TRO, do you mind sharing a little of the stop loss strategies as well. My most of the losses are either from not taking profit early which turns profit to loss, or from improper stop loss (either too wide - unnecessary large loss, sometimes even near reversal point or too narrow - got whipsawed often).
TRO - It usually does. The "trick" is to know when to quit.
• Price either goes up or down.
• No one knows what will happen next.
• Keep losses small and let winners run.
• POSITION SIZE = RISK / STOP LOSS
• The reason you entered has no bearing on the outcome of your trade.
• You can control the size of your loss (skill) but you can't control the size of your win (luck).
• You need to know when to pick up your chips and cash them in.
Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss)
You can not control the probabilities of wining or losing.
You can not control your average win size.
The only part of the equation of the equation that you can control is your average loss size.
I do not need to lose more than 10 pips to know price is going against me.
If I risk 2% per trade, that's all I want to lose. Of course, I could lower my position size to get a wider stop, but what's the point? When price goes my way, I want to make money faster.
RISK = STOP LOSS * POSITION SIZE.
$1000 ACCOUNT BALANCE
2% MAXIMUM RISK
$1000 * 0.02 = $20
$20 = STOP LOSS * POSITION SIZE.
If I pick 10 for stop loss, then I trade 2 minilots. If I pick 20 for stop loss, I trade 1 minilot. There is no "right/wrong" way.
After I get up X pips, I will put on a trailing stop sometimes to exit part or all of my position. IT DEPENDS!! I do not have a set method for exiting.
Trading is very simple:
Only trade in one direction, long or short, FOREVER!!
If you are long, you will never be short and have the price run up against you. You will take some losses of 10 pips every now and then. When the big run up happens, you'll be long!! This is how to make the BLACK SWAN work FOR YOU rather than AGAINST YOU. You are protected against the price going down while you are long.
3) You are long and you make a profit that has "unlimited" upside.
Before someone asks what the TP is, THERE IS NONE!! If you preset your TP then the BLACK SWAN can not work for you!! You learn to scale out of your position. The R:R should be higher than 1:1 if you trade smart.
When you finally "see it", it will hit you like a ton of bricks.
Last edited by TheRumpledOne; September 10th, 2009 at 07:16 PM.
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Yes, I did attend DTI..... and yes I learned the YM key #'s at DTI.
All ranges on the Key Number post.... 20-30.....45-55.....70-80.....90-05...are areas that the YM often ranges in. When the is broken to the high side it is often a good buy and when the range is broken to the low side it is often a good sell. Just remember that these numbers must be used in concert with other factors. Just buying or selling on a key number does not guarantee a successful trade.
I also learned the Time of Day Methodology at DTI.
"Snyder and Mitchell say that the reason autistic people see the pieces of things is that they have privileged access to lower levels of raw information. A normal person doesn't become conscious of what he's looking at until after his brain has composed the sensory bits and pieces into wholes.An autistic savant is conscious of the bits and pieces.
That's why autistic savants can make perspective drawings without being taught how. They're drawing what they see, which is all the little changes in size and texture that tell you one object is closer up and another object is farther away. Normal people can't see all those little changes without a lot of training and effort, because their brains process them unconsciously. So normal people are drawing what they "see," which is the finished object, after their brains have put it all together. Normal people don't draw a dog, they draw a concept of a dog.Autistic people draw the dog."