its 100:1 in the usa
How can I improve my trading?
- Thread starter qwB
- Start date
You may be a day trader, but don't forget the daily chart.
Whatever bar duration you are using for intraday, mark off the previous day's high, low, and close. The market participants who move price are not trading the 5 minute or the 1 minute or the whatever minute chart you are trading. The institutions who move the market are very much keying of the visible levels of the previous day, the most recent daily swing high and daily swing low, and the previous week's high and low.
Take a few weeks off from trading, and instead, set yourself the task of learning how your chosen market behaves at those three levels, i.e. yesterday's high, yesterday's low, and yesterday's close.
How does it act when it breaks out?
How does it act when it breaks out and reverses?
If a break out does fail and price reverses back in the previous day's range, does it reach the middle of that range? What happens at that level?
While you are doing this observational learning, keep notes. If you can, print out your charts, write notes by hand.
Within a week or two, you're going to start to get idea about how your instrument behaves at these levels. Then, once you decide to try trading again, resolve only to take trades at these levels (by "at" I don't mean you have to buy or sell the precise price, I mean you don't do anything until price tests the previous high or the previous low or the previous close. Price will either break out and continue, break out, fail the break out.
Define how you'll trade these.
Finally, I would recommend that you start with a fixed take profit amount, and you should base this amount on either average daily range, average true range, or an ATR of the intraday bar duration you are trading. For example, if the average daily range is 200 points, and today's range at the breakout of yesterday's high has been 50 points, then ADR suggests the break out could travel another 150 points. Set you take profit as some multiple of that projected range, for example, your observations might suggest that price usually travels at least 30% of the ADR after a breakout before reversing. Maybe you make it part of your plan to take profits at .25ADR. This is just a hypothetical. You would make this decision based upon your observations of your market.
But do track ADR and ATR.
Additionally, have a plan to move your stop loss to break even. If you are doing this right, most of your trades should be profitable enough within the first 20 minutes that you can all but assure a breakeven or better result, and those that don't will probably hit your stop loss quickly, or otherwise indicate to you that the trade is failing, and you should exit manually before your stop is hit.
Not too many issues with Douglas or Steenbarger, but the other books have some statements / recommendations that if not wrong are at least not necessarily always right,
e.g.,the rules for entries are not very important, only the exits are important, or
never risk more than 2% of the account on any one trade, or
backtests must include thousands of trades or the results cannot be trusted,
plus a few other statements about approaches within technical analysis that are bad/never useful, etc. that may be too sweeping.
Take some time off and observe the market a bit. Try to see where you think you should enter/exit a trade and take a note of them. And then observe what the market does after you have made your supposed entry, does it go where you thought it would go, how much did it move and etc. After your observations, try to see if you can see a pattern for you to develop some kind of system.
You need to have some basis for your entries. To do that, you need to observe the market more. This is what I would suggest you to do right now, just watch the market and learn about the market.
Really? You will make a lot of money after following Wade? I knew you were gullible, but now I'm starting to believe you need some professional help.
He has this eureka moment every other few weeks, he is stuck in a vicious circle but refuses to change he his mindset and feels attacked every time someone points out the obvious, even when you are actually trying to help him.
I doubt even professional help is going to benefit him at this point.
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If you were learning to play piano instead of trading, after 10 months you still are going to basically suck, not be able to play much and a difficult Rachmaninoff piece would seem like something no one could play.
Time is really the best teacher for trading IMO. You probably will have to over come blowing out a few accounts and what will then seem like a total waste of time and money.
Tactically, if I started over, from day 1 for whatever trade idea I have I would give real consideration to taking the other side. Even if you don't short yourself and flip, at least give real consideration as to why someone would take the other side of your trade idea.
Personally, I think all the trading psychology stuff is worse than wrong. Mostly self affirmation so you can mentally stick to ideas and tactics that don't work and something for trading psychologist to write books about. Steenbarger's Traderfeed blog has some good stuff when it comes to markets inter-spread with a massive amount of self affirming nonsense.
Time is really the best teacher for trading IMO. You probably will have to over come blowing out a few accounts and what will then seem like a total waste of time and money.
Tactically, if I started over, from day 1 for whatever trade idea I have I would give real consideration to taking the other side. Even if you don't short yourself and flip, at least give real consideration as to why someone would take the other side of your trade idea.
Personally, I think all the trading psychology stuff is worse than wrong. Mostly self affirmation so you can mentally stick to ideas and tactics that don't work and something for trading psychologist to write books about. Steenbarger's Traderfeed blog has some good stuff when it comes to markets inter-spread with a massive amount of self affirming nonsense.
It takes all kinds.
I are here to learn, to listen and improve my day trading.
Some on the other hand are here only to preach, to broadcast because they already know everything about trading.
And they considered it an insult if you tried to be helpful.