Yup... I'm exactly at this point. After weeks of my trading, I am consistently losing, so no point in continuing to do this. I am going to build something based on the levels I outline in my prep and go from there. Trading at the extremes is really what should be focused on.
NQ trading is done which is totally dependent on high quality service and customer satisfaction.As price action is done using pice action chart so for NQ trading Price action is used..
You will be surprised at how easy trading becomes once you write down your rules. You will also be surprised at how long it will take you to come up with the rules. If/Then type of scenarios. If price does this / Then I will do this. Then paper trade and you'll find out if the strategy works. You will also find out if you can follow your own rules. After 50 or more trades you will know if the strategy is profitable or at least if the problem is the strategy or the trader. Paper trade with the same capital that you plan to go live with.
Its funny because I really was getting to the point of needing something else because trying to think was getting tiresome, and I could clearly see that even though I had a general idea of what I wanted to do, I still wasn't acting fast enough because deep down I knew that I didn't know exactly what I was looking for. I wonder if I can ask you to give me an example from your trading plan, not an exact setup of course, but in terms of the language you use. Here is what I am thinking after seeing price react so well to overnight levels and previous day highs and lows. This is probably also almost too broad, but essentially, what happens most often at these levels is first a rejection, unless the price shoots through in less than a minute. So if this isn't the case, if the climb up is slow, then when price gets close to the previous day high, enter a short 2 ticks below (maybe 3 or 1 will work better, have to figure this out). If price turns around even lower (ie. doesn't even hit my entry), oh well, I don't get in. But if it fills, just wait. If price goes one point above, its still ok (have to define exactly what numbers work best), but if price goes 1.5 points above the PDH, then exit for a loss. So essentially I am risking 2 points (which is less than the loss I have been taking on many trades), but the benefit is that I am already in that short very early on. I don't want to define exits because this move might be good for 5 points or 20 depending on the day, but at least I will have an entry that I know will work X % of the time with a well defined risk. Now if price then goes lets say more than 3 points above the PDH, now buy it at 3 points above this level. So essentially, most often, price either turns around at this level, or traders take it to new highs. So I first try and short, and if it doesn't work, then changes are good it will continue and hence that long should be taken. I'm not sure of course how well this will work yet, it almost sounds too easy, but as you say, after 50, or maybe even just 20 or 25 instances of this, I should know if its profitable or not, but do you think this is in line with exactly how it should be laid out in the plan? Is this the proper way to write it? What other factors could I add, other filters to increase the chances of taking a good trade and staying out of the bad ones?
I'm in retail and there is a saying (less is more). In my opinion the simpler your plan the more likely you are to follow it. Kinda like that one guy said SLA can't be automated . There will always be some of our own judgement.
When I first started trading, it was equities discretionary. Had a good run following stocktwits pumps, until PLUG power took me out. After tbat i vowed penny stocks never again. Then i tried NQ and es, after 3 days win streak, had 37 straight loosing days before i gave up on the instrument and went automated with other asset class. To me index equities is just a too eficient market to day trade,swing maybe.
This is a problem though because if you have to use some of your own judgement, you might not be able to think fast enough, and then you're left with not knowing exactly what to do. It sounds like most guys who have solid trading plan say there is no thinking involved, no judgement, just doing what the plan says to do, and if its not specific enough that you're not sure, you don't do anything.
The person that started the SLA approach specifically told me that I wanted strict rules and this approach can't be traded that way. Not disagreeing with what you say I'm just saying the less rules the better. And in my case its not the method but the trader that's the problem
Yup... I do agree with that as well... and I can see how you have to be flexible. This is exactly the problem I'm having actually. Many guys say they have a trading plan that is pages and pages, thick like a book! Then if you don't stick to it, a whole discussion opens up about why you can't follow your own trading plan. But then of course Db teaches that you have to be looking at what do traders want, which I think is absolutely correct. This is why I'm curious as to what detail a trading plan would really be. Are we talking down to the precision of ticks? If a person has it in their trading plan to take reversals from key levels, how do they identify when the trade in on (rarely does the reversal happen exactly at the level to the tick), and then when is the trade scratched. Do they backtest enough to see that 2 points and 1 tick is the ideal number, so when the trade goes 2.5 ticks against you then its a scratch? Or are they also watching the pace of the up and down thrusts... but then how would they even code this into their trading plan?? So much to think about!
All we can do is back test until we are confident enough in our plan. The main reason I respect redneck and nodoji so much is their attention to detail and their willingness to help