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gifropan

What Do You Do when You "miss " a Trade

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I have found that there is a wealth of good trading advice here so here is a question that I have been grappling with for some time.

 

I often find myself in a situation where I have failed to enter a trade at my intended price and the market has moved away in the direction I wished to trade. I often find that, out of frustration, I get tempted to chase the move saying to myself "if you had got your price you would still be in the trade" The result of this is that if I get stopped out, I loose more than I initially intended and also what would have been a scratch trade if the market came back will now be a loosing trade. I would be grateful for any ideas from TL members on how to deal with this kind of situation.

 

Thanks

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  gifropan said:
I have found that there is a wealth of good trading advice here so here is a question that I have been grappling with for some time.

 

I often find myself in a situation where I have failed to enter a trade at my intended price and the market has moved away in the direction I wished to trade. I often find that, out of frustration, I get tempted to chase the move saying to myself "if you had got your price you would still be in the trade" The result of this is that if I get stopped out, I loose more than I initially intended and also what would have been a scratch trade if the market came back will now be a loosing trade. I would be grateful for any ideas from TL members on how to deal with this kind of situation.

 

Thanks

 

 

If I miss a trade, I wait for the next one. There is always a next one.

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I think it depends on how far it's moved in relation to your ideal entry price. If it's under 5 ticks, I would consider getting in. If there's been a big move, I would just wait for the next one.

 

Depends on how aggressive you want to be.

 

Of course the easiest way around this is to get in @ your ideal entry. Easier said than done, I know how that goes.

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The thing I do is get really really mad at myself, no no just kidding those days are behind me now.

 

But seriously enquire as to why you didn't execute your trading plan to the letter, is it because you don't trust your system or do you have a fear of losing.

 

I know for myself I have a need to be perfect when it comes to trading and if I allow this need to get in the way of my trades I freeze and no trades eventuate, so I have a sign on my trading computers to remind me that trading is all about probabilities which allows me to trade freely.

 

If you are blocked in anyway and you have a system that works the anwser generally lies btw ones ears.

 

I always look inward to find out what is going on with my trading when issues arise.

 

Hope this helps

 

cheers

 

1pipatatime

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Yes its a tough and very frustrating situation to be in...what is frustrating is that you had a theory and it didnt pan out the way you thought....hence the "answer" of how price actually works comes into question...yet again...

 

The chasing is an attempt not to miss out...ie we feel abandoned by the market and thus in turn we abandon ourselves by leaving our rational/system and hence chase price to recconnect ...

 

The chasing of price is an attempt to stem the unpleasant feelings we experience when we recieve that narcissistic blow that we dont know why price moved against at that point in time. Its at this moment when we truly want something to happen and it doesnt that makes us all truly vunerable as these states are an old replay of what happened to us well before we ever thought of taking up trading.

 

To break this pattern you have to start to feel the comulsive nature to it...the wanting to grab or push your idea onto the market. We all at some stage try to force the market to mirror our needs. When it doesnt we get very angry/frustrated. When you go down deeper about this you will see a form a mixed feelings...like a chaos...to stop ourselves from experiencing this type of state we sort of automatically grab for the first thing we think about or even the first thing we see...if you practice seeing this chaos more and more it starts to change and the automatic , comulsive side will start to abade...Hence the more conscious one is of this the better one is able to stick the ones rules and not identify with where the markets at. Instead one can stay centered and detached from it and play the game from ones own perspective.

 

 

 

All the Best

 

John

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  1pipatatime said:
The thing I do is get really really mad at myself, no no just kidding those days are behind me now.

 

But seriously enquire as to why you didn't execute your trading plan to the letter, is it because you don't trust your system or do you have a fear of losing.

 

I know for myself I have a need to be perfect when it comes to trading and if I allow this need to get in the way of my trades I freeze and no trades eventuate, so I have a sign on my trading computers to remind me that trading is all about probabilities which allows me to trade freely.

 

If you are blocked in anyway and you have a system that works the anwser generally lies btw ones ears.

 

I always look inward to find out what is going on with my trading when issues arise.

 

Hope this helps

 

cheers

 

1pipatatime

 

 

 

I am not saying that I missed the trade because of lacking the confidence in the system. Sometimes you miss a trade because the market either moved to quickly for you to act or occasionally some hesitation. Often it reaches my initial profit objective as well which is quite frustrating. Do you ever recommend chasing the market.

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Someone says: trading is like riding the subway...always there is another trade just minutes away, the key is keeping a level mind because the will come and you have to be ready for the next.

