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@blackgrey45 I am curious...you have mentioned with your buy low sell high strategy that you are a mean reversion trader. What do you use as that "mean" that you are targeting? Do you use an EMA of some sort, or a std dev-based number? Just curious....thanks!
By mean reversion I mean this: if price is hitting highs the average price for the last hour is lower than current price, in which case I think the price would revert(move) lower.
I have been back and forth about my mean reversion strategy but this is generally how I approach the market.
Trade 1, MCL, Short @12:04pm Eastern Time, Entry 74.43, Exit 74.10, P/L +$33.00
After much debate with myself I am resuming "buy lows and sell highs" strategy.
My 4 trading tules include
1. Determine max loss for each trade
2. Don't average down
3. Only one position at a time
4. Buy lows and sell highs
For:
-Familiar with the strategy, used this for most of my 13 years of trading
-Feels great to buy lows and sell highs, could not imagine buying highs selling lows
-The majority of other traders I have talked to advise me not to continue with this strat, makes me think I am doing the right thing
-I enjoy buying lows and selling highs
Against
-I get destroyed on trend days
-I am not profitable buying lows and selling highs
-Very unpopular strategy amongst fellow traders
-Always a drawdown at some point during the trade because its impossible to trade exact lows and highs
What convinced me? Mostly because I am familiar with catching a falling knife, I enjoy it, and its unpopular which makes me think its a good strategy.
Ah! You are like myself, I'm all for change as long as I don't have to do anything different!!
One quote I remeber is that "you have to be comfortable with being uncomfortable to be successful"
Look up the definition of one who keeps repeating the same thing and expecting different results.
All that being said there is nothing wrong with buying low and selling high. I'd just make sure I had tight stops for the times I was wrong. Expect to be wrong over 50% of the time but make a killing when you are right.
Start with a small position and scale in as it moves in your direction or take a small loss and wait for the next set-up.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
Cutting losses is one of the main things I am working on. My winners average $10-$50 and some of my losses were clocking in at +$200 which I recorded a couple of times in this journal.
Are you losses because you scaled up or because you failed to honor your stop. FOMO; you just know the minute you take your loss that the trade will turn around and you will have closed the position at the worst possible time.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
I have a stop loss in mind then when it gets there I just hold onto the position until a huge loss occurs. That is pretty much how every loss goes. I have no discipline. Its usually a small winner or a big loser nothing in between. I want to hold every loss until I am right and it comes back to at least break even.
