Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
Thought I'd throw up a forex trade I've been in for a couple of days....this trade has been as much as $1800 in profit....its over if and when it crosses the trend line.....
I am only charting here.....the actual trade is in my TINY forex account. I am trading in micros there so you do the math...its not about the money anyway at this point, still engaging in a thought experiment with regards to forex.
Honestly, I am finding I like it more and more....far less hassle and stress. Its basically set and forget....I had a small loser earlier. I tried to be short just before the little spike up and got taken out for about a $300 loss....but I shorted it again and got my stop above the spike.....and its paid off so far....I'm trying to be more mindful of the edges in this experiment....but its a different mindset and I don't always see it this clearly.
This is only my third trade since I started this. I made a huge winner on the way up, adding to the pull backs AND the break outs....then I missed the second leg up and then took the small loser....so not really enough work here to have any long term meaning.....
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
A friend mentioned to me today that I seem to be making good decisions every day....and in fact, I am making a reasonable number of poor decisions or at least ones that don't work out. What is working though, is in general, the good decisions I make I let those (mostly) override the effects of the poor decisions. I also strive to make sure the ones that don't work out are small....which makes it easier for the good decisions to override the effect of the bad ones.
Which leads me to my second thought.....there are two holy grails.....
1. The one between your ears which in time will allow you to realize and execute number two.
2. The Exit is far more important than the entry...both in terms of stops as well as profit taking.
3. I forgot to add the third....adding on to a winner....I'm not there yet. I've done it a few times with great success and a few times with less than great success....I'm still learning how to effectively implement this important piece of the puzzle.
Please no blow back on the importance of the entry....I know you need to minimize risk....but having miniscule risk all the time does no good if you are constantly exiting the trade in the wrong place.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
"Outliers are Critical. In poker, it's usually best to play conservative until you get a hand where the probabilities are strongly in your favor. When trading, it's usually the same. You need to wait until the odds are strongly in your favor, and then go in heavy. Unfortunately, those conditions may exist only 2 to 3 times per day and only in windows of a few seconds where you can get in at the right odds.
Outliers are the keys to the castle. You add to your winners. Try to turn each and every trade that goes in your favor into an outlier. Get as much out of each trade as you can. Inverse applies to trades going against you. Limit your losses to the best of your ability by knowing you're wrong and scratching before the market proves you're wrong.
At the end of the day, 1 or 2 outlier trades can make up for every missed opportunity or good trade gone bad. And those become outlier days. And those lead to outlier weeks. Pretty soon, you don't have to worry about being right 70+ percent of the time. You take all that stress of "being right" off your shoulders and that in turn makes it easier to scratch a trade that's lost its premise. I no longer think that it "may come back so I don't have to take the loss" or "just try to get out here on this limit!" Who cares, scratch it. Next bus is coming. It's a heck of a lot easier to come back from a 200.00 loss versus a 2000.00 loss."
And this is another post from that blog where he demonstrates the concept.
My charts from today.....it was a bust.....wasn't feeling the market movement early.....I even shorted an uptrend, something I haven't done in forever! I recovered though and ended positive but it could have been a killer day.
On a lighter and far more important note, I spent the last two hours volunteering at Operation Christmas Child. Its a great cause and they do fantastic work. Feel free to donate if you are so inclined. I'll be spending most of tomorrow there as well.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
I was long out of the Globex HOD...it failed. I went long at the bottom and held for 30+ ticks and got a break even...Then I went short for -10, its not on the chart, Then I went short again....held to the top of the Asian session WORH...and trailed out when it stalled right before the targets. I also added to the trade as it progressed....at +31ish ticks which was around .66, the trade was break even at the blended entry and thats where it stayed until it stalled out. Of course it went further but my premise was to the ORH.....so the trade was a successful trade. +40 ticks on a blended 3 lot....
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
As many long time readers will remember, I've done some combines with TST in the past. In fact, I passed a few of them, can't remember how many to be honest but I could never maintain discipline long enough to make a difference and stay live under their rules.
Eventually I quit doing the combines and started applying what I had learned there about risk management and those lessons got me to break even trader status. Then I began to understand something about my trading and that was how to win. The light didn't come on like a light switch, instead it came on like the rising sun...slowly. And to be 100% transparent, I suspect this will be a lifelong thing. The sun always rising over my trading and exposing more and more truth to me with my trading improving incrementally along the way.
Then this spring, a friend asked me to do a combine with him and I consented, but, instead I had a heart attack. So that got postponed. Later on, he asked me again and this time I had both time and ability so we started the combine within a day of each other. He blew his account out and I won mine. Then I passed the live trader prep. And now, I have a live account at TST. (Not set up yet).
I've been a fan of TST for a long time. The rules can be tough to live with. But as a trader we have to accept the things we cannot change and work within those rules if we want to be successful. @mfbreakout has a great thread about working with what we are given and being successful within that context.
The stats below reflect my trading within the confines of TST and their rules...I think I have some insight into how they might be thinking about risk and reward and I tried to structure my combine to fit that perception. Apparently it worked because they really liked my combine.
In any event, I want traders that read my thread to know if you are underfunded and many are, TST is a great way to earn a funding...but you must be a real trader. Don't even try until you KNOW you can pass it.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
In reference to my post a couple of days ago regarding how to fix mistakes and also the importance of outliers from Don Millers trading blog....I decided to do some down and dirty analysis of my own trading.....
I was not surprised to discover that out of around 150 trades documented since I started keeping score again, quite a large percentage of my profits have come from outliers...that handful of trades that account for the bulk of my profit.
What does this mean? It means that trading is about limiting losses until you can find the good trades and maximize them for all they are worth.
This means that my stats that tell me to hold trades longer is becoming more and more meaningful. And that I need to hold my trades even longer.
This means that keeping score is more important than one might otherwise realize. How else would you know this?
Here's to holding trades longer...
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
Question for you. In the emini-watch.com thread I posted a link to 10 days to better emini trading. This is a series of videos created by Barry Taylor to help others improve their trading. One of the videos is regarding targets. He suggests shooting for a small targets and letting the market take you out instead of a trailing stop. He also advocated not moving ones stop because one can get stooped out prior to hitting target. The other component to this is that he says "stop assuming each trade will be a huge winner or trend move". He's saying that the market goes from contraction to expansion, so always assuming a large move is detrimental. This coincides with your comment on outliers. It makes sense that an outlier will come along only on occasion. He trades the ES, so it's a different animal, but I think the application applies to any market.
What do you think about this? I tend to think one needs to maximize profit potential and always taking small profits could be a bad habit. I've always thought that scaling out was the way to go much like Vance does. My impression is that TST likes small targets. Not sure about scaling. What do you think.
