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The PandaWarrior Chronicles


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The PandaWarrior Chronicles

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  #1101 (permalink)
 PandaWarrior 
In the heat
 
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Rad4633 View Post
Quick question does Mattz percent of winners differ from NT as I would assume they would be the same, I understand Mattz has alot more input for data etc. Just curious on % number as that is exactly what I was just posting in my journal that everyone needs to pay attention to % along with R2R

I'm not really sure what you are asking here. However, you should know I do not have an account with @mattz I just happen to really like him and I go to him with questions and he's always been straight with me. So as far as platform info about Optimus, I cannot answer those questions.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1102 (permalink)
 Rad4633 
Greensboro NC
 
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PandaWarrior View Post
I'm not really sure what you are asking here. However, you should know I do not have an account with @mattz I just happen to really like him and I go to him with questions and he's always been straight with me. So as far as platform info about Optimus, I cannot answer those questions.

Sorry for confusion Panda, let me clarfiy better. When you put your data into the spreadsheet from Mattz did your winning % of trades vary from NT or were they the same. I would assume the same. this was my question

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  #1103 (permalink)
 PandaWarrior 
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Rad4633 View Post
Sorry for confusion Panda, let me clarfiy better. When you put your data into the spreadsheet from Mattz did your winning % of trades vary from NT or were they the same. I would assume the same. this was my question

Again, I don't have an account with @mattz but to answer your question, my numbers were slightly different due to how Ninja handles ATM strategies vs the broker. But the overall numbers are right on. The spreadsheet does not include commissions. I'm not sure if it has a commissions function or not. I haven't found it yet if it does.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1104 (permalink)
 PandaWarrior 
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If I Could Teach You One Thing About Trading Success, This Is It

What if it was all wrong? The common advice you hear about trading, that is. What if it was, plain and simple, wrong? Have you ever really considered that?

Youíve been told that you need to focus on simplicity. And that you have to find a few trusted setups to execute with discipline each time they show up. And that all you need is good psychology and youíll be profitable. But who tells you all of this? Is it professional traders who are making a living from their trading, or is it people who are trying to sell you trading education? Do you think it might be in their best interest to tell you that itís simple and straight-forward, even when it isnít?

Well, Iím not here to bad-mouth those people, but as a professional trader whoís made a living solely from trading, I have my own views about what trading is all about, and what it takes to achieve success. So here is what Iíve found.

Trading is not about clear-cut, straightforward simplicity. Trading is about being okay with ambiguity. Itís about tolerating confusion. Itís about sitting with discomfort and being at peace with it. Itís about not having an exact script of when to trade or not to trade, and being okay with that. Itís about exceptions to the rules. Itís about contradiction. Itís about uncertainty.

And yet traders left and right want to make it simple. They want to reduce it to a few simple setups to trade mechanically with discipline. But the market is not simple. The market is all about uncertainty, and complexity, and ambiguity. Simple setups traded mechanically could never capture that, and they can never give you a true lasting edge. So choose a different way.

Choose to learn the art of reading the markets. Learn to synthesize different elements like price action, structure, market internals, and intermarket themes, and pull them together into a contextual view. Only then can you choose to employ ďsimpleĒ setups to trade with. Because only then will you know which setups to use under which conditions. And this is everything.

And donít be fooled. Learning this is a very complex process that will take time. It turns out that psychology, while hugely important, is NOT everything. First, you need an edge. And having a consistent edge requires that you dedicate yourself to learning to read the markets and how to execute correctly in context. But itís very possible. Many have done it before you, and this means that you too can learn it if you dedicate yourself. They had nothing that you donít have. All they did, was to be relentless.

They didnít spend their trading days waiting for mindless setups and indicators to line up. No. They spent their days reading the market from minute to minute, hour to hour, figuring out the odds of it doing this or that, adapting dynamically, thinking of trading ideas as the action unfolds.

Now, youíll ask me if itís not easier psychologically to just have simple clear setups to wait for. Absolutely. It is. But who said ďeasyĒ would make you money? The market rewards what is hard to do. Itís hard to have ambiguity surrounding your market reads. Itís hard being uncertain. Itís hard dealing with competing and sometimes conflicting signs. And yet, this is what itís all about. You have to avoid needing things to be clear cut. Instead of running from uncertainty, train your mind to be able to better deal with it.

And keep a trading journal. But donít fill it only with thoughts about your emotions. Let it be filled instead with your notes about market action. Youíll find my notes still in the drawer beside my bed. Over 1000 pages of them. Day after day. Week after week. Making mistakes, wrong interpretations, being clueless about how the market was acting, not knowing how I should trade, not knowing if my views made sense or not. But I continued taking notes and learning. And then, something magical happened. Market feel was born. Now I had the prerequisite to trade those ďsetupsĒ theyíll tell you about.

So dedicate yourself. Dedicate yourself like youíve never dedicated yourself before. Trading is a mental sport. You have to approach it like that. Donít listen to the salesmen. Start building your skills. Start practicing. Make mistakes. Take losses. Be clueless. Donít be afraid of it. Itís okay; thatís the only way youíll progress. And trust me, progress you will.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1105 (permalink)
 VinceVirgil 
Toronto, Canada
 
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PandaWarrior View Post
As I mentioned a few days ago, I won a trading journal/spreadsheet from @mattz at Optimus Trading Group. I promptly forgot about it until today.

I've kept them in the past and like all good things, I have gotten lazy about keeping my stats. Matt at Optimus has been talking to me about making my trading more like a business and I realized today that I have neglected this aspect of my trading for a while.

So I decided to take my trades from last Monday through today and manually input them. I chose last Monday because that's when I really began looking for confluence between MTFs in a manner that reflects live trading. The two weeks prior to this were just experiments to see if I could see it all happening real time. I also made some minor modifications to my trading chart as well from a 2M to a 1M during this time as well.

The first few days were tough. I had some mental errors, some money management mistakes and a couple exit mistakes. That being said, as I began to get more comfortable with it, the performance began to improve and my winners started to overtake the losers in terms of profit.

The data in the pic is NOT what I expected to see. My win rate is quite a bit lower than what I thought I was running. Also, my profits were derived from fairly large winners in terms of dollars. This was accomplished with both size and distance. The larger winners were due to size and couple were due to runners. Seems like I need some of both.

The spreadsheet will track a bunch of other things that I have not put in but going forward, I can input the set up, trend vs counter trend, day of week and a few other things that may or not be important.

Since I'm doing far fewer trades than I used to, inputting them should be less of a chore than it was before.

I will try to post the summary every day if I have time.


Now thats a cool spreadsheet macro. Where can I buy one?

I do my stuff with pen and calculator...takes quite awhile...and its a little clunky to imput and save. But I am terrible at excel.

Any resource like that would be really great. I want to manipulate my data more. Cant really do it with pencil and ink.

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  #1106 (permalink)
 Rad4633 
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PandaWarrior View Post
Again, I don't have an account with @mattz but to answer your question, my numbers were slightly different due to how Ninja handles ATM strategies vs the broker. But the overall numbers are right on. The spreadsheet does not include commissions. I'm not sure if it has a commissions function or not. I haven't found it yet if it does.


This is why I kept saying Mattz spreadsheet


As I mentioned a few days ago, I won a trading journal/spreadsheet from @mattz at Optimus Trading Group. I promptly forgot about it until today.

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  #1107 (permalink)
 PandaWarrior 
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How to Accelerate Your Trading Learning Curve and Increase Your Largest Profit Days, Part 1

Thereís a hidden enemy hurting your trading results. Itís not a lack of discipline, or falling prey to your emotions, or using bad strategies. All those things do hurt, but theyíre usually visible and can always be fixed. What Iím talking about is more dangerous.

Itís more dangerous because itís not readily apparent. And also because it directly affects everything else. So what is this powerful hidden enemy? Itís simply this: being satisfied with your best performances.

Wait, what? Arenít you supposed to be happy when you do well? Of course you are. And you should reward yourself mentally and emotionally. But donít linger there. Enjoy the achievement, but donít be satisfied. Hereís whyÖ

Being satisfied with your best results to date leads to complacency and untapped opportunity. It causes you to not progress rapidly and reach your true potential. And yet the key to surviving your learning curve, and to reaching elite levels of performance if youíre already profitable, is to keep making your Ďbestí better.

If your current best trading day resulted in a net profit of 7 points on the ES emini S&Pís and youíre satisfied with this performance because on most days you barely break even, what kind of motivation are you giving yourself to break through that level and have a 10 or 15 point day? And if youíre not motivated to achieve that, how can you expect to improve?

The Secret to Great Performance

You may be reading up to this point and thinking that you donít have to always be improving your best performance to improve; you could simply improve by having less bad performances. Very true. But let me ask you a question. What is easier to do, fix your weaknesses or improve on your strengths?

Think about it. What do you find easier to accomplish in life in general, overcoming something that you struggle with or getting even better at something that youíre already good at? I think the answer is pretty obvious. And the answer brings forth an interesting conclusionÖ

That conclusion is that while elite performers (whether they be top athletes or top traders) definitely do constantly work on their weaknesses, they spend just as much time- if not even more- working on their strengths. This keeps making their Ďbestí even better, and those good performances greatly compensate for all the times they donít do well.

Letís take an example. Suppose youíre good at trading intraday trends. Your strengths are patience and a lack of fear of regret. Youíve always had these character traits and they translate into giving you the great ability to hold your winners longer than most people since youíre able to wait and are not always worried about regretting losing the profits. You also have the technical strength of detecting trends early and reading them well. On the other hand, you often over-trade range-bound days because you find all the fake breakout moves highly frustrating, and they bring out the anger in you, which are your natural weaknesses. You also donít have a good eye for reading choppy days well.

Like most traders, youíre constantly working on those weaknesses. Always trying to control your frustration and anger so that you donít over-trade and take losses. Always trying to improve your ability to detect and read range days. Now this is all well and good, and you should definitely be working on these weaknesses. But what about your strengths?

Well, if youíre like most traders, youíre not even focusing on your strengths. Youíve taken them for granted and are satisfied with the gains they bring you. But let me pose a question to you. What if you improved your ability to hold trending moves even longer and also became better at detecting them earlier? If in the average month you made 30 points from all the days with trending moves and lost 30 points from all the range-bound days- making you a break-even trader- improving your performance on the trending moves by only 20% puts you 6 points in the green, and suddenly makes you a profitable trader!

Of course improving on the range-bound days by 6 points would also have the same effect, but the point is that itís much harder to improve that weakness of yours than it is to improve a strength! All things are already aligned in your favor when working on strengths, and this makes a given % improvement easier to achieve. And that makes all the difference.

What the Great Performers Do Differently

The great performers in any discipline naturally understand what Iíve explained above. They definitely always work to eliminate their weaknesses, but they focus even more on accentuating their strengths. They take the more efficient route to great performance.

If a boxer has a great natural right hook, he may work diligently on his weaknesses, but heíll work even harder on perfecting that right hook. Because he knows that if itís great, it can win him fights. And he knows that he can make it greater than he can make his other punches, and he can also achieve this feat faster. And if a tennis player has a good forehand, sheíll work a lot on all of her other shots, but sheíll become better overall if she makes that good forehand truly world-class. Because having a bunch of average shots makes her average, but having a killer forehand can win her games, sets, and matches.

So given all of this, hereís what I want you to do right now. Take an inventory of yourself and your trading results. What are your strengths? What key character traits contribute to your best performances? Do you have certain types of market environments that you make more money with? Note all of this down.

