I trade multiple lots, scale in and scale out. Been doing this for about a month now and will continue. But sometimes I donât always get to add to my trades. I stalked this set up pretty much all day. Once I got the confirmation I knew exactly where I was going to enter, add, and exit.
Another trade sequence. This example gives a better illustration of how I scale in and out and manage risk with size. The initial entry was late and I took some heat on this trade. Price literally came within a tick or 2 of my ideal entry price before taking off to which I had to chase it. Then when price stalled a bit I took off one contract when price was going against me as shown on the chart. Basically reducing my risk at this point in case the trade doesnât work out. Once price headed back in my direction I added back the contract with a target of 2735 to 2738 area and scaled out as we approached it, +335⦠On a scale of 1 to 10 I would rate this execution an 8 because of the initial entry. Yesterdayâs trade was a 10. If today's trade did not work out as planned and I had to bail on the second lot, my cost for this trade wouldâve been (net after commissions) $20 for the first contract and $70 for the second. So my risk to reward was 1 to 3.5 The core of this risk management strategy is to reduce size as it goes against you and increase size as it moves in your favor. For those that understand how to manage risk with size, this is the holy grail for discretionary traders. Plus it does wonders to help control your emotions.
Posted the wrong attachment earlier, here is an updated one as I took one last short. Tough day, 5 trades -352. Going to start posting my PnL's at the end of the week and cumulative PnL ytd at the end of the month. This week:
Instynct, sorry to see that you had a negative pnl for today. still had a nice week overall do you mind sharing the chart from today. i find it beneficial to see trades that ended up in loss. did you follow your plan and stats just did not work out or? what do you think about using few MAs and an oscillator/stochastic to A) help with direction of trend and trade and B) pinpoint entry/exit zones, then use PA and/or zoomed in time frame to execute entry and exit in those zones respectively? thanks, tihfa
I missed the morning sell off and, while my trade during the chop was pretty much in line with my strategy, it just didnât work out. Price showed me a little profit but I ended up taking a net loss for -128. The next 3 trades were a combination of a little sloppiness and mismanagement. The 5th trade was a quick shot at a short eod. Took a whopping 4 ticks out of it while price continued to sell off another 7 handles. I posted the previous 2 charts of my execution because I wanted to illustrate and follow through on what I had said previously, which was to share the changes that I made to my trading when they prove profitable. I really had no intention of posting execution charts on a regular basis so I will take a pass on the chart. But if you have any more questions I will try to answer them. And if anyone wants to discuss the generalities of price action Iâm open to that too. I donât use MAâs or oscillators so I may not be the best person to answer this. I do think that MAâs can be helpful if you find the right periods and settings to suit your trading style, and you use that in conjunction with other methods for reading price. Oscillators not so much. And if youâre looking for more specific prices for your entry/exit, yes definitely use zoomed in or fast time frames for that.
Last weekend I decided that I needed to get over my fear of trading size. So on Monday I increased the Order qty to 2 and traded as many as 6 lots at one point. End result was not good in terms of the PnL. I believe it was my biggest one day loss trading futures. Looking back, my trades were in line with the strategy, but it was just the wrong day to put on size. Once I missed the morning sell off, I got faked out on every turn as the Market played me like fiddle. I mean the timing couldn't be any better to part as much of my money from me as possible. Had I decided to trade 6 lots on Tuesday I would've had a record one day PnL to the plus side. For the rest of the week I changed Order qty back to 1 and traded anywhere from 1 to 3 lots. On average I did about 4-5 trades per day as it was a busy week. I've been keeping a close eye on aapl price action, and it seems like just this one stock can influence the markets as a whole, and the whole world for that matter. Its amazing to me how much power a group of sellers in one stock has over the rest of the financial markets. Today was an ok day, got chopped up in the morning but once 2697 area broke down (dragged down by aapl), I rode a short position down to about 88-89 to close out the week. Could've held on the last contract a bit longer but I'm tired and its been a long week.
good for you Instynct, glad you upped the size. anything i've ever traded that I've eventually upped the size on ALWAYS has an initial negative PnL. that's just how it goes. btw, AAPL is 18% of QQQ, and 4% of SPY. so in the QQQs case, a 6% move in apple is a 1% move in the index (like AAPL had the other day). but back to the original point, you've shown you have an "edge" and since liquidity for the moment isn't a factor, trade the size, hit a PnL mark, and up it again. pretty excited about your weekly posts, cheers.
Thanks Art. Come sunday when I do my weekly review and preparations for the following week, I will be working on how to avoid days like monday. Or at least have the losses under control when I find in myself in those kinds of situations.
Instynct, Something to contemplate Appears it took Monday to get you into the swing of things, as rest of the week looks good Think about doing a dry run Sunday night â visualization/ sim trading â in preparation for Monday May be hard to sleep Sunday night, but youâll be ready come Monday ======================== Artâs point is very valid ======================== Good trading this week Sir RN