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Primary source of income: how many have made it?
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Primary source of income: how many have made it?

  #511 (permalink)
Jedi Master
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Paige View Post
Monpere,

Sorry for sounding so confusing. The point I was trying to make was that I'm not sure that I should second-guess an entry (or trade plan) once I have entered. I'm not sure that just because I am privilege to post-entry price action, that this knowlege can be of any positive benefit to me.

Assuming that I originally entered a position using a set-up and exit plan that (I have deemed to have) a positive expectation, it would seem that scaling-out would be the equivalent second-guessing.


I know, I know. I'm doing a horrible job of explaining my feelings on this. That's why I used the 'Ask Marilyn" example. Because I can't figure out how/if the odds on a trade change just because I am in it. And if the odds do not change from the point I entered -- then how can altering my strategy (scaling-out) possibly be anything other than a weak, second-guessing play?

To me, leaving "Runners" seems like gambling. And gambling, to me, is playing something that has a negative expectation over the long run. And I would be guaranteed to eventually go broke playing such things.

I'll admit that trying for the 'Big Hit' is incredibly romantic and enticing (likely even to top-notch traders). Might this be the single biggest reason that some of us are ever allowed to make a dime!

"Oh, if I could only have had at least one contract left when that huge move happed shortly after I closed my entire position......."

Might this very type of thought be the poison candy that is so difficult to resist that it either kills most traders or at least serves to drag-down their returns over the course of their trading careers? The forbidden fruit? Something to break the monotony of doing things right and simply making money.

I don't know any answers. Only questions and an ever evolving opinion.

Peace,
Paige

Paige,
I think you're getting into trading methodology now.. To a directional trader, both the direction and the target is not a guess but a probability trade. My experience is that most traders scalp because they don't have a good reason to hold. A good directional trader always knows why he holds and why he folds and its usually in their edge.. However, there is nothing wrong with scalping as many do it very well.. As long as your edge is real as reflected in the fact that your account is growing, that's what matters..
Jedi
And may the force be with you

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  #512 (permalink)
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scaling out


Paige View Post
Thanks Jedi, Init, Nak,

Great food for thought as always!

My personal hang-up with scaling is that I really can't grasp how ones present win/loss total on a trade would, in any way, be indicative of the future direction of the instrument being traded. I just don't see the connection here.

It seems that the philosophy might be based upon the notion of "runners", which seems to insinuate free-roll betting with "house money". Well, even I have enough sense to know that there is no such thing as "house money" and that any amount you are ahead in a trade is "your money" -- regardless of whether you have closed it out or not.

Afterall, at any given moment during a trade, there is only one correct decision to make. Close or hold. Unfortunately, we only know which decision was correct after the fact. But I don't believe that it's posible to 'money manage' ones way to this correct decision. If the market doesn't take our W/L total on a trade into consideration when deciding it's next tick, then why should we base our decisions on this? There just seems to be no connection here.

But as a girl, I reserve the right to change my mind

Peace,
Paige

Think about why a lot of traders blow out their account, they let a few losers run...
You have to have as many things in your strategy that is the opposite of what most traders do.

However many contracts you are trading, dedicate at least one for just a little longer time. but make sure you are completely fine with getting out of that one breakeven.
In this a business, you need to pay the bills with your primary setups, and you need to at least have the opportunity to say "wow" that was an awesome runner.
Try not to be so rigid, because in order to break to the next level, You will have to be able to switch from a scalper in todays action, a daytrader tomorrow morning and if things line up, a swing trader for a few days.
You can only take what the market gives you.
It would be crazy to be a scalper on a 10:1 up volume day.

When I am stalking a level to short, I dont know if i'm going to have to do a countertrend short after a fakeout or a momentum short. If I stuck to the exact same rules on every trade, I would be playing a statistics game. And we all know how what that outcome is.

Start off with one type of price action you can put the most confidence in, and when you know that inside and out, just build on it.
Take it slow and never let a loser run and you can make money by trowing darts at a chart...

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  #513 (permalink)
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Init View Post
Think about why a lot of traders blow out their account, they let a few losers run...
You have to have as many things in your strategy that is the opposite of what most traders do.