In Part 2 of this series, Iíll share with you the strategy Iíve used to improve my trading strengths, and how it leads to faster overall learning (which also helps improve the weaknesses), and to increases in overall profitability.

In the meantime, let me know what you thought of this post! Did it open up your eyes to a new way of looking at things? Or do you disagree with its conclusions? Letís get a nice dialogue started for the benefit of all.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1108 (permalink)
 PandaWarrior 
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How to Accelerate Your Trading Learning Curve and Increase Your Largest Profit Days, Part 2

In Part 1 of this series, I talked about a surprising thing that the top performers in any field do differently than the rest. In this part I’ll be sharing the strategy that builds on this knowledge, and which has helped me accelerate my own learning curve and increase my largest profit days.

By the end of this post you should have a practical method for speeding up your learning, while improving your overall results by becoming better at what you do best. If you’re a developing trader, this could be what pushes you to profitability. If you’re already a consistently profitable trader, this can help take you to elite performance.

The Method

Simple principles can often prove very powerful when put to use. I think you’ll find this method to be simple, and its effects to be highly beneficial.

In Part 1 I told you to do an inventory of your strengths. Particularly, which types of market environments and set-ups do you have the best results with? And which character traits / abilities contribute to your out-performance in these instances? Once you have those, here’s what you simply do:

Each time you reach a new ‘best day’ or ‘best trade’, instantly set a new goal to beat that mark.
You mean that’s it? No complicated strategies? Yes, that’s it. But don’t be fooled; this simple method will start a chain reaction of inevitable consequences that are about to take your game to another level.

The Benefits

To understand why this method is so powerful, let’s think about what happens when you instantly and perpetually set new goals to beat your best performances.

When you want to always better your best, you have to figure out how to improve your skills. So when you have these constant goals, it acts like fuel to push you far beyond what you’d ever normally do. Now you’re no longer satisfied with your good performances. Instead you’re instantly trying to figure out what you’ll need to learn to beat them. And since this is your goal, you won’t believe how much more you’ll push to learn.

Instead of stopping and resting when the market closes, now you stay at your desk and review the day and the trades. After all, you have to beat your new best mark next time around. What could you have done better? What subtle market behavior did you miss? How could you catch it next time? What mistakes did you make? How could you avoid them next time? What things did you do right? How can you do them even more right next time? Put more size on at the right time? Enter earlier? Don’t scale out? Add another trade at certain point? The possibilities for improvement are endless. Both in terms of learning to read the market better, and learning to execute on your insights better.

But something else happens when you use this method instead of being satisfied with your best performances: you start pressing it more when you recognize your ideal trading conditions. In fact, you become better at recognizing those ideal conditions to begin with. Since you’re constantly studying them, you become adept at detecting when they’re likely to occur. And since you want to beat your best, you don’t stop trading when you’re up a nice profit for fear of losing it. No. Now you’re on a mission. Fear of regret gets thrown aside as the bigger regret becomes not beating your best when you had the chance. And given that one of the biggest hidden weaknesses traders have is quitting while they’re ahead for fear of giving back the profits (even though this is often the best time to press it) , you simultaneously remove this weakness.

That’s the power of this simple method. It sets a whole virtuous chain of events in action. And knowing that you have a ‘best mark’ to beat, your focus also increases and becomes laser-like. In the end, and somewhat ironically, you not only end up improving your strengths, but in the process you improve your weaknesses too, and get better on the whole.

Action Plan

So now that I’ve shared with you this powerful strategy, it’s time to go put it to use. From Part 1 you pinpointed your specific strengths. You know when you’re at your best. Now each time you hit a new best performance level (whether on a specific type of trade, day, or period of favorable market conditions), enjoy and reward yourself but instantly set a goal to beat the new mark. You may not achieve it for a while, but the benefits that are brought about from striving to do so are what matter.

If you constantly follow this plan of action, you should find your learning curve accelerating, and your largest profit trades and days increasing, as you capitalize more on your strengths and improve overall.

What methods do you use that have helped you accelerate your learning and improve your performance? I’d love to hear about them in the comments below.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1109 (permalink)
 PandaWarrior 
In the heat
 
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VinceVirgil View Post
Now thats a cool spreadsheet macro. Where can I buy one?

I do my stuff with pen and calculator...takes quite awhile...and its a little clunky to imput and save. But I am terrible at excel.

Any resource like that would be really great. I want to manipulate my data more. Cant really do it with pencil and ink.

The "lite" version is for futures only.

https://trading-journal-spreadsheet.com/default.aspx

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1110 (permalink)
 PandaWarrior 
In the heat
 
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Rad4633 View Post
This is why I kept saying Mattz spreadsheet


As I mentioned a few days ago, I won a trading journal/spreadsheet from @mattz at Optimus Trading Group. I promptly forgot about it until today.

Sorry, I am doing three things at a time and missed your point. My bad.....

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1111 (permalink)
 PandaWarrior 
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Oh man, what a great day for practice reading multiple time frames. When I got to the charts, I was long biased from last night. I was wrong about how far the shorts would take it, they went much further than I thought possible in one day. So once they made it to the break up area from a couple of weeks ago, I figured a bounce was in order.

When I got to the charts, the higher time frames were long. No trend following shorts available. So long it was.

However, the lower time frame was decidedly short and the intermediate was getting that way. This is the first time since I've been looking at MTF seriously that I have seen the charts so messed up when I first sit down. Some times they are somewhat out of sync but most of the time, the overnight session has been slow enough to allow some consolidation just before 5:30AM my time which sets up a trend following trade around 5:30-5:45ish. Not today.

Since I had no idea what was going on or how long it would take to get the charts in sync, I instantly felt the motivation to trade leave me. I really didn't want to be here nor did I feel like waiting.

So I moved to my sim mode, totally forgot about anything resembling money management or wise behavior and just started clicking away. Whatever felt like it might be worth something I took. Some were good, most were bad.

Eventually, the charts started to sync back up a bit and I knew it would be long trades the rest of the morning. It was a very whippy day. No sustained momentum. After I got over the stupid stuff, I started trading with my plan, had a loser and a couple of winners. Trades posted are the real ones, not the crazy stupid stuff I did earlier.

I also have been reading about volume a bit. So decided to put a 250V chart with the same set up. Figured I could see both buying and selling volume that way. The volume chart today was very smooth. I might end up liking it. I'll keep it around for a couple of weeks and see how it works vs my lower time frame chart.

I am going to do a debrief on today, see how the out of sync time frames might possibly be traded for real and also finish the Danny Riley webinar I started last night. Two hours without interruption is a long time in my house.




Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1112 (permalink)
 PandaWarrior 
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All three time frames were long this morning. I missed the best move out of consolidation as it happened well before I got up. So reduced to looking at continuation entries. To do this, I went to my one min chart, look for opportunity and took the trades on an even smaller time frame. Not my preferred method but it worked today. I messed up the first long and ended up taking an unnecessary loss, made up for it on the next one and then when price broke the support level at the top, I took the fade back to support on the ten min chart using the smaller time frame as entry.

Today it worked like its supposed to. Perhaps my mental focus was better so I was able to see the price action better. In the end, I made the money I needed to make in time to be daddy this morning.

On a different note, I watched the Manesh Patel and Danny Riley webinars this week. Both were excellent. Thanks @BigMike for having these guys on. Danny Riley in particular spoke to me about how much more difficult it is to make up losses if you get down early and that it could be really important to find a stopping point once you are nicely in profit early. Taking this to heart as confirmation of what I have been thinking all along.

Another interesting thing. My win rate on black jack is the same as my trading win rate. 42%. In both cases, I am up $8000 since I started keeping track again last Monday. This is confirmation that managing the size of your winners vs losers is the key to staying in the game. In black jack, I quit every time I make or lose $1000. If I win $1000, I increase my bet size for the next $1000 and if I lose I reduce my bet size for the next $1000. So far its been working. If nothing else, its a fun exercise.

I need to figure out what my rules would be for this in trading as so far, I've kept my money risk the same now for months without thinking about how to increase it when the account is growing. Something else to think about.

Time for the weekend....cheers




Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1113 (permalink)
 Silver Dragon 
Legendary Data Wizard!!!
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PandaWarrior View Post

On a different note, I watched the Manesh Patel and Danny Riley webinars this week. Both were excellent. Thanks @BigMike for having these guys on. Danny Riley in particular spoke to me about how much more difficult it is to make up losses if you get down early and that it could be really important to find a stopping point once you are nicely in profit early. Taking this to heart as confirmation of what I have been thinking all along.

Another interesting thing. My win rate on black jack is the same as my trading win rate. 42%. In both cases, I am up $8000 since I started keeping track again last Monday. This is confirmation that managing the size of your winners vs losers is the key to staying in the game. In black jack, I quit every time I make or lose $1000. If I win $1000, I increase my bet size for the next $1000 and if I lose I reduce my bet size for the next $1000. So far its been working. If nothing else, its a fun exercise.

I need to figure out what my rules would be for this in trading as so far, I've kept my money risk the same now for months without thinking about how to increase it when the account is growing. Something else to think about.

Time for the weekend....cheers


You bring up a interesting thought; Protect profits and manage risk are 2 mainstays of trading so It begs the question: Why don't traders have a win limit for intra day trading?

This could be especially helpful for new and less experienced traders since they run the risk of letting emotions taking over resulting in giving back most or all of their gains.

Even for experienced traders this could be helpful by requiring discipline on the winning and losing side.

Rule would be something like: Win limit would be enforced when trader is flat and total net profits are over the win limit.

Robert

nosce te ipsum

You make your own opportunities in life.
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 PandaWarrior 
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Silver Dragon View Post
You bring up a interesting thought; Protect profits and manage risk are 2 mainstays of trading so It begs the question: Why don't traders have a win limit for intra day trading?

This could be especially helpful for new and less experienced traders since they run the risk of letting emotions taking over resulting in giving back most or all of their gains.

Even for experienced traders this could be helpful by requiring discipline on the winning and losing side.

Rule would be something like: Win limit would be enforced when trader is flat and total net profits are over the win limit.

Robert

I like a couple of different ideas.

1. I trade to make X% over my trailing daily average. In other words, if my daily average is 100.00 then I would try to make some number over that. Say $400. Once I reach that number, I quit.

2. Have set business hours. Example. I will trade the first three hours of the day no matter what. Use an equity trail stop that gets you out if your equity falls below 30% of your high water mark. If you make $1000, you would stop trading if your equity for the day fell below $700.

3. Trade to a specific number each day and quit. I like this one the least as it puts the idea in your head the market owes you this every day.

Of the three, I like the first one the best so far. Say you want to average X per day over the course of the month, quarter or whatever time frame you measure with. This means you will want to try to make X+(Y) where (Y) is some number greater than your desired daily average every day if you can. If you are winning, press it a bit. If you are losing, dial down the risk until you are winning.

The idea being that if you have net losing days and you only trade to the average, your average will fall short over time. You must trade for a multiple of the amount you wish to average over time.

If you have a daily stop limit, it might be good to use that limit as your minimum daily target thereby producing an initial 1:1 ratio. Assuming you have a daily winning percentage greater than 50%, you should be good. That combined with an initial per trade R:R of at least 1:1, that should be ok. I currently use an RR of greater than 1:1 which allows me to be profitable with a per trade win rate of 42%. However, my daily win rate is around 90%. This means I am losing on 58% of my trades but making money almost every day at a current rate of 1.66 of my daily average goal.

