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Taking loss cutting losers managing positions HOW?
talk about losses!! i let my micor nq 2 lot cost me a bundle!! but still green on the day. it is bad habit to get loose and just trade with no probability in our mind or eduacated guess. saying its going to go higher or it should turn before the close is what i did and I need to work on that big time!!
Have a great weekend.
if you are having trouble holding your winners longer then do this exercise.
get cold water from sink.
put the cold water in a normal sized panor pot not a huge soup one just oen you would use to boil eggs in and turn the burner on high. start your phones stop watch and place teh phone where you cannot see it.
NOW do not take your eyes off of the pot of water under heat. i am serious. no distractions no looking away! just you and that pot of cold water waiting for it to get to a rigorous boil!!
when you start seeing small bubbles in the pot understand that that is not a rolling boil.. once it boils guess how much time went by and then check your phone.
keep doing this until you understand TIME.
it is a great exercise to do everytime you automatically cut your winners early without a technical exit point.
looking at a chart now the sell from the high was pretty easy too see today.
The losses i took did not need to happen at all but at least i took them and i also made sure not to be in the mkt at 3.50 and 3.58 to 4.01 pm.
Sandpaddict
Vancouver, Canada
Market Wizard
Experience: Advanced
Platform: Ninjatrader, MT4
Broker: IB, Global Prime
Trading: Futures CFDs
Posts: 684 since Mar 2020
Thanks Given: 975
Thanks Received: 637
Oh wow ok. See I could never do that. But I'm also serious considering calling it quits. I cannot see myself making this work.
I am drawn to bouts of thinking only people like Mike Reed (RIP) and Lance Beggs and inversely Al Books styles work yet my mind believes you cannot predict, yet my incredible losses SHOW ME WITH ABSOLUTE CLARITY that I'm the problem and making/loosing is two side of the same coin.
I studied my LOSES and that's how I formulated my strategy BUT I do not have the patience, discipline and clarity anymore. That's obvious now.
I lost $1800 in one day trading one contract at a time with a max of 4 on the MNQ. That is impressive!!! VERY VERY impressive.
Turn those around and even with commissions and that would have been a record breaking day for me.
So why cant it be? ME. That's why. I'm not ready to do that. That's clear because if I was I'd be doing it.
I need to go back to drawing board and have a better plan if I'm going to keep going.
Entries are related to exits. Profits are related to losses. So it's ALL RELATIVE... so until I can hold for huge runners or CONSTANTLY larger profits then losses there is no point playing this game.
So yesterday WORKED in my favor and it's what I ment about NOT panicking out yet even though this ended up being a profitable move was it a good one?
Really not sure anymore. I would like to say yes but was it really? Stopping out at top would not have been good either?
I did the same thing way back when - I was trading a triple moving average approach, losing my shirt and said - "if I am doing so bad, the opposite MUST be good." So I did that, and it was profitable for a while. Eventually though I lost big trading the opposite approach.
Its a tough game, and once you lack confidence you are really in trouble.
Well a few things, if you have a roof over your head and some food for you and your cat, you should be proud of your self. A lot of people dont have it.
If you are losing $1800 in a session in a proper money management system, that means you are trading with $100k + account. Are you?
third, regarding that particular trade, I would have got out at the top because there is no good place to put a stop. Then I start over. Would I have reversed at that point? hard to say a lot depends on the time of day. I like to break up the morning and afternoon session. They look very different in every market.
Lastly, keep your day job and stay small until you know what you are doing. Go to micros or options. Options are wonderful, they are like the old bucket shops where you would buy a slip that could go to a million or expire worthless when it goes past your stop. It took me many years to be comfortable doing this and I'm still quite clumsy and dumb. But still I am here. I still have a day job also, my own old fashioned need for structure I suppose.
Someone asked a monk, what is the hair blown sword before mastery? He said "unusable"
After mastery? "untouchable"
A hair blown sword is a sword so sharp were you to blow a hair against the blade it would cut in half.
