Day-Trading 2.0 for small traders

[TheRumpledOne]

Quote from jjrvat:

I can find many excuses for why this trade failed:

Looking at the chart, I see 3 "pushes", as in, three waves that made higher highs.... for some reason, the market usually pushes in 3s.

It is just an observation of mine.

After the third push, I usually look for a reversal. But I always remember:

ANYTHING CAN HAPPEN!

 

[italianfx]

Quote from jjrvat:

I can find many excuses for why this trade failed:

1. Price hit next Pivot R1.5 twice plus and it couldn’t break it and already retrace to R1
2. By mistake I used a chart template without middle pivots (I use this when pivot are very close together)
3. Big guys running stops at the pivot
4. Bad luck,
5. Etc, etc, etc, I can continue forever but its worthless

This is not bad trade but a mistake not because of the previous reasons but because I was overconfident and I didn’t respect 2 basic principles:

1. The previous low (+/- 9:06:32) was at 4927. The last 3 bars before I pulled the trigger ALREADY broke this point (4925, 4925 and 4922) but because the R1 was there I decided to “oversee” this fact and instead of trading price I traded pivot points !!!.

2. I neither respected macro direction analysis where direction may change: London opening coinciding with price reaching pivot point…

3. It was so clearly wrong, that my natural stop (the previous low) was above the current price!!! (nevertheless I stubbornly place the trade) … At least I minimized the error closing the trade when price closed below Hull again at 9424 with a loss of 5 pips in 2 contracts ….

Sometimes is better to miss the train because of few pips than getting run by it.

jjrvat

With All respect I don't think was only a mistake, I prefer to call it a bad trade.
As TRO said "anything can happen" , in this case price went down and you got stopped but if price went up it was a good trade or a mistake turned good?
Look at the next long signal after you got stopped, price stopped right on the 250 wma and the last most important low and went up, for me was another nice long entry but we can never know if it will be good or bad.
This is why I like to remember myself of some sentences took from trading in the zone:
1 Anything can happen
2 You don't need to know what will happen next to make money
3 there is a casual distribution between your winning and losing trades given by your trading system
4 Each moment in the market is unique

So our job as traders is to objectively see if our condition are met and execute our trades

PS. any comments are welcome

 

[jjrvat]

ItalianFx,

Thanks for the comments, thats exactly the point I wanted to raise with this trade. Yes the next trade went up (the 240 WMA provided support), but you are missing a key issue: Consistency with your analyisis!!!.

The mistake (is a mistake because it breaks price analysis not because the loss) and the next trade was not consistent with price analysis (but is a valid trade if you are trading moving averages not price).

If you start making exceptions because a trade without support of price analysis went good (there are millions) you will pay back later in consistency. In the long run you will have thousand of doubts everytime you see waves (maybe you will wait for price to reach the WMA or pivots, stochastics, MACD crossing or something like that instead of following price).

You don't need to know what will happen next but you need to be consistent with your analyis (trust on me on that one) and of course is a casual distribution between your winning and losing trades given by your trading system but both the winners and the losser should be evaluated according to your system not to other possible entries.

Your last comment explain perfectly my argument ... So our job as traders is to objectively see if our condition are met and execute our trades ...Did the mistake I posted objectivily met the conditions to execute a trade ???

Btw, I am not implying that you should keep a fix set of rules when trading, even more a system need to be flexible, adaptable and sustainable in time, however the basic principle of price analysis in my opinion is unmovable.

jjrvat

 

[StillStanding]

since the entry you use is very specific, perhaps you can suggest a good specific initial stop loss point and profitable exit point.

Thanks

Quote from TheRumpledOne:

Since I am a scalper, as soon as the price crosses the MA, I am in. I am out as soon as the price stalls... I leave a lot on the table, in fact I just took 3 pips and left 8.

 

[TheRumpledOne]

Quote from StillStanding:

since the entry you use is very specific, perhaps you can suggest a good specific initial stop loss point and profitable exit point.

Thanks

Quick answer: STOP LOSS is ALWAYS A MAXIMUM 7 PIPS.