I am quite pleased with this measuring metric and will continue to monitor it as time goes by. I think the key for me is to continue to find ways to eliminate mistakes by half as well as to increase my confidence over time to let winners ride even more than I do now.

Winners larger than losers is the key. Plain and simple.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #1115 (permalink)
 tigertrader 
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Silver Dragon View Post
You bring up a interesting thought; Protect profits and manage risk are 2 mainstays of trading so It begs the question: Why don't traders have a win limit for intra day trading?

This could be especially helpful for new and less experienced traders since they run the risk of letting emotions taking over resulting in giving back most or all of their gains.

Even for experienced traders this could be helpful by requiring discipline on the winning and losing side.

Rule would be something like: Win limit would be enforced when trader is flat and total net profits are over the win limit.

Robert


PandaWarrior View Post
I like a couple of different ideas.

1. I trade to make X% over my trailing daily average. In other words, if my daily average is 100.00 then I would try to make some number over that. Say $400. Once I reach that number, I quit.

2. Have set business hours. Example. I will trade the first three hours of the day no matter what. Use an equity trail stop that gets you out if your equity falls below 30% of your high water mark. If you make $1000, you would stop trading if your equity for the day fell below $700.

3. Trade to a specific number each day and quit. I like this one the least as it puts the idea in your head the market owes you this every day.

Of the three, I like the first one the best so far. Say you want to average X per day over the course of the month, quarter or whatever time frame you measure with. This means you will want to try to make X+(Y) where (Y) is some number greater than your desired daily average every day if you can. If you are winning, press it a bit. If you are losing, dial down the risk until you are winning.

The idea being that if you have net losing days and you only trade to the average, your average will fall short over time. You must trade for a multiple of the amount you wish to average over time.

If you have a daily stop limit, it might be good to use that limit as your minimum daily target thereby producing an initial 1:1 ratio. Assuming you have a daily winning percentage greater than 50%, you should be good. That combined with an initial per trade R:R of at least 1:1, that should be ok. I currently use an RR of greater than 1:1 which allows me to be profitable with a per trade win rate of 42%. However, my daily win rate is around 90%. This means I am losing on 58% of my trades but making money almost every day at a current rate of 1.66 of my daily average goal.

I am quite pleased with this measuring metric and will continue to monitor it as time goes by. I think the key for me is to continue to find ways to eliminate mistakes by half as well as to increase my confidence over time to let winners ride even more than I do now.

Winners larger than losers is the key. Plain and simple.

Here's the problem with the above lines of thought: you're trading your money and not the market, where the overriding concern is to minimize regret, and not maximize profits. If you are trading well and the market is not choppy then take advantage of this seemingly rare occurrence, when its not -walk away. But, let the quality of the market be the determinant of when to trade, and not your P&L.

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 PandaWarrior 
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tigertrader View Post
Here's the problem with the above lines of thought: you're trading your money and not the market, where the overriding concern is to minimize regret, and not maximize profits. If you are trading well and the market is not choppy then take advantage of this seemingly rare occurrence, when its not -walk away. But, let the quality of the market be the determinant of when to trade, and not your P&L.

I agree. I attempt to do this by increasing targets and potentially adding a bit to my money risk. Especially if I am already up. Lets say I normally risk $100 and I'm up $500. On the next trade, I may risk $200 or even $250 if I think I have a really good trade setting up. If it looks like there is plenty of room for the trade to progress past my normal R:R targets or perhaps a break out with a potential runner, I will move my targets out to those areas where it looks like price might run.

This sets up an issue with me though. Managing the runner. I am getting better at it. I have a set trailing method. Basically I trail the swings but only after a new low or high has been made. Once price gets close to my targets, I start trailing one or two bars back depending on how big those bars are.

In this way, I try to maximize the profit potential of trending days. At this point, trading becomes an art form and one which will take many years to perfect. However, I feel like I have at least crossed the hurdle where I know its an art form vs something purely mechanical. There is a lot to be said for feel and that only develops with time.

Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #1117 (permalink)
 tigertrader 
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PandaWarrior View Post
I agree. I attempt to do this by increasing targets and potentially adding a bit to my money risk. Especially if I am already up. Lets say I normally risk $100 and I'm up $500. On the next trade, I may risk $200 or even $250 if I think I have a really good trade setting up. If it looks like there is plenty of room for the trade to progress past my normal R:R targets or perhaps a break out with a potential runner, I will move my targets out to those areas where it looks like price might run.

This sets up an issue with me though. Managing the runner. I am getting better at it. I have a set trailing method. Basically I trail the swings but only after a new low or high has been made. Once price gets close to my targets, I start trailing one or two bars back depending on how big those bars are.

In this way, I try to maximize the profit potential of trending days. At this point, trading becomes an art form and one which will take many years to perfect. However, I feel like I have at least crossed the hurdle where I know its an art form vs something purely mechanical. There is a lot to be said for feel and that only develops with time.

You're still missing the point Brian, this isn't Vegas...you're still trading your P&L and not the market. Each trade is an independent event that has absolutely nothing to do with your P&L. Risk/Reward parameters should not be determined by how much money you are up or down, but by the context of the market and the merits of the trade. Its very difficult to do, but your trading decisions should not be based on how good of a day you are having, rather than price action/price level based management of the trade itself. In a way being up on the day may be worse than being down on the day in terms of emotional destabilization. When you are up money, there's a temptation to think you are invulnerable. You start to take on additional risk that may not be warranted, because you "can afford it", or you are playing with the "house's money", instead of what is proper risk/reward for the trade itself. Trading is full of asymmetrical responses like this. When a trade is going against you and you are about to be stopped out, the thought that the market may be simply retracing might lead you to move your stop or even average down, but when you are in a winner and the market retraces, the trader immediately worries that his profit will disappear and stops himself out of the trade instead of adding.

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  #1118 (permalink)
 Silver Dragon 
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tigertrader View Post
When a trade is going against you and you are about to be stopped out, the thought that the market may be simply retracing might lead you to move your stop or even average down, but when you are in a winner and the market retraces, the trader immediately worries that his profit will disappear and stops himself out of the trade instead of adding.

This is very true. I solved the problem with moving stops. I only move them closer to entry. In fact I am beginning to recognize when I am wrong and cut my losses before it even gets close to the stop. This is big step up for me; knowing when I am wrong and acting on it.

The second part about worrying about profits disappearing is still a problem. I have taken a profit on the pullback only to have it go 50 ticks higher after I exit. Even with knowing the past its still hard to overcome. But, it will come just as the stops did however, it is very slow process to retrain your mind to let go of the emotion of losing something you just worked so hard to get.

Robert

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 PandaWarrior 
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tigertrader View Post
You're still missing the point Brian, this isn't Vegas...you're still trading your P&L and not the market. Each trade is an independent event that has absolutely nothing to do with your P&L. Risk/Reward parameters should not be determined by how much money you are up or down, but by the context of the market and the merits of the trade. Its very difficult to do, but your trading decisions should not be based on how good of a day you are having, rather than price action/price level based management of the trade itself. In a way being up on the day may be worse than being down on the day in terms of emotional destabilization. When you are up money, there's a temptation to think you are invulnerable. You start to take on additional risk that may not be warranted, because you "can afford it", or you are playing with the "house's money", instead of what is proper risk/reward for the trade itself. Trading is full of asymmetrical responses like this. When a trade is going against you and you are about to be stopped out, the thought that the market may be simply retracing might lead you to move your stop or even average down, but when you are in a winner and the market retraces, the trader immediately worries that his profit will disappear and stops himself out of the trade instead of adding.

Some things I think we agree on.

1. Each trade is independent of each other.
2. Each trade should be evaluated on its own merits.
3. In an earlier post, you said when the market is going your way and you are trading well, you should press. (side note, in this post, you said "your trading decisions should not be based on how good of a day you are having). This appears to contradict your earlier statement but I will assume you mean how good of a day you are having in the context of the size of risk you are willing to take vs a "normal" day.
4. There are certain set ups/market conditions that warrant more initial risk.

Some basics about my trading:

1. I have never moved a stop in the hope it will come back. I have moved a stop mid trade if I see a better location for it both looser and tighter. But never in a hope situation.
2. I never average down in a trade. I have averaged up in a trade but its not something I do regularly.
3. I never add size unless my equity is great enough to allow a full stop out and still be above my trailing daily average by at least 1.5%
4. I only add size if I have solid confluence between time frames.
5. My trading goal is to be consistently profitable on a weekly basis. I am over the need to make X number of dollars every day.

Here are my thoughts and questions in regards to your comments.

1. You've been a reader of my thread for a while and your input is valuable as you have time and experience I do not. However, most of your posts are about what I do wrong and while I accept that as an aspect of legitimate coaching, I would like to hear some specific ideas about how a trader should approach being a better trade manager. Nothing about entries because every one has their own method. Its the exit that makes or breaks you and the hardest thing about trading to get a handle on.

2. Crude oil is a wild beast as you know, some days its very directional either long or short for 200-300 ticks and simply entering and holding all day is the best option. Other days, it will run 100 ticks up, then 100 ticks down and then back up again. Other days, it simply grinds out an 80 tick range with no trending direction at all. Still other days you get a 100 tick burst and then sideways the rest of the day.

3. The way I see it, there are a few ways to approach trade management. (this assumes all targets are larger than the stops).
A) All in all out scalping for a few ticks. Say 5-10 ticks per trade
B) All in all out looking to trade legs in a move. Say 15-30 ticks per trade. 2-4 trades per move/trend
C) All in all out, trying to capture a large infrequent move that makes your week with many small stops or BE
D) Scale into #C with small size, wait for the move to happen, add to it on the pull backs. Trail out at a reversal.
E) All in scale out to eliminate risk quickly and let a small runner go. Trail out at a reversal.
F) Variations on all of the above but I think this captures the main ones.

4. In light of characteristics described in #2 with an attempt to provide direction as outlined in #1 and looking at #3 as a starting point of how to manage a trade, would you be willing to give specific positive advise on how a trader should have traded the charts in my posts #11111 and #11112 and what the results would have been with that advised followed exactly? I pick these days because they are recent and provide a reasonable example of crude's price action. Ignore my indicators for the purposes of this illustration.

I ask this because I truly want to learn from someone with a lot more experience than I have and I'm tired of wrestling with this question. I'm at the point mentally that I don't jump into a trade just for the hell of it, nor do I increase size to make up a loss or other stupid stuff like this. What I am after here is solid specific coaching from a professional about the finer points of trading. I recognize that most of trading is being comfortable with ambiguity and uncertainty, but my take away from some of your posts in my thread is that there is no right answer and no matter what a trader does, its wrong.

Simplicity is the ultimate sophistication, Leonardo da Vinci


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 PandaWarrior 
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The Difference Between Knowledge and Performance

Cognitive knowledge of how to do something is very different than managing performance during challenge. Until the learned knowledge about trading and risk is integrated into the emotions and mindset needed for peak performance in trading, then the learned knowledge is simply not available to the trader during the emotional environment of trading. The learning has not taken place in the emotional context where the performance will be measured. This is because the way you think is emotional-state-dependent.

What does this emotional learning look like to a trader? Traditionally most traders learn how to trade and manage risk while paper trading where there is no risk of loss. People can learn how to trade well and manage risk well in this emotional environment devoid of real risk. They learn the mechanics of trading, how to use their methodology, and get valuable screen time for pattern recognition. And, as they learn how to use these tools they become profitable on paper, but without the context of the downside of the risk of uncertainty.

