Wow--so many responses--thanks for the help, guys!
Quote from Thunderdog:
Consider scaling out.
Yeah, that's the first bit of advice I got regarding this issue (a couple of months ago). It has worked wonders for me, as well as the "two for one" (Dave Landry's term) method described by Pita:
Quote from Pita:
Cut your positionsize to the half while doubling your stop, then sit back and watch. Predetermine your targets (1,2,3,...) and always keep a little rest. When you are in the market but not really under pressure you will see things that you didnt see before. You will learn how it feels having a runner under your fingers. Of course all this takes a working strategy first.
P.
Pita's method works awesomely for many of the other traders in the room.
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I'm still leaving quite a bit on the table--on a regular basis--in spite of these techniques. Basically, I'm trying to evolve from a scalper (five to twenty cents on 1000 shares over a few seconds) to an intraday swing trader ($0.80 to $2.00 on 200 to 500 shares over a few hours). Holding that long while watching price action and order flow is very difficult for a scalper-type like myself.
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About my system/methodology: I'm kind of divided between two approaches. I originally came from daily swing trading (hold time: 4 days to 2 weeks), trading only by charts. I used fully-automated systems that removed the psychological element of trading. Even now, I am trading the same set-ups, but with options brackets that are set up well in advance and that trigger on their own. I have done exceptionally well by predetermining profit targets and stop loss exits and then by just walking away and letting it do its thing.
On the flip side, I am also a full-time scalper-type daytrader having a hard time with all the noise introduced by the hybrid system. Those traders in my firm that have survived the switch to hybrid have all abandoned scalping and gone to intraday swing trading or pairs trading. So, I'm trying to follow (like running from a tsunami)...
The problem here appears to be entirely psychological, because I have no problem taking my predetermined losses or 100% of the preplanned profits when trading my fully-automated systems, but plunk me down in front of the screens with the MM/L2 and Open Book, and all of a sudden, I'm getting out way before my anticipated exits OR setting my profit targets far short of the total move.
You just helped me realize something: I don't use the charts nearly as much in my daytrading--I'm not really thinking ahead about preplanned profit targets and stop losses when daytrading because I'm almost totally engrossed with order flow.
Quote from cashmoney69:
Say you're looking at a weekly chart and a daily, and price on both charts seems to be at a support level.. how do you determine how long the trade should last?
I usually use the next resistance level (going long), set a limit sell at that point, and then watch the order flow as the price wiggles towards that point. Usually, one of three outcomes happens:
1) Price wiggles or drops downward, and I exit with a loss.
2) Price wiggles upward, slows and/or appears weak, and I get out with a tiny profit. Usually, I do manage to save myself from a winner turning into a loser, so this behavior is being regularly reinforced.
3) Price moves upwards, hits my target (with or without scaling out), and continues for a large move. This is the part I'm trying to fix, because these rare long runs are where the real money is made. The puny winners in #2 are canceled out by the losses in #1.
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Quote from booking:
My worst fault is that I always hold on to them too long! Only when the trend has changed do I cash it in and sometimes I've given up a significant proportion of the profit.
So I'm now practising getting out earlier when it looks like the move up/down is faultering - my reasoning is that I can always re-enter the position if it's apparent the price is going to rise/fall further.
This is a very lucky "problem" to have, as all the traders in my firm that have this "fault" do very well. Take it from me (us at this firm), piecing in and out of a larger trend doesn't work well at all. You end up with smaller profits AND higher transaction costs. We've got guys here who make $300 to $500 daily after 100000 shares traded, and we've got guys who make the same amount after only 10000 shares traded. After watching both, I'd much rather go with the intraday swing traders than stay a scalper.
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So, I guess after all this, the question becomes: what can I practice to improve my "faith" in the intraday charts while still staying focused on order flow in the market maker/Level 2 and Open Book screens to determine buying/selling pressure and when a move "falters?" Is it really a binary choice?
Thanks again for all the great responses!
