Right at the moment, these losses are extremely tiny in relation to portfolio. I have not been able to watch the markets a lot intraday over the last 3 sessions,so these are more than day trades, but I will be holding short here and looking for new places to short. I would say that 75 to 80 percent of my profits over the last quarter century have been initiated in the counter trend area. Because at some point, I am now with the trend, but with a better size.
ES Journal Archive (2006 - 2008)
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Right at the moment, these losses are extremely tiny in relation to portfolio. I have not been able to watch the markets a lot intraday over the last 3 sessions,so these are more than day trades, but I will be holding short here and looking for new places to short. I would say that 75 to 80 percent of my profits over the last quarter century have been initiated in the counter trend area. Because at some point, I am now with the trend, but with a better size.
I agree that you trade carefully in relation to the worth of your portfolio, but you have to see the daytrading system as a separate system. And the way i goes now it will not be profitable and the risk is real that you will wipe out the amount invested in these daytrades. Which means that you will never be able to trade this way with bigger amounts, because big or small, it will always be a loss. The aim normally is to make profits.
There is something wrong in the basic setup of the system.
I already mentioned before that i know two traders that had the same opinion as you ; the lost more than 10 million dollars each by sticking to their position. Adding to the short is not bettering your position, it makes it worse.
Right now, these are not day trades, since I have not had the time to really devote to the day trade thing. I had initially put them in the short term account, but I am going to instead build my short position for the longer haul. I simply have not had enough time to devote to the short term thing other than a few glances and posts. It is true that I am now short 3 units (one in the positional account). When able--could be as early as tomorrow, I will again try out the short term trading. Position that I have on now is still well less than 1 percent of portfolio if I stopped myself out with a 100 point loss, so at the moment , I am not too concerned. Thank you for the concern and great intentions however !!
No stop target right now. I will continue to add up to 1450 --perhaps beyond. We'll see. I will begin here averaging up at larger intervals and at some point begin to add more than one unit. Ive got a nice small short base here and I can work from there. If we get a quick down , I may cover and begin the process again unless it looks to have more legs than the recent dropoffs.
The improvement of the average price can be compared with the "boiled frog phenomenon".
If you throw a frog in boiling water, he will jump out of the water due to the heat.
But if you put the frog in cold water and start heating up the water till it boils, the frog will get boiled and he will not jump out of the water because temperature will rise slowly and he will get used to the heat.
Same thing goes for traders. They try to improve the average entry after getting caught by an opposite move. Their losses will increase slowly so that they will get used to the open loss. As they get used to the loss they increase their losing position with the argument "the bigger the opposite move the better the entry", because they added at a better price than the last time and the average price improves. What they don't realize is that it is better to lose 20% on 2 contracts than 10% on 10 contracts. Their loss per contract will decrease but the total loss increases.
If prices rise you should buy, if prices decline you should sell.
Anticipating the market is very dangerous.
I witnessed a short of 1050 minis at 495 ( in fact 210 big contracts) in 1995. Just watch the S&P chart to see what happened.
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