The problem is that you cannot go to the bank and cash in your paper profits. Yet when the trader takes his or her learned skills into the arena of live trading where capital is at risk, a very different emotional environment takes over - one for which the trader is rarely trained and for which he or she is not prepared. At that moment the skills the trader learned in the emotional environment of a classroom simply are not available to him in the emotional environment that occurs while live trading, where the possibility of capital loss is real and tangible.

These are completely different emotional worlds. And the knowledge gained in the no-risk paper world is not usable until the trader adapts to the new sets of emotional skills and mindset needed for risk management where personal capital is actually being put into play. This is where emotional intelligence is far more important than head-knowledge.

Live trading exposes the fear-based mind that interprets the uncertainty of trading when capital is at risk. Depending on your beliefs about losing, you remain locked into a loserís mind or you learn how to learn from your losses by bringing a powerfully different mindset to the ambiguity of trading.

Teasing Apart Uncertainty and Fear

A highly disciplined mind is the undercurrent that lies beneath emotional management of both methodology and platform. No one becomes successful without emotional discipline. For the vast majority of traders who want to become successful, emotional discipline is built, not found. It is not found out-there in more rules that you will not follow in the heat of trading. It is found by acknowledging your fears and re-training your beliefs so that losing becomes an opportunity to learn and grow from your mistakes Ė instead of trading NOT TO LOSE. In training a mind to trade, the crucial step is that you and the way you perceive (your mind) learn to embrace the uncertainty of probability. It does not come naturally. And your staying in denial about this need keeps you stuck in your self-limiting performances.

Until this happens, your brain is always going to chase certainty because that is what it has evolved to do over countless generations. Your brain is biased to believe that there is an answer that will correctly predict what the markets will do. No matter how much evidence there is to the contrary, your brain and your mind will resist probability thinking. It wants to stay in certainty thinking. This is simply not an effective mindset in trading where the illusion of control is dangerous.

Now add social adaptation to your biological pre-disposition. Most traders grow up in families, schools, and cultures where they learn to not make mistakes, to not lose, and to always be right -- and you have the perfect storm for forging a brain and mind unable to think in probability terms. So the brain and mind that you bring to trading rarely has the capacity to separate uncertainty from fear. And, sure enough, most traders fear uncertainty, which is exactly what they must manage from a probability mindset to be successful traders. If fear is linked to uncertainty, a trader has difficulty moving from paper trading to live trading. And they will continue to have problems until this linkage is disrupted and reformed by new beliefs about uncertainty, losing, and winning.

Learning, Failure, and Trading

What happens when a trade goes against you? (This will tell you a lot about what you learned about how to be successful.) In our culture being successful is associated with not making mistakes. Success is about winning...being a winner. Yet successful trading involves relearning how to lose. Because you are going to make mistakes and you are going to lose. It is the frequency of winning and losing (and the size of the winners compared to the losers) that counts. Learning from mistakes is the key to becoming a successful trader Ė it is what separates successful traders from inconsistent traders. The perception and beliefs you have about winning and losing will be put to the test in trading.

When you lose, do you trigger to self interpretations of inadequacy, powerlessness, and unworthiness? This will expose your faulty beliefs that link your performance with self-limiting beliefs. The fact is that the brain (and you) learn only from failure, not success. Success actually locks you into a comfort zone that keeps you from growing. People get locked into once-successful strategies and refuse to change when the strategies no longer work. Thatís success for you. When you lose, you have high motivation to change. This is key. When you develop a mindset that stops attempting to avoid mistakes but, rather, becomes curious about learning from the mistake Ė you are on the road to probability thinking.

Learning to trade successfully is not about being smart. It is about putting probabilities in your favor and having the emotional stamina to stay in probability thinking, rather than chasing certainty as the Holy Grail. This is the mind that you need to bring to trading. You manage your risk and then move on. Loss is not a statement about the worth of your being. Loss is only about your performance in risk management. Mistakes happen, learning happens, and another trade (with greater skill) becomes possible.

Itís not really about whether you like risk or not. It is about becoming comfortable with risk. This is where uncertainty, and its management, is separated from fear. And it is where the journey of a trader moves from the need for certainty to the management of the ambiguity of the uncertainty of trading in the markets. What mindset do you bring to uncertainty, ambiguity, and losing in trading? The effectiveness of the beliefs behind that mindset will be found in the balance of your trading account
Rande Howell

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PandaWarrior View Post

2. Crude oil is a wild beast as you know, some days its very directional either long or short for 200-300 ticks and simply entering and holding all day is the best option. Other days, it will run 100 ticks up, then 100 ticks down and then back up again. Other days, it simply grinds out an 80 tick range with no trending direction at all. Still other days you get a 100 tick burst and then sideways the rest of the day.

3. The way I see it, there are a few ways to approach trade management. (this assumes all targets are larger than the stops).
A) All in all out scalping for a few ticks. Say 5-10 ticks per trade
B) All in all out looking to trade legs in a move. Say 15-30 ticks per trade. 2-4 trades per move/trend
C) All in all out, trying to capture a large infrequent move that makes your week with many small stops or BE
D) Scale into #C with small size, wait for the move to happen, add to it on the pull backs. Trail out at a reversal.
E) All in scale out to eliminate risk quickly and let a small runner go. Trail out at a reversal.
F) Variations on all of the above but I think this captures the main ones.

Hi @PandaWarrior, nice journal and fantastic discussion here. Would love to hear how/when you think these different methods of trade management should be applied when trading crude, given its behavior.

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Futures Operator View Post
Hi @PandaWarrior, nice journal and fantastic discussion here. Would love to hear how/when you think these different methods of trade management should be applied when trading crude, given its behavior.

I'm glad you've enjoyed the thread so far.

As to when & how it's appropriate to use these trade management methods, I have my opinions but truthfully, I think depending on what you are trying to accomplish, how much time you have each day and what your temperament is, anyone of these can work for you.

My post is an attempt to solicit professional advice so I hope we will hear from @tigertrader soon.

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2. Crude oil is a wild beast as you know, some days its very directional either long or short for 200-300 ticks and simply entering and holding all day is the best option. Other days, it will run 100 ticks up, then 100 ticks down and then back up again. Other days, it simply grinds out an 80 tick range with no trending direction at all. Still other days you get a 100 tick burst and then sideways the rest of the day.

Hello PandaWarrior. the success of your MTF approach to trade crude depends on how well crude trends on a given day. and the fact is crude does not trend well everyday, hence the struggles and occasional losing days. but why limit yourself to crude only? why don't you have multiple instruments available and everyday pick the best trending one to trade? surely a man of your level of trading experience can find the (comparatively) best trending futures instrument at a glance. wouldn't it making trading a bit easier then?

here is an example of last Friday's GC and CL, you can see that before market opened in USA, GC was clearly trending better than CL. and it remained so throughout the day.

and there is also an added benefit. by picking the best trending instrument to trade, or waiting for one to develop, it's easier to bypass those not so good opportunities, and stack more odds in your favor.

I'm probably only pointing out the obvious to you, you are certainly a much more experienced trader than me. I've just began to experiment with trading this way, so if you've explored this already, could you maybe share your findings?

Best Regards

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Hello PandaWarrior. the success of your MTF approach to trade crude depends on how well crude trends on a given day. and the fact is crude does not trend well everyday, hence the struggles and occasional losing days. but why limit yourself to crude only? why don't you have multiple instruments available and everyday pick the best trending one to trade? surely a man of your level of trading experience can find the (comparatively) best trending futures instrument at a glance. wouldn't it making trading a bit easier then?

here is an example of last Friday's GC and CL, you can see that before market opened in USA, GC was clearly trending better than CL. and it remained so throughout the day.

and there is also an added benefit. by picking the best trending instrument to trade, or waiting for one to develop, it's easier to bypass those not so good opportunities, and stack more odds in your favor.

I'm probably only pointing out the obvious to you, you are certainly a much more experienced trader than me. I've just began to experiment with trading this way, so if you've explored this already, could you maybe share your findings?

Best Regards

I respect those that can do this but I find I have enough on my plate with CL. For me the old chinese proverb that says man that chases two rabbits loses both applies to me. Besides, my screen space is insufficient to accommodate three screens plus a Dom for more than one instrument.

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 tigertrader 
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The answer is simple, Brain. If I'm long and I think the market is going higher, I am looking to add to my position. If I'm short and I think the market is going lower, I am looking to add to my position. Its pretty automatic for me and really doesn't require much conscious thought. The reason that it has become so instinctual is that I know my game. I have a pretty good understanding of current price action and how it relates to the overall context of the market and this allows me to have a gauge on the duration and distance of the trade. Scaling out of a profitable trade, obviously provides the trader with more flexibility and expands his choices. Do I look to add on every trade I make? Of course not. I look to add when conditions have become favorable to support pressing and adding. Nevertheless, it does not mean that it will work. The difference between unsuccessful traders, net-profitable traders, and big money making traders is smaller than you think. It usually boils down to a small but perceptible edge, and while it can be related to poor money management, inadequate knowledge of the market, or a bad methodology, it is usually an internal factor - a lack of: discipline, emotional control, patience, and especially an improper attitude about losing and risk.

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The answer is simple, Brain. If I'm long and I think the market is going higher, I am looking to add to my position. If I'm short and I think the market is going lower, I am looking to add to my position. Its pretty automatic for me and really doesn't require much conscious thought. The reason that it has become so instinctual is that I know my game. I have a pretty good understanding of current price action and how it relates to the overall context of the market and this allows me to have a gauge on the duration and distance of the trade. Scaling out of a profitable trade, obviously provides the trader with more flexibility and expands his choices. Do I look to add on every trade I make? Of course not. I look to add when conditions have become favorable to support pressing and adding. Nevertheless, it does not mean that it will work. The difference between unsuccessful traders, net-profitable traders, and big money making traders is smaller than you think. It usually boils down to a small but perceptible edge, and while it can be related to poor money management, inadequate knowledge of the market, or a bad methodology, it is usually an internal factor - a lack of: discipline, emotional control, patience, and especially an improper attitude about losing and risk.

I accept the simplicity. Easier to say than do of course but still, very simple.

On a larger time frame like a daily chart I can see how this approach might be simpler to do vs an intra day chart. However, if it is doable on a daily, it's doable on a smaller time frame.

What you've said reminds me of the Phantom of the Pits. The basics was be wrong small and be right big. That only happens by adding to winners as aggressively as your risk and money management rules allow. On a straight trend day, you stand to make a fortune and on range bound days you scratch or have small losses. Is this correct? What about the idea many traders have of sacrificing the occasional big move in exchange for many smaller and more frequent trades while attempting to be more accurate with timing?

The next issue a trader must address is the understanding of market structure and what the potential exit zones should be. You can add till the cows come home but if you don't have pre determined exits, you'll work hard and end up break even when price eventually comes back on you as it inevitably will.

It sounds like the edge exits primarily in simply pressing the trade when your right combined with appropriate risk management when your not. Everything else is either a scalp with small size or acceptable losses while you probe the market.

Speaking of losses, I still dislike them but recognize them as the cost of doing business and the result of imperfect knowledge about uncertainty. The losses that bother me are the ones that happen as a result of my interference of a perfectly good trade. These losses are becoming more rare for me thankfully.

From an intra day standpoint, my next questions are:

1. When long, how do you look to add? Is it possible breakouts, buy the dips, or like some one I saw once, buy the bottoms of all the red bars or buy the tops of all the green bars in an established trend? Or all the above?

