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- Thread starter N54_Fan
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Moved the stop to $46.33 this morning. I have not decided on where to move it for Mon. I will update. Sometimes I move my stops 3-4x a day and I dont think I have the time to update everytime I move a stop. Thats why I updated when I closed a position on PPO. I will try to be as detailed as possible.
N54 Fan:
Spent the weekend reviewing my copy of âCome into my Trading Roomâ. I must have picked up something the first time I read it because I do use his â3 time frameâ method when assessing a trade.
Be interested in knowing if you have a method of grading your trades. Elder grades on the percentage you take out of a move. He grades entry, and exits based on a percentage of the days range. He also mentions that it is important to rate yourself on how you followed your trading plan. Personally I grade myself only on how I followed the plan. If I follow my rules and enter a trade where I planned and took my stop where I planned, then I grade it as a good trade with bad results and give myself a better grade than if I had made money on a trade where I had broken some of my rules.
Elder also states âOne of the worst things a trader can do is reveal his open trades, putting his ego on the line, and gumming up the decision making process.â I disagree. Revealing your open trades is a great exercise to see if you have the discipline to follow your plan. If your ego gets in the way when you have to justify your trades to a bunch of strangers imagine the internal battle you will have when itâs only yourself you have to answer to.
It was a good review and I can see a lot of things I missed when I first started out. I probably skipped through most of the material looking for canât fail set ups. Now I search for hints on money and trade management.
Thanks for the suggestion.
Spent the weekend reviewing my copy of âCome into my Trading Roomâ. I must have picked up something the first time I read it because I do use his â3 time frameâ method when assessing a trade.
Be interested in knowing if you have a method of grading your trades. Elder grades on the percentage you take out of a move. He grades entry, and exits based on a percentage of the days range. He also mentions that it is important to rate yourself on how you followed your trading plan. Personally I grade myself only on how I followed the plan. If I follow my rules and enter a trade where I planned and took my stop where I planned, then I grade it as a good trade with bad results and give myself a better grade than if I had made money on a trade where I had broken some of my rules.
Elder also states âOne of the worst things a trader can do is reveal his open trades, putting his ego on the line, and gumming up the decision making process.â I disagree. Revealing your open trades is a great exercise to see if you have the discipline to follow your plan. If your ego gets in the way when you have to justify your trades to a bunch of strangers imagine the internal battle you will have when itâs only yourself you have to answer to.
It was a good review and I can see a lot of things I missed when I first started out. I probably skipped through most of the material looking for canât fail set ups. Now I search for hints on money and trade management.
Thanks for the suggestion.
What criteria do you use to determine where to place stops?
I have been using what I refer to as a mental to fixed stop method. I caculate a stop when I enter the trade. I will let the stock trade thru that price then set a stop in the market below the bar that the stop was violated. The reasoning for this is to guard agaainst stop hunting.
It's a method that I may give up on shortly. A review of my last 9 months of trading showed that I would have had about 1% better return by taking my stops as calculated even though some of the positions that became winners would have been stopped out.
Keeping my stop at $46.33 because I expect to buy again to add to positions and take new positions on this retracement.
As for how I figure them, well I always pic a spot that is a bit random and still within my range of exits. For example I never place my stops at an even round number. Even round numbers are more likely to get hit. So I always place it at like $xx.52 or $xx.33 or something that seems a bit random. I also use the same criteria for entry as I do for exits. Some times I allow more breathing room as in when I think there is a trend forming like now in UYG.
I use a form of EMA crossover to give me a signal on the 60 min chart. The "earlier" in the trend the shorter the EMA Crossover values (say EMA 5 and EMA 10). The further in the longer the EMA values (say,...EMA 5, 50) It is easy to calculate or even "eyeball" on a chart where this EMA cross may occur if price reaches a certain level. You can plug in the current price and the current EMA values and then figure out the price that would "trigger" this EMA cross. I have an Excel file that does this automatically if I plug in these numbers. I then allow a SMALL bit of additional breathing room around this "calculated" value to ensure that if it is hit then I know with realtive certainty that the move has ended. If for example the calc. value is $46.44 I may use $46.33 as my stop. You can see how this will tighten quickly as a move ends and the EMAs curl to get closer to each other every hour. On a losing trade like WYNN it gets you out VERY QUICKLY and minimizes losses. Obviously there is a small element of discretion as to where I place them but this is my hard and fast way of doing it. Works well for me because I am a trend follower.