 

Sure, Easier said than done. I try to keep in mind

 

imho

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I approach it this way: if the missed trade was a setup I look for, if it follows my rules of entry, and it's successful, then it verifies and validates what I'm doing... which gives me more confidence to take the next one. And as many wiser folk have already said, there's always a next one.

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  gifropan said:

I often find myself in a situation where I have failed to enter a trade at my intended price...

 

Hi gifropan,

 

You should try to determine why you're missing your initial trade entries if it's a recurring pattern. There are many reasons for this, but I think one prevalent reason is the following. Many times traders hesitate to pull the trigger because they're looking for more trade confirmation. As others have said, this could be due to lack of confidence in your system or yourself as a trader, which I think is usually resolved with experience. Experience builds confidence and knowledge, which is why I think it takes years to become a successful trader. Another reason may be a trader's struggle to deal with the uncertainty that is inherent in trading and will always exist. If this is the case, then I think you simply need to embrace uncertainty as it is uncertainty that creates opportunities in the marketplace, otherwise everyone would know what something is worth.

 

One thing that took me a while to learn was that the best trades do not give a trader much time to enter. Hesitate and the opportunity is most likely gone (i.e., the trade moves away from your entry very quickly). If a trade gives you a lot of time to enter, than it most likely isn't a very good trade and everyone already sees it - there's no edge if everyone sees the same trade. I don't know if this applies to you or not, but these were some issues that I struggled with and maybe you can relate to them as well.

 

Regards,

Antonio

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My work space has to be incredibly clean. So when I miss a trade, I take a post it note saying "Follow The Plan" and stick it to my monitor. It drives me crazy! It makes me pay attention, and when the next set up comes I deff take it so I can take that damn bright pink post it note off my monitor. I can only take the post it note off if I take a trade. If I miss another set up then I stick another one on there.

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After reading some of the other replies here, I would say whether or not you chase and what to do depends on...

 

1) How many trades do you get per day? If you are a 1 and done trader, then you might need to chase a bit. If you get 5, 10 or more trades per day, missing 1 may not be a big issue.

 

2) How far are you willing to chase before letting it go? IMO a few ticks is not worth missing a winning trade over.

 

3) And the real question is - why are you missing winning trades and what can be done to stop it? That's probably the most important question of this entire thread.

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Great topic and some really good replys.

 

Here are a couple of famous sayings that might help you.

 

When you are sitting there watching that trade run away from you, remember, "It is always better to watch a trade wishing you were in it, than watching a trade and wishing you weren't.

 

Also please note that if you wish to chase, the last one in the water swims with the turd.

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  Disco Scottie said:
I approach it this way: if the missed trade was a setup I look for, if it follows my rules of entry, and it's successful, then it verifies and validates what I'm doing... which gives me more confidence to take the next one.

 

100% with you on that Scottie. I take pains to record all the setups which action on my rules - so if I miss an entry due to my own hesitation or for whatever reason, I still have evidence of my setup working (or otherwise). I then record results of my paper trading separately from trades I took, which still enforces a degree of accountability to the trading plan - which I think is very important.

 

For me it comes down to body-of-evidence... the more you record and study your setup in action the better you can refine it and manage the trades you do get an entry into. So a missed trade, however successful, is really just another opportunity to train yourself for your next entry. It's not always easy to convince yourself into this positive mindset but well worth trying, imo as it will benefit your cash trades long term while frustration over missed opportunities will only force more errors and chasing on your part. :crap:

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re What Do You Do when You 'miss' a Trade?

  Quote
I often find myself in a situation where I have failed to enter a trade at my intended price...

No good general answer!

Depends on

1. what kind of system you’re trading and

2. why you’re missing trades.

 

if you’re scalping and/or trading high frequency setups then take a fly fishing attitude - wait / reel it in and cast again

if it’s a system that requires nimbleness, consider moving your time frame around by little bits until you dial it in for yourself.

if it’s a breakout system then maybe create a contingency entry plan (like on 1st retracement – btw being aware that this is a wholly separate new system with different stops and targets and statistics, etc.)

if it’s a trend system, just get in as soon as possible / give up a few ticks. with trend systems you have to be in every single time to make sure you’re on board for the outliers.

if the system is missing too many limit order entries – give up some precision and get a little fuzzy with it. Consider placing an array of orders to fill the position - with only a small number of cars at your ideal entry point, etc

 

re #2 why.