Coming, they can't be denied. Going, they can't be detained.
part of understanding loss is realizing position size. Now 4 mnq is not a small position no matter where you place each individual trade.
13700 x 4 x 2 is 109,000 a 3% down day puts you down 3,300 if u dont exit.
I will admit that 90% of my BIG losing days are always attributable to me longing on big down days and not exiting or cutting loss. I am very good at playing the game well as far as making money consistently. My biggest weakness is to cutloss.
I am not here writing about loss because I have perfected taking losses or that I have mastered trading I took the name cut loss because there is no way to scale up or increase size and make consistent money unless you 1 million percent can cutloss!
That's why I am really enjoying and hoping more traders demo or live chime in right here on this thread to give us all a jolt in the right direction.
In answer to holding a position all day..no worries doing that and it is a great experience but you start to realize even more when you do an all day swing that you need to cut loss or 1 huge news down day can seriously take you out.
Taking a loss should be as easy as rolling the dice and saying ok even I'm long odd I'm short and you know you could do a 20 lot and not be worried because you would exit with a loss quickly.
What stops most from taking losses is not the loss or being wrong it's that you made a decision you made a call you took a shot and the mkt has been tickling your break even or slight loss and at times spiking a point or 2 into profit territory and you want 4 points or 6 or 10 and 2 isn't good enough for all the time you put into making this trade and the longer it takes the more invested married to it you become so the mkt says we did the math..we filled 400 contracts that we think we not is or our customers. We think we have 200 retail longs left in the mkt we want to run it higher but we can force it down and get them out and then run it higher..I bet we can drop 10 more nq points and force those weak hands..because we want more contracts. Remember they are only created by a buyer and a seller.. so they run it down..ur pissed cuz your patience was misdirected and now ur thinking shit I'm wrong..again..I cant be ..wtf is this mkt doing..they take it to 12 points lower and you are like..fuck they could run it down 20 more points to hit that big 600 even liquidity point...so you still hold and that 15 points lower u click and say I dont care! I'm out...which is right where 180 of those other retail also puke out and now the other side of your sell..the buyers...step in and run the mkt hard and fast higher all the way to where u initially wanted to exit... and you look at the chart in disbelief and say to yourself...but I was right!!
Yup..been there
Cutloss
Midway florida
Posts: 243 since May 2021
Imagine driving somewhere you go to all the time on the same route. Now instead of turning right like normal switch it up and turn left for every right. Do you end up at your destination? No!! You eventually realize that you are losing time and losing direction so you STOP and change direction.
Why after driving miles in the wrong direction do u question where you are going ? Do you say..well this road will probably double back eventually I dont want to say I was wrong I went the wrong way..I should just keep burning up fuel and miles in the wrong way to get back going the right way!!!
Imagine just stopping!! Pulling over taking a few minutes to study the map and make a new stab at going the right direction!! Guess what..you saw on the map much like a chart that the road you were on kept going right into a 3000 foot ravine! Good thing u stopped you say to yourself..holy crap stopping may have saved my life!! It looks like I can go right now ..very similar to trading...I hate using stops. I rarely use stops but of you master getting back in..not right at that second but relaxing studying the mkt and getting back in you just might realize that those stops saved your account and the small losses even though expensive over time still saved you on some big ones and allowed you to get even better entry on larger positions so it was actually a good thing.
And in hindsight the trade wasn't that great to begin with obviously
Sandpaddict
Vancouver, Canada
Market Wizard
Experience: Advanced
Platform: Ninjatrader, MT4
Broker: IB, Global Prime
Trading: Futures CFDs
Posts: 684 since Mar 2020
Thanks Given: 975
Thanks Received: 637
It's so true isn't it. Once the confidence is gone sticking to the plan becomes impossible. Especially since I like wider stops.
I get theres no free lunch. You either have a high winning percentage, or a positive W/L ratio (obviously it's a bit of both in reality).