2. The exit. Do you look for exit zones based on market structure or do you simple stay in until you'd rather be short and give up some portion of the move.

3. Assuming you are long small and before you start adding, stops are important from a possible catastrophic standpoint. However, do you recommend stops be placed just below the action with the thought you are right about direction and wrong about timing and you need to allow for price to further work itself in your direction or do you recommend the stop be placed well away from the action to allow for price probing those "retail" stop placement areas?

Thank you for your answer and willingness to help.

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 tigertrader 
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From an intra day standpoint, my next questions are:

1. When long, how do you look to add? Is it possible breakouts, buy the dips, or like some one I saw once, buy the bottoms of all the red bars or buy the tops of all the green bars in an established trend? Or all the above?

2. The exit. Do you look for exit zones based on market structure or do you simple stay in until you'd rather be short and give up some portion of the move.

3. Assuming you are long small and before you start adding, stops are important from a possible catastrophic standpoint. However, do you recommend stops be placed just below the action with the thought you are right about direction and wrong about timing and you need to allow for price to further work itself in your direction or do you recommend the stop be placed well away from the action to allow for price probing those "retail" stop placement areas?

Thank you for your answer and willingness to help.

I don't trade bar to bar, and although I keep candle charts, I pay very little attention to what kind of bar is formed, with the exception of bars with extremely long tails. These bars can be important points of support or resistance. Instead I concentrate on price levels. If I am pressing and adding, it is likely to be on a trend day, in the direction of the trend. If I have just initiated a long on a dip (in an up-trending market), is it at or near a level where I could expect the value longs to step in and support the market, have the bears been trapped, or is it just a cyclical low? My assessment of these variables will determine how aggressive I will be with my adding. My adds are also predicated on volatility, i.e., ATR and ADR. If the average daily range is is 11.00, I am not looking to capture a 12.00 point move, rather than a 5 or 6 point move, depending on time-of-day, and even the day-of-the-week. There's other input I consider which I constantly monitor in real-time as I watch price action, e.g., the dollar, bonds, $TICK, p/c ratio, VWAP, profile, delta, breadth, sentiment, pivots. As far as the mechanics of adding, I'll add on dips mostly (timed with the $TICK) and save breakouts for putting out "highballs". I may or may not pyramid my size when adding, but that is essentially based on feel. There is no real way of knowing how far a move will carry, and sometimes the trades with the lowest probability of working are the one that are the biggest winners, so I almost always scale out of these kind of trades. Additionally, I always try to place my stops, a) where other don't place theirs b) where I no longer want to be in the position and 3) within the parameters of my risk management strategy.

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I don't trade bar to bar, and although I keep candle charts, I pay very little attention to what kind of bar is formed, with the exception of bars with extremely long tails. These bars can be important points of support or resistance. Instead I concentrate on price levels. If I am pressing and adding, it is likely to be on a trend day, in the direction of the trend. If I have just initiated a long on a dip (in an up-trending market), is it at or near a level where I could expect the value longs to step in and support the market, have the bears been trapped, or is it just a cyclical low? My assessment of these variables will determine how aggressive I will be with my adding. My adds are also predicated on volatility, i.e., ATR and ADR. If the average daily range is is 11.00, I am not looking to capture a 12.00 point move, rather than a 5 or 6 point move, depending on time-of-day, and even the day-of-the-week. There's other input I consider which I constantly monitor in real-time as I watch price action, e.g., the dollar, bonds, $TICK, p/c ratio, VWAP, profile, delta, breadth, sentiment, pivots. As far as the mechanics of adding, I'll add on dips mostly (timed with the $TICK) and save breakouts for putting out "highballs". I may or may not pyramid my size when adding, but that is essentially based on feel. There is no real way of knowing how far a move will carry, and sometimes the trades with the lowest probability of working are the one that are the biggest winners, so I almost always scale out of these kind of trades. Additionally, I always try to place my stops, a) where other don't place theirs b) where I no longer want to be in the position and 3) within the parameters of my risk management strategy.

Ok, makes sense.
Currently CL has an ADR of around 250 ticks. I'm guessing since my charts aren't open. When I get up and see an overnight range of 100 tick and price is currently half way between the high and low and I believe the market is long, then a potential target zone might be the ADR less 50+\- ticks to allow for the 50 ticks price is off the low. This would workout to +/- 140-170 ticks as a potential target zone. This may be a simplistic explanation but have I captured the essence of the idea?

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 tigertrader 
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Nov crude's ADR(20) =$1.64 and an ADR(10)= $1.78 and it's ATR 15 is running around .20 cents. Irrespective of other inputs, this puts your trades in some kind of perspective. If you were to risk 1.5X ATR you would risk app. .30 cents, if need be .40 cents and maybe a decrease in size. The odds of buying the low of the day and selling the high (capturing the range) are pretty low, so if you were to capture 70% of the range, that would be app. a $1.20 which would be a 1:4 risk/reward and a reasonable target for the trade( not taking into account price levels/S&R).

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Nov crude's ADR(20) =$1.64 and an ADR(10)= $1.78 and it's ATR 15 is running around .20 cents. Irrespective of other inputs, this puts your trades in some kind of perspective. If you were to risk 1.5X ATR you would risk app. .30 cents, if need be .40 cents and maybe a decrease in size. The odds of buying the low of the day and selling the high (capturing the range) are pretty low, so if you were to capture 70% of the range, that would be app. a $1.20 which would be a 1:4 risk/reward and a reasonable target for the trade( not taking into account price levels/S&R).

This approach to trading seems to require the trader have some sort of opinion about the daily direction and be prepared to trade in that direction only as opposed to being both long and short throughout the day as well as potentially having only a single trade while adding and subtracting to it throughout the day.

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This approach to trading seems to require the trader have some sort of opinion about the daily direction and be prepared to trade in that direction only as opposed to being both long and short throughout the day as well as potentially having only a single trade while adding and subtracting to it throughout the day.


Not really... not an opinion but an awareness of the context of the market. Trend days, (in equities) occur only 14% of the time while range days occur 86% of the time. The trick is to be able to identify trend days as early in the trading session as possible and adjust your strategy accordingly. The other 86% of time (majority) you can trade a tight mean reversion strategy.

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tigertrader View Post
Not really... not an opinion but an awareness of the context of the market. Trend days, (in equities) occur only 14% of the time while range days occur 86% of the time. The trick is to be able to identify trend days as early in the trading session as possible and adjust your strategy accordingly. The other 86% of time (majority) you can trade a tight mean reversion strategy.

Does anyone have data on range vs trend day statistics for crude?

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triangles are reversals I marked but did not take.




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triangles are reversals I marked but did not take.




I am liking the charts...

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 PandaWarrior 
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I struggle a bit when the charts are not in sync. To take or not to take, that is the question. For me, I am answering that question with smaller targets. In other words, where is the trade likely to stop?

Today, even though the long was with "trend" the target was previous HOD on the long, and support levels on the shorts. Those levels happened to coincide with my normal targets in terms of R:R and while I thought the second short target was in play on the first short trade, I elected to take the first one off at the support area and see if it held or broke. I knew if it held, price would reverse and if it broke, I'd get another chance at the lower target.

I generally take the hand drawn lines off the chart before posting but thought I would leave them on today just to show some of my thinking today.




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Made a couple of adjustments today in terms of looking for reversals. I have been seeing them fairly well but not taking them. They make me nervous. I took one long today but it was really to late, so was really nervous about it and got out BE the first time, then got another shot, took some off but the runner got stopped out and then of course at the open it shot up to my target zone. Oh well. Some times BE is not your friend.

I also went long straight into the resistance zone and after I did it, realized what I'd done and got out at BE and then said to myself, if this is a bad long trade, then it could be a great short. So I did and got out at a conservative exit.

The support and resistance areas were definitely places where price paused today day on the shorter time frame, but eventually, they all broke and the shorts worked well.




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Hi Brian

Looks like all your hard work is paying off now. I'm delighted for you. Now I will sit and wait for an email from TST with your name on it. It surely can't be long in coming.

Best wishes

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Small scratch day for me today. I made some mistakes early, couldn't seem to get a handle on what was going on. then focused a bit more, got to BE, scratched a couple of trades, got a small winner and ended up slightly ahead. After commissions its about BE on the day and I'm happy for it after the mistakes early.

Seems like every time I slip focus a bit on just doing ONLY what I have tested, I pay for it. Second guessing what I have tested is a no no. So back on the wagon tomorrow.

On a side note, I'm driving some friends to the Grand Canyon tomorrow. They are going to hike from the north rim, down the canyon and back up the south rim. About 25-30 miles. I drop them at the north rim, drive 4+ hours around to the south rim and pick them up that evening. I get several hours of uninterrupted alone time to think, to plan, to dream or just veg out. Long drive to be sure but looking forward to it.





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A really nice sell off from yesterday's rally and one I was hoping would wait until I got up this morning. But I got here just as it was pulling back of the lows. I recognized what it was doing, got in but truthfully, I am not comfortable with counter trend trading like I would like to be. I took a tiny loss, berated myself for being chicken, got back in at the same price, let it go up a bit, and then got out at BE. So rather than torture myself any longer, I decided to wait and try to be short if and when it found some resistance.

Today I decided to short at resistance instead of waiting for all three charts to line up. Basically take the short at the highest time frame level regardless of what the other charts said. I waited until the lower time frames had some sort of selling going on and then shorted. This was the hardest trade I've ever done. It took forever. And in fact, I second guessed myself, got out at BE,got long, out at BE and finally made the mental leap to stay with my original premise and just hold it. I had a target of a few ticks above the LOD, trailed my stop out at +30 ticks. It eventually went to my target but it may not have filled me there as it ticked that price and bounced.....so might have ended up with +30 anyway based on some other form of trail.

Thats enough excitement for one day. Time to rest for the drive to the Grand Canyon trip tonight.




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 devdas 
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Brian,

Any specific reason for 9 min...from 10 minute.

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Brian,

Any specific reason for 9 min...from 10 minute.

1 x 3 = 3

3 x 3 = 9


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Enjoy the trip.



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Have a GREAT/SAFE trip Brian!!!

:car::car::car::car::car::car:

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tigertrader View Post
The answer is simple, Brain. If I'm long and I think the market is going higher, I am looking to add to my position. If I'm short and I think the market is going lower, I am looking to add to my position. Its pretty automatic for me and really doesn't require much conscious thought. The reason that it has become so instinctual is that I know my game. I have a pretty good understanding of current price action and how it relates to the overall context of the market and this allows me to have a gauge on the duration and distance of the trade. Scaling out of a profitable trade, obviously provides the trader with more flexibility and expands his choices. Do I look to add on every trade I make? Of course not. I look to add when conditions have become favorable to support pressing and adding. Nevertheless, it does not mean that it will work. The difference between unsuccessful traders, net-profitable traders, and big money making traders is smaller than you think. It usually boils down to a small but perceptible edge, and while it can be related to poor money management, inadequate knowledge of the market, or a bad methodology, it is usually an internal factor - a lack of: discipline, emotional control, patience, and especially an improper attitude about losing and risk.

@tigertrader, can you provide some details on the average time duration of trades to give some context? Or just tell us an idea of how much you are targeting in points on each trade?

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@tigertrader, can you provide some details on the average time duration of trades to give some context? Or just tell us an idea of how much you are targeting in points on each trade?

