Why are the best trades winners from START?

Discussion in 'Trading' started by conpax, Nov 21, 2006.

  1. conpax


    If a trade goes for me straight away, it appears (anecdotally at this stage) that the trade has a HIGHER probability of success!

    if the trade goes against me from the start, well, the odds appear (anecdotally) to be AGAINST me!

    why the hell would this be true?

    what does it matter whether the trade goes in one direction or another in the first 5/10/20 minutes of a trade?

    Anyone got any ideas?
  2. you obviously don't know this biz

    unless you are talking about severe scalping

    but I think you are not talking about scalpin

    anyway what trade does in first 5 min is not important

    my trades half the time go against me for first 5 min

    doesn't mean a thing

    I mean come on man, this is basics, you gotta have trading plane, tested stops etc
  3. Why are the best trades winners from START?

    I think because most trades are entered with the trend.
  4. Jesse Livermore repeatedly stated that his best trades always worked out from the start. I suppose this would be true because it is easier for a train to continue moving 95mph in one direction than it is for the train to stop, and move backwards at 95mph. so when you get in, the trade either goes your way and continues to, or it goes against you and continues to....unless you do what I have been doing lately which is buying and selling pivot points: you buy the high and sell the low......this has been really hurting my account recently.....I seem tohave a knack for buying or selling the wrong side of a pivot point

    By the way, when I first read your post, I thought you were making that statement about TRADERS not TRADES. In general, would people on this forum say that hte best TRADERS tend to make it from the getgo? Just curious about the consensus on that.
  5. I was told that the 1st hr of trading points the stock in the direction for that day. I dont know if this is true though.

  6. If that were so we woudn't need this forum..lol making money would be too easy

    A trade that goes well from the start gives you peace of mind so you are more likely to make rational decisions versus getting panicked when a trade goes against you after entering the order.
  7. i think it all depends on your trading style. if you trade besed on momentum then seems v logical that a trade goes in the right direction immediately - you are entering on the side of momentum. if it turns around then it is a good indicator that momentum is weakening / changing which is against the whole concept of the trade. the same is true of breakouts. the opposite however is likely true for traders who "buy panic", "buy dips" etc.

    i have backtested this extensively for one of my momentum based models. most of the best trades work from the start.
  8. traderob


    Good one. LOL.
  9. Why are the best trades winners from START?

    You got the direction and timing right.
    Nothing more, nothing less.
  10. bluedemon77

    bluedemon77 Guest

    I read this somewhere too (Fisher's book?), but I also remembered that it only was true slightly more than half the time. The same is true of pivot ranges. So my understanding is both of these things can give you an edge, but not a huge one.

    Regarding the main subject of this thread, I tested this with my own system and did not find it to be true. Bailing immediately or within 30 minutes if the trade goes against me did not improve my profit. I think it depends on what your system is though. If you enter at random points, the direction the price takes relative to your entry point might give some indication of the trend, but it probably wouldn't be the best indicator.
    #10     Nov 25, 2006