Do some digging around with your trading fears and biases…

 

Somewhere you may not be willing to pay either or both the explicit stop size and/or the implicit composiite risks of unlucky, deserted, wrong, loss pains to find out if a trade is good or not…

 

Mark Douglas talks in terms of thinking in probabilities. You may have to take it way beyond that and totally freakin completely surrender to probabilities…

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Try this, if your missing by a few ticks and the trade hasnt really taken off yet and the set up is good to begin with jump in where it is and add to your position where you wanted to be, If it does indeed come back on you. Then scale some out at the original entry price.

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  ckait said:
Try this, if your missing by a few ticks and the trade hasnt really taken off yet and the set up is good to begin with jump in where it is and add to your position where you wanted to be

 

Good advice ckait, I actually do this on a daily basis and as long as you manage the risk you take with that first entry then a little while in the red (as price hopefully retraces to a more favorable entry point) is usually a small price to pay for catching some good moves. As with lots of aspects of entries, this strategy's success comes down to confidence in your trading plan. Taking an average entry and / or increasing your stake / risk at a better level.. all this is undoubtedly nerve racking at times and it definitely requires commitment to your strategy and plan. Find that and the rest should come naturally. :)

Edited by Bear Mtn.
shortened the quote to just the relevant part..

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Don't chase. Use your paitence, discipline, and confidence.

 

Your entry should be where it is because of your plan. if you chase, you increase your risk and are not following your plan.

 

Whether you like it or not, you really have no idea of what price would do if you chased and entered. Your entry could have been the little bit extra that some other trader needed to see to execute an entry in the opposite direction.

 

It's really only an assumption that price would have done what it did if you chased and entered.

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To me, chasing implies a deviation from a plan and therefor a lack of disicipline. Chasing happens when you enter because you are afraid you've missed something. If this is the case, and you enter, you've lost no matter what the outcome of the trade. Disicpline is far more important than any one trade and the developing of that kind of behavior will cost you far more in the long run than any trade you may "miss".

 

If its a part of your plan, then its not a chase IMO. So "chasing" can only be defined on a case by base basis.

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How many times do you get into the right position on the first try? What is it that you trad e? I dont trade patterns per say. They are patterns I recognize that have to do with supply demand and the agressiveness of the participants. Its not always exctly clear, the market doesnt work that way, you get a set of events that make people want to buy agressive sell agressive, or or you get professionals playing two tick charlie taking money from newbs. How many times do you find yourself in the right position only to be shaken out by two ticks? Bet it happens all the time. Do you buy the first sign of agressive buyers after a 10 handle sell off? Or do you wait for the re test of the same preice to see if they come back in? Do you wait for anothe push lower after than the initial sign of eager participiants? I will enter on all of these senarios. The way you handle the risk of you positions will determine if you are sucessfull. Not the enrty price. Just some insight for those who still view things in one dimension. Happy trading!

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  ckait said:
The way you handle the risk of you positions will determine if you are sucessfull. Not the enrty price.

It depends on how you mean that. The risk management is bound with the entry price. In another words, possible ways of your risk management are always determined by the place where you enter. This is not to say that there is only one good entry within every setup. But each entry requires different management and some may be better than others.

 

And that also gives an answer for what to do when one misses a trade. If one is able to define subsequent possible entries within the setup, entries which allow for managable risk within one's limits, then he can look for these entries if he misses the primary one. If he is not able to define such subsequent entries, then he must give up on entering, because he has no way how to manage the risk then.

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  ckait said:
How many times do you get into the right position on the first try? What is it that you trad e? I dont trade patterns per say. They are patterns I recognize that have to do with supply demand and the agressiveness of the participants. Its not always exctly clear, the market doesnt work that way, you get a set of events that make people want to buy agressive sell agressive, or or you get professionals playing two tick charlie taking money from newbs. How many times do you find yourself in the right position only to be shaken out by two ticks? Bet it happens all the time. Do you buy the first sign of agressive buyers after a 10 handle sell off? Or do you wait for the re test of the same preice to see if they come back in? Do you wait for anothe push lower after than the initial sign of eager participiants? I will enter on all of these senarios. The way you handle the risk of you positions will determine if you are sucessfull. Not the enrty price. Just some insight for those who still view things in one dimension. Happy trading!

 

You've listed several very good reasons not to chase. If you wait, it will come back a lot of times.

 

An entry should be a range of prices (ticks/pips) the best giving you the smallest risk. If an entry is 1 price only that makes it tougher to enter.

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Alot of times it does but more often than not it doesn't. the trades Im interested are daily range trades not 2 or 3 ticks and usually there is one shot, if you miss it you need to be quick and creative if you want to get in.

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