Mike

As I mentioned earlier, It all depends on a variety of inputs; current volatility, type of day, time of day, previous day, news, price levels, et al. I probably shouldn't be giving any advice, the way I've been trading lately (especially in the ES), but on the other hand, my recent lack of success is a perfect example that conditions have to be favorable to support this strategy, especially when you are an aggressive trader.

Currently, the market is locked between near-term highs, and downside sell levels. Long term and intermediate term cycles are still bullish, but are historically overbought. The minor cycle has begun to unravel recently due to these overbought conditions. Market internals are subsequently mixed and traders at the margin appear to be waiting for the next catalyst before jumping back into the market.

This is both good and bad. Its a bad environment for trading aggressively, but it is good because, we are hopefully at an inflection point that will set the stage for larger market swings, and perhaps, a trending market. Until then, trading aggressively, is certainly not a strategy "you want to try at home".

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As I mentioned earlier, It all depends on a variety of inputs; current volatility, type of day, time of day, previous day, news, price levels, et al.

How about just a vague idea if your stop and target is closer to 10 ticks or 100 ticks per trade.

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 tigertrader 
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How about just a vague idea if your stop and target is closer to 10 ticks or 100 ticks per trade.

Mike


If conditions warrant it...I usually risk 1.5X the ATR15m, and look to capture 70% of the ADR 20D intra-day, with the intention of taking the position into the ETH, if feasible

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If conditions warrant it...I usually risk 1.5X the ATR15m, and look to capture 70% of the ADR 20D intra-day, with the intention of taking the position into the ETH, if feasible

Perfect, thanks Gary for providing that context.

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I'm tired from my long weekend trip, so just did one today and now back to bed I think. It went to my BE target, came back and missed my BE by one tick twice. Then went on to fill my target.

Last week I extended my R:R multiple out a bit. I've been working with 1.5xR and decided after seeing a 2xR multiple working well to stretch it out a bit. I still go BE after 1XR at this point. Its what I've tested over time and so going with it for now.




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 PandaWarrior 
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I'm still learning and suspect I will always be learning the nuances of MTF.

I have a short bias from the daily chart at this point and the highest time frame I watch was long. However, I decided to go with my bias and when that trade was stopped out, had trouble reconciling current price action with the bias and also reconciling the charts together.

The point is that this point, I was guessing but not an educated guess. Lack of patience to wait for the charts to present an alignment I could recognize easily was also an issue.

I know for 100% certainty, that if I wait for the periods of confusion to elapse, I will get a good trade. Most of the time, I am reasonable good at waiting for this to happen. I was impatient today and the PnL shows it.

Funny thing is that eventually the charts did get in sync which produced a pretty good trade.

The actual MTF trade would have produced enough profit to offset all losses plus have a tidy profit but I was already at my daily stop limit.......had I waited, the trade was enough to provide 6X my daily average. Major opportunity lost.

Its better to wait than to be confused.




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  #1151 (permalink)
 mokodo 
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PandaWarrior View Post
Its better to wait than to be confused

I'm adding that to my words of wisdom page in my trading plan. Oh so true!

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 PandaWarrior 
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Charts exactly the way I like to see them, all perfectly synced up.

One and done today. 6X daily average goal. I like these kind of days!!!

After yesterday's bout with confusion and impatience, I realized my only job as a trader is to stay out of the market as much as possible and ONLY trade when I 100% recognize what is happening and what could potentially happen in the future. After that, I need only execute and wait. What will be will be. I have no control over what actually happens, I can only manage the trade within the context of what is happening against my construct of what I think will happen. The results are up to the market.




Simplicity is the ultimate sophistication, Leonardo da Vinci


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  #1153 (permalink)
 tderrick 
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Panda !!, Panda !!, Panda !!, Panda !!, Panda !!, Panda !!, Panda !!, Pan.............................


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  #1154 (permalink)
 Silver Dragon 
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PandaWarrior View Post
I realized my only job as a trader is to stay out of the market as much as possible and ONLY trade when I 100% recognize what is happening and what could potentially happen in the future. After that, I need only execute and wait. What will be will be. I have no control over what actually happens, I can only manage the trade within the context of what is happening against my construct of what I think will happen. The results are up to the market.

Words to trade by!

nosce te ipsum

You make your own opportunities in life.
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  #1155 (permalink)
 josh 
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PandaWarrior View Post
After yesterday's bout with confusion and impatience, I realized my only job as a trader is to stay out of the market as much as possible and ONLY trade when I 100% recognize what is happening and what could potentially happen in the future. After that, I need only execute and wait. What will be will be. I have no control over what actually happens, I can only manage the trade within the context of what is happening against my construct of what I think will happen. The results are up to the market.

Nice job Panda -- I am not a regular on this thread but I clicked over here today and wanted to you -- max DD less than 4%, beautiful equity curve. This week I am going through what you went through yesterday, a bit of confusion and uncertainty, and as a result have taken only one scratch trade--but as you said, it's better to be missing out, than to be in and regretting it. Keep up the good trading man!

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 PandaWarrior 
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Small loss day today. I had opportunity to scratch out a BE on the day, last trade was up enough to punch out and call it a day at BE, instead, I held the trade, trailed out at the swing breaks and ended down about 4 ticks minus commissions on the other BE trades.

Yesterday was a day for holding trades and today was a day for controlling losses. I think I did that reasonably well today and am satisfied with the results. Could I have exited a couple of profitable trades sooner and made more money? Of course but you can never know this before hand so just like leaving money on the table by exiting a runner to soon, so do you leave money on the table by not exiting soon enough. The uncertainty of this is what drives traders to smoke the chill out weed.....or worse....

Anyway, each day that goes by, I am becoming more and more comfortable with uncertainty. Not knowing what will happen in the next one second let alone what will happen an hour from now. The edge is all that matters. Trade the probabilities and let the results be what they will be.

I am trading my plan well for the most part, executing the entries, moving the stop to BE when my plan says to and not before although I am tempted on every trade to do so, wait for the target to be filled instead of punching out early and moving my targets out if it feels like momentum is on my side.

Overall I am very encouraged.




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  #1157 (permalink)
 papa15 
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Panda
You are trading exceptionally well....it is certainly great to see that and I wish you continued success.

My only comment is I see you take trades frequently that are against the 50 sma on your largest chart....many of those, if not most, seem to be the break even trades....when trade with that moving average, you have your 2-6x daily norm days....I know I have to fight my desire to get in early, make money and walk away, but I find that waiting for the right setup means fewer trades that go against me....just a thought. I really do applaud your success

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  #1158 (permalink)
 PandaWarrior 
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papa15 View Post
Panda
You are trading exceptionally well....it is certainly great to see that and I wish you continued success.

My only comment is I see you take trades frequently that are against the 50 sma on your largest chart....many of those, if not most, seem to be the break even trades....when trade with that moving average, you have your 2-6x daily norm days....I know I have to fight my desire to get in early, make money and walk away, but I find that waiting for the right setup means fewer trades that go against me....just a thought. I really do applaud your success

Papa15


Hi Buddy,

I recognize those as less profitable. The only reason I will do them is if there is enough room between the entry price and the level represented by the 50SMA on the 9M chart to get a decent target. I try to get to BE real fast on those as well. I'm willing to take a BE in exchange for the possibility it might run a bit. Once in a while it does.

Price has recently hit my original target from my last trade. However it would have stopped me at BE as well not once but twice although the original stop was never in real danger. Today is a day where moving to BE on the MTF trade resulted in less than optimum exits. But I dont trade that way. My main thought is to prevent capital loss un-necessarily and letting winners turn into potential losers does not fit with my way of thinking currently.

So yes, trades taken with the larger time frame trend are better by far, I do recognize that and perhaps it is best to ignore everything else.

Cheers.....

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Most people chose unhappiness over uncertainty, Tim Ferris
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  #1159 (permalink)
 tderrick 
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Where are you on your BE rules these days, buddy?

One of the hardest subjects for sure... I have difficulty moving a stop to BE if it enters the killing zone, if
you know what I mean... I would rather stay at least 1 tick above the current swing, no matter the scale.

I know that means different things for us, as I tend to be a bit more aggressive in my swing entries, as you
know.

So , do you have a tick count, or is it just PA feel?

your brotha,
Aj


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 PandaWarrior 
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tderrick View Post
Where are you on your BE rules these days, buddy?

One of the hardest subjects for sure... I have difficulty moving a stop to BE if it enters the killing zone, if
you know what I mean... I would rather stay at least 1 tick above the current swing, no matter the scale.

I know that means different things for us, as I tend to be a bit more aggressive in my swing entries, as you
know.

So , do you have a tick count, or is it just PA feel?

your brotha,
Aj

I have a rule, exit BE once price has gone 1XR. If I was scaling out, this is where I would take the first position off and where the entire trade would then be BE without moving the stop up on a scale out scenario. Since I am not scaling out at this time, I want to avoid turning winners into losers. I back tested this and while its not ideal, (you do lose out on some moves occasionally) it keeps me out of a reasonable number of ultimate losers as well. So I am taking the good with the bad at this stage.

Today, had I not moved to BE on the last trade and simply held it, today would have ended nicely green. However, I would have had to hold past my trading cut off time, price was not moving agressively and I needed to leave the office. So I ended negative on the day. Those are the breaks I suppose.

All that being said, I think I wish I could just go loser or winner. No BEs. BE kinda throws off the numbers a bit but at this stage, I'm comfortable with it.

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  #1161 (permalink)
 gtichauer 
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PandaWarrior View Post
I have a rule, exit BE once price has gone 1XR. If I was scaling out, this is where I would take the first position off and where the entire trade would then be BE without moving the stop up on a scale out scenario. Since I am not scaling out at this time, I want to avoid turning winners into losers. I back tested this and while its not ideal, (you do lose out on some moves occasionally) it keeps me out of a reasonable number of ultimate losers as well. So I am taking the good with the bad at this stage.

Today, had I not moved to BE on the last trade and simply held it, today would have ended nicely green. However, I would have had to hold past my trading cut off time, price was not moving agressively and I needed to leave the office. So I ended negative on the day. Those are the breaks I suppose.

All that being said, I think I wish I could just go loser or winner. No BEs. BE kinda throws off the numbers a bit but at this stage, I'm comfortable with it.

Brian I think it is a great excercise to take your actual trade to risk free at the point where a 2+ ct trade would be at that same level....in your case 1XR. More if u measure and document how it ended live and how it would have ended multicontrat.....this builds confidence while preserving capital.....trading 1ct is much more difficult than scaling out and reducing risk as the trade move in your favor, but I am 100% with you with this methodology.....

do u know % of times u got taken out b/e and your stop was not taken before your targets? this would be called a scratch in live trade while a full winner in your "ideal" trade ??

GT
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 Futures Operator 
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PandaWarrior View Post
I have a rule, exit BE once price has gone 1XR. If I was scaling out, this is where I would take the first position off and where the entire trade would then be BE without moving the stop up on a scale out scenario. Since I am not scaling out at this time, I want to avoid turning winners into losers. I back tested this and while its not ideal, (you do lose out on some moves occasionally) it keeps me out of a reasonable number of ultimate losers as well. So I am taking the good with the bad at this stage.

All that being said, I think I wish I could just go loser or winner. No BEs. BE kinda throws off the numbers a bit but at this stage, I'm comfortable with it.

Would be interested to hear the detailed stats of your backtesting on this. Also you could go BE+1 to get the winner or loser rather than BE.

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 Futures Operator 
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gtichauer View Post
trading 1ct is much more difficult than scaling out and reducing risk as the trade move in your favor, but I am 100% with you with this methodology.....