But I've got it backwards again! I'm taking lots of smaller and larger stops but not nearly enough profits to cover.
I know it's me. I need to take a position and hold it and have an appropriate stop. It's simple really isn't it? Simple. Yes. Easy? F-no!
It sounds like the idea of cutting loss needs to be broken down into many various sub sections about loss.
I will start.
4 main reasons in my mind for loss
1. Position size..too large = huge loss
2. Stops too close lots of small winners and not enough bug winners
To overcome cumulative losses with fees and commissions.
3. Stops too far not many losses but when they are taken they are large and because the stop distances are so large and we have lots of time to look at the market and think about the levels we actually might adjust this deep stop or cancel it or add here there are lots of ideas that may be bad ones during this time or good ones.
4. Catastrophic loss prevention from terrorism or mkt potentially hacked or power outages I mean those things are all the ultimate trap. There has been tons of hacking lately and why couldnt it hit the stock mkt? That would allow the focus to enact a universal federal firewall just like china. My point here is that..
But on a less catastrophic note of loss using a max loss for the day on the entire account could alleviate even using a stop if u want. Once u lose 300 or 5000 whatever you pick then that's it for the day or the trade etc. But for me I have drained a couple very small accounts just watching small losses turn into big ones and adding g as we dropped thinking its gotta turn! Now maybe since small account I took excessive risk to. Begin with and that is not good practice! Treat all accounts the same especially micro accounts. If y want to get to the big leagues ur gonna have to play the small leagues properly 1st!!
Loss is going to happen no matter what strategy no matter what stop distance. It is no lie that losses are part of the business. But are they realized losses or paper losses..perhaps another sub sector of loss should be..when to convert a paper loss into a realized loss?
Loss gets even more complicated when one starts to add multiple positions at different times or adding to a loser or even adding to a winner which can end up leading to an overall loss. In order to stay in the game long enough to perfect your skills you must take loss there is just no way around it and guess what..2 steps forward and 1 step back still puts you 1 step forward. You cannot always win intraday on every trade. You gotta give some back to the people who gave it to you and come versa just at some point you need to be up almost everyday and certainly every week if day trading. If you are losing weekly then ur not trading properly or what you do is not working.
Maybe using a wide stop or medium stop based on current volatility is needed and you take profits fast say. A 2 to 1 ratio..so ur willing to lose more than u make but your win % is high enough over time to make up for the losses. Usually in this scenario your fees and commissions will be the reason you lose not the market.
Sandpaddict
Vancouver, Canada
Market Wizard
Experience: Advanced
Platform: Ninjatrader, MT4
Broker: IB, Global Prime
Trading: Futures CFDs
Posts: 684 since Mar 2020
Thanks Given: 975
Thanks Received: 637
Yeezus! Great post! So true... so true.
It's always two sides of one equation. You either trade with a VERY high win rate otherwise cost and comms will kill you (as you pointed out) or you trade for some sort of larger win/loss ratio.
In simming over the weekend I instantly started trading LIKE I SHOULD and I put stops in every trade without thinking and not getting cute... it goes below the last major turning point!
If price goes there that's the mostly likely point it will turn back in my favor... but its ALSO the point it will most likely break down/up!
Again in sim with no emotions I just take the stop and take the next trade and start again.
I don't go... oh no! it's going against me... ok it's going in my favor... oh no it's taking my profits back get out! Oh no it's going back in my direction now!
No... I have my stop in and then I hold till it either keeps going in my favor for... well... days if it would or it clearly is acting different than a market that has any chance of continuing in it's current form or it hits my stop or I have a chance to bring my stop to just above break even (after a good move in my favor) and it hits my stop there.
Stops still in my mind can be devastating if used inappropriately. Using too tight of stops can practically guarantee failure.
And trailing stops are no better.
So my stops are instrumental and I will never enter without one now... but they will be placed at the appropriate distance to alow trade to "work out". If the stop gets hit its because the trade is now INVALIDATED.
