A Retail's Day Trading Experiment

Jzwu2017 said:
@ironchef, you will definitely feel it if you have a real edge.

I have been looking at the market for over 10 years. Only a few years ago one day I suddenly felt I could see the market clearly once or twice a day. At that moment I realized I finally gained some edge.
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You still have to check what is your hit rate on this
 
I still have overtrading problems so my win rate is a little over 50% in general. Since I only use very tight stops (predetermined hard stop or timed stop usually with 5-10 mins) entry timing becomes critical.

Now my biggest issue is loss control. For example, I can be positive every day for a week or two and suddenly one bad trade I couldn’t get out on timed stop, either because I am convinced that I am right or due to psychological reasons, that one bad trade wipes out all previous winnings.

Does that sound familiar? LOL And that’s why I said before human psychology and mindset are the last tough barriers to successful trading. The market is “designed” to be against human nature. Ourselves are our ultimate enemy.

To help fight ourselves discipline is crucial, but if you’re not at 100% discipline level sooner or later you will get chopped big time.
 
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Practice taking a loss early and small. There is always another trade in the future. Early is the hard part. Better to get close to BE on a trade that has mostly downside after the entry, even if it *might* go positive, and unlikely it will go big positive. Let that sink in. Seriously.

But it sounds like, your tight stops are not working for your mindset. They are OK until they are not and then things fall apart. The issues is, you have a plan that you cannot follow because the pain is not managed by the tight stops. Then you avoid the pain and take a large loss, eventually.

Not a good way to trade. It is like hiding in a bunker (tight stops), and then going into the war zone outside (tight stop fails), and getting shocked by all the damage going on.
 
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Bad_Badness said:
Practice taking a loss early and small. There is always another trade in the future. Early is the hard part. Better to get close to BE on a trade that has mostly downside after the entry, even if it *might* go positive, and unlikely it will go big positive. Let that sink in. Seriously.
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This is very wise advice. I use Sierra Charts and they have a statistic that shows the average open profit on your losing trades and the average open loss on your profitable trades. It is amazing that this number is almost identical on both sides. And it is small. It is also consistent over the years. As John Carter has said for the most part a trade is going to be a loss quickly or a profit quickly. My results confirm that.

That makes "Position Bias" the worst trading sin in my opinion. BB hits it right on target, when you can sense that the trade has mostly downside potential. Get Out. Enjoy the feeling of being flat and out of a risk position. Then look for another entry.
 
ironchef said:
Yes. I followed your advice, went live last Friday, with much reduced size trades.

Profitable but I don't like the win rate.

Not going to change anything, just press on and see what outcome I will get.
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Do what you want but going for higher R:R and lower WR is a better path.

Many think day trading means you have to be pushing buttons all the time when in reality, as a successful trader, you’re sitting on your hands most of the time.

Maybe you’re the exception.
 
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I agree high R/R ratio is way better than high win rate. Much easier trades and fewer trades.

In order to achieve a high R/R ratio you got to trade a significant trend. It is mean reversion (reversal) vs. trend.
 
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