Of course the other side of this is that despite being harder, the realized R/R per contract is higher with 1 contract/all in/all out.

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 PandaWarrior 
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gtichauer View Post
Brian I think it is a great excercise to take your actual trade to risk free at the point where a 2+ ct trade would be at that same level....in your case 1XR. More if u measure and document how it ended live and how it would have ended multicontrat.....this builds confidence while preserving capital.....trading 1ct is much more difficult than scaling out and reducing risk as the trade move in your favor, but I am 100% with you with this methodology.....

do u know % of times u got taken out b/e and your stop was not taken before your targets? this would be called a scratch in live trade while a full winner in your "ideal" trade ??

I haven't kept stats on trades that stopped at BE then went on to win. To be fair, while I like stats, I hate compiling them. This is a stat I've not worked on nor does my spreadsheet have a place for it. Perhaps that will be the next project I work on. Right now its working and thats all I really care about.

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 PandaWarrior 
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Futures Operator View Post
Would be interested to hear the detailed stats of your backtesting on this. Also you could go BE+1 to get the winner or loser rather than BE.

My back testing consists entirely of scrolling through countless charts, identifying when my setups occur and counting the number of times I get a winner vs a loser vs a BE. Nothing "scientific" about the back test. I have idea about how to conduct an automated one with a set of parameters coded in ninja.

I realize this comes as a disappointment to some, but I'm a simple guy and I do things the simplest way possible.

I dont believe in BE+1. I used to but no longer. For various reasons but the biggest one is that it distorts your win rate. If you have system with 70% win rate but half of those are BE+1, your win rate is screwed up. And basing your projections or edge based on that is going to cost you money. Better to have the BE show up as a legit BE rather than a fake win.

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  #1166 (permalink)
 Futures Operator 
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PandaWarrior View Post
My back testing consists entirely of scrolling through countless charts, identifying when my setups occur and counting the number of times I get a winner vs a loser vs a BE. Nothing "scientific" about the back test. I have idea about how to conduct an automated one with a set of parameters coded in ninja.

I realize this comes as a disappointment to some, but I'm a simple guy and I do things the simplest way possible.

I dont believe in BE+1. I used to but no longer. For various reasons but the biggest one is that it distorts your win rate. If you have system with 70% win rate but half of those are BE+1, your win rate is screwed up. And basing your projections or edge based on that is going to cost you money. Better to have the BE show up as a legit BE rather than a fake win.

Nothing wrong with that, whatever works. I was more interested in the details of what you found through your backtesting than the method. Do you have any stats you came up with for how each method of stop management would affect your results?

Interesting point on the BE+1. How do you track BE's, in terms of win rate? Couldn't you track BE+1's the same way? Do you find the ease in tracking it as BE instead, worth giving up the +1?

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  #1167 (permalink)
 VinceVirgil 
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PandaWarrior View Post
My back testing consists entirely of scrolling through countless charts, identifying when my setups occur and counting the number of times I get a winner vs a loser vs a BE. Nothing "scientific" about the back test. I have idea about how to conduct an automated one with a set of parameters coded in ninja.

I realize this comes as a disappointment to some, but I'm a simple guy and I do things the simplest way possible.

I dont believe in BE+1. I used to but no longer. For various reasons but the biggest one is that it distorts your win rate. If you have system with 70% win rate but half of those are BE+1, your win rate is screwed up. And basing your projections or edge based on that is going to cost you money. Better to have the BE show up as a legit BE rather than a fake win.

Conversely, dosnt BE distort your losing rate, reducing your average loss in dollars? I mean, commissions are always going to result in BE as a loss.

I prefer the BE + 1 personally, only to cover commissions. Add up all those round trips over the course of 6 months, and I rather have the tick to the good. ( minus the commissions of course)

Just a personal thing i guess, but I hate paying those commissions. Its like the juice to the house.

It just occurred to me...Is there a way to configure Ninja Trader so that BE + or - a couple of ticks wouild not be counted in win loss raio. Or better still, be considered a scratch trade?

Just a thought...those Ninja guys gotta be avble to do that...they are pretty smart dudes.

On another note, the TradeVue Journal Webinar had an interesting feature in that it grouped trades together as lots were added or taken off as 1 trade. Dont know all the details, but it seemed like a good idea.

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  #1168 (permalink)
 PandaWarrior 
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in light of an unbelievable employment report, I was almost certain I wouldn't get a set up I liked for quite a while. The 100+ tick spike destroyed all chart structure and put me on edge. This meant I would need to find a way to either ride the lie or wait for a long time for a new structure to rebuild itself. I elected to try to ride the lie. And sure enough, it was a liar just as I suspected.

Once I was convinced it was short, I tried the first shot which got me positive, a BE which was one of those I could have just left alone, and then the next signal came before the real break out which meant a lot of waiting.....but it came, price went out to beyond my normal exit, I trailed out at 40 ticks. I was hoping for a huge runner but didn't get it.

Finished the week nicely. Ready for the weekend




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  #1169 (permalink)
 Big Mike 
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Nice week Brian



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  #1170 (permalink)
 Xav1029 
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PandaWarrior View Post
I have a rule, exit BE once price has gone 1XR. If I was scaling out, this is where I would take the first position off and where the entire trade would then be BE without moving the stop up on a scale out scenario. Since I am not scaling out at this time, I want to avoid turning winners into losers. I back tested this and while its not ideal, (you do lose out on some moves occasionally) it keeps me out of a reasonable number of ultimate losers as well. So I am taking the good with the bad at this stage.

Today, had I not moved to BE on the last trade and simply held it, today would have ended nicely green. However, I would have had to hold past my trading cut off time, price was not moving agressively and I needed to leave the office. So I ended negative on the day. Those are the breaks I suppose.

All that being said, I think I wish I could just go loser or winner. No BEs. BE kinda throws off the numbers a bit but at this stage, I'm comfortable with it.

Great journal Brian. I am currently learning to manage multiple contracts and this is almost exactly how I try to manage my trades. Instead of 1XR, I use PT1 for my first scale out, and then move the rest of my stops at least to where the trade is BE. PT1 is usually around 1R, and I have found managing multiple contracts is actually less stressful than a single contract.

Keep the posts coming

Xav

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  #1171 (permalink)
 PandaWarrior 
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Xav1029 View Post
Great journal Brian. I am currently learning to manage multiple contracts and this is almost exactly how I try to manage my trades. Instead of 1XR, I use PT1 for my first scale out, and then move the rest of my stops at least to where the trade is BE. PT1 is usually around 1R, and I have found managing multiple contracts is actually less stressful than a single contract.

Keep the posts coming

Xav

Glad you like the thread. 1XR is one times risk for me. If I take 15 ticks of risk, then i go BE once price has gone 15 ticks. I have no targets less than 2XR. And I often times look for 3-4XR when the conditions are right. All in all out though for me.

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 PandaWarrior 
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Probably done for the day, small loser day. I had confluence on three time frames but I did not like the 27M chart and so the longs really gave me fits in terms of trusting they would go. I even waited until they got to my BE trigger before moving the stop but each time they got hit. Except for the one I missed because I was looking at something else due to being pretty bored and I confess, somewhat nervous about trading at all today.

Nevertheless, other than the missed trade that worked at the beginning of the move and the one at the end, I traded my plan pretty well. I made a decision not to take the last one as I felt it was really at resistance and had no chance of working. Of course it went to what would have been my target and then a bit but given my nervousness today, the feeling we were at resistance on the higher time frames and the general slow pace of the rally, I made the best decision I thought possible at the time.

I may trade later on today but only if I see shorts. I am short biased today due to the daily chart and so no more longs for me until at least the 27M chart agrees with the shorter time frames. That could be a while.

I'll do my spreadsheet later on if I trade more.


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 PandaWarrior 
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PandaWarrior View Post
Probably done for the day, small loser day. I had confluence on three time frames but I did not like the 27M chart and so the longs really gave me fits in terms of trusting they would go. I even waited until they got to my BE trigger before moving the stop but each time they got hit. Except for the one I missed because I was looking at something else due to being pretty bored and I confess, somewhat nervous about trading at all today.

Nevertheless, other than the missed trade that worked at the beginning of the move and the one at the end, I traded my plan pretty well. I made a decision not to take the last one as I felt it was really at resistance and had no chance of working. Of course it went to what would have been my target and then a bit but given my nervousness today, the feeling we were at resistance on the higher time frames and the general slow pace of the rally, I made the best decision I thought possible at the time.

I may trade later on today but only if I see shorts. I am short biased today due to the daily chart and so no more longs for me until at least the 27M chart agrees with the shorter time frames. That could be a while.

I'll do my spreadsheet later on if I trade more.


You know you're important when you start quoting yourself....

Turns out I gave up a bit to soon....had another signal with another winner. These two would have wiped out the loss plus given me enough profit to meet my daily average. Those are the breaks though. Make the best of it.

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  #1174 (permalink)
 VinceVirgil 
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PandaWarrior View Post
Probably done for the day, small loser day. I had confluence on three time frames but I did not like the 27M chart and so the longs really gave me fits in terms of trusting they would go. I even waited until they got to my BE trigger before moving the stop but each time they got hit. Except for the one I missed because I was looking at something else due to being pretty bored and I confess, somewhat nervous about trading at all today.

Nevertheless, other than the missed trade that worked at the beginning of the move and the one at the end, I traded my plan pretty well. I made a decision not to take the last one as I felt it was really at resistance and had no chance of working. Of course it went to what would have been my target and then a bit but given my nervousness today, the feeling we were at resistance on the higher time frames and the general slow pace of the rally, I made the best decision I thought possible at the time.

I may trade later on today but only if I see shorts. I am short biased today due to the daily chart and so no more longs for me until at least the 27M chart agrees with the shorter time frames. That could be a while.

I'll do my spreadsheet later on if I trade more.


I like your line in the sand mentality. Plan your trade, trade your plan with reference to market context. If its not there for your method, dont try to force the trade.

One of my biggest challenges is having a long bias, regardless of the market context. Maybe its the wealth management side of me coming back to haunt me...all those years in the Buy and Hold enviornment has manufactured the long bias mentality.

At least I am conscious of it, and of course, aknowledgement is the first sep toward solving a problem.

But, on short trades, my profitability is way higher than on long trades. Which likley means I should be looking to graft my short trade mentality to long trades.

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 PandaWarrior 
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VinceVirgil View Post
I like your line in the sand mentality. Plan your trade, trade your plan with reference to market context. If its not there for your method, dont try to force the trade.

One of my biggest challenges is having a long bias, regardless of the market context. Maybe its the wealth management side of me coming back to haunt me...all those years in the Buy and Hold enviornment has manufactured the long bias mentality.

At least I am conscious of it, and of course, aknowledgement is the first sep toward solving a problem.

But, on short trades, my profitability is way higher than on long trades. Which likley means I should be looking to graft my short trade mentality to long trades.

I'm more profitable on shorts as well. I understand the long bias from a wealth management perspective, i have it to as it relates to equities but commodities and especially commodity futures is no place for a long bias at least long term for us intra day traders.

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 PandaWarrior 
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I had a draw down day today. The reason, I tried to play fortune teller and predict what the market was going to do instead of just staying on board with what it was doing. I did manage to keep control of the losses so they were fairly small but still, it was really poor behavior on my part. I know better.

Two days in a row with some mental issues. Time to bear down and overcome.

Another thing, I've spent to much time in front of the charts last few days. Could be the extra time is clouding my judgement. I find that the more I look at charts, the more I second guess myself in live markets. Back to regular trading hours tomorrow.

