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Webinar: FuturesTrader71 (FT71) on Risk, Sizing, Scaling and Trade Management
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Webinar: FuturesTrader71 (FT71) on Risk, Sizing, Scaling and Trade Management

  #81 (permalink)
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TI Anon View Post
(I know there is a good chance I'll be attacked for these comments. I'll only consider the attacks by long term profitable traders-with verifiable proof- to be of any consideration, what so ever. Comments by others will be treated in kind.)

Try being more positive, it works wonders . This is a positive, helpful forum. The goal of a post is not to prove anyone wrong but to have a good civil discussion without dragging people through the mud.

If a large number of people don't understand a post, it might be best to reword it from a different angle.

Mike

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  #82 (permalink)
Curtis
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Thank you for the positive environment traders strive to have here.

That webinar from T-71 was the best i have heard in a long time , His comments on confirmation was something that has been chewing on me and was a fog. I never understood it.

This fourm just keeps getting better and better for me , Thank you Big Mike and all

Nothing so Impressive as Simplicity
D.G. Watts

Last edited by CRM5096; March 24th, 2012 at 10:05 AM.
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  #83 (permalink)
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Big Mike View Post
No trader wants to lose money.

But if you take the Derrick Rose example, embracing losers or being a good loser would be equivalent to Derrick missing a lay up. If he flips out, loses control, throws out all his strengths of how to play good ball and just starts fouling everyone and hoarding the ball, missing shot after shot after shot, then he is going to have a problem.

He doesn't do this. He is a good loser when you equate a loss to a particular shot within the game. He keeps his cool and doesn't focus on the missed shot. No. He moves on to the next shot, because that is what matters.

Traders need to be a good loser in the terms they need to learn that missing a lay up is part of the game. It is not a big deal, so don't make it one. By being a good loser on these individual plays, or trades, then the game as a whole (trading session, day, week) can come out on top as a winner because you've remained in control and allowed your experience as a player prevail.

Mike

The D. Rose example was to highlight an attitude about losing. I'm not sure the shot analogy to trading is fair. The only shot that is comparable is the one shot at the end of game that either wins or loses the entire game. It is the only has shot that has same potential similar to trading. Since the potential to "be in it" or "done" is there. And, great players definitely lose their "cool" on that one.

I find your use of term "good loser" interesting.

“Winning is a habit. Unfortunately, so is losing.”
~ Vince Lombardi

“Practice does not make perfect. Only perfect practice makes perfect.”
~ Vince Lombardi

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  #84 (permalink)
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TI Anon View Post
The D. Rose example was to highlight an attitude about losing. I'm not sure the shot analogy to trading is fair. The only shot that is comparable is the one shot at the end of game that either wins or loses the entire game. It is the only has shot that has same potential similar to trading. Since the potential to "be in it" or "done" is there. And, great players definitely lose their "cool" on that one.

I find your use of term "good loser" interesting.

“Winning is a habit. Unfortunately, so is losing.”
~ Vince Lombardi

“Practice does not make perfect. Only perfect practice makes perfect.”
~ Vince Lombardi

This is what happens when people use analogies to simplify complex subjects, the debate becomes about the analogy itself, rather then the original subject, and we end up learning zilch.

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  #85 (permalink)
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Big Mike View Post
By being a good loser on these individual plays, or trades, then the game as a whole (trading session, day, week) can come out on top as a winner because you've remained in control and allowed your experience as a player prevail.Mike

Seemed to work pretty well for this guy:


Luck is what happens when preparation meets opportunity. ~ Seneca
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  #86 (permalink)
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CRM5096 View Post
Thank you for the positive environment traders strive to have here.

That webinar from T-71 was the best i have heard in a long time , His comments on confirmation was something that has been chewing on me and was a fog. I never understood it.

This fourm just keeps getting better and better for me , Thank you Big Mike and all

Thanks for your post it reminds me what great information there was on confirmation,information risk and trade management among others.It helps me to get over my funk on the 50-50 thing.

