ES frustration today

[brownsfan019 17]

 

So what are the ways to exit with a profit?

 

1. Being stopped out.

 

2. Exiting a position because the day session is about to end and you are a day trader.

 

3. Emergency situation that is going to take you away from the computer screen. And thus not allow you to watch the position.

 

4. Have set profit targets before entering the trade and exit when these price levels are hit. Which in turn, can also lead to the possibility of entering a trade in the same direction as the previous trade once the initial profit is taken out.

 

If price move against you, things are different. Do you really need to wait for your stop to be hit to know you are on the wrong side? If your initial stop is based on an area where if hit, all conditions (for your trade)would be changed, then waiting for the stop to be hit still makes little sense. Before it is hit, you know you may be right on direction but are wrong on timing.

 

Until my stop is hit, I am not wrong. I do need my stop to be taken out to show me that I am wrong. Until then, I have a great possibility of reaching profit.

 

Why not get out, with the intention of re-entering when price starts moving in the direction of the initial trade?

 

This is a possible rule to follow when trading. I personally choose to just let my trade go and either prove me wrong - by hitting my stop - or prove me right - by taking my profit target out.

 

A market moving sideways would be the same thing. The non-directional movement means you are wrong on timing, but could be right on direction.

 

I would rather get to the party 'early' than too late. Now, if you work under the assumption that your direction is correct, then why on Earth exit the trade? If you are correct, but early - why can't you just sit tight and give it some time?

 

Another thing to consider is this: Capital tied up in a trade has an opportunity cost. Most people do not trade multiple tradable (although they should), and if you have capital tied up in a trade that is going nowhere, that is money that can not be put into a market that is moving. Trend followers need trend. Some market somewhere is always trending. If a trend follower has capital tied up in a trade that is not trending, he is missing out on the very thing that gives him is edge-trend

 

This is really just a function of the size of the account and the size of the current trade working. If you are trading e-mini's at $500 margins, you can trade 5 different markets on a $2500 account. If a person is over-leveraged in one trade, then something needs to be adjusted to the rules that are being followed. Now, I will aslo mention that trying to focus on too many markets for a newbie can be distracting and overwhelming. I personally trade 3-4 markets as I prefer to focus extensively on a small number of markets and understand how they move and react vs. trying to trade multiple futures, forex, options, and stocks.

 

Pivot - great discussion here. I hope others do not take offense to this discussion, but I hope we are providing a few sides of the story to the OP and others reading. Hopefully our experiences of trading can help some other traders thru the very difficult learning curve...

[Anonymous 11]

And that is one way of trading. Another way is to be confident in your entry and stop level and then let the trade work. This will reduce commission costs considerably and help prevent overtrading.

 

 

The question boils down to this: at what point do you know you are on the wrong side of the trade? Does you stop have to be hit for you to know that?

Why not one tick before? How about 4 ticks before.

 

At some point prior to the stop being hit, you know you are on the wrong track. Why not exit at that point?

 

I guess I should of mentioned I also believe in UNDER TRADING IN BOTH SIZE AND FREQUENCY.

 

Hence I talked about entering at the right time to avoid the need to exit during the sideways action. Also note that I did not say jump aboard the market in the opposite direction. Here we are talking as if you got the direction right, just not the timing. Get out and wait. but be nimble.

 

And again, Pit traders are not worried about commissions. As I said, these two gentle men are pit traders.

[brownsfan019 17]

The question boils down to this: at what point do you know you are on the wrong side of the trade? Does you stop have to be hit for you to know that?

Why not one tick before? How about 4 ticks before.

 

At some point prior to the stop being hit, you know you are on the wrong track. Why not exit at that point?

 

I am wrong when my stop is hit. Not one tick before or one tick after. That's it. Until my stop is hit, I am not wrong, even if the trade is in the red currently. A loss does not become real until the stop is hit or until a trader hits the flatten button prematurely.

 

I guess I should of mentioned I also believe in UNDER TRADING IN BOTH SIZE AND FREQUENCY.

