Anyone who has been day trading for any length of time will have had this experience. You watch a market for a while, and you see a nice steady uptrend lasting maybe twenty minutes or more depending on your trading timescales. So you jump on the trend, maybe on a small pullback, and instantly the market goes against you, often to the galling extent that you have picked the exact top of the trend. If you are a real newbie, you may even suspect skulduggery by the broker to snatch your few pounds of investment. You duck out some time later with a loss, feeling very unlucky indeed. But are you? For me, this is a variation of the gambler’s fallacy. Simply put, if a roughly even chance (say red on a roulette wheel) comes up ten times in a row, it seems to the uninitiated as if black is due any time now, and so is a good bet for the next spin. However, a moment’s thought would reveal that the wheel has no memory of past numbers, so it is just as likely to come up red again as to come up black on the next spin. The trading situation is the reverse of this, but a similar principle. The trade has been in an uptrend for a while, so you expect it to continue. But there is no reason why it should really. Of course there is a lot of theory saying that a market is more likely to continue doing what it is doing rather than change, and this is what trend following relies upon, and over time it seems to work given good money management. But even if it was 60/40 that it would continue on the next tick, it might very well soon reverse anyway, and it really wouldn’t be as unlucky as it seems when you look at the chart. I know most of you will know this already, but for those newbies out there, be aware that trading looks simple when you see a chart at the end of the day. All you have to do is jump early on a trend and follow it until it breaks down, and then jump out with a nice easy profit. Unfortunately, at any point on that trend, there was still a substantial chance that it would reverse at any moment leaving you with a loss. For the statisticians out there, it is the difference between looking at data a priori or a posteriori. I am currently about breaking even as a day trader investing trivial amounts of money. This probably puts me marginally ahead of the average trader. But it has been a long hard road even getting this far. Good luck to all, just don’t bet the farm until you know what you are doing (and probably not even then).
In that case the winning % is probably >50%. When you become "more knowledgeable" it shifts to <50%...
Winning more than 50% of your trades is quite easy. Just take profits fast and set stops really low. Mission accomplished. But you won't make money if that's your only strategy. My point is to stop thinking a 50% win rate is somehow the measure of success. It's not. Growing your account can happen by winning less than 50% of your trades. The goal is always to put the odds in your favor. If you do that you can trade as a full time job. Many people do. Losing days, weeks and months will be a reality. Just keep learning and keep putting the odds in your favor.
The back and forth game will usually continue until you blow an account or understand the importance of Performance metrics. Your performance metrics are important parameters to evaluate the quality and proficiency of your Trading Strategy. It's imperative to use a system that measures what you're doing, or you'll continue to spin the hamsters wheel every day without making concrete progress. Once you've attained good metrics, it would help to combine your expectancy ratio with Pareto's Law and a good risk mitigation protocol. I only make 6 trades/day based on my own metrics/risk tolerance.
Trend is misleading concept in day trading in my opinion. Avarage retail trader with average capital will suffer trying to follow the trend. The back feal moves are deadly if you count on general direction of the market. Yes, it's complicated, you must keep you analysis flexible. Good luck.
Guess your scenario, lacking any particulars, is not a recent one since the trend had been down for awhile?
You need to verify your win %. You seem to not understand that on equal risk vs reward a 60% win percent will over time grow your account. That is why a casino can win at black jack over time even when some players get lucky. They have around a 55% advantage. So the more days and hours that people play at the casino, the better they do. Remember you want to be the casino not the player.
Trading in short time frames, you should expect the trend to change much faster. That is the reality of it. If you cannot stand the whipsaws, you should consider swing trading or trend following. Day trading has it own rewards and challenges that come with that stock trading approach. Since, you choose to day trade, you should accept all the challenges that go with it.
If you were watching a trend for 20 minutes before entering, that's way too late. 3-4 minutes of green one-minute candles is plenty. I do up to 110 trades daily and started daytrading in the late 90s. Win percentage is irrelevant, all that matters is net profit.
Hello Blitzjoker, Before I state my comments please read this as a disclaimer: *I am not a consistent profitable manual day trader of +1 years only about 3 months so far. I have never made money trading manual day trader for more than 3 months. Please take what I say as my own personal experience as it may not be worth the gum on the ground and completely bullshit. Take some time to figure out exactly what you want from Market you trade every week. For example, it could be $1000. Take some time to figure out exactly how you want to trade everyday. Do you want to be a scalper or swing trader? Scalper win about 80% of time. Swing trader win about 40 % of the time. Take some time to figure out why exactly manual traders lose money over time. Can you trade the same way for the next 20 years manually without the emotions involved. Take some time to figure out what makes you happy day to day. Maybe trading 8 hours a day is not fun for you. Maybe try 1 hour or 3 hours. In short, before trading. just figure out what makes you happy and what exactly you want from this market.