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TraderFoo

What Would Have Been a Good Way to Trade Today (monday 7/27)

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I got chopped out of almost every trade today. Stopped out by 1 tick, made my stops bigger, got stopped out by 1 tick again .. and so on :crap:

 

So hindsight being 100%, I still don't know what the best approach would have been.

 

Maybe there's not a great answer to this post .. and in that case it will just serve as me venting :frustrated:

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I got chopped out of almost every trade today. Stopped out by 1 tick, made my stops bigger, got stopped out by 1 tick again .. and so on :crap:

 

So hindsight being 100%, I still don't know what the best approach would have been.

 

Maybe there's not a great answer to this post .. and in that case it will just serve as me venting :frustrated:

 

The best way would have been to have followed your trading plan. Does your trading plan say to make your stops wider? How about stop trading after x number of losses/ticks?

 

If you had a trading plan, you wouldn't have to wonder what you should have done differently today as you already would know that just following your plan is all you need to do and that losing days are just part of the business.

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great point, thanks :) .. i have a trading plan template here on my computer... but never did anything with it.

 

playing it by ear as i learn has only got me under/over/and back to break-even on my account, so a trading plan sounds like the perfect next step.

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I got chopped out of almost every trade today. Stopped out by 1 tick, made my stops bigger, got stopped out by 1 tick again .. and so on :crap:

So hindsight being 100%, I still don't know what the best approach would have been.

Maybe there's not a great answer to this post .. and in that case it will just serve as me venting :frustrated:

 

 

 

what are you trading?

what resolution is your analysis?

 

if you post your chart (or desktop), people can offer more applicable suggestions.

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great point, thanks :) .. i have a trading plan template here on my computer... but never did anything with it.

 

playing it by ear as i learn has only got me under/over/and back to break-even on my account, so a trading plan sounds like the perfect next step.

 

If you don't have a plan and just play it by ear, you are in essence making random trades. With random trades, you should also expect random results.

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I mostly trade ES, 1-2 contracts on usually 500 tick or 2 minute charts during the first 2 and last 1 hour of the regular hours. I usually run a 2-3 point stop and trade gaps and pullbacks to pivots.

 

i think sevensa pretty much hit it on the head though. regardless of the feedback i got, it would not have been as bad if i was following a plan instead of chasing, moving stops, and not just shutting down the computer after consecutive bad trades. (if that were part of my plan)

 

usually i have a lot more discipline, but i think doing so well last week that i let it get to my head. last week i had my best day, today i had my worst day. it's a great lesson.

 

i need to find some good parameters/limits for a trading plan on a smaller account. ($5k) and more importantly, then, i need to follow it.

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A few thoughts..

 

Two cars is too much for a $5k account, especially while you're learning. A learning trader doesn't want high leverage, as you want to make your mistakes as cheaply as possible. I recommend that new traders start by trading ETFs (even on a swing basis), so they can formulate a strategy and get to real money as soon as possible. That way, you can make a whole lot more mistakes, and learn a lot more, for less money.

 

Also, a lack of a plan is the greatest downfall of a trader. Until you have a set plan that can be followed, trades are based on your whims. You end up chasing, averaging down, etc. Find a methodology that suites you, discover an edge (and verify that the edge actually exists), and practice it.

 

When you're trading based on probabilities of success (any bona fide edge), you're playing a game that I've told several newer traders. Pretend I have a 6 sided fair dice. If 1, 2, 3, or 4 rolls, you pay me $10. Otherwise, if a 5 or 6 rolls, I pay you $40. You're allowed to play as much as you want. Do you play the game? I would in a heart beat: the expected value per roll is +$6.67. However, on any one roll, I'll likely lose. Further, the outcome of any one roll doesn't matter at all.

 

Trading is the same. With an edge, you're playing a probabilities game. The outcome of any one trade doesn't matter. You'll have streaks where you lose several in a row, and you did nothing wrong. A losing trade shouldn't bother you at all, just as a losing throw of the dice wouldn't bother you. But you'll never know until you form a solid plan.

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I got chopped out of almost every trade today. Stopped out by 1 tick, made my stops bigger, got stopped out by 1 tick again .. and so on :crap: So hindsight being 100%, I still don't know what the best approach would have been. Maybe there's not a great answer to this post .. and in that case it will just serve as me venting :frustrated:

 

We use biases from higher time frames to keep us out of trouble and in opportunity regardless of the speed of the market.

 

In a previous post on bias based trading I have described how to formulate such indicators of bias.

 

Here is a shot of the last 5 hours of trading in today's (7/27/2009) ES. Times are PST.

 

biastoday.jpg

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We use biases from higher time frames to keep us out of trouble and in opportunity regardless of the speed of the market.

 

In a previous post on bias based trading I have described how to formulate such indicators of bias.

 

Here is a shot of the last 5 hours of trading in today's (7/27/2009) ES. Times are PST.

 

biastoday.jpg

 

Urma,

I have been looking for a nice chart like the one you showed today to Trader Foo.

I have Trade Station but I have never seen that chart. Did you set it up or is there a canned chart area that I am missing?

If you made it would you be willing to share?

Thank you,

estate1997

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Urma,

I have been looking for a nice chart like the one you showed today to Trader Foo.I have Trade Station but I have never seen that chart. Did you set it up or is there a canned chart area that I am missing?If you made it would you be willing to share?Thank you, estate1997

 

Here is a link to a thread on this board that I posted as a primer on how to formulate such an index of weighted biases.

 

http://www.traderslaboratory.com/forums/f34/primer-formulation-index-weighted-biases-6400.html

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