3 to 1 win/loss ? Don't think so.

[slapshot]

Quote from AAAintheBeltway:

slapshot,

For someone who has been trading less than a year, you seem to have a darn good handle on it.

Thanks - it really doesn't feel that way - I feel like a babe in the woods just trying to learn how to survive.

The majority of the credit for my "progress" goes to my wife who has let me sound ideas off of her until we both heard the truth. AND especially to a good friend who is a much more experienced trader - this person has spent much time coaching me and helping me cut through my own B.S. so that at least I can start working on the right areas.

Also I've learned so much here on ET - if not the details but at least specific areas of trading that need exploring & resolution. So Thanks to you and many others that have contributed.

I'm lucky to now have a sound plan and a method to track my trading now so perhaps I can learn to execute as well.

Only then will I be able to consistently trade well.

Just like Mark Douglas says in "The Zone", the key is now undoing the psychological damage from prior trading.

Best Wishes,

Paul

 

[MondoTrader]

I realize many make a distinction between trading and investing, but here is what Warren Buffett recently said in his letter to shareholders:

"Indeed, during the 38 years we have run the company's affairs, gains from the equities we manage at Berkshire (that is, excluding those managed at General Re/Cologne and GEICO) have exceeded losses by a ratio of about 100 to one."

 

[monee]

Quote from slapshot:




Thanks DB for the sage advice.

The setups I'm trying to trade happen very regularly in pretty much all markets - ORB/RB, Trend Continuation and Reversal.

So in other words, what to do to try to catch the beginning of a trend, how to manage the middle and what to do near the end.

Been playing a lot of Reversal in this market lately, that's for sure.

I won't take a trade unless it fits into one of these catagories because I get into trouble trading in between them. At least this is the way my inexperienced brain has categorized them.

The rules I'm referring to are more like Stop & Profit Management, times when/when not to trade, trading size etc. etc.

These are the ones I still have a tough time with. And it doesn't matter what the market is like - they are damaging all around.

I.E. My risk plan for each setup has a different stop-loss - since I trade ranges/trend, my Plan is to move my stop to b/e after I'm "in the money" by the same amount of points as the original risk. Then I keep looking for valid reasons to stay in or get out of the trade based on what the market is telling me. When I do this I get my fair share of 5 to 10 point winners...although I sometimes get stopped out b/e.

But one thing I struggle with is to not take 2 point profits or kill the trade just because it has ticked a few points against me, or especially not to take 2 points while it is nearing my b/e stop, because usually it will keep on running. If not, then the market had reversed anyway and my reason for being in the trade was gone.

Taking small profits was killing my edge. Period. And yet the whole time, for months, I was under the delusion that I was doing a good job "keeping my losers small" and "not going broke while taking a profit" - truth is I was creating small losses and killing winners way too soon.

Then I would chase the same trade and sell the bottom or buy the top.... you know the rest of the story or know traders like that I'm sure.

When I can in all honesty look myself in the mirror and know for a fact that I always execute by my plan rules, THEN I'll start looking at market changes. Right now I know I'm the problem.

Best,

Paul

Slapshot ,great post
My strategies are very similar to yours.
I too found that I was cutting winners too short.
Two keys I have found to eliminate myself from prematurely exiting a good trade:
1st : As long as my strategies are viable and I adapt to the type of mkt we are in I should have plenty of confidence in my plan.Then I must realize trading is a game of probabilities and I must always keep the risk vs. reward concept in my head.So as far as closing a winner early, if I close it out a winner and it's not near it's target ,technically it's not a winner because the gain will not be large enough to offset the losing trades.
2nd: One must figure out a way to never be upset that the mkt moved without one of their setups giving an entry.Something along the lines of the fact that ones setups will provide ample opportunities so it is not necessary to deviate from them.
3rd: 1 and 2 are much easier to accomplish
if you have a source of income exclusive of trading.

Just my thoughts.

 

[MondoTrader]

"3rd: 1 and 2 are much easier to accomplish
if you have a source of income exclusive of trading."

I agree with that as well. I have heard of people talking about cash reserves in the checking account, but few mention earning wages or having passive income producing investments. Needing to have a winning week in order to pay the rent is no way to live or to trade.