Great advice, thanks! I kinda do this with es.
How do you cut losses?
- Thread starter hurricane_sh
- Start date
do stats of your trades. see results if you stayed in or cut losses at various levels.
good system, when stop hit will mean reversal. So time to reverse !
Now, hard to look in mirror and find out that stop loss actually losing proposition in your trades, hence system expectation is negative
hence, your dreams will remain just that.
good system, when stop hit will mean reversal. So time to reverse !
Now, hard to look in mirror and find out that stop loss actually losing proposition in your trades, hence system expectation is negative
hence, your dreams will remain just that.Another typical day: earned $350 with es and lost $100 to stocks, I stopped trading before I gave it all back like yesterday. I have decided to trade es exclusively for the time being.
Gave it more thought, I realized es and stocks were quite different, with es I usually hold only several minutes, and I can happily settle for a few ticks profit. But stocks require more patience which I don't have especially after I got used to es trading, I usually trade 200 shares, even $20 profit is difficult to reach. es is obviously more suitable for me.
I used to think es is harder to trade, it's not necessarily true. es is a better choice for scalpers.
Gave it more thought, I realized es and stocks were quite different, with es I usually hold only several minutes, and I can happily settle for a few ticks profit. But stocks require more patience which I don't have especially after I got used to es trading, I usually trade 200 shares, even $20 profit is difficult to reach. es is obviously more suitable for me.
I used to think es is harder to trade, it's not necessarily true. es is a better choice for scalpers.
Last edited:
I don't recommend being in the top and bottom picking business especially for a beginner but as to losses, know where you want to get out if the trade goes the other way before you enter. Hard stops or mental limits are personal choice but there needs to be a defined point where you cut bait.
Learn to spot the end of a retrace in a trend, then use swing low / high of that retrace as stop.
As you get better, learn to spot retrace failures for potential deeper retaces instead of reversals ie calling tops and bottoms
Scaling leads to horrible money management unless you are investing, in trading it is for rookies that have no idea how to enter properly.
And careful with free advice, mine included.
As you get better, learn to spot retrace failures for potential deeper retaces instead of reversals ie calling tops and bottoms
Scaling leads to horrible money management unless you are investing, in trading it is for rookies that have no idea how to enter properly.
And careful with free advice, mine included.
Last edited:
Freak of Nature nailed it. It has been shown that scaling in and scaling out usually leads to lower profits. However if you are a long term trend follower in trades for weeks and months it can be effective to minimize losses and increase gains (notice I DID NOT say MAXIMIZE gains). Take everything everyone says with a grain of salt but I think you should read some of the books by Van Tharp since he answers and shows nearly every permutation of scaling in and out and how it's usually not the best way to manage money. And just because someone agrees with you does NOT MEAN you are doing it right nor does it mean they are right. You should test these thoughts out yourself. Try you system on paper first. Why pay the tuition when you can test for free??
Unless there is a obvious previous support or resistance point I simply don't try to fade the market. I've been there b4, tried a few times and simply gave up becuase of the amount of times that the market kept moving against me. If its on its way down I just stay away from it.
Some1 posted earlier about buying in as the market retraces, I would only enter after the market changes direction and its obvious. Just my thoughts.
Some1 posted earlier about buying in as the market retraces, I would only enter after the market changes direction and its obvious. Just my thoughts.
THow to find the point where to cut the bait?
I have a system and calculated, based on over 1000 trades, the impact of using or not using a stop. I could mathematically proof that in my case I have to use a stop because it improves my performance. Without stops my profits would be lower, my losses bigger and my drawdowns bigger too. So it was clear what to do.
Place the stops where performance is optimal. I simulated these trades with different levels of stops. For each simulation the trades were adjusted in plus and minus. Some trades were stopped too early, but some other , losing trades were stopped earlier too. The total final result and drawdown told me were to cut the bait.
Not difficult but a lot of job before you know the answer.
Very good system and almost always profitable trades.
But there is one small problem: you should be able to define with almost 100% accuracy if it is a retracement and not a change of direction.
On the other hand you always have that problem, even if you wait till the direction changes, or at least you THINK it is changing direction...
I think that statistically there are more retracements then direction changes, because, if not, it would mean that retracements would not exist. So that's already in favor for retracement buying.