 

Hence I talked about entering at the right time to avoid the need to exit during the sideways action. Also note that I did not say jump aboard the market in the opposite direction. Here we are talking as if you got the direction right, just not the timing. Get out and wait. but be nimble.

 

So, we want to be nimble and exit trades quickly, but also under trade? If you are quickly hitting the flatten button and then quickly re-entering, I believe that's the opposite of under trading.

 

And again, Pit traders are not worried about commissions. As I said, these two gentle men are pit traders.

 

I understand that, but as RETAIL traders commissions are a factor, especially based on what has been negotiated. We are all retail traders here, not pit traders, so to ignore commissions is a mistake in my opinion. If you are trading the YM and paying $5 round trip, you've just added another tick to your stop losses. To me, that's something that needs consideration.

 

Until tomorrow, good trading everyone. Time for this trader to get off the computer already!

[Anonymous 11]

...Until my stop is hit, I am not wrong. I do need my stop to be taken out to show me that I am wrong. Until then, I have a great possibility of reaching profit.

 

If your stop is placed at a point where the conditions for the trade become invalid at your stop level that would be one thing. But you still should be able to see you are wrong on timing and Possibly right on direction.

 

Most people, however, use money stops. They base stops on the size of their account or on some risk to reward matrix. If your stop is based on how much you are able to lose, why not exit sooner once you realize that you are on the wrong side. You don't have to lose all of what you risked to be wrong.

 

This is one of the times that you can limit your losses. Sometimes the market will move against you and hit your stop. Other times the move towards it will be gradual and you can save capital by an early exit. CAPITAL PRESERVATION IS THE NAME OF THE GAME, AFTER ALL.

 

I would rather get to the party 'early' than too late. Now, if you work under the assumption that your direction is correct, then why on Earth exit the trade? If you are correct, but early - why can't you just sit tight and give it some time?...

 

As a trader I need movement. If the market is not moving then nothing is being done. If you believe that one of the edges an off the floor trader has, is trend, then why enter a trade when trend in not present? Yes, the assumption was that the direction is correct. What is not known is how long the distribution/accumulation phase will be. While you're sitting tight waiting for the market to be marked up or down, there may be another market being marked up or marked down.

 

***As for profit target exits:

 

I am glad they work for you. I believe exiting at a target is speculating on the future when it is not necessary to do so.

 

*****One more thing: I am very glad that we are able to have a civil debate on a topic without the name calling and boorish insults of the other sites. Thank you Soultrader for community such as this.

[walterw 10]

I believe we all learn in this type of debate... thought we can clearly think diferent.... if we all think the same there would be no market.... I cant help it but I will attach an excell with my input... hope it helps... cheers Walter.

Timing Keymoo Trade.xls

[torero 10]

It's great to quotes great traders and try to emulate their success such as Mark Fisher and others, but you always have to put thing in proper context. First, he trades size in the pits, thus he has low commission costs, he can see everyone's hands better than retailers with the screen in front of us, and he's more concerned about how to get in and out with his large positions. I believe most of us cannot do what he does, we can't afford fees and scrape a profit with so many trades, we cannot see others' hands and those intangible cues like pit traders have (noise level would hint a more activity to come), and our positions are so small we only think about getting in and out at the price we want, not when we have to like he does. All I'm saying is comparison is fine but proper context must be exercised. This is why books cannot conveyed nuances.

[torero 10]

I believe we all learn in this type of debate... thought we can clearly think diferent.... if we all think the same there would be no market.... I cant help it but I will attach an excell with my input... hope it helps... cheers Walter.

 

Excellent illustration, walter! This is exactly my method as well. Knowing where the S/R is helpful but remember it's not glass, but rubber band. This is the reason I use the confirmation after a breakout, to find the pivot to set my stop close to it, despite it having violated the S/R level by pushing farther in than expected.

[TinGull 10]

As Soul would say....it's amazing to see how many different ways so many people can profit from the same markets. It really is something amazing when one person sees things a little differently than another, yet both can seize opportunities to make money in the same markets.

