if you had to start over...

[The Bear 10]

I forgot to say, STOP LIMIT orders also work fine for me in the TS account for entries and I usually don't get bypassed even in fast markets.

[darthtrader 10]

bakrob99, I will certainly be scaling at some point. I really can't see though putting on 2 or 3 contracts with a 5k account risk wise.

 

Dalton really has my head swimming now. There was some quote from Mind Over Markets about trading logic only coming from putting on trades, something like that.

 

So what you guys think about this. Instead of trying to make money on this first 5k YM account, set a goal of trying to put on 100 trades and break even? Use a 10 point stop and an automatic 10 point profit target. Then keep putting on 100 trade blocks with the same 10/10 stop/profit until i have made money over the 100 trades? Basically like setup batting practice. That would seem alot more logical than backtesting to try to see if you actually have positive expectancy.

[bakrob99 11]

I understand that you are trying to keep the risk to a small % - but explain to me please what is the difference from the trades perspective if you place 2 contracts with a 5K account or 2 contracts with a 25K account. The market doesn't know.

 

I have found it easier to make $$$ by scaling out of positions which allows you to let the 2nd contract run ... the only way to make up for your inevitable stop losses.

 

Scalping makes your broker richer and you broker.

[BlowFish 10]

  bakrob99 said:

I understand that you are trying to keep the risk to a small % - but explain to me please what is the difference from the trades perspective if you place 2 contracts with a 5K account or 2 contracts with a 25K account. The market doesn't know.

 

--Snip--

 

The reason people keep limit risk on any single trade percentage of there margin is to prevent blowing up. Your risk of ruin grows significantly as you put more margin at risk on any single trade.

 

As an example if you had a rigged roulette table that paid red 60% of the time would you bet all of your stake each spin? How long would you last? Would you bet 2%? 10%? 50%? Why?

 

If you had a roulette table that paid 70% of the time would you risk more? How much more?

 

The objective is to stay in the game, money will come if you do (and you have a positive edge of course).

 

Cheers.

[Guest cooter]

  BlowFish said:

The reason people keep limit risk on any single trade percentage of there margin is to prevent blowing up. Your risk of ruin grows significantly as you put more margin at risk on any single trade.

 

As an example if you had a rigged roulette table that paid red 60% of the time would you bet all of your stake each spin? How long would you last? Would you bet 2%? 10%? 50%? Why?

 

If you had a roulette table that paid 70% of the time would you risk more? How much more?

 

The objective is to stay in the game, money will come if you do (and you have a positive edge of course).

 

Cheers.

 

Another reason not to overtrade and quit while you're well ahead for the day, and satisfied.

 

If I really traded ALL of my setups after reaching my daily goal (which was reached by noon EST already), I'd be burnt out and ready to give it all back to the market.

 

Even as I write this, just glancing at the screen I see 3 more setups which I didn't take....oh the horrors of it all!!!

[wsam29 10]

  cooter said:

LOL. Those who don't admit that they didn't blow up or nearly kill their very first futures trading account must be world-class traders by now.

 

 

Or they are liars!!!

[bakrob99 11]

  BlowFish said:

The reason people keep limit risk on any single trade percentage of there margin is to prevent blowing up. Your risk of ruin grows significantly as you put more margin at risk on any single trade.

 

As an example if you had a rigged roulette table that paid red 60% of the time would you bet all of your stake each spin? How long would you last? Would you bet 2%? 10%? 50%? Why?

 

If you had a roulette table that paid 70% of the time would you risk more? How much more?

 

The objective is to stay in the game, money will come if you do (and you have a positive edge of course).

 

Cheers.

 

I think you miss my point. Let's say you randomly enter long or short ... based on nothing - just flip a coin.

 

Can you come up with a strategy to make money under that condition?

 

I think you will have an easier time doing so if you have a chance to scale out and move your stop up to let the other half of your position run.