However many contracts you are trading, dedicate at least one for just a little longer time. but make sure you are completely fine with getting out of that one breakeven.
In this a business, you need to pay the bills with your primary setups, and you need to at least have the opportunity to say "wow" that was an awesome runner.
Try not to be so rigid, because in order to break to the next level, You will have to be able to switch from a scalper in todays action, a daytrader tomorrow morning and if things line up, a swing trader for a few days.
You can only take what the market gives you.
It would be crazy to be a scalper on a 10:1 up volume day.

When I am stalking a level to short, I dont know if i'm going to have to do a countertrend short after a fakeout or a momentum short. If I stuck to the exact same rules on every trade, I would be playing a statistics game. And we all know how what that outcome is.

Start off with one type of price action you can put the most confidence in, and when you know that inside and out, just build on it.
Take it slow and never let a loser run and you can make money by trowing darts at a chart...

Init,
I think you nailed it in that reply. Ideally, the method is flexible enough to adjust to market conditions and the trader can recognize the various conditions to either scalp or hold, and even when to stay out. This is rare in the trading world though because most traders adopt one method over another. Position traders often stay out of the market with scalp conditions and scalpers often stay out of the market with trend conditions.
Jedi

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  #514 (permalink)
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Jedi View Post
Init,
I think you nailed it in that reply. Ideally, the method is flexible enough to adjust to market conditions and the trader can recognize the various conditions to either scalp or hold, and even when to stay out. This is rare in the trading world though because most traders adopt one method over another. Position traders often stay out of the market with scalp conditions and scalpers often stay out of the market with trend conditions.
Jedi

I believe both @Private Banker and @tigertrader do this...

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  #515 (permalink)
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bluemele View Post
I believe both @Private Banker and @tigertrader do this...

Would love the opportunity and honor to trade with them.. I trade that way too but have not met another that trades this way. My methodology is actually very simple once you get the hang of it but you do have to put a small puzzle together so there are some moving parts to it.. For me, its the only to trade but there is a price reading aspect most get turned off by..

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  #516 (permalink)
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With experience comes knowledge in knowing when to press and when to accept what little the market will give each day. There are many things to take into consideration but the most important item to note each day is the volume and balance of the market in which you're trading. But this should only be advised to those who fully understand this and are able to accurately recognize what's occurring. For those who are in their early developmental stages of trading should learn to identify those types of days but focus on establishing a goal based strategy for each day. This will establish a consistent track record and will build confidence in what you're doing. This should also include a daily loss limit. You need to be able to come back the next day to try again. Over time, you'll be able to increase that daily goal (inclusive of leverage which goes without saying). Also, I would advise against a dollar amount goal per day as this brings your attention to your P&L vs. executing your method correctly. Look to net N amount of successful rule based trades per day. The money takes care of itself so don't stare at your P&L all day.

One of the biggest hurdles a retail trader faces is the noise in the markets and the tools available out there. When starting out, keep it simple and become consistent. I see a lot of complicated methods out there which may work for those who've created them but I highly advise against looking to replicate them. Learn the value in that method and integrate that value into what you're currently doing if it makes sense but keep it simple. The simpler the method, the easier it is to make a trade decision. Also, make sure to have a plan in place each day for your trades. Don't just walk in blindly. Look at multiple chart periodicities to understand the overall market structure. Example, if price hits a certain support/resistance area, what are you going to do and what is a realistic goal for that trade. Sorry for the tangent here but I just want people to be realistic with what they're doing and learning and become successful with it.

Cheers,
PB

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  #517 (permalink)
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Private Banker View Post
With experience comes knowledge in knowing when to press and when to accept what little the market will give each day. There are many things to take into consideration but the most important item to note each day is the volume and balance of the market in which you're trading. But this should only be advised to those who fully understand this and are able to accurately recognize what's occurring. For those who are in their early developmental stages of trading should learn to identify those types of days but focus on establishing a goal based strategy for each day. This will establish a consistent track record and will build confidence in what you're doing. This should also include a daily loss limit. You need to be able to come back the next day to try again. Over time, you'll be able to increase that daily goal (inclusive of leverage which goes without saying). Also, I would advise against a dollar amount goal per day as this brings your attention to your P&L vs. executing your method correctly. Look to net N amount of successful rule based trades per day. The money takes care of itself so don't stare at your P&L all day.

