Having been an institutional trader earlier in my career ( commercial energy ), generally speaking their trading desks don't waste time and resources "picking off" small lot orders. In fact, for the most part their trade holding time frames and trade origination purposes are not necessarily aligned with short term spec order flows. I have have had four clients who are institutional order desk brokers at IB's since I started this training gig in 2008. They match up buy and sell orders between institutions all day long. I have a friend who makes markets in OTC interest rates swaps at Northern Trust in Chicago - he tells me the order flows between institutional clients are so well balanced that his book is for the most part delta neutral and he doesn't carry a big hedge inventory. Point being, watching big individual specs would likely be more useful from a "tea leaves" standpoint than tracking institutional order flow IMHO.
You shouldn't necessarily overthink Trades...because it doesn't matter, that much...whether you spend five minutes, or five hours, or five days analyzing it. You kind of have to just go with your gut feeling, and experience and wisdom. A trader needs to learn and embrace...losing control, -- it's kind of like Sailing...once you enter the sea...you're no longer in control, per se....but She is. The Sea is. it's just a matter of how you...Dance...with her, that will determine if you will succeed or fail. Instead of trading alot of different things under the sun...which will make you think alot and make your head spin...you should instead trade a Very narrow focus or just one thing Be a master of one; not a jack of all trades.
+1 to all the comments above about how the "thinking" is done ahead of time. I've come to know what works for me on a regular basis, and I'm pretty methodical about continuing to do it. I already know what I need to do if the trade goes in my favor or against me. In my case, it's certainly not as simple as "exit the trade at some particular predetermined price." As for risk management - this is a learning process for everyone over their trading careers. You get comfortable with how much leverage is appropriate in various environments and with the various products you get used to trading. With respect to the comments above about the roulette wheel landing on red 100x in a row -- That is entirely possible on a fair/non-broken roulette wheel, and the subsequent individual spin on it will have exactly the same expected outcome as the expected outcome on each previous spin. But in this highly-unusual case, a shitload-number of standard deviation from the normal outcome has just occurred
Despite our gender-blind naming of diseases, hurricanes, storms and other forces of nature, we still bestow on our planetary home and the very core of our existence names of the ultimate symbols of life-giving femininity: Mother Earth and Mother Nature.
Once you have developed a strategy, enter the trade once all aspects of your strategy are met. If your strategy has an edge it doesn't matter if you take a loss because over time, you'll always come up ahead. You have to become emotionless when entering trades. Always enter a trade once it has met all criteria of your formula or strategy, period.
I thought you have to be emotionless when you exit your trade than entering a trade. You just have to hedge your trade.
Of course... by the way, how do you figure out when to exit when you are in profit or when you are in losing position?