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  #87 (permalink)
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Big Mike View Post
No trader wants to lose money.

But if you take the Derrick Rose example, embracing losers or being a good loser would be equivalent to Derrick missing a lay up. If he flips out, loses control, throws out all his strengths of how to play good ball and just starts fouling everyone and hoarding the ball, missing shot after shot after shot, then he is going to have a problem.

He doesn't do this. He is a good loser when you equate a loss to a particular shot within the game. He keeps his cool and doesn't focus on the missed shot. No. He moves on to the next shot, because that is what matters.

Traders need to be a good loser in the terms they need to learn that missing a lay up is part of the game. It is not a big deal, so don't make it one. By being a good loser on these individual plays, or trades, then the game as a whole (trading session, day, week) can come out on top as a winner because you've remained in control and allowed your experience as a player prevail.

Mike

I think what is unclear here in this comment was that a missed lay up or even series of missed lay ups makes Derek a loser...when nothing could be further from the truth. One missed lay up or missed trade does not a loser make.....however, its how you handle the missed lay ups that determine if you are a loser or winner.

A loser takes that mistake and extrapolates it out into the future as a repeating and unbreakable habit. A winner knows mistakes happen and just keeps playing their game. There is a world of difference. Slumps happen. During a slump, you play smaller, you play within yourself and to switch metaphors to baseball, you look for base hits, get hit by a pitch, walk, whatever it takes to get on base. Build small successes once again. But you have to keep swinging, you have to keep taking your shots.... you know that eventually, the slump will break and you'll be a super star again....in trading, that means continue to trade but trade smaller size, look for smaller winners...whatever it takes to build success again.

Anyway, my thats my view from the

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #88 (permalink)
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omni72 View Post
For anyone interested in FT71's post about the Theoretical Average he discussed in the most recent webinar, here is the link:

Anatomy of a scaling trade

On a totally unrelated topic, at about 1hr36min into the webinar it sounds like @BigMike has the same text notification ringtone from Dexter that I have. If so, I'd love to be able to figure out the odds of that happening.

Thanks for sharing that link. I think this is a good example of what traders should not do as FT71 refers to a few times. I'm not too familiar with FT71 and these are only my opinions of course. However, I've been trading for a long time and have managed millions of dollars in client and proprietary capital and know what makes sense and what does not. I think in the example provided in the link, it shows how one can get out of trouble while being biased on a direction.

I think it's extremely important to do one's "homework" so that they are prepared going into each day's trading session however, it is extremely important to remain open minded. You can have a "slight" bias on direction but I think it's more important to recognize and change what the order flow is telling you. By looking at the chart provided on how the day turned out, you were trying to swim against the current all day. Had you watched the open and order flow, there clearly was downward pressure on the market. Establishing a short position off vwap and cycling through positions on retracements and thrusts back into trend would've resulted in far more of a profit while taking risk off as the trend developed further. Remember, previous areas of support are often tested and when they're blown through, the market can reward you big time. Same goes for areas of resistance.

I understand the point of the description given but I think this was a case of being overly biased on direction and being lucky enough to have caught that first retracement higher which was the majority of the overall return in the trade(s). So, my point here is don't fight the order flow!

Anyway, I realize hindsight is 20/20 and it's easy to sit here and rip through a chart. My intentions for showing this are not sanctimonious in any way and are simply to emphasize that while it's important to have a game plan, you need to be open to adapting to what the order flow is telling you (sorry for being repetitive but I really want to drive that home). The chart below provides an alternative view which shows what I'm referring to based on what is happening TODAY. High and low volume nodes are important to watch as we can see how the market accepted and rejected price in the past however, the market is constantly changing and what was in in the past, may not be the case tomorrow which is why it is extremely important to remain open minded and trade what your screens are telling you.