[brownsfan019 17]

If your stop is placed at a point where the conditions for the trade become invalid at your stop level that would be one thing. But you still should be able to see you are wrong on timing and Possibly right on direction.

 

Right, and if I have to sit tight to let the trade work, then I will vs. exiting and then re-entering later.

 

Most people, however, use money stops. They base stops on the size of their account or on some risk to reward matrix. If your stop is based on how much you are able to lose, why not exit sooner once you realize that you are on the wrong side. You don't have to lose all of what you risked to be wrong.

 

This is one of the times that you can limit your losses. Sometimes the market will move against you and hit your stop. Other times the move towards it will be gradual and you can save capital by an early exit. CAPITAL PRESERVATION IS THE NAME OF THE GAME, AFTER ALL.

 

I found that the problem with thinking like that is you are going to exercise too much discretion on when to flatten a position, which in turn could turn into a winning position - just like the OP's initial post. I guess my view is that if you are not going to honor your stop, why place one to begin with? That just turns into a mental game - you have a hard stop on your DOM, but you know in your mind that you will probably hit the flatten button before that level is reached. So, the question becomes how and when do you flatten and why? I think there's too much discretion being exercised there, especially for a new trader. In the end, most new traders will hit the flatten button very quickly and end up taking many, many 'small' losses.

 

As for capital preservation being the name of the game, I would debate that as well. We are daytrading volatile instruments. To go into that game thinking 'I just want to survive' is a terrible mistake and a costly one. If you just want to try to break-even most days, why bother playing? To me, the name of the game is WINNING. Just keeping the capital already have does me no good. That's a terrible risk/reward setup - risk is your account size and the reward is to come out even or slightly ahead. I'll pass on those odds. Trading money should be RISK CAPITAL not the house payment.

 

 

As a trader I need movement. If the market is not moving then nothing is being done. If you believe that one of the edges an off the floor trader has, is trend, then why enter a trade when trend in not present? Yes, the assumption was that the direction is correct. What is not known is how long the distribution/accumulation phase will be. While you're sitting tight waiting for the market to be marked up or down, there may be another market being marked up or marked down.

 

I agree, we all need movements to make money. No doubt. However, it is possible to enter what you believe to be the start/beginning of a trend only to find it stall a bit and then resume the move. That's not uncommon at all on the indexes. Actually, very rarely do we see a giant move in one direction. Most days we will see a smaller move, some pause (or rest) and then another move. This pause period can last 1 minute to 60+ minutes. You just never know how long. I am willing to wait it out vs. exiting and then re-entering later.

 

As for another market moving while you wait, that's based on what you are watching and how much you can trade. I trade the US indexes and the Euro FX. That's about it. So, when the YM is moving, so is the NQ, ES, and ER2 usually. When they are not moving, I am considering the EC. That's it. So, my cost of holding a trade is minimal b/c I have limited the markets I trade on purpose.

 

***As for profit target exits:

 

I am glad they work for you. I believe exiting at a target is speculating on the future when it is not necessary to do so.

 

Not so much speculating as knowing your setups and what is a realistic profit objective. I am not looking to hit home runs here, just single after single, after single. For example, currently on the EC my profit target is 10 ticks from my entry. The reason is that I know that the EC can move 10 ticks in my direction before any type of retracement that could take my stop out. Once my target is hit, I look for a reason to re-enter in the same direction. If another signal appears - and during a strong trend they fire off like crazy - I will keep getting in and going for 10 and then look to re-enter.

 

*****One more thing: I am very glad that we are able to have a civil debate on a topic without the name calling and boorish insults of the other sites. Thank you Soultrader for community such as this.

 

Very true. Some boards out there would have resulted with name calling and a bunch of negativity. Thanks Soul!

[torero 10]

I have to agree with brown, there has to be discipline when trading and making an entry. Believe I've done this and it was nice to continually taking small losses but psychologically it hurts watching your capital shrink and see the fees accumulate, it's a negative sum game and doing that will not break even or win. The market is a very nasty place to play with your head and emotions, teasing you to come in and out... over and over until you plead for mercy. A trading plan with stop loss (not jerk it around) will decide once and for all if the trade works or not.