One of the biggest hurdles a retail trader faces is the noise in the markets and the tools available out there. When starting out, keep it simple and become consistent. I see a lot of complicated methods out there which may work for those who've created them but I highly advise against looking to replicate them. Learn the value in that method and integrate that value into what you're currently doing if it makes sense but keep it simple. The simpler the method, the easier it is to make a trade decision. Also, make sure to have a plan in place each day for your trades. Don't just walk in blindly. Look at multiple chart periodicities to understand the overall market structure. Example, if price hits a certain support/resistance area, what are you going to do and what is a realistic goal for that trade. Sorry for the tangent here but I just want people to be realistic with what they're doing and learning and become successful with it.

Cheers,
PB


PB, very clear and concise....you're soooo spot-on!

"Faith is the substance of things hoped for, the evidence of things not seen." --- "Therefore, I Believe it and I will see it. And every day and in every way, I am healthier, wealthier, and wiser."
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  #518 (permalink)
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Private Banker View Post
With experience comes knowledge in knowing when to press and when to accept what little the market will give each day. There are many things to take into consideration but the most important item to note each day is the volume and balance of the market in which you're trading. But this should only be advised to those who fully understand this and are able to accurately recognize what's occurring. For those who are in their early developmental stages of trading should learn to identify those types of days but focus on establishing a goal based strategy for each day. This will establish a consistent track record and will build confidence in what you're doing. This should also include a daily loss limit. You need to be able to come back the next day to try again. Over time, you'll be able to increase that daily goal (inclusive of leverage which goes without saying). Also, I would advise against a dollar amount goal per day as this brings your attention to your P&L vs. executing your method correctly. Look to net N amount of successful rule based trades per day. The money takes care of itself so don't stare at your P&L all day.

One of the biggest hurdles a retail trader faces is the noise in the markets and the tools available out there. When starting out, keep it simple and become consistent. I see a lot of complicated methods out there which may work for those who've created them but I highly advise against looking to replicate them. Learn the value in that method and integrate that value into what you're currently doing if it makes sense but keep it simple. The simpler the method, the easier it is to make a trade decision. Also, make sure to have a plan in place each day for your trades. Don't just walk in blindly. Look at multiple chart periodicities to understand the overall market structure. Example, if price hits a certain support/resistance area, what are you going to do and what is a realistic goal for that trade. Sorry for the tangent here but I just want people to be realistic with what they're doing and learning and become successful with it.

Cheers,
PB

Thanks PB,
I think the most important part of trading is to identify the type of day we're likely to see before the structure forms and then plan accordingly, and then the ability to recognize when the type of day is changing, and again before it unfolds and trade accordingly again. If you get that right, the rest is levels and execution, which is not to be underestimated of course.. Many things do have to come together to be consistent. Volume is of course a big part of the puzzle.
Jedi

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  #519 (permalink)
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Jedi View Post
I think the most important part of trading is to identify the type of day we're likely to see before the structure forms and then plan accordingly, and then the ability to recognize when the type of day is changing, and again before it unfolds and trade accordingly again.

Just be careful here. Having a plan and having a market direction bias are two different things with the later being a potential recipe for disaster. There's no way we can accurately expect the market to do anything we anticipate and highly caution against being biased. At the end of the day, we should be trading on our reaction to what the market is doing in real time. Our trading plan should be unbiased in that if the market hits a support/resistance area or whatever, look to react accordingly. Maybe I read what you wrote wrong but just wanted to stress that point.

Best,
PB

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  #520 (permalink)
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Market Direction



Private Banker View Post
Just be careful here. Having a plan and having a market direction bias are two different things with the later being a potential recipe for disaster. There's no way we can accurately expect the market to do anything we anticipate and highly caution against being biased. At the end of the day, we should be trading on our reaction to what the market is doing in real time. Our trading plan should be unbiased in that if the market hits a support/resistance area or whatever, look to react accordingly. Maybe I read what you wrote wrong but just wanted to stress that point.

Best,
PB

I have to chime in now, you hit the nail on the head PB, I hear people talking about reading the market in the first 30 mins but then news or this or that happens, Bammm if you were long or short you take a big hit. My stagedy is take bunts rather than home runs, in and out quick

What are your thoughts on the best stragedy for a uptrending day as an example, after you see a move up that night (I trade ES for now) then do you let price action bounce of the mean so many times before you enter, then ride the wave after that. I lack the experience in my proper execution of this type of trade same applies to down trending

Many Thx In Advance, Nothing beats Experience! Nothing!

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