From Micros to Millions: 2% per day

[DeltaOneFutures]

Then I should've quit a loooooong time ago.

Anybody wanna join gamblers anonymous with me?

I think you're up $ overall. And you have video games as a hobby. So if trading was hobby time and you've not lost money then no harm done.

You did a cool run this year, shows what is possible with discipline when conditions are right, but you don't have any edge you could build a career on. Please don't develop a gambling issue.

The guy I mentioned had an industry background (Ibank, hedge fund) before setting out on his own, and the firm he founded employs > 30 traders who do well so he knows what he's talking about for sure.

Lots of folks out there not doing so well this year. That means more animals in need. Maybe time for a more rewarding hobby...

 

[sstheo]

Sstheo,

Question please:

1. Based on your prior trades, what is your average reward to risk ratio?

Thank you.

About 4 to 1 risk to reward. 4:1 which by most standards is inverted from what should be.
But most traders lose money.... so "what should be" MUST be questioned.

 

[SimpleMeLike]

About 4 to 1 risk to reward. 4:1 which by most standards is inverted from what should be.
But most traders lose money.... so "what should be" MUST be questioned.

Hello sstheo,

Thanks for responding.

Is taking trades with RR less than 1 bothering you somehow negatively with your trades? I ask because this bothers me at times too when I take trades with RR less than 1.

 

[sstheo]

Hello sstheo,

Thanks for responding.

Is taking trades with RR less than 1 bothering you somehow negatively with your trades? I ask because this bothers me at times too when I take trades with RR less than 1.

With an 80%+ win rate, the "inverted" R:R didn't bother me at all. It's the times when I moved the stop (as mentioned) that sometimes ruined my day. That is when I was bothered.

Ironically, my best trades in the last month were losses where I took my losses quickly either at or before my stop. Why were these my best trades? Because I showed myself that I was disciplined and could actually follow my rules.

I know that if I follow my rules, I have high a likelihood of ending up positive at the end of the day. On the other hand, if I cherry-pick trades and stops, I will die...

 

[TripleJs]

With an 80%+ win rate, the "inverted" R:R didn't bother me at all. It's the times when I moved the stop (as mentioned) that sometimes ruined my day. That is when I was bothered.

Ironically, my best trades in the last month were losses where I took my losses quickly either at or before my stop. Why were these my best trades? Because I showed myself that I was disciplined and could actually follow my rules.

I know that if I follow my rules, I have high a likelihood of ending up positive at the end of the day. On the other hand, if I cherry-pick trades and stops, I will die...

If I understand correctly, most of your entry is based on momentum confirmation rather than picking top/bottom?

 

[sstheo]

If I understand correctly, most of your entry is based on momentum confirmation rather than picking top/bottom?

Up until now, I would say about 50% of my trades have been momentum scalps for 5 to 15 ticks and 50% have been reversals at support or resistance where I am only looking for 3 to 5 ticks. As far as picking tops and bottoms, I love to try to do that, but am usually wrong, LOL. But as long as I keep the losses under control, it is worth it to try.

But as mentioned, I am now reevaluating my whole approach.

 

[SimpleMeLike]

With an 80%+ win rate, the "inverted" R:R didn't bother me at all. It's the times when I moved the stop (as mentioned) that sometimes ruined my day. That is when I was bothered.

Ironically, my best trades in the last month were losses where I took my losses quickly either at or before my stop. Why were these my best trades? Because I showed myself that I was disciplined and could actually follow my rules.

I know that if I follow my rules, I have high a likelihood of ending up positive at the end of the day. On the other hand, if I cherry-pick trades and stops, I will die...

Hello sstheo,

Why do you move the stop once you set it? Also why do you cherry-pick trades and stops?

Since you are aiming at small tick profits in relation to bigger stop loss distance, this means high probability of price reaching your profit target is more likely. It could help ease your mind if you just let leave the profit target and stop loss alone, and let either one be hit. If you are using a price action stop loss, you should be fine leaving it alone.