[brownsfan019 17]

I have to agree with brown, there has to be discipline when trading and making an entry. Believe I've done this and it was nice to continually taking small losses but psychologically it hurts watching your capital shrink and see the fees accumulate, it's a negative sum game and doing that will not break even or win. The market is a very nasty place to play with your head and emotions, teasing you to come in and out... over and over until you plead for mercy. A trading plan with stop loss (not jerk it around) will decide once and for all if the trade works or not.

 

I guess tor is like me - we like clearly defined rules and then follow them. To simply say that I will flatten sometime before my actual stop is hit will play with your mind all day long.

 

Today was another great example of setups that took a little longer to hit, but they did. Here's the best so far:

 

• Long YM at 12737 at 10:09am EST
  
• Moved up nicely initially, but no profit target hit (actually 1 tick away)
  
• At 10:12 and 10:13am the trade is in the red, but not stopped.
  
• At 10:43am profit target hit for +10.
  

So, it took 34 minutes to reach my profit but I could have easily turned this into a loss if I paniced or didn't feel like waiting.

 

The other question I have about exiting and entering quickly is how do you filter these trades out? I mean, how do you not get chopped to death when it's consolidating? I would rather be in a trade and patiently waiting vs. trying to go long, then short, then long again b/c you want to get in right before the big move. I just don't see how you can time these perfect and not get chopped and also not trade frequently. It's not adding up to me.

[walterw 10]

I have the belief that any congestion its included in a trend... so market its always trending... there is no such non trending conditions really... now on the speed universe you are trading... things may go flat... but on a higher speed universe that is trending... ok ? now on this "keymoo laboratory example" we have a congestion happenning on a smaller speed universe than the one keymoo was trading... so that congestion its yet inside the trend of keymoo speed universe.... you dont want to be in a trade if your speed universe gets congested.... because you are not trading on the higher speed universe trend.... now you wana hold if you get a congestion included on the trend of your speed universe.... kind of dificult maybe I can do an excel to explain better.... cheers Walter.

[Anonymous 11]

1. Please note that I never said "the trade feels" wrong. I have only talked about getting out at predetermined levels in both price and time. In other words, a plan that is repeatable. Not that much discretion here.

 

I also talked about jumping back on board. I said if you method only produces a signal to enter on a mov. average cross, for example, if you get out then you need another cross to get back in. For this type of entry, getting out is NOT good, because you can not get back in quickly. Moreover, with the cross example, before you can go long again , the moving averages have to tell you to go short. So this not actually the situation we are discussing here.

 

2. The one thing that all successful traders share is this: survival.

 

They have survived the learning period long enough to get to a place where the are now able to make money. Capital preservation is key. You can not make money tomorrow if you lose it all today.

 

I would have to agree with the POP: trading is a loser's game. He who loses best, wins. If you can take the losses and still be around to take advantage of the wins, you make money. You become one of the few.

 

95% lose in this game. That does not mean the other 5% got that way by winning from the start.

 

I am reminded of the story of a new trader that got a job on the floor of the CME. What was the first thing he learned? Some secret method held tight and known only to the coven of pit traders? No. He was taught how to get out of a losing position 100 times out of 100. Note getting out here does not mean setting a stop and waiting; it means recognizing you're on the wrong side and taking yourself out.

 

a. If it is just about winning, why would so much time be spent on handling losses?

 

b. If it were just about setting stops to be hit, why would so much time be spent on getting out of bad trades?

 

c. (although not what we are talking about here) If it were about winning trades, why wasn't the trader given that INDICATOR so many losing traders are searching for?

 

3. As far as over trading. Two things: being right and sitting tight. This keeps the amount of trades made down. And the other is what trades you enter to begin with. With VSA it is possible to enter trades at the point where the Mark-up phase is just about to begin or beginning. A trader can position himself to take advantage of the supply/demand imbalance and thus by pass that channel, sideways movement. In short, selectivity on signals coupled with being right and sitting tight. But if you find yourself in a go nowhere trade, get out. If it then starts to move, be nimble enough to jump back in.