UYG stop filled yesterday at the close. In cash now.
I expected to see the market retrace to 1250 to 1270 and bounce. However it appears that we broke below the key level of 1250 and now have a gap lower on the futures. It is highly unusual for my system to not have any good trade setups taking shape. However that has been the case for the last 3 days. The futures this morning show about 1.5 percent drop expected at the open. This will gap past any sell signal my system generates. I have learned overtime that it is best not to chase the market, to force a trade that is not there, or to take trades that show a low reward to risk ratio. So for the 3rd day in a row, I will be starting out the day with no planned trades. I do have a couple of trades on my radar and will post them if & when they take shape.
My swing trading trend following system has made some good trades since the start of the journal. Even the late entry in UYG's recent advance provided $2.01 profit per share. Some may ask why was I willing to give back paper profits before closing the UYG trade. The answer is that in a trend following system you need to be willing to give room to "let your winners run" but this means possibly sitting through some level of retracement. The key is in not letting a winning trade turn into a losing trade.
I expected to see the market retrace to 1250 to 1270 and bounce. However it appears that we broke below the key level of 1250 and now have a gap lower on the futures. It is highly unusual for my system to not have any good trade setups taking shape. However that has been the case for the last 3 days. The futures this morning show about 1.5 percent drop expected at the open. This will gap past any sell signal my system generates. I have learned overtime that it is best not to chase the market, to force a trade that is not there, or to take trades that show a low reward to risk ratio. So for the 3rd day in a row, I will be starting out the day with no planned trades. I do have a couple of trades on my radar and will post them if & when they take shape.
My swing trading trend following system has made some good trades since the start of the journal. Even the late entry in UYG's recent advance provided $2.01 profit per share. Some may ask why was I willing to give back paper profits before closing the UYG trade. The answer is that in a trend following system you need to be willing to give room to "let your winners run" but this means possibly sitting through some level of retracement. The key is in not letting a winning trade turn into a losing trade.
Dang! I thought this thread would be about the Indian car maker.. 
Sorry I didnt see your post earlier...
Yes 3 TF method works great. I actually credit Elder and Van Tharpe with ~75% of my system being profitable. Elder reccommends 3 TF as do I but I have found that if you focus on the upper and lower TF and almost IGNORE the middle TF you will have more success. So focus on weekly for trade direction and then 60 min for timing. The daily will show coiincide with the other 2 if the 60 min does. This also reduces risk of trade as you end up getting in earlier and stops are tighter. So even though I focus on EOD data (you would think I trade the daily TF) I use the 60 min for entry/exits but weekly for direction. As 60 min turns in my direction so will the daily TF but it lags about 4-24 hrs behind.
As for grading my system I do not follow Elders grading system except as a mental note. I do not grade my trade within the channel because I focus more on trend following AND Swing trading. Elder focuses more on swing trading. So he would buy at value and sell at resistance. I would buy at value of what I think is posibly a trend or new trend and sell at or below value as the trend shows it is ending. What this distinction means is that I am willing to stay with winners longer than Elder does and allow for retracement. Only when the "trend" seems to have ended will I get out of a position. So I do not grade my place in a channel. However, I do grade myself (mentally) on my entries during the day. My system sometimes misses trades because I place my trades before the market and prices may gap move past my entry price. However, MANY times I enter at or very near the best prices of the day. In fact I have had numerous trades where my entry was at the absolute high (when shorting) or absolute low of the day (when long). I do think these help as they help you lose less if you are wrong and make more when right about a trade.
As for showing my trades,...yes I partly agree with you. It is harder to stay objective but I will do my best.
BOTH orders this morning were filled. Forgot to mention stops.
AMZN buy to cover stop @ $215.91 and TMO @ $50.95.