 

 

I met a trader who was complaining about losing money and was looking for a better entry technique (aren't we all). He took a mentorship with Linda Radsche - who demonstrated that she was able to make money based on random entries (long or short) by using proper money management. She demonstrated that it NOT ABOUT THE ENTRIES ... IT'S ABOUT THE EXITS.

[Guest cooter]

  bakrob99 said:

I think you miss my point. Let's say you randomly enter long or short ... based on nothing - just flip a coin.

 

Can you come up with a strategy to make money under that condition?

 

I think you will have an easier time doing so if you have a chance to scale out and move your stop up to let the other half of your position run.

 

 

I met a trader who was complaining about losing money and was looking for a better entry technique (aren't we all). He took a mentorship with Linda Radsche - who demonstrated that she was able to make money based on random entries (long or short) by using proper money management. She demonstrated that it NOT ABOUT THE ENTRIES ... IT'S ABOUT THE EXITS.

 

Well said.

 

Book half your profits when you can, and let the rest runaway....

[Guest cooter]

  bakrob99 said:

I understand that you are trying to keep the risk to a small % - but explain to me please what is the difference from the trades perspective if you place 2 contracts with a 5K account or 2 contracts with a 25K account. The market doesn't know.

 

The market doesn't know, but YOU do.

 

And 2 contracts on a 25K account isn't as significant (financially or psychologically) as 2 cars on a 5K account.

 

And if you're going to do that, you may as well treat the 5K account as a throwaway, test account, rather than a true trading account. The more capital you have, for the same amount traded, the less stress and exposure you have to financial and emotional ruin.

[darthtrader 10]

  bakrob99 said:

I think you miss my point. Let's say you randomly enter long or short ... based on nothing - just flip a coin.

 

Can you come up with a strategy to make money under that condition?

 

I think you will have an easier time doing so if you have a chance to scale out and move your stop up to let the other half of your position run.

 

 

I met a trader who was complaining about losing money and was looking for a better entry technique (aren't we all). He took a mentorship with Linda Radsche - who demonstrated that she was able to make money based on random entries (long or short) by using proper money management. She demonstrated that it NOT ABOUT THE ENTRIES ... IT'S ABOUT THE EXITS.

 

bakrob, thats very interesting. could you go into some of Linda's exits if you know them?

please no one here take anything i post as if i know anything, i'm a blank slate looking to be molded. i'm not here to make the quick buck though.

hell, i have seriously considered that since most newb traders blow up, why not pay a relative to go in and randomly alter my entry system to the negation of my trade 85% of the time.

obviously though, thats not exactly the point here, just making money as a newb.

[BlowFish 10]

  bakrob99 said:

I think you miss my point. Let's say you randomly enter long or short ... based on nothing - just flip a coin.

 

Can you come up with a strategy to make money under that condition?

 

I think you will have an easier time doing so if you have a chance to scale out and move your stop up to let the other half of your position run.

 

 

I met a trader who was complaining about losing money and was looking for a better entry technique (aren't we all). He took a mentorship with Linda Radsche - who demonstrated that she was able to make money based on random entries (long or short) by using proper money management. She demonstrated that it NOT ABOUT THE ENTRIES ... IT'S ABOUT THE EXITS.

 

Yes its pretty easy to come up with a stratergy to make money on random enteries, try it, it works. If you can do it with a small basket of diverse instrumens you can actually make reasonable and consistant money. Also I agree with what you say about exits being key, (though of course good entries can help :-) (sorry I did not get that from your original post).

 

If you scale in and scale out thats fine but to make any sense of what you are doing you must evaluate each part of the trade sperately. For example if you enter with 2 lots and a stop of - 1.5 take half off at +1.5 and trail a stop on the rest -- evaluate this as two seperate trades (that share the same entry criteria) a 1.5 scalp with 1:1 RR and the bigger swing with trailing stop.