 

Again, jumping back in does not mean getting in just because. You should have clear rules for entry and re-entry. Maybe you have to look for a add on signal as your new entry point, that is a choice you would make. But the concept of getting out, then getting back in does suppose a nimble approach. Which is why the people who are writing about it most, tend to be floor traders.

 

4. Once a stop is in place it should never be removed. And it should not be moved except in the desired direction of the trade. Putting in a stop in the first place is for protection. There will be times when the market moves against you too fast for you to get out sooner. A stop can also help you define certain market conditions or where price is on the "playing field". But the idea that only at that price do you know you are wrong is felonious at best. Especially, since most people use stops not based on what the market is telling them but on account size. If you have a 20 tick stop, you can't realize you are on the wrong side of the trade after the market moves 15 ticks against you (5 pips short of your stop)?

 

In truth, good stop placement usually means stops are further away than most people would want them to be. The market doesn't care how much a trader has in his or her account. The market will, however, tell a trader where the optimal place to place a stop is. But for most traders this place can be too far away. Now, why not place a stop at the level dictated by the market, but have a mental stop (much closer and more in accordance with risk parameters) as you real stop? Which is essentially what I have been suggesting.

[brownsfan019 17]

I would have to agree with the POP: trading is a loser's game. He who loses best, wins. If you can take the losses and still be around to take advantage of the wins, you make money. You become one of the few.

 

95% lose in this game. That does not mean the other 5% got that way by winning from the start.

 

It's funny - I've seen 80% of traders fail, 90%, now 95% and even 99%. Who is verifying these stats? People trying to sell you stuff? I've never seen a published CME report that details 95% of traders fail. And what is 'failing'? This stat that is thrown around so casually out there has no statistical basis whatsoever. It's the guys selling you the holy grail that want you to believe very few make it, but for those that do... Watch out! Now by my stuff or else!

 

 

a. If it is just about winning, why would so much time be spent on handling losses?

B/c handling losses - esp mentally - are a big part of the game. In the end however, if you don't win, you don't survive. Your account may be in tact, but you will have little $$$ to show for your time.

 

b. If it were just about setting stops to be hit, why would so much time be spent on getting out of bad trades?

I don't agree with this necessarily. Stops are there for protection and to get you out of a losing trade. That's their purpose - get out of a bad trade. Pretty straight forward to me.

 

c. (although not what we are talking about here) If it were about winning trades, why wasn't the trader given that INDICATOR so many losing traders are searching for?

I don't understand this either... Many systems out there make money, but traders are too soon to give up on them. The 'holy grail' is out there, probably staring you in the face, but human emotions do not allow the trader to actually see the system make money over time. In other words, a stochastics crossover system for example will make money over time. Will the average trader be around to see that? Nope, as soon as they enter a drawdown, it's time to find the next grail.

 

 

In truth, good stop placement usually means stops are further away than most people would want them to be. The market doesn't care how much a trader has in his or her account. The market will, however, tell a trader where the optimal place to place a stop is. But for most traders this place can be too far away. Now, why not place a stop at the level dictated by the market, but have a mental stop (much closer and more in accordance with risk parameters) as you real stop? Which is essentially what I have been suggesting.

 

Ok, here is where we disagree completely. Good stop placement is NOT the same as a stop that is far away. On my trades, I am NEVER below a 1-1 risk/reward ratio. It's more like 2-1. So, if my YM profit is 10 ticks, the average stop is 5-10 ticks.

 

Proper stop management does not mean put a stop really far away. Quite the contrary actually. If you have a strong entry, you can have a very acceptable stop that will be respected. I've pointed to a few examples in my personal trading just in the last 2 days where this was. A couple trades the stop was ONE tick away and it never got triggered. And we are not talking about a 20, 30, or 40 pt stop on the YM. 10 points at the MAX.

 

Now, the question may be - how do you have a 'close' stop that is respected? For me, it came down to working on a smaller timeframe for charting. You cannot do this on a 15, 30, or 60 minute chart. I use volume based bars and have each market set so that during quick moving markets, I am getting signals galore. During slow moving, I can tell b/c the candles take a long time to form.

