I agree with this... watching the same instrument day after day after day--the setups become clearer and clearer--one will notice nuances and variations based on tempo, time of day, and most importantly--context..
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how to handle psychology after huge draw drawn when system indicates 10 consecutive losses and we incur more than 20 with couple of small wins in between and fear of loss stops u to put on trades only to regret later?
I think we must develop our own set of rules--by validating those of others and/or creating some of our own. Creating our own rules might mean recognizing a pattern of failure due to our own personal weakness and committing ourselves to avoid that circumstance in the future. It might be something that isn't a problem for someone else.
Sometimes we try leaving off a rule doesn't seem to matter to us...until we discover that we didn't understand the motivation for that rule in the first place and now, through painful experience, we realize that it was a good rule after all. So with a deeper understanding and a dose of older-but-wiser maturity, we submit to what we thought we didn't like because it now keeps us out of trouble. The trouble is we have a tendency to not like rules. If it were really possible, we'd all probably like a completely effortless, worry-free answer-template we could strap onto ourselves and magically have no more trading problems. We need to take the rules that are out there and make them our own. If we don't, we won't realize their value and will receive no benefit from them. Sounds like work, doesn't it? uh-huh. It is.
Even very good automated systems will leave money on the table. Trying to squeeze out every drop of money on the one hand, creates an unperceived vulnerability in trading habit (a blind spot) that, on the other hand, will have opened a door through which the market will inevitably come to bite, gobble, consume, and frustrate.
The only way to actually KNOW which method is best would be to trade an equal amount of trades being disciplined to good trading rules, and then trading the same amount of trades intuitively--by the seat of your pants--and accurately and fairly documenting and comparing the outcomes. The problem is, the one who doesn't think rules are all that important will NEVER KNOW because they will NEVER actually succeed in changing their thinking and behavior enough to give it a fair trial. They'll bail out and nothing will change. (Unless, of course, they reconsider).
"There aren't any shortcuts to any place worth going." --Jared Martinez
Onward and upward. One patient step at a time. "Just pick yourself up, dust yourself off, and start all over again."
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The question suggests to me that you're not adequately confident about the statistical aspects of your edge, and the degree of statistical significance you have in the variability, and/or your position-sizing. But it's a huge topic for which it might be better to start a fresh thread (or add it to a more suitable one) than to take this one off-course?
Again, I'm not sure it belongs in the middle of this thread. There are several threads in the forum with good book recommendations. For example: https://futures.io/traders-hideout/8-some-highly-recommended-books.html . (I'm no expert on trading psychology books, but for money-management, I strongly recommend the second half of Van K. Tharp's Trade Your Way to Financial Freedom and Michael Harris's Profitability and Systematic Trading.)
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Not sure if hondo69 is still around, looks like last activity was in 2010. However my take is that yes, this is definitely a game controlled by big money. Depending on the markets, unless you have funding to swing thousands of contracts market price is not going to move.
Having said that, suggesting that 'big money can only maximize their profits by tricking retail traders' just doesn't make sense to me.
The game is generally played by big players Vs. other big players. Usually the player with more money wins. To the hedge funds or the 5,000 contracts traders, retail traders are just small fry. Sure, retail traders will get caught up in the action, but the big fish is not looking to take out my (say) 10-lot trade or even 100-lot trade. They're looking to (e.g.) trap people who just bought 1,238 contracts and price is not going anywhere.
This snapshot from John Grady's website captures the above concept rather well for me.
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As for 'why wait for a pullback' to me that's just common sense. A guy much wiser than me taught me that you can actually lose money by shorting into a downtrend or buying into an uptrend: it all depends on where you enter. If you enter at the wrong point and you're not prepared to stomach a significant drawdown you will lose money. All of this if the market conditions of course don't change half-way through, in which case you're in trouble!
I think the pullback bit is simply good risk-management, to limit your off-side risk as much as possible.