In addition, I favor leaving your stop loss and profit target alone because this will let your measure the outcome of this trade management much easier. If you measure XXX trades where you leave the stop loss alone, this may give you good expectancy.

However, if your rules says move the stop loss before profit target is hit when you XYZ happens, then you should not have any problems, you are doing the right thing.

I remember I had a similar problem similar like yours. The fix was to leave my stop loss alone and not touch it until my profit target was reached or unless I was trailing (i.e., if price does this at this location or does this, then I move my stop objectively,etc.) a winning trade per my rules. Once I did this all the stress (shoulda coulda woulda, etc.) instantly went away because now I only focus on chart read, entry, target and stop. Afterwards, "I" am removed from the equation. Set my alarms and walk away. Much easier for recording data at the end of the day as well.

I know the standard trading tip is "Cut your losses quickly". But for me, I am not smart enough to understand what it means by "Cut your losses quickly". What in the world those this technically and logically mean. What does quickly mean? How quickly? So I initially set my stop loss, and if it get hit, it get hit.

Hope this helps

 

[syswizard]

I know the standard trading tip is "Cut your losses quickly". But for me, I am not smart enough to understand what it means by "Cut your losses quickly". What in the world those this technically and logically mean. What does quickly mean? How quickly?

Two techniques: 1) velocity and 2) time.
1) If down xxx pts within yyy minutes (points per minute), get out.
2) If no profit or in a loss position after zzz minutes of entry, get out.
How do you determine the variables ? Backtest.
If you can't do that, and your method is non-backtestable, then you are stuck with forward testing on a trial and error basis using small size or sim mode. That could take a lot of time.

 

[sstheo]

Hello sstheo,

Why do you move the stop once you set it? Also why do you cherry-pick trades and stops?

Since you are aiming at small tick profits in relation to bigger stop loss distance, this means high probability of price reaching your profit target is more likely. It could help ease your mind if you just let leave the profit target and stop loss alone, and let either one be hit. If you are using a price action stop loss, you should be fine leaving it alone.

In addition, I favor leaving your stop loss and profit target alone because this will let your measure the outcome of this trade management much easier. If you measure XXX trades where you leave the stop loss alone, this may give you good expectancy.

However, if your rules says move the stop loss before profit target is hit when you XYZ happens, then you should not have any problems, you are doing the right thing.

I remember I had a similar problem similar like yours. The fix was to leave my stop loss alone and not touch it until my profit target was reached or unless I was trailing (i.e., if price does this at this location or does this, then I move my stop objectively,etc.) a winning trade per my rules. Once I did this all the stress (shoulda coulda woulda, etc.) instantly went away because now I only focus on chart read, entry, target and stop. Afterwards, "I" am removed from the equation. Set my alarms and walk away. Much easier for recording data at the end of the day as well.

I know the standard trading tip is "Cut your losses quickly". But for me, I am not smart enough to understand what it means by "Cut your losses quickly". What in the world those this technically and logically mean. What does quickly mean? How quickly? So I initially set my stop loss, and if it get hit, it get hit.

Hope this helps

Why move it sometimes? When I am not disciplined. That is the only time. In those times, I feel like I "know" that the market is ultimately going to go my way. And then I become a polygamist with two wives -- my real wife and the trade I just got married to!

Of course, the way to trade correctly is the way you describe - set and forget. If near the PT, then of course I can trail the stop or just take the profit.

 

[Overnight]

Why move it sometimes? When I am not disciplined. That is the only time. In those times, I feel like I "know" that the market is ultimately going to go my way. And then I become a polygamist with two wives -- my real wife and the trade I just got married to!

Of course, the way to trade correctly is the way you describe - set and forget. If near the PT, then of course I can trail the stop or just take the profit.

That mental niggling in the back of your mind on moving the stop is the evil mistress in your polygamous marriage. She's a dominatrix BITCH. Hard to subdue her, eh?