Market Profile ~ the Hope and Fear of It All.

[i trade 10]

Market Profile – The Hope and Fear of it all.

 

I wanted to start this little thread and see what kind of feedback and conversation is stimulated. Everyone has their own style - I’m going to show you mine.

 

Hope and fear…it’s perfectly normal to experience these emotions but over time I came to realize that I was experiencing them in a way that was detrimental to my trading results.

I don’t remember where or from whom I learned this but here’s the idea: Hope belongs with the winners, fear with the losers. In the “old days” I had it all backwards. I hoped my losers didn't go any further against me and I feared letting my winners run, worried that they would turn and come back on me. Now I hope the winners run in my favor and fear letting losing positions run against me. I’m far from perfect, I’ll say without any hesitation that the biggest hole in my trading game today is not getting as much as I can out of my runners. I’m a scalper by nature, usually scaling in and out, so letting some run has always been an obstacle for me…one that I am slowly overcoming. But on the flip side of the coin getting out of a losing situation, especially when market condition has changed against me, is second nature. That’s where MP comes in. It gives me a sense of control and confidence in which my emotions, for the most part, are kept in check. This sense of control also gives me confidence in determining my bias and accepting my risk points (the correct risk points, not financially controlled stops). And that is the base from which I trade on.

 

On a side note I didn’t realize how time consuming it can be to write a detailed post. As it is I have been so focused on trading lately that I feel like I don’t spend enough time with my family and have been barely getting by on 5-6 hours sleep a night so we’ll see how it goes. All though I have devoted an incredible amount of time, energy, and passion towards the markets over the years(trading on and off for over 10 years), during this past year I have transitioned into full time trading so it’s been even more intense. In 2010 my 2 major goals have to do with balance: 1) Developing more balance between trading and the rest of my life, and 2) refining the balance between scalping and letting my winners run.

 

I’ve found that as I’m writing one thought can quickly lead to another. Bear with me as I try my best to communicate my thoughts in a rational way. I guess I'll just go about it from a general view point and then focus in on specific ideas and questions as I go.

 

Another issue I've come across is that what I am seeing develop in real time, as profiles and value areas build, might be hard to explain visually after the fact. As the day wears on profiles and value are constantly developing and shifting especially as I merge profiles on shorter timeframes to put value into a clearer context. We’ll see how it goes.

[DugDug 10]

" I hoped my losers didn't go any further against me and I feared letting my winners run, worried that they would turn and come back on me. Now I hope the winners run in my favor and fear letting losing positions run against me."

 

Very good quote - you will see this thought repeated by a lot of top traders who basically run with the idea of trying to avoid the losses and letting the profits look after themselves.

(especially from people who are not day traders - but it can be applied to both.)

 

I always thought that hope was a dirty word to be avoided, but in your context its very valid.

Good luck with the thread, I am sure writing things down will help you clarify ideas, thoughts and plans.