brownsfan019

Wow... interesting arrangement of chart settings there. All the best to you jan! Let us know how it goes.

Addict, I think it's as simple as being confident in your setups and then consistently executing your trading plan. It's very easy to say, but hard to achieve. To first get to the level where you can trade your setups w/o hesitation is not easy to do. Until you prove to yourself that your setups work, you'll always being wondering if you should just tweak it a little... And then to build a trade management plan and executing it the same exact way each time is part 2. As I mentioned in my blackjack strategy thread, I believe you must execute your plan the same way each and every time.

Jan, I think you are missing the point here. Just looking at one trade and saying this is how you should exit on ALL your trades is simply not going to work. It may never work again on THIS very instrument. This is part of the process you need to go thru YOURSELF. You need to look at many, many of your setups and start to statistically analyze where your ideal exits are over the long run. I understand the frustration with exits. That's the hardest thing for me. And I've gone thru many different ideas for exits. It's not easy. You just have to accept that you will never always exit at the most optimal point. It simply will not happen. So the goal is create an exit system where you capture as much of a move as possible for you and then repeat the same process over and over and over again.

Interesting post bf. Good points. Assuming you are confident enough to trade your methodology w/o hesitation, there is a strong argument to trade larger that's for sure. Now, here are the 'assumptions': You know your system makes money. You have tested, tested and tested just to make sure your analysis is correct. You can execute w/o hesitation. You can leave the emotions out of this. Probably the hardest one if you increase your size. And lastly - you are 100% confident in your system!!! Assuming all of that, I could agree with increasing size to bring your focus in even more and increase your returns quicker as well. More money is always a good thing. I would also add to the mix - if you can operate under these conditions, there's really no need to keep much extra cash in your account. Since futures brokers don't pay interest on cash (unless you put in T-bills), the argument here could be to keep that excess cash in something more liquid that pays you something.

I agree dal and that piggybacks on another thread where we are discussing the trader not taking their setups for whatever reason. Same rationale there as well.

Jan - make no mistake, no trader constantly exits longs at the high or shorts at the low. It's numerically next to impossible. Depending on the size of your lots/contracts, you may want to consider multiple exit points. Some traders take some off at a fixed level, some use other analysis (I use WRB's). Nothing will be perfect every time, that is for sure. You need to test out different exit methods based on how you trade. Some ideas: WRB's Fixed Levels Trailing Stops Time stop Fib's Candlesticks

If you have a daily or weekly monetary goal in place, you take that. I personally do not like that strategy at all. Assuming you are not done trading based on a $ goal, then YES you take EVERY single trade that your system produces b/c you have NO IDEA which ones will work. What if you stop after 1 and you later see that 5 more would have produced profitable? You just left a ton of $ on the table. Again, if you truly believe in your trading system, this should make perfect sense. If the trading system is more or less a 50/50 shot, then I would hesitate as well. This is my opinion from my personal experience. I think it's good for new traders to look for a $ goal and then quit. But for those of us that have been around for awhile, we realize that you have to strike while the iron is hot. That may mean that one day produces profits for your entire month. It happens. If you bypass those extra trades b/c you were afraid to give back money, it will cost you in the long run. Maybe others have found that just taking one or two a day and see what happens is best. But, whether you are a trend follower, counter-trend, chop, etc. I believe you must strike and strike hard when the conditions that you are waiting patiently for present themselves b/c there's going to be plenty of times where not much is happening in your trading world. Along the lines of another thread, we were discussing the common traits between a sales career and trading and this fits right into that. As a sales person you realize that all it takes is ONE sale to make your day/month/year. I don't think you can hit one trade to make your year, but the idea holds - you can hit a handful of trades during the month that make your month. You can hit those all on the same day. So, one day of trading could very well make your month. If you eliminate those big winners simply b/c the first trade of the day made money, you just set yourself back in a large way.

Good point tor. The fact that you take every signal your system produces does not mean that you are trading 100 times a day. It might, but there is no correlation between taking all your setups and overtrading.

Good point.

Pivot - you are right, there's probably many different combinations of using the WRB to exit that may or may not work better than exiting at the close or during the formation. As you said, either way looks great in hindsight. I like the close the best simply b/c it's mechanical and there's no 2nd guessing yourself, which I am great at doing. I know we could analyze the AM vs. Lunch vs. PM vs. Econ News vs. Non-Econ News etc. etc. to see where the best might have been. To be honest, I think in the end, it's simply a matter of doing the same thing, each and every time, like I attempted to explain in the blackjack thread. I think that whether it's trading, blackjack, etc. to randomly pick your entries, exits, etc. is a loser's game and the 'house' will always win in the end. I really don't see how someone could randomly choose their entries, exits, etc and think that's a good way to make money.

How can it not matter? Unless you win 100% of the time, it matters big time. If your win % is 60% assuming you take everything, as soon as you eliminate a winning trade(s), your % changes drastically. How can you possibly screen your valid patterns out then? Gut instinct? Just because? And if you are screening out your valid patterns, perhaps it's the pattern that you are trading that is not good, not the fact that you randomly decide when to take your setups. If you have 100% confidence in your trading methodology, you should WANT to be in EVERY setup. If you are somewhat confident, very different story then obviously. There's no reason that a trader that knows their setups are solid and produce over the long haul that would WANT to pass on some trades. I'd love to know why you would want to screen out valid setups. That's kind of contradictory though - if you are screening out your valid setups, are they even valid to begin with? :rolleyes: I'd love to auto-trade all my setups if I found a programmer that could program how I trade. Easier said than done.

