Hello JS.....
I hope my personal disclaimer was thorough-I indeed know nothing about the type of trading you are involved in-
I did hope to provoke your thinking though- I think Turveyd 's response to my somewhat rambling commentary made a good point
"Daytrading is where the money is made big money and big losses at first ofcourse."
The "big Losses" come after a trader over trades, trades too large, trades on emotion, doesn't trade his plan because he is trading due to his emotion- (discretionary) not his analytical discipline- and does not follow a strong position sizing approach. JMHO- Been there, done that personally- Again- mostly on swing trades- you will be capable of doing that so much quicker day trading!
Again, I do not know Anything about the product you trade, NOR Daytrading ( sampled it a few times over the past 15 years on vacation days ) (although it is a micro of swing trading - Charts are simply wider) - but i do understand lack of discipline- failure to follow a well thought out strategy- the tendancy to not follow a disciplined well executed approach but to give in to discretionary trades . Impulse trading- and all the other mistakes one can make........
I was hoping to challenge you a bit- perhaps get a different perspective-
You answered most of my questions- Thank you
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ou will eliminate the overtrading - you will take only the best setups- Won't trade chop- How will you know when a transition from chop to trending occurs? How would you get on board?
Those are good questions. Ranging and CHOP are different to me. Chop is generally lower highs and higher lows forming into a wedge of sorts. Range usually has respected extremes, and price is hovering around a certain price that traders are finding value at. Lately in the NQ, 3980 has been a rangy price point many times over the past 4 weeks. Yesterday was filled with wedges, CHOP to me. Not ranges.
I cannot predict the transition. Generally I play a pullback after a range or chop break. If it trends, good. If not, try again. Are you asking so that I have this in my plan, or are you showing interest?
I think this is where Art and science diverge- The question is - is this a good -higher- probability entry? I'm only asking You- I would point out that as a "new" trader, you would likely do best to have a limited arsenal- only target those trades - and stalk them- that have the highest probability of success-
"questions here need to be answered pertaining to each setup. I do not have ALL of those answered in paper, but I know them. They should be on the paper as well?
I think the exercise and the act of actually writing something down on paper helps solidify the thinking.
I think every trade - when printed out- written- presents a starting point for analysis-
Perhaps- Consider - looking at each & every individual recent trade- in hindsight- once the emotion of the moment has passed.....
What is a big loss? Is it 50% needing a 100% gain to get back to where you started?
Does a 30% loss pay the tuition fee? After the loss comes what? Enlightenment? Experience?
From there does success and consistent trading start?
t this point, I'm risking what I SIM traded. Very little. This is how I'm surviving this curve. I'm not adding contracts, I'm not risking more than 1 to 1.5% of capital on each trade.
This seems very responsible ! If you were initiating a swing trade - However- If you take 15- trades each day, your port risk on any one day is 20% +/- exposure/ ?????? That seems quite large an average Risk -every day- unless you substantially reduce the # of trades you make- JMHO.
I think daytrading has got to be one of the most rigorous occupations out there-
As a new trader- you have absolutely no experience in the Ring in real time- You will do well to give yourself 'Ring time' and survive the learning curve.
Simply step back and try to only take what you consider the "Best" Quality trades-
Don't worry about making money at this point- Concern yourself with executing well disciplined trades and see if you can build an actual foundation of entry and exit signals-
While i am not a daytrader- One should always know what the next higher time frame direction is-
Trades in the lower time frame that coincide with the higher trend direction will usually prove to be more lengthy & profitible- My Opinion..... Trades that are countertrend bounces should be held with a tighter stop to nail any weakness/shift back to the predominant trend- Reversion to the mean prevails. Does that always hold true/ How much volatility?
Again, good luck in your journey- If you decide that longevity has it's merits- don't worry about getting Rich in the next week or two! Instead, Plan to be Here for the next Year or Two- or Ten.
Forget the noise- Find the very best of the best setups and focus on them- ignore the rest as noise-
Analyze them, find out what works- develop a focused strategy on your best entries/exits You have the rest of your life to determine what those really are- They will change- You will change.
I think the Key here is to be a survivor first- Understand that the expectation is that you will simply be another well intentioned casualtie of the trading environment.
Why would you be the exception to the norm?
Yes- I am asking you why it should be "Normal" that as a new trader you should have "big" losses/
Are you prepared to sustain "Big losses?"
If "big Losses' are the norm- and you don't want to be normal- don't trade the way new traders trade
You perhaps started that way-
Good Luck to your Future Success!
SD
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