How I stopped making the same mistakes in 2010 and started to make more money
- Thread starter thinkfirst
- Start date
Quote from Redneck trader:
TF,
Great Job over the last 13 days Maâam
wash â rinse â repeat
RN
Thank you RN, glad you are writing back in my journal. Your comments are always welcome here.
I have a formal plan and rules written out. The technical trading rules are very simple because there are only three types of trades I do: with-trend value entries (pullbacks in the trend that pivot near the falling or rising 20-bar EMA, better known as higher lows, lower highs), trend reversals (the first higher low/lower high following a strong trend) and breakouts (sell new lows, buy new highs).
My risk management is simple because I have a max daily loss of $500 (I'll have to double that once I start trading 2 lots of CL because I've found that a survivable stop is often $300 away), a max loss per trade of $250, and since I trade off price pivots I always have a fixed hard stop above or below the pivot bar, or occasionally above/below the high or low of the day if it's close enough. Since using a 1-min chart to enter the trade quickly, my stops are rarely greater than $80 away.
My rule of no trades after 11:30 was based on the fact that I almost never made a useful profit after that time, often churned away profits instead and gave commission to IB. I am looking at end of day strategies now, because the profit potential is very good in the last hour.
I do still keep a trading journal with brief notes, but I've been so good at following my rules that I haven't had to go to confession in a while
The thing I have to constantly be careful of is when price is trending, is making the 3rd push in the trend and is reaching overbought or oversold on both the 1- and 3-min chart. It usually looks like a reversal is coming, but you have to look at where the next support or resistance level is, because it will, more often than not, be tested and there's no need to counter-trend too soon. Better to wait patiently for confluence from the 5-min chart, or wait for a failed test of the next S/R level.
Man, that's because you have yet to experience that great feeling of nailing the top.
On a serious note, I strongly suggest others to stay away from picking tops and bottoms. Even though I've had much success getting in near the top and the bottom, I probably lost more money than necessary as a result. There's so much safer, let alone profitable, way to play the tops and bottoms than to rush in blindly. One thing everyone should not forget is that in a strongly uptrending market, you will rarely see a sharp break from the high. It will often make a minor blip before retesting the high again. Even if the trend isn't so strong, it's not likely that prices will completely break down at the exact high. That usually happens on the next rush for the exit. That is when you want to load the boat. But again, be mindful of the overall trend.
Quote from schizo:
Man, that's because you have yet to experience that great feeling of nailing the top.
Oh, I nailed a top and bottom once, early in my trading career. I had a short position on with a stop and profit target. The next morning price stopped me out to the tick of the day's high, then reversed and bottomed to the tick of my target. It was so uncanny I actually thought I was dreaming and my alarm would go off at any minute.
actually in a range-bound market, top and bottom can be easily pindowned. in a trending market, you still need to pindown pullback bottom/top or overshoot top/bottom to enter and lock profit. (better call them turning points)
I think top/bottom picking is an essential skill a trader must grasp. yes, it is hard to pindown, but after many drills, I think the odd will be greatly increased and the skill will be finally mastered.
I think top/bottom picking is an essential skill a trader must grasp. yes, it is hard to pindown, but after many drills, I think the odd will be greatly increased and the skill will be finally mastered.
Quote from schizo:
Man, that's because you have yet to experience that great feeling of nailing the top.
On a serious note, I strongly suggest others to stay away from picking tops and bottoms. Even though I've had much success getting in near the top and the bottom, I probably lost more money than necessary as a result. There's so much safer, let alone profitable, way to play the tops and bottoms than to rush in blindly. One thing everyone should not forget is that in a strongly uptrending market, you will rarely see a sharp break from the high. It will often make a minor blip before retesting the high again. Even if the trend isn't so strong, it's not likely that prices will completely break down at the exact high. That usually happens on the next rush for the exit. That is when you want to load the boat. But again, be mindful of the overall trend.
Day 14
I didn't see any trades today that qualified for entry and I ended up not trading.
+0
I didn't see any trades today that qualified for entry and I ended up not trading.
+0
Day 14
My profits today came from swing long positions. It seems like this is great market for investors and I can even see it in my pnl, swing longs are doing fine, day trading not so much.
+2,953.43
My profits today came from swing long positions. It seems like this is great market for investors and I can even see it in my pnl, swing longs are doing fine, day trading not so much.
+2,953.43