I guess we disagree there b/c I don't see how someone can randomly choose what setups they take and make money over the long haul. Unless your winning percentage is 100%, I don't see the numbers work in your favor. Again, it's semantics. This was beaten to death over at elitetrader and in the end, we are all gamblers in our life. When you walk down the street, you are gambling that a bus will not hit you. When you place a trade, you are gambling that your analysis is correct.

http://www.traderslaboratory.com/forums/f37/my-blackjack-strategy-1701.html#post10339

LOL What's wrong with taking a valid signal? In my opinion, EVERYTHING. If you have a valid setup, why would you say No Thanks? That's exactly my point - if you pass this time and it's a winner, you lose. If you take it next time and it stops out, you lose. Now, you should have at least broken even on those two trades, yet you are down money. The exiting is no different - if you say "I am going to exit on WRB's at the close", then you need to exit at WRB's on the close, not sometimes on the close and sometimes while they form. That's a losing game.

And on the topic of gamblers - we are all gamblers here. I know that traders don't always like to be referred to as gamblers, but in it's basic form, that's what we are doing here. We are gambling if the market is going to go up or down. And then we see what happens. This idea is the very definition of semantics at it's best.

In the end, consistency is key to success.

No, that was not the point at all... OK, let's start again... The point is that whether trading, playing cards, etc. you should have a set of rules that you follow each and every time if you expect to make money. You cannot randomly guess or flip a coin and expect to make money. In other words, you cannot take a trade based on setup XYZ and then pass on that exact same XYZ setup when it appears again b/c more often than not, you will be wrong twice. The blackjack analogy was just that - an analogy. You could substitute blackjack with horseshoes, solitaire, rummy, whatever suits your taste.

I mentioned in another thread about my "Blackjack Strategy" and wanted to explain further here. On another forum that I am on, there is an arcade section and members play games to get the best score among the group. Obviously it's a more casual forum than here. I was playing a number of the games, but kept coming back to Blackjack. Just in case you need more info on Blackjack, here's a couple sites I found thru google: Blackjack Rules, How To Play How to Play Blackjack - Blackjack 101 The game of blackjack is fairly straightforward once you have your rules in place, like trading. What I found myself doing the first few times playing was that there was no rhyme or reason to hitting or standing when my initial cards totaled 16 or lower. And that is where you make or break your game - what to do when you have 16 or lower and what to do based on the dealer's top card showing as well. So, like trading, after getting fed up of losing my $2000 initial fake money stake, I took a step back and said that I should have a plan (no matter how basic) if I wanted to stand a chance at making fake money. I then told myself that based on what I had and what the dealer's top card was I would do the exact same thing over and over again. The reason I bring this up is that I found myself losing twice instead of breaking even on many hands. Example - one hand I would have under 16 and hit and the next have under 16 and not hit. Turns out that over and over again, I was constantly wrong and lost twice when I should have at least broke even on the hands. The odds of picking the right way to play each time randomly is not in your favor. Once I realized that, the light bulb went on. You cannot in Blackjack or trading sometimes follow your rules and expect to make money. You simply cannot take one trade and then pass on the exact same setup the next time. Over time, the odds will work against you and you will lose twice. You'll lose actual money the first trade and you will lose the money you should have made on the subsequent trade. And it's not just about taking your setups. It's about how you manage the trade - entry, stop, profit taking, etc. You must do the same thing over and over again. Just entering the trade is part 1. For example, in the WRB thread I mentioned that when exiting using WRB's, you have to make the decision to either wait till the close of the WRB or exit while the WRB is being formed. You have to pick one and go with that each time. So now anytime I find myself over-thinking things, I just refer back to my Blackjack strategy and the example reminds me of what to do. After putting my basic plan in place I took over the first place ranking. My score was 10,400 with a starting stake of 2,000. It took 21.5 minutes to take my initial stake and increase it by 420%.

So here's the million dollar question pertaining to WRB's: When exiting, do you wait for the WRB to close or exit as a WRB is being formed. That is the big question here and I refer to the decision as my "Blackjack Strategy" which I mentioned in another thread and may post a better explanation here as well. In a nutshell, you must do the same each and every time. My current position on this question is to wait for the close. It's more mechanical and no 2nd guessing involved. Yes, some WRB's actually close lower or not a WRB at all. It will happen. But when a 4 pt WRB appears and you take 1.5 or 2, you just left a lot of money on the table. What do you think Pivot? Maybe Mark can share as well if he stops by.

Pivot, Glad to see you are still checking this thread out! Here's a chart from this morning from an actual trade. This chart is a 5 minute ES chart and as you can see, if you get long into the move near the open, three WRB's appear to provide nice exits. The net on this trade was +4.83 ES pts/contract.

Pivot - you still out there? :p Update: Considering how good the WRB's can be for exiting and since they are not as noticeable on a constant VBC chart, I have a 5 minute chart up during the day for the ES. If anyone out there is still reading this thread, I'll throw some screenshots up, but if not, no point in wasting time. So, anyone - Pivot or not - if you like this thread and like watching my progress on WRB's, let me know and I'll continue with updates. I just don't want to take screenshots, annotate them, post them here with explanations if I'm the only one looking at them!

Some people thrive on pressure, others don't. Only you know if you can make it work now or later. Personally, I thrive when it's crunch time. Don't know why, just how my genetics are I suppose.

I didn't mean to do that. I was just curious as to what active traders find easier to do (not necessarily what they would like to be doing) - either you find it easier to make solid money each day/week/etc or easier to go on some swings up/down. Again, not necessarily what you would WANT to be doing.

Interesting notouch!! That flies in the face of active daytraders like myself, but it is something that I have looked at more and more actually. It's very counter-intuitive actually - trade less, make more. Maybe even not trade during the regular session. That will mess with your mind! :rolleyes:

Note - I'm curious to see the results/posts and I have a follow up question to this once there's some data.