brownsfan019

"Treat trading like a hobby and it will pay you like a hobby. Treat it like a business and it will pay you like a business." ~no particular author

Nick - step 1 of trading the US indexes - check all econ reports coming out that day/week. http://online.barrons.com/public/page/barrons_econoday.html Step 2 - learn the importance of reports - some are more important that others. For example, we have FOMC on Wed. That is a HUGE report. Seeing the calm before the storm should not surprise anyone.

Since many threads end up asking about how to exit a trade, I thought we could all compile one thread that shares the many, many ways to exit a trade. Obviously nothing is perfect, but this could be a nice resource for everyone. So, if you are willing to share, post your exit method(s) and why you like them. It might be easier to post one method per post so that info does not overlap and confuse anyone. Let's try to give the full story - the pro's and con's of each method. Also, if you want to debate the merit of the strategy, start a new thread or continue in another discussion if you can. If possible, I'd like to keep this thread clean, so feel free to link to another discussion. In other words, it would be nice to have one clean thread about this topic vs. this turning into a 'I love XYZ method' and 'I hate XYZ method' and then every post is about XYZ. My example... EXIT METHOD: Wide Range Body (WRB) PRO'S: When they appear, can provide very timely exits. CON'S: If they do not appear, you need to have a plan B for exits and/or end up letting the trade possibly retrace. MORE INFO: http://www.traderslaboratory.com/forums/f34/wide-range-bodies-big-candles-1480.html

Update here on the WRB front - as the charts I've posted have shown, when there is a WRB, it should at the very least get your attention. How you interrupt that info is up to you. There is one serious flaw with WRB's and using them for exits however - when they don't show up! :mad: In other words, if you have a trade that moves in your direction but a WRB does not appear, the question becomes what to do. That has been causing some frustration on my end. For example, I had an ES short on 5/4/07 that moved approx 4 pts in my direction. One WRB appeared that provided a good exit. Since I am trading multiple lots however, I was looking to exit at different levels and all that showed up was one WRB. Of course the argument is to simply exit on the first WRB you see. The rebuttal to that being it's not uncommon to see more than WRB appear. So then it's simply a matter of taking most/all off at a certain point (however you determine that) or try to catch the bigger moves (when they are there).

James - today was just flat out terrible in my opinion. Hence the reason for the post. Other than today, it hasn't been too bad for me. Obviously so much goes into what a trader considers good trading areas, but I'm willing to go with the flow.

FYI - MultiCharts is running a beta with OpenECry data. It appears to be running fairly good here, which is nice. It eliminates the need for dtn and gives you access to data of every market OEC covers, which is a lot! More info: TS SUPPORT :: View topic - OpenECry data source plugin Make sure you read thru thread as there are a couple add-on releases in the thread.

The amount of slippage depends on how many contracts you are trading and what markets. As for brokers, here's my suggestions - http://www.traderslaboratory.com/forums/f92/futures-trading-brokers-trading-software-1589.html

Well that was an uneventful day.

Well, not much going on today thus far. What do you think? Note - I really don't care why you vote for what you did... This is just like watching paint dry and I thought we could do something to pass the time...

For all the Cramer lovers and haters out there - 11-16-06 Cramer’s Comeback | Wallstrip

This site is great. Just watch some of the videos. http://www.wallstrip.com http://www.wallstrip.com/theshow/archives-shows/

EXACTLY momentom - each trader has to do their OWN statistical analysis on their trading setups/habits. I personally have found that when my setup appears, I need to be in b/c if there's only one good move in the day, that can make or break my end results.

One suggestion for you guys that will be up and at 'em - you mind as well trade it if your setups are there! The ES usually has enough liquidity in the pre-market, esp on econ news days.

And the 'adjusting' that you speak of (arbitrarily picking when to stop, arbitrarily picking what trades to take and/or when, etc.) is exactly what will over time destroy a P&L. Over time, you cannot with regularity pick and choose when to stop and when to trade and expect to be correct the majority of the time. Point being that we all know trading is difficult enough as it is, but as soon as you limit your upside, you've just made the equation even harder to complete. Also, as I asked before, if you believe in capping your gains Cooter, at what level, if any, do you cap your losses? Since this is obviously a psychological debate here, I'm curious to know both sides of the story. It's easy to say keep trading till you make $XXXX, but what if you don't get there right away? What if you take a number of losses initially? Since your argument is that human psyche must be a consideration in your analysis, how do you 'adjust' your trading when you are in the hole initially?

I see what you are saying. When I look at counter-trend vs. with trend, I am just looking at the current trend movement of that day. Let us know how this goes, whether real $ or not. Always good to learn new things I suppose.

