Fixes for Trading Problems... share yours here?

KCalhoun

KCalhoun

Post a problem you've had, plus an idea to fix it....

for example....

Problem = overtrading

Fixes:
  • Only trade "out" days, days in which S&P is outside prior day's range
  • Limit trading to strongest gappers and open range breakouts at 2d highs
  • If I have 3 losing trades in a row, either stop trading that day or reduce size

Hope this becomes a useful thread, it would be great to hear your problem & fix.
 
Problem = Exiting a losing trade only via a preset stop.

Fix = Cut losses prior to stop being hit!

Problem = Exiting a profitable trade only via a preset target price.

Fix = Place a stop at an acceptable "giveback" level. Do not allow 100% of decent profit to evaporate! Allow market structure and environment to define acceptable and decent.
 
If I take a position and my premise of bullish or bearish proves to be wrong then I have to make a decision to hold or exit with loss.

Solution:

Start with small position size.

1) First place the correct SL (Wiggle room) which if price reaches that point my premise is likely invalid. See a trader can pick the wrong side of the market and is certain to lose or he can pick the right side and get out on a minor correction and lose. A trader can also have excellent paper profits and overstay the market and paper profits evaporate. A trader can also be right on the market and wrong on timing. Correct SL placement IMO needs to take into account the above.

2) If it reaches the invalid point exit immediately with the loss. Taking a loss is really nothing. If I do number three below.

3) Immediately look for an opportunity to reverse direction and go with the correct direction the market. Then I double up position size and go in the correct direction getting my loss back and likely make a good profit on a comparable move. Say I take a loss on 4 points in the ES. I reverse and double up and on a 2 point move I am back to break even. Another point or two and I am ahead of the game. The danger is if the market gyrates back and forth then I could get whipsawed from side to side but if I catch a fairly decent trend on the doubled up reversal then a profit is basically assured.

Of course the tactic is easier said than done. It does take some nerve. But if a trader can stop worrying about money and instead focus on the important thing-namely where is the market likely to go from this point? If I can re-focus on what is going on in the market then I have a powerful tool for success and a powerful tool for correcting a mis-judgement on market conditions that caused me to suffer a loss.
 
Problem - over trading/trading with too tight of an out resulting in multiple entries and multiple small losses trying to establish a position for a move
Solution - be more patient for a better price, but also have a range in mind that I would like to be in at instead of an exact price, most times having a bigger out would cost me way less than chopping in and out...save on commission too

Problem - trusting myself that I'm right and holding for the bigger moves
Solution - have been writing down all of my trades and and their final result - seeing on paper everyday that my price targets are hit or exceeded everytime is starting to help with this.
 
volpri said:
3) Immediately look for an opportunity to reverse direction and go with the correct direction the market. Then I double up position size and go in the correct direction getting my loss back and likely make a good profit on a comparable move. Say I take a loss on 4 points in the ES. I reverse and double up and on a 2 point move I am back to break even. Another point or two and I am ahead of the game. The danger is if the market gyrates back and forth then I could get whipsawed from side to side but if I catch a fairly decent trend on the doubled up reversal then a profit is basically assured.

Of course the tactic is easier said than done. It does take some nerve. But if a trader can stop worrying about money and instead focus on the important thing-namely where is the market likely to go from this point? If I can re-focus on what is going on in the market then I have a powerful tool for success and a powerful tool for correcting a mis-judgement on market conditions that caused me to suffer a loss.
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Excellent points everyone.

I like this re reversal trades, I do that often with ETFs that trade opposite like GDX/DUST TZA/TNA.

Biggest lesson learned is only do that with extended charts on high volatility days, otherwise you get chopped out a lot. Wish I was more patient
 
KCalhoun said:
Excellent points everyone.

I like this re reversal trades, I do that often with ETFs that trade opposite like GDX/DUST TZA/TNA.

Biggest lesson learned is only do that with extended charts on high volatility days, otherwise you get chopped out a lot. Wish I was more patient
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Finally got to the stage where low volatility I make a profit only smaller, high volatility days I just make loads more.

My issue was trades with tight SLs turning into longer term with ever increasing SLs.

Fix, real tight SL with a method to support/enable where 4 SL hits in a row won't phase me and 1 profit will get me back to BE and above.
 
With respect to many cut loss and/or take profit "problems",
learning to reverse is a bit of a grail!

Done with proper reasoning and execution, keeps one on the correct side of the market. ;)
 
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