 

Volume based bars by far have taken my trading to a whole new level. And I found them on elitetrader. I don't want to discuss the 'enemy' per say, but of my time over there, the ONE thing I found useful was volume based bars. Search for ProfLogic if interested.

[Anonymous 11]

Sorry for the word good. You are correct good has nothing to do with distance.

 

By good I ment, based on reality. And what is reality? what the market is telling you. Not based on an individual's account size or risk parameters.

 

Yes, keynumber (aka floor pivots) can make good stop levels. If the market tells you so. But the point is a keynumber can be further away than most people can handle. A doulble top on the left of the chart may make an appropriate place to place your stop just above. This would be what the market is telling you, but if you place your stop closer merely becuase of account consideration, then it is not a stop based on reality.

[Anonymous 11]

Harvard business study, 2000-2001, I believe:

 

Conclusion-the fewer barriers to entry into a certain endeavor, the greater

the failure rate.

 

Fewer people who go to med school and then a residency fail as doctors, but all you need to be a trader is money and a dream. How about astronauts (current events not withstanding) versus actors?

 

In short, where the weeding out process take place prior to becoming part of the established community the failure rate is less than where the weeding out takes place once you have joined the community.

[torero 10]

Very interesting post, pp. Good nice study that is totally true in this business where failure to be prepared produces high failure rate, simple. All doctors must be prepared before moving to on their profession, in trading, anyone without preparation can trade. True enough. I guess we can say this profession is more or less training on the job except we don't get paid doing it, but get penalized for doing it incorrectly.

[brownsfan019 17]

And the devil's advocate here...

 

It can be argued that those that drop out of med school after one semester 'failed' as doctors as well.

 

My point being that while the barrier to trading is simply cash, I would think that if you were to examine those that treat this as a full-time business vs. the 'hobbyist' your results would be very different.

 

A full-time business owner will:

• Realize this is a 40+ hour work week in the beginning
  
• Realize that creating a steady stream of income will take many months, probably years
  
• Realize that while any new business is difficult, you have to fight thru the most difficult times
  
• Take ownership for their business and blame noone but themselves
  

A casual hobbyist will:

• Think this is a get rich quick program
  
• Blame everyone, everything BUT themselves for failure
  
• Give up after a very short period of time
  

Now, if you were to track the stats of true business owners vs. hobbyists from the beginning, I believe the stats in the end would show the owners having a higher % of those in profit. Of course there will be owners that fail and hobbyists who happen to make it, but the majority will favor the owners in the end.

 

It's just frustrating to read a stat where everyone is lumped into one pile. I am not a casual hobbyist. This is what I do for a living. I trade. I don't do anything else for my income and wealth creation. Take my stats and put them up against someone that trades when they have the time and really don't need the trading thing to work out and I would venture to say that over the long haul, I'll still be here years from now when the hobbyist is off looking for the next get rich quick scheme.

 

I'm not disagreeing Pivot, just venting some frustration with how these calculations are done.

[Anonymous 11]

And the devil's advocate here...

 

It can be argued that those that drop out of med school after one semester 'failed' as doctors as well.

 

My point being that while the barrier to trading is simply cash, I would think that if you were to examine those that treat this as a full-time business vs. the 'hobbyist' your results would be very different.

 

A full-time business owner will:

• Realize this is a 40+ hour work week in the beginning
  
• Realize that creating a steady stream of income will take many months, probably years
  
• Realize that while any new business is difficult, you have to fight thru the most difficult times
  
• Take ownership for their business and blame noone but themselves
  

A casual hobbyist will:

• Think this is a get rich quick program
  
• Blame everyone, everything BUT themselves for failure
  
• Give up after a very short period of time
  

Now, if you were to track the stats of true business owners vs. hobbyists from the beginning, I believe the stats in the end would show the owners having a higher % of those in profit. Of course there will be owners that fail and hobbyists who happen to make it, but the majority will favor the owners in the end.