1) Usually, I only trade the major pairs.

2) At the moment, I only trade USDJPY because I get more "bang for the buck".

3) Michal Kreslik and I ran statistics for the major pairs. MILLIONS OF TICKS. Our analysis showed that if the price moves against you 7 pips, you are in for a long wait ( on average ) before the price returns to your entry.

4) I am a scalper, meaning that I exit with a profit as soon as possible. I like to think of it as a "smash, grab and run". If you smash the window of a store, you grab something and run away fast BEFORE the cops come. The more you take, the longer you are at the scene of the crime.

My scalping mantra:

IT IS BETTER TO BE WRONG WITH A PROFIT ( price continues in your direction after your exit ) THAN WRONG WITH A LOSS ( price goes against you as you hold ).

Or as my trading buddy, AirBall, says:

"3 PIPS IS A LOT OF MONEY"

 

[Dr.N]

jirvat,

your concept obviously works better than expected, i tested it today trading aapl with outstanding results….but what i find most fascinating is the way you describe the workings behind the concept…i hope you will continue i read everything you post,,, you’re obviously very gifted trader

thanks for sharing your thoughts

 

[italianfx]

Quote from jjrvat:

ItalianFx,

Thanks for the comments, thats exactly the point I wanted to raise with this trade. Yes the next trade went up (the 240 WMA provided support), but you are missing a key issue: Consistency with your analyisis!!!.

The mistake (is a mistake because it breaks price analysis not because the loss) and the next trade was not consistent with price analysis (but is a valid trade if you are trading moving averages not price).

If you start making exceptions because a trade without support of price analysis went good (there are millions) you will pay back later in consistency. In the long run you will have thousand of doubts everytime you see waves (maybe you will wait for price to reach the WMA or pivots, stochastics, MACD crossing or something like that instead of following price).

You don't need to know what will happen next but you need to be consistent with your analyis (trust on me on that one) and of course is a casual distribution between your winning and losing trades given by your trading system but both the winners and the losser should be evaluated according to your system not to other possible entries.

Your last comment explain perfectly my argument ... So our job as traders is to objectively see if our condition are met and execute our trades ...Did the mistake I posted objectivily met the conditions to execute a trade ???

Btw, I am not implying that you should keep a fix set of rules when trading, even more a system need to be flexible, adaptable and sustainable in time, however the basic principle of price analysis in my opinion is unmovable.

jjrvat

Thanks for clarification, I got the missing key issue ;-)
Consistency with my analysis!!!
I don't need to know what will happen next but I need to be consistent with my analysis, I need to know what I will do (place a trade) when all my condition of my trading system show up objectively.

 

[timokrates]

I would like to start a little discussion on exit strategies.

So far I see three:

The scalper exit, which for me means to exit the whole position at a certain amount of ticks (profit).

The discretional scale-out, which means to close parts of the position according to price analysis, market behaviour and/or technical helpers (trendlines, MAs etc.)

The scale out with stop moved to breakeven after first target is hit (auto or manual).

I see this all from a scalpers perspective, which means taking profits quickly - even if it's only a tick.

Of course there is a forth 'strategy', if the stoploss is hit.


I would like to collect some opinions on the different possibilities (maybe there are more).

 

[Rn86]

Very useful thread, keep it up.

Here is ER2 500 volume bars chart with simple modification – hull moving average as a paint bar indicator. Price above hull MA – blue bar, below – red. Dotted line is a 240 WMA with a slope / red down/blue up/ as it was explained previously in this thread used for trend definition. Cyan and red dots are pivot high /strength 5/ and pivot low /strength 5/ for visual aid.

I don’t use floor pivots/res/sup, so basically the rules for short entry are:
240 WMA red and above the market, lower low and lower high completed, first red bar / yellow arrow/

 

[StillStanding]

if it's so simple why do 95% of traders fail??

Quote from TheRumpledOne:

You make it sound so simple!

What a minute.. IT IS SIMPLE!!

Thanks again for taking the time to share.