No. Emotions are what govern your decision making when you do not have a strategy. This "strategy" won't work on a real time sim either, which is why "students" are encouraged to annotate historical charts showing where they would have traded. Then they get impatient with missing out on what they see as an opportunity to make money, trade their live account, and lose. At which point the mentor/educator tells them it is their emotions. And the cohort of struggling unsuccessful but hopeful traders - "true believers"- keep egging each other on down the road to nowhere. Gurus don't make money and a strategy you or anyone else can read for free online won't make you money. What mental gymnastics would you engage in to avoid finding out if this statement is true? If you were to learn the truth: at stake is your hopes, dreams, and unearned self image as a sucessful trader. It is better for you to know the truth. As soon as possible. Then you can return to making rational choices.
Once you have your plan worked out and have done enough SIM trading, and you feel like you are ready to trade for real, then you could always start out small by trading QQQ. This way you can size your trade to an amount where the money matters enough to keep you serious, but also keep it small enough to where the losses don't hurt as much. This should help you to stay "emotionally detached and focusing on the market, not on your p&l" as bh_prop said. BUT FIRST you must prove to yourself in SIM that your plan works. I'm not even sure that what you have done the past couple of days is really even SIM trading. What you have described seems more like "well I could have shorted here, and if I held I would have made X pts, and I could have went long here, and it looks like it didn't work so I would have probably been able to get out B/E" That's not really SIM trading. You need to actually put the trade on in the platform, and manage it as the trade unfolds. Otherwise you may be just fooling yourself.
In a way you are correct, but as long as I'm honest with myself, I think I can be diligent enough to make it work in a live environment. The exits I have no idea where those would be, but I can focus on maximizing profits later. The entry, the best entry, the first and safest entry, with a clearly defined exit that tells me the trade isn't working is I think the thing to focus on. I do believe that in this past week or so I have make a huge leap forward, not just baby steps, but a whole level up.
Ok.. lets continue. So after W, price was going up solidly until we hit X at which point it turned down. On the 5 minute, this certainly started to look like a hinge so I drew it in with these yellow lines. Y - I also had an initial DL drawn in from U and the higher low, and price bounces off Y quite nicely here. It goes out the top of the hinge. To play this, I can use the fact that after my hinge was drawn in, price only made it to the midpoint, it didn't even hit the lower line, so I shouldn't be surprised that it went out the top. I'm not going to work on entries just yet, but if I wanted to carry over the idea of having an entire bar above some trend line like ND shows in her BOPB setup, then where the green arrow is marked would be the trade. Z - We have practically a triple top here at 4014. If I consider this down move after the open to be 4036 to 3992, then 4014 is exactly the 50% level, and one we cannot cross. After we turn down, I can use this point for some possible supply lines. We break the DL quite strongly, so perhaps this up move really is over. a - Fast forward to here. Because the 3998 level was already breached, I don't think its going to provide juicy trades anymore, more likely it will be the the lowest low at 92 now. Anyway, I notice that if instead of just using that yellow line to mark in my hinge, I can use this in fact as another trend line. I wasn't accustomed to using these lines because for a great length of time, price had moved away from it, but thanks to ND, I am now paying special attention to them. I think that often I was shorting after seeing big moves down, only to be caught by one of these higher time frame trend lines. Had I been aware of them, I might have known to be thinking of going long rather than short. Here price reverses just a tick above it, and this would give me good reason to go long above this bar. At the same time, I do have some SL's from Z that I drew in so I can watch these as well. The long ultimately fails, and really, going long after such a strong down trend is silly, but perhaps knowing this, I could just use this as a place to get a few points if I was so inclined, expecting the bounce for at least a few points. b - When we break below, its just congestion for 4 minutes, but I can use this low to fan the line ever so slightly. We keep trying to go higher, and it appears we are building a level of support, but there is still nothing that really screams to go long. c - This dashed SL comes from connecting the high at the open with Z, so its another major trend line. I could almost say that one bar does close above it, but a trade above this bar would never trigger and back down we come. (trade isn't marked in, but to be faithful to my system, with price coming up to a major trend line, if it opened and closed above, I would have to go long) d - It gets really quite messy in here, and honestly, not the best place to be looking for a trade, but here we do break below the trend line again but bounce back up. e - This is where it gets good though. This bar above the down arrow is fully below the trend line, so if a sell stop is placed here and price comes down to trigger it, we might finally be in a good down move. It of course does fill, but there is more sideways action. f & g - With price coming up to here, this a good reason to be careful above moving stops to BE. Both of these highs are roughly exactly where the entry was, so if hit, you haven't lost any money, but you almost miss the additional 20 points that price ends up dropping. SUMMARY Easy to analyze on a chart like this I guess, but I am making sure to be specific about what I need to see.
KP..... be sure that what you are now drawing in is something that you can draw in "prior" to any setups or entries and in real time as bars are formed on the "hard right edge". If you can't, then they will not work for real time trading. cheers toucan
Yes.. absolutely right. This is the problem I had with SLA initially. In real time, I just didn't quite know how to draw my lines. I would draw them too tight right after entry and then a line was sure to break. As it is now, by just focusing on the 5 minute trend line, price might very well be far away from it at the open. In this case, nothing I can do but wait until they meet.
I'm trying to lose him... he keeps following me around and I was always scared of him, but I tell him I don't like him anymore so he should stay away!
I'll give you a little exercise that might help. When you get that fear of missing out feeling and want to just get in despite the fact you'd be either chasing an entry or jumping the gun prior to a valid signal, write down the entry price and the price where your stop loss would go and make note of the results. That busy work will distract you from putting on the trade and maybe even give you some new trading ideas. My latest new trading setup is based on a filter designed to keep me out of low probability trades that fit most of the other criteria for entry. One day I thought "Wow, that really is a good filter, most of the those trades seem to fail badly...hey maybe I should just take the other side of the signal!"
Brilliant, just like your write-up about missing out on the reversal in a strong trend. Just when you think you're missing it, take the trade in the direction of the trend instead! I'm very much focusing now on not doing anything until price comes to a 5 minute trend line. There are still things like how to draw one that are in issue, meaning do you slope it down if a swing high or low doesn't quite reach it... but I will just have both on my chart and monitor what happens. Just this alone will greatly increase the success rate and prevent being caught up in moves that are not significant to the overall trend.