How To Not Chase?

arturo100 said:
Very interesting. Thanks for sharing these details on your setup. If I may ask, which ones have been the best years, i.e. more productive, of your trading?
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2019. I'd been trading heavily five years by that point, and had learned how to normalize cost across trades, and isolate a specific alpha with a set of hedges.

42%! My best year.

Then I got too cocky, and made a big stupid FOMO bet during COVID, and lost it all and then some. I got wild, and didn't diversify properly.

This year I've moved back to what I was doing in 2019. I made back everything I lost, and I'm up 13% a/o Friday.
 
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kmiklas said:
2019. I'd been trading heavily five years by that point, and had learned how to normalize cost across trades, and isolate a specific alpha with a set of hedges.

42%! My best year.

Then I got too cocky, and made a big stupid FOMO bet during COVID, and lost it all and then some. I got wild, and didn't diversify properly.

This year I've moved back to what I was doing in 2019. I made back everything I lost, and I'm up 13% a/o Friday.
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Nice comeback! It is not up to everyone to recover after such a massive loss. Keep up the good work!
 
How do you not chase? Buy low, sell high is my recommendation. Not easy to execute on when high and low are relative, and not absolute. I use a highpass filter followed by an Inverse Fisher Transform, in order to try and get a better than 50/50 chance of a price reversal entry point.
 
easymon1 said:
Show a chart or two each that worked and did not work?
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Trade that worked(today):
1.JPG

Trade that didn't work(before chased then hoped it would go back :():
2.JPG

Light Blue is long, Gray is short.

kmiklas said:
I find it hard to have confidence trading this style. I always saw it as a 50/50 gamble, minus commissions and fees. You might as well play craps and roll the dice.

- You're at the mercy of whatever technical you picked.
- At any time a Portfolio Manager can suddenly enter/exit their position, leaving you in the red.
- You're up against quant firms with expensive hardware. They have a Ferrari, and you have a tricycle.
- Said quant firms hire Ph.D.'s in math and physics--hired specifically to beat out your dollar-store retail technical analysis.
- Where is your edge? Can you say with any level of confidence that you'll win on 4 of 7 trades? even 51 of 100?

I'd say adjust your trading style to a time horizon where you have an edge. Then you will trade with confidence, knowing that your trades are based on your work, experience, and mind.
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I understand, I have tried swinging before but holding overnight is a problem for me, I might be using to much size when I swing. Appreciate the help.

easymon1 said:
Do you backstop your trades with support or resistance levels?
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If we mean backstop as, stop losses I do not.

Thanks.
 
chaser123 said:
If we mean backstop as, stop losses I do not.
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Stop loss levels are a whole 'nother topic.
more to the point was whether you like to backstop your entries with a support level from which price might rise / a resistance level from which price might drop.
 
easymon1 said:
For the pictured "Trade that didn't work" above, what denotes your actual entry and exit points?
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Well I did have a plan, I wanted to buy at the low that was just made(breakout level), but like I said I like confirmation it happened then I waited if I should buy and doubting myself. I guess I broke my plan and it headed higher and broke a new high then I chased into it. I now am buying at levels I plan to buy at, and if they fail I exit for a small loss or gain based on price action.
 
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