I mean no disrespect to FT71 as I'm sure he is an excellent trader/teacher or whatever and this is an example of just one day but I had to step in here as opinions vary. I guess this makes the market move as people have different ideas on what is happening or will happen based on their trade set ups, etc.

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Cheers,
PB

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  #89 (permalink)
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In terms of trade management, my experience has been that 'all in/all out' has always proven to be superior. I believe most average traders like scaling out because it makes them feel good. That in itself may be a valid reason to do it, but it generally does not perform better.

With enough skill and mathematical planning, I think 'scale in/scale out' may be quite ingenious, if you have the skill and account size and tools to scale into positions that are going against you, improving your average entry price, your risk/reward ratio, and then scaling out at various points and make the math work in your favor.

But, I also believe that 'all in/scale out' is probably the worst of them all, because when you lose, you lose on many more contracts then when you win. You are actually maximizing your losses when you lose, and minimizing your wins when you win. The only event that saves this approach, is when you get an odd ball extended run on your last contracts that makes up for the inherent weaknesses of this approach. Hoping to get that rare extended run, means you are requiring the market to do something extraordinary in order to make money.

I also believe that ' 'full stop/full target' is superior to trailing stops, and break evens for the typical day trader, and increasingly so, the shorter the chart period you trade. At the end of every trading day, I evaluate the theoretical performance of all my signals using trailing stop, break even, and full stop/full target approaches. The full stop/ full target approach almost always performs better. Of course your mileage may vary based on your particular trading method and trade management, but I think overall the result would probably be the same for most.

I'm including a pic of my excel sheet of the CL signals this Friday, comparing my different trade management approaches, if they were applied to each of the signals. I generally do 2:1 risk/reward with trailing stop and break even, 2:1 full stop/full target, and 1:1 full stop/full target. As usual 2:1 full stop/full target is the most profitable.

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Webinar: FuturesTrader71 (FT71) on Risk, Sizing, Scaling and Trade Management-cl_xls.jpg  

Last edited by monpere; March 24th, 2012 at 03:17 PM.
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  #90 (permalink)
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monpere View Post
In terms of trade management, my experience has been that 'all in/all out' has always proven to be superior. I believe most average traders like scaling out because it makes them feel good. That in itself may be a valid reason to do it, but it generally does not perform better.

With enough skill and mathematical planning, I think 'scale in/scale out' may be quite ingenious, if you have the skill and account size and tools to scale into positions that are going against you, improving your average entry price, your risk/reward ratio, and then scaling out at various points and make the math work in your favor.

But, I also believe that 'all in/scale out' is probably the worst of them all, because when you lose, you lose on many more contracts then when you win. You are actually maximizing your losses when you lose, and minimizing your wins when you win. The only event that saves this approach, is when you get an odd ball extended run on your last contracts that makes up for the inherent weaknesses of this approach. Hoping to get that rare extended run, means you are requiring the market to do something extraordinary in order to make money.

I also believe that ' 'full stop/full target' is superior to trailing stops, and break evens for the typical day trader, and increasingly so, the shorter the chart period you trade. At the end of every trading day, I evaluate the theoretical performance of all my signals using trailing stop, break even, and full stop/full target approaches. The full stop/ full target approach almost always performs better. Of course your mileage may vary based on your particular trading method and trade management, but I think overall the result would probably be the same for most.

I'm including a pic of my excel sheet of the CL signals this Friday, comparing my different trade management approaches, if they were applied to each of the signals. I generally do 2:1 risk/reward with trailing stop and break even, 2:1 full stop/full target, and 1:1 full stop/full target. As usual 2:1 full stop/full target is the most profitable.

I would say that it's pretty stupid to give back 50-100 (CL) ticks by not moving one's stop. However, if I recall correctly, you are going for like 10-20 ticks and that is very different from playing the larger swings.

The problem with stop moving or trailing stops is that people move them based on arbitrary numbers, that is never a good idea. It's much wiser to do so based on the "rhythm" of the instrument.

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