 

You will surely discover they have different characteristics. The 1:1 almost certainly will smooth your equitey curve and often times is actually more profitable than the trailing part. Also if you take say 3 losses with 2 contracts you will need to have 6 wins at the 1:1 target or a win where the trailing portion goes to +7.5 points to get back to where you started. With 5 losses (inevitable with a 50% 60% or even 70% system) things can start to get ugly. Of course each to there own but I prefer to take everything off at 1:1 and have a higher % winners or trail everything if there is good momentum going.

 

Really the big advantage of the scale out type senario is psychological. The thinking goes once you have 'paid for the trade' you are 'playing for free'. It certainly wont increase your bottom line - either the trailing piece or the fixed peice will be more profitabe. It can be no other way. If you look at your results (real or simulated) you will see this clearly.

 

Many 'pros' will actually advise scaling in rather than out. (certainly the trend traders). The thinking is that a trade is most at risk early in its life so it is better to take a loss on a small portion of your position. From a maximising profit point of view this is a better propsition. Of course maximum profit is not the only objective. As I mentioned before psychological comfort and or a smooth equity curve may be more important to you. If you dont run the figures how can you know?

 

My point really is do your own due dilligence - examine your figures (with a simulator if you dont have real data) and really understand what effect changing parameters will have. If you wanna know if coin toss entries work and how they work - try it for yourself - thats the only way you can be sure.

 

And of course really understand RoR. That really is the key figure for deciding position size. While it is partly true to say that most traders fail due to undercapitilisation or overtrading (trading too big for there account size) imo its because they do not understand the RoR.

 

Cheers.

[The Bear 10]

  cooter said:

Another reason not to overtrade and quit while you're well ahead for the day, and satisfied.

 

If I really traded ALL of my setups after reaching my daily goal (which was reached by noon EST already), I'd be burnt out and ready to give it all back to the market.

 

Even as I write this, just glancing at the screen I see 3 more setups which I didn't take....oh the horrors of it all!!!

 

Great thread guys. Hey cooter it's all about the momentum now....have you been trading RBOB? I'm bullish on henry hub too...for the moment.

 

I've been missing alot of action on CL though since i've been stuck entertaining a girl. I come back and look at the days end and my jaw drops. Now is the time though.... Good old HAL even looks like it might be turning.

[Guest cooter]

  The Bear said:

Great thread guys. Hey cooter it's all about the momentum now....have you been trading RBOB? I'm bullish on henry hub too...for the moment.

 

I've been missing alot of action on CL though since i've been stuck entertaining a girl. I come back and look at the days end and my jaw drops. Now is the time though.... Good old HAL even looks like it might be turning.

 

Another reason to find a gal who is outta your way during the trading day - otherwise she can definitely mess with your P/L!!!

[bakrob99 11]

  darthtrader said:

bakrob, thats very interesting. could you go into some of Linda's exits if you know them?

please no one here take anything i post as if i know anything, i'm a blank slate looking to be molded. i'm not here to make the quick buck though.

hell, i have seriously considered that since most newb traders blow up, why not pay a relative to go in and randomly alter my entry system to the negation of my trade 85% of the time.

obviously though, thats not exactly the point here, just making money as a newb.

 

 

Sorry ... I can't really as I never spent any time in her room ... but I think the point is that professional winning traders know how and when to exit... and do not get as caught up in the perfect entry as novice traders do.

 

How many times (especially recently) have you seen time and sales data roaring away, momentum clearly higher or lower, and fretted about how to get in... only to see the market move 10 or 20 ES points from the time you noticed the trend. Happens all the time.

 

My advice: Get in .. 1 contract to start... and get ready to add to it... wait for the first green bar in a downtrend (red in an uptrend) and the next time the bar color changes back to red, add to your position. Leave your stop at breakeven. If it's late in the day, plan to exit at the close.

 

Major moves... scaling in... building positions... managing but accepting risk. Those are the trades which build account balances.

 

I admit - I don't do it. I have to use an automated strategy which doesn't care about how much it's made in the trade - just how much it plans to make. Since that has happened for me, trading has changed to the upside.