Sometimes I wonder if the mental game ever gets any easier? I know that in my former business, I eventually quit worrying about some stuff that used to drive me crazy early on. I wonder if that time will come for me? I feel like I am almost there in terms of really exploiting my edge but somethings still missing or perhaps I am not quite ready........

til tomorrow.

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  #1177 (permalink)
 tderrick 
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PandaWarrior View Post
I had a draw down day today. The reason, I tried to play fortune teller and predict what the market was going to do instead of just staying on board with what it was doing. I did manage to keep control of the losses so they were fairly small but still, it was really poor behavior on my part. I know better.

Two days in a row with some mental issues. Time to bear down and overcome.

Another thing, I've spent to much time in front of the charts last few days. Could be the extra time is clouding my judgement. I find that the more I look at charts, the more I second guess myself in live markets. Back to regular trading hours tomorrow.

Sometimes I wonder if the mental game ever gets any easier? I know that in my former business, I eventually quit worrying about some stuff that used to drive me crazy early on. I wonder if that time will come for me? I feel like I am almost there in terms of really exploiting my edge but somethings still missing or perhaps I am not quite ready........

til tomorrow.


Must be a strange moon phase, buddy... I just could not focus....

tomorrow we attack again


AJ
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 Big Mike 
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PandaWarrior View Post
Sometimes I wonder if the mental game ever gets any easier?

Like anything with repetition it becomes second nature. I say that if trading is exciting, you are probably losing money. What I find more interesting are the people that tell me I am wrong, that trading is exciting. Then I read their posts and follow them around the forum, and generally find they are lost. But that's just my opinion...

Find a trade location you are interested in, and pick a direction. Have a good risk and target defined. Put on the trade, then move to the next one.

Mike

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 PandaWarrior 
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Big Mike View Post
Like anything with repetition it becomes second nature. I say that if trading is exciting, you are probably losing money. What I find more interesting are the people that tell me I am wrong, that trading is exciting. Then I read their posts and follow them around the forum, and generally find they are lost. But that's just my opinion...

Find a trade location you are interested in, and pick a direction. Have a good risk and target defined. Put on the trade, then move to the next one.

Mike


To be fair, I'm really bored most of the time. I do get tempted occasionally to trade to relieve the boredom but most of the time, thats not an issue. Most days I just want to get it over with and get on with the rest of the day.

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  #1180 (permalink)
 PandaWarrior 
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Missed a couple of days posting charts. This is early out week for my kid at school along with some other distractions. Today I am finished early enough to get ahead of that game and at least post a chart.

One and done today.

I thought the long rally might be over when I sat down as it had been rallying all night. But I got a good low risk signal and went in half size since I thought if it fails, I want to be small size right here.

Well it went all the way to my target zone but I trailed out a little ahead of that since there was a news report coming and I wanted out prior to that. The news report spiked price to just beyond my original target and then reversed.

I had a couple of other marginal signals today but elected to pass. I needed a win emotionally and even though it was half size, I still made decent money today.

The crisp clear MTF signals seem to produce winners in excess of my normal targets. Going forward, I will be working on just letting the winners run. Tough sometimes to be sure but I've gotten good at cutting the losers and to be completely fair, I have done better at letting price run to 2XR. However, I am going to start looking for the 50+ winners. Most of the time, these are available if I just wait for the clear signal and then just wait for the trade to mature on its own without demanding it run to 100 ticks in 30 seconds.....

Anyway, thats what I did this morning with the exception of getting out ahead of the news. Otherwise a full 50 ticks would have been mine.


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  #1181 (permalink)
 bobarian 
whitestone, new york
 
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Hey Brian,i was wondering if you were trading 1 contract or more?Obviously,your trade placement is good enough.Not many traders have a very good grasp on where price should go....For that matter,most traders have no idea where to enter!
I say,work on your strengths.Maximize your strength,to nullify your weakness.We all know,that alot of traders who trade multiple contracts,take profit in increments.I think this is a statement in itself.Depending on what we trade determines the increment.
It seems to me you are creating alot of unease(understandable),but is there a way to avoid this?You trade the cl.I would say that with your entries,you probably get 10 to 15 ticks easily enough.
So,with that said,if you do trade more than 1 contract,cover in increments.Once you get your 1st target,now you can relax.A traders r/r is a personal decision.We all know that.Even the best traders take profit in increments,which means they ultimately dont know where price will end up

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 PandaWarrior 
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bobarian View Post
Hey Brian,i was wondering if you were trading 1 contract or more?Obviously,your trade placement is good enough.Not many traders have a very good grasp on where price should go....For that matter,most traders have no idea where to enter!
I say,work on your strengths.Maximize your strength,to nullify your weakness.We all know,that alot of traders who trade multiple contracts,take profit in increments.I think this is a statement in itself.Depending on what we trade determines the increment.
It seems to me you are creating alot of unease(understandable),but is there a way to avoid this?You trade the cl.I would say that with your entries,you probably get 10 to 15 ticks easily enough.
So,with that said,if you do trade more than 1 contract,cover in increments.Once you get your 1st target,now you can relax.A traders r/r is a personal decision.We all know that.Even the best traders take profit in increments,which means they ultimately dont know where price will end up

I know scaling out makes sense emotionally but from a math standpoint, its inferior. Scaling out requires large runners to make up for the full stop out if you are wrong. So what I've done instead is a compromise and one I hope to overcome soon. I space my "targets" out at multiples of risk. Then as price meets those objectives, I trail my stop up.

For example,

Price goes 1XR, I trail to BE
Price goes to 2XR I go to 1XR, etc....

I didn't do this exactly today, I tried to stay with the swings as my stop instead of the exact R multiple. But you get the idea. Also, it makes some sense to pick a target zone based on some other time frame S/R and aim for that, trail the stop up under swings in case it reverses prior to reaching that zone.

The end result is this; you're never gonna buy the bottom and sell the top. The best you can hope for is capturing a majority of whats available to you in the time you have allotted yourself to trade. If you can do that, you're a winner. This then comes down to probabilities. You trade your edge such as it is, you take profits where you think you should and let the results play out over time.

The more I trade, the more I recognize that letting the winners run is the key. And in crude, you can get some major winners. So no, I dont think its mathematically favorable to scale out. An all in all out 20 tick trade is better than a scale out with three targets if the targets are less than 50 ticks. Yes it does make it somewhat easier to manage the runner risk free but once you get past the kill zone as @tderrick likes to say, you have no risk. The only risk you have is that it might come back and take out your trail stop. But thats what its there for anyway. So if you are scaling out, that runner needs to run 100 ticks to make it really worth while in my opinion. Of course there are plenty of guys making money doing exactly the opposite so it really is just my opinion. I just want to win with full size. And I'm willing to experience some frustration in order to get to the place where I can hold a full size or scaled in trade as far as the trade is able to go.

All big time traders scale out and in constantly to reduce risk but more importantly, in an attempt to have maximum size on for the winners. I haven't gotten there yet but its my holy grail. To be able to scale into and out of a trade as it matures trying to have on as much as possible when the trades finally over.

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 tderrick 
Nashville, Tennessee
 
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Lord, don't let us forget to sign up for your Webinar.... Give us lot's of warning


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 PandaWarrior 
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tderrick View Post
Lord, don't let us forget to sign up for your Webinar.... Give us lot's of warning

lol

I'm giving you fair warning now....its the 23rd. That should be ample notice for you to make plans to be somewhere else at that time.....

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 PandaWarrior 
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My first net losing week in over a month. I just couldn't get it together this week. I had two winning days and those days basically offset the losers. I'm down about 2 full winning trades +/- a bit. Mentally I had some weird blockage Monday and Tuesday. I was really nervous for some reason. Wednesday and Thursday were better but both days settled for less than I could have had. I was simply looking for an emotional band-aid to stop the bleeding. Today I KNEW it would not be conducive for my style of trading and yet I traded anyway. A small net loss today. Nothing major but unnecessary. Of course, after I had left the office for the day, there was a good set up that paid 50+ ticks. But I wasn't there for it and I'm not sure I would have taken it anyway after the way the morning set up.

Anyway, I'm looking forward to next week. Trading is the hardest thing I've ever attempted but I'm getting better at it. Or at least the mechanical portion. The mental self talk needs to improve while I am both waiting for a trade set up and while in the trade. I do feel like the open trade mental talk has gotten better. I took my stops today like a man and even though I wanted to move to BE early on a couple of them, my trade plan calls for price to move a certain distance before I do that. That only happened twice and the others were stops. So I quit after three stops and two BE trades after telling myself to just hold the line on moving the stop mid trade.

Hopefully after two inside days, we'll get a break out next week. If I had to guess which way it will go, I'd have to bet the first move will be to the short side to around 89.25 or we might get a head fake to the downside by breaking the inside bars by a few ticks and then reversing up. The double top looks like a tempting target for the longs to shoot for as a trading range breakout spot. . The 92.50-95.00 area served as resistance, then support and now it looks like it might be resistance again. So a true trading range has developed. 87.50-95.00. Should be an interesting week next week as price seeks to either resume the sell off or rally to new highs.

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  #1186 (permalink)
 VinceVirgil 
Toronto, Canada
 
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Something I have been working on for the CL.

Its a single 800 tick chart, from today.

I take the over night highs as the ceiling price.

21 EMA as reference.

Support and resistance is the same, double tops and bottoms. Reversals or counter trend only if a definitive momentum change.

I marked the trades I thought were key entries. The short term lines are in place, and look to reverse or a continuation after they are broken.

Its a single chart... I think it show a number of recognizable and repeatable patterns.

Let me know what you think.

Vance

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 PandaWarrior 
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VinceVirgil View Post
Something I have been working on for the CL.

Its a single 800 tick chart, from today.

I take the over night highs as the ceiling price.

21 EMA as reference.

Support and resistance is the same, double tops and bottoms. Reversals or counter trend only if a definitive momentum change.

I marked the trades I thought were key entries. The short term lines are in place, and look to reverse or a continuation after they are broken.

Its a single chart... I think it show a number of recognizable and repeatable patterns.

Let me know what you think.

Vance

Hey Vance, good to hear from you.

I like the idea. I'll throw up a chart next week and monitor it.

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 VinceVirgil 
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PandaWarrior View Post
Hey Vance, good to hear from you.

I like the idea. I'll throw up a chart next week and monitor it.

Sure thing.

I arrived at the 800 tick after trying a bunch of different ones. From 150 to 2000.

The 800 tick seems like the best fit, even in random backtesting. I wanted to have the entire day on a single screen, and with tradable patterns. Its very similar to my 5 minute, however, the tick chart combines a volume element on the single chart.

I like the idea of a single chart. Kind of the minimalist approach ala Al Brooks.

It also includes momentum because of the contracts traded and their time frame.

The candles seem to be a more managable size as well...around 12 to 25 ticks...on the 5 minute, get some 100 tick candles...a little intimidating to trade into one of those. Or against it.

When the candles paint up and down with overlap, it looks liike an area of exhaustion or capitulation. Again, on the the single chart. I beleive it helps to recognise choppiness in a tight range.

Again, I have only started developing this over the last few weeks. I havnt tested it extensively or traded it live. But it looks promising.

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 PandaWarrior 
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I picked this up today from Embrace The Trend

Ed Seykota, it seems, has a way of distilling complicated processes down to their essence.

The Essentials

Ride your winners
Cut your losses
Manage your risk
Use stops
Stick to the system
File the news

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