I really don't see the correlation between a card counter that can be shut down and a trader that makes money. The CME is not going to call you up one day and tell you that you made too much recently and you are now banned from trading. Nor will the NYSE, CBOT, etc. I understand that FX is a different story. So, really the point you are trying to make Cooter is that since many traders cannot detach their emotions from practical trading mechanics, you must shut yourself off at some point - good or bad. And in theory, I get that. If your edge is truly an edge, then I believe you must exploit it each AND every time it appears b/c you have no idea going into the trade if this will be a winner or not. Since obtaining a 100% win ratio is not likely, you cannot omit any winning trades or your winning % will be drastically skewed. In the end, we are all playing a numbers game here. Going into a trade setup, we know that this has a X% chance of producing a profit. We know that there's no way to be correct all the time, so you better be in the trade when your winners do show up. And if 5 winners show up in one day, you better capture that profit b/c tomorrow is a brand new day and once again, we have no idea what the day holds.

Paul - we had this discussion in another thread awhile ago and myself and few others made the argument that if you have an array of probability trades, why bother with anything other than the most highly probable of producing profits and simply trade large size on these gems?

Walter - I suppose, I would look at like this: On counter-trend trades, consider getting some/all off after an acceptable move in your direction knowing that you are going against the flow. There's money to be made here, no doubt, but my personal opinion is that you cannot get greedy in counter-trend trades. On trend trades, I would consider allowing the trade some more room to work for larger profit potential. I personally have found some great success with WRB's, so perhaps that's a consideration. Of course, if you can scale out as well, that's another component for consideration. I am a big fan of scaling out if your account size and risk tolerance allows.

Walter - another question if I may - if your goal is $100/ct and done, how are you sticking around for the $250/ct days? Do you arbitrarily decide to let trades run for the sake of letting them run? To make $250/ct, you are violating your daily goal rule. I'm wondering how one makes the distinction of stopping at $100 or going for that $250, which is more than double your initial goal for the day.

Cooter - you took the question right of my mouth. Walter, what's your daily max pain setting? Cooter, same question to you as well. Where do you guys say enough pain and stop trading for the day?

Walter - I think it first depends on how you define 'momentum' as I personally think there's plenty of momentum most days. We don't know when that momentum will show up and it may only show up for a few minutes or a few hours, but I do know that when it shows, I need to be in my trades. For example, there can be some great momentum before/during/after econ news and if you can trade during these times, it can provide great opportunities in a very short period of time. It might only last for a few minutes, but there's some serious money exchanging hands.

I thought of another way to explain - It's often said that in order to make money trading, you must have an 'edge'. Assuming that is correct and assuming you are not sure when your edge will in fact be an edge, how can you stop trading your edge b/c of some arbitrary dollar gain? The market does not care if you hit your goal for the day. How many days have you looked at in hindsight and said 'WOW, I would have made a KILLING trading my edge all day!'. Well, if you simply stopped after one trade, that 'killing' is purely a dream. I suppose I am of the belief that you have to take the money when it's their for you b/c there will be plenty of times when the well is 'dry'. That does not necessarily mean you are losing, but let's be realistic - there are plenty of days that not many traders get excited about due to the lack of movements, volume, etc. I would prefer to be in the game when things are moving around and make my money knowing full well there will be times when there just isn't many trades and/or profits.

Good charts Walter. Thanks for sharing. It would be interesting to know what is the best exit method. As we know, the exits are so important and that can dictate whether a trader can make money with this. A nice simple method coupled with a good exit strategy is something for consideration here.

I guess I must be a futures broker in disguise then! :p I think the 'take $X dollars per day' talk is great when you are new to trading. That makes sense. However, as you get more experienced and understand that you must strike while the iron is hot, you will see the error in thinking like that your entire trading career. Simply - no trader knows when their setups will occur, when they will work, when they will fail. Knowing that information, you MUST capitalize when your setups are working. As I stated earlier, one day can literally make your month and to say 'No Thanks, I've made enough today' can be very destructive over time. I think too many traders, esp those new to trading, are way to quick to stop when they make a little money and way too willing to keep trading when they are having a rough day. That's a losing proposition no matter how you slice it up. Another way to think about this is to first categorize yourself as a trend trader, counter-trend trader and/or chop trader. Most are one of those three. Since we have NO IDEA going into the day what type of day we will see, you have to capitalize when it's 'your' kind of day. Personally, I need volatilty. I need movements. When the market is chopping around, I'm probably going to lose/break-even that day. On days when the market is really moving, for me to walk away after my first trade provides a nice profit is simply ridiculous and in my opinion a very amateur type move. There can be days where an ENTIRE day can provide NUMEROUS PROFITABLE setups. To just pass on those for no reason, other than b/c you are afraid of losing the money you made, is more destructive than you guys are realizing here. I don't know... perhaps you've never had a day where you made so much money that you could not believe what your P&L was at. And until you do, this will sound like 'broker' talk, but I think it's quite the contrary.

Walter - how's this look on a trending day? I appreciate the post and how 'easy' it looks, but you should carefully explain the pitfalls before a newbie jumps in. One trending day could literally take your entire account if simply playing the S/R flips. Throw in when the market can't make up it's mind around these areas, and you can be rapidly buying and selling over, and over, and over again. Your broker will love those trades though!