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I am really honored to be a part of this forum. This is my first post \ question \ scream for help and looking forward to seek your guidance.
I am a new trader with only a four months in day trading. Trading only in ES mini futures. I have made it a point to close open positions at end of the day but this past Friday, got caught in wrong trade - left my short positions ES mini open in anticipation that over the weekend, magic of Fibonacci retracement @ 61.8% would come to my rescue. This never happened - what happened was the following -
a. Considering Friday's min level of ES mini of 3129 to Friday's max level of 3210 , the retracement of only 35% was observed.
b. Considering Thursday's min level of ES mini of 3090 to Friday's max level of 3210 , retracement of only 20 % was observed.
Can anyone throw some light on what's the basic mistake I have done here !
Can day traders reply on Fib retracement to make trading decisions !
Considering where the market stand, Pl suggest what would be better way to get out of this trade!
Your first mistake was thinking fibonacci levels mean anything. They don't and they're certainly not magic.
Your second mistake was not closing out your position.
Your third mistake was asking other traders for advice instead of closing a losing position that's gotten away from you.
Honestly I'm confused by what you're asking. If it's what to do with a run away loser it's to close the position. It may never come back and if it does its luck and a lesson you're not learning. Eventually you're lack of discipline will cost you your account or more.
Not unless you are looking for small mean reversion intraday trades...Your mistake was shorting ES when it screams long since May 15. Close the trade and regroup. Also, throw the Fibs away. JMHO 2020-06-08_1826
Trading: The one I'm creating in the present....Index Futures mini/micro, ZF
Posts: 2,311 since Nov 2011
Thanks Given: 7,341
Thanks Received: 4,518
Trading is all about Risk... Managing Risk.... Period! End of Story!
I have heard nothing about your Risk. Risk is all you should be talking about.
So now, tell me, what is your Risk on this trade, please?
How much of your account are you Risking on this trade?
You, absolutely must, plan out the Risk, BEFORE, you enter.
This is also where trade sizing needs to be addressed.
If the probabilities line up in your favor, according to your Edge/Plan, AND the Risk is in line with said Plan, then you take the trade. If not, ie the Risk is too great... you pass.
If the environment changes sufficiently and the probability of your trade working falls away... ie other traders aren't showing up to make your trade work. Exit.
Trading is a social experience/game/event/undertaking/experiment and an illusion, that has very little to do with "Numbers" and MUCH more to do with .......Perceptions......
Ron
...My calamity is My providence, outwardly it is fire and vengeance, but inwardly it is light and mercy...
The steed of this Valley is pain; and if there be no pain this journey will never end.
Buy Low And Sell High (read left to right or right to left....lol)
You probably have noticed that not everyone uses or believes in fibs.
But, for the sake of argument, let's suppose that fibs are not the issue.... because there are many, many different ways to trade, and many trading methods. Any of them could have put you in this situation. I would say that, no matter what a person's trading method, it is always a serious mistake to let yourself be in a position where you will be in big trouble if something doesn't work out as expected -- simply because nothing is 100% reliable, and you have to have a plan in case it fails, as everything will at some point.
So the first thing is simply not to ever believe or think or hope that something magical is going to bail you out. No matter what you think will happen, it doesn't have to. This applies to fibs, assuming you trade with them, and to any other thing that you will ever use to trade with -- it does not have to happen.
In this case, here are two things that would have helped: (1) having a stop order in that is GTC ("Good Till Cancelled," which open orders normally are not -- they normally expire at the daily close), or, (2) probably better, just taking the loss early and small by closing out before the daily close.
So, for the future,
(a) unless it's in your established trading plan, and has worked and you're good at it, don't hold past the close
(b) don't be in a position without a stop loss order
(c) don't trust anything, fibs or any other thing, to bail you out. You have to trade the probabilities, not rely on miracles
(d) most importantly: kill a loss early and small. Don't let yourself get stuck in a position where you are vulnerable to a serious loss.
My point is not to beat on you for having a loss, nor for making a mistake. This is a good mistake to have made, if you understand it and learn from it. Don't worry, every trader makes many big mistakes in their time.
As to what to do today, the simplest answer -- not the only one, but the simplest and probably the best -- is to just bail out now and take the loss. Maybe price will suddenly turn around and something will magically save you, but probably not, and you should be trading based on the probabilities.
@casey44 a few posts up above referred you to another recent thread by someone in a similar situation, and it would be a good idea to click on that link and see if you can use anything said there.
There were some ideas offered in that thread for the trader to work his way out of the situation, and they possibly would work in the hands of a very experienced trader using the techniques discussed, but I would be very cautious about trying anything you don't already know forwards and backwards. Otherwise, taking the loss now is probably your wisest move, and just live with it.
After all, if you don't, what's the worst that could happen? Well, you could blow out your account, so think about your willingness to accept that.
Good luck. Everyone has done something like this. Just don't miss the opportunity to learn from it.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
Regarding the advice to just take the loss and be out of it, it's worthwhile to note that, as of now (just before 9:00 AM US Eastern Time), ES is about 3104, down considerably from its entire range on Friday when @Thombya took the short. So, if he ignored everyone and held on, he's in the green now.
I wanted to add this into the discussion, to acknowledge what has transpired and to make the simple point that no one can know what the future will bring -- we can only execute according to a strategy that makes sense to us and that has worked out in the past, and that we have reason to believe will continue to work. Then, you just take your shot and see what happens. In the long run, a good strategy will work, but it won't work always.
So with that said, I still think that the advice people were giving, to close early and take the loss, is the best way to handle these situations. This means an appropriate GTC stop loss and being willing to just shrug if things don't work out as expected.
But it's also true that if @Thombya stayed short, he did pretty well.
So, you play your game and know that long-term consistency is what you aim for.
But I do hope it turned out well.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
hey Thombya
Fibber lie all the time
whats you overall Dollar loss at this point ?
if its 100,200,300 500 , 1000 + ?
if so get out now...or when market is open..
Dont use Fibs , microstructure is where it is at. in other words go deeper before throwing your money , good hard earned money on a fantasy.. thats what you have at the moment instead of a proven tradeable method...
Try this...prove to us what % successful the 61.8% retracement has been on the time frame you have chosen. Lets say you go back 30 trading days at least....what is the % win (and define what is a win and loss ie win/loss targets, define them now what you had in mind). If anything it will show you what a big assumption you had made without any real evidence ...so learn from this even though it is painful.
this is not an easy game my friend, you will require 20 K of hrs into it and some heavy programming skills can help.