 

It's just frustrating to read a stat where everyone is lumped into one pile. I am not a casual hobbyist. This is what I do for a living. I trade. I don't do anything else for my income and wealth creation. Take my stats and put them up against someone that trades when they have the time and really don't need the trading thing to work out and I would venture to say that over the long haul, I'll still be here years from now when the hobbyist is off looking for the next get rich quick scheme.

 

I'm not disagreeing Pivot, just venting some frustration with how these calculations are done.

 

Nice. I do see where you are coming from. Just a couple of things:

 

1. The calculation would include first year med students that fail. As the conclusion implies that more first years fail than do 4th year residents. This is what the weeding out is all about. Therefore by the time you get to professional level status, only the cream is left.

 

2. You are so correct. Anybody with some money and a dream can become a trader. Trader here is defined by the act of trading. Not the obvious skillful way one such as you goes about running a trading business. If more people had your sensibilities as they approached this endeavor, the rate might not be so high.

 

3. System sellers or not, any search of the various trading forums should lead you to believe far fewer people are making money than are not. There are so many posts out there from people looking of that one indicator or method because they are not profitable. System vendors pray on this to be sure, but they do not fuel the misconception. They don't really have too.

 

Based on the few posts I have seen from you, I believe you are one of the ones who has made it or will make it in this "game". Make no mistake about it though, that puts you in the minority. Regardless of what the actual percentage may be.

[brownsfan019 17]

Pivot - thanks for the kind words. Not to get all mushy here, but those are perhaps the most kind words I've ever received on a forum. As we stated before, you don't find many websites where that type of dialogue would take place. This forum appears to be more about quality vs. quantity, very different than other forums.

[torero 10]

I congratulate you both on your success and sharing your experience and opinions. Great to have you both here! Bravo!

[keymoo 10]

Guys, thanks for your thoughts. I think what I have learned from this is that I need to test things before implementing them no matter how good they sound in a book. Anyway, I thought I'd show you the other side of the coin and the necessity to be consistent. I took a very similar trade on the ES today where I was fading VAH, and a mid-pivot. I only fade mid-pivots when the distance between pivots is large, which today they were.

 

Anyway, my sell limit got filled at the top of a trading range, and then the market sat there for over an hour doing nothing. I should have got out according to the time-stop within 20-30 mins, but I decided this time to leave the trade to run its course. Of course, this time I got stopped out by buying the high of the day. Great.

 

So, the moral is, test, test, test.

 

[brownsfan019 17]

So, the moral is, test, test, test.

 

Test, test, test and then repeat the exact rules the same way each and every time. It's uncanny how the human mind works and that these 2 sample trades have shown doing the exact opposite each time would have turned a profit or kept the loss small.

 

I know that doesn't help with the loss, but hopefully this was a great learning experience for you and those reading the thread. The key is to be consistent in your trading. Jumping from one setup, indicator, etc to the next will not make you money over the long term. Once you have proven to yourself that the trading system you have works, then work it.

 

I think in the end it's all about confidence - if you are confident in your entry, stops and exit strategy, you can take the trades w/o hesitating. If you are unsure of your setups, then 2nd guessing will play with your mind all day long.

[wsam29 10]

best advice when a market frustrates you like it did to me last week, is take some time off.

 

I'm have not done a thing this week and will look back at the markets next monday.

[Soultrader 12]

Thought I'de jump in here to tell you guys that this is an amazing thread! Some really great stuff guys.

 

"The battle is won before it is fought" - Sun Tzu -

 

Build a trading plan and trade the plan. Also know when to break it or else you will be sitting duck when the markets do the unexpected. Enter only at price levels that you feel comfortable with the risk. Think risk only.. profits will handle itself alone. Observe, observe, observe!! Program your brain to recognize market patterns. Not candle patterns... but the overall pattern on a bigger picture. Learn to read what the market is telling you. This will significantly increase your odds for short term setups. It took me 2 years to be able to read the language of the markets (though I am learning EVERY single day). It's actually quite simple but takes alot of time to understand this simplicity.