Ideas for struggling traders
- Thread starter steve46
- Start date
Ansare
In my opinion, how you manage your mental status is one of the most important issues for success.
When I say I have no bias, what I mean is that I realize that at any time during the session, ANYTHING can happen.
If I see obvious trending behavior, I trade as though it will continue BUT I am careful to manage my risk as though at any time that trending behavior can end.
This is the approach I was taught. I react to what I see. I try to do the right thing at the right time. In my opinion, the market is a series of questions, and a good trader will supply the right answers. If you do that, the result is a profit.
If you answer wrong, the result is a loss.
In my opinion, how you manage your mental status is one of the most important issues for success.
When I say I have no bias, what I mean is that I realize that at any time during the session, ANYTHING can happen.
If I see obvious trending behavior, I trade as though it will continue BUT I am careful to manage my risk as though at any time that trending behavior can end.
This is the approach I was taught. I react to what I see. I try to do the right thing at the right time. In my opinion, the market is a series of questions, and a good trader will supply the right answers. If you do that, the result is a profit.
If you answer wrong, the result is a loss.
Thanks for your comment Bernoulli
One of the reasons we are here is to learn. If you have an idea, please go ahead.
Also it would be a good idea to see if you can approach a bond trader to ask how they use the S&P contract to hedge. I will do the same at my end. Perhaps we can get a more up to date comment from a professional. I own physicals, but I am not active in that market.
Good luck to you
Steve
One of the reasons we are here is to learn. If you have an idea, please go ahead.
Also it would be a good idea to see if you can approach a bond trader to ask how they use the S&P contract to hedge. I will do the same at my end. Perhaps we can get a more up to date comment from a professional. I own physicals, but I am not active in that market.
Good luck to you
Steve
Here is another "idea" that struggling traders can investigate.
As you can see from the attached chart, we have 3 minute candles over a 200 period MA (Exponential) showing the longer trend, over an 80 period MA (also Exponential) showing the mid-term trend, over a 3 period MA showing the short term trend.
The rule set is simple. We will talk about short trades first.
1. Wait for price to test and fail to take out either the 80 MA or the 200 MA (preferred)
2. Possible entries on the test (preferred), on the failure, and on the first open lower than the 3 period MA. (Blue lines)
3. Stop loss estimated at 2pts min (today's vol)
4. Also notice that entries that lean on confluence of 200MA and a pivot are preferred. The pivot becomes the stop loss point.
First and preferred entry occured at 1262.75, stoploss is a close at 1264.75
Second entry is open of the next bar at 1262.25. Minimum stop loss is 2 points (1264.25)
Third entry is the first bar that opens below the 3 period MA. We see that bar open at 1261.75 with a stop loss at 1263.75 min.
As can be seen all entries would have resulted in a clear profitable trade.
Trade management options are as follows;
1. Hold a single contract, taking profit with discretion
or
2. Scale out of multiple contracts at 2, 3, 5. 7 and 10, leaving at least 1 contract to run to end of session.
In this case the trade would have resulted in profit of approximately 6 points if held to end of session on 1 contract
or
Scale out would have resulted in profit at 2, 3, and 5. The final contract held to end of session could have been liquidated for profit of 6 points.
As you can see from the attached chart, we have 3 minute candles over a 200 period MA (Exponential) showing the longer trend, over an 80 period MA (also Exponential) showing the mid-term trend, over a 3 period MA showing the short term trend.
The rule set is simple. We will talk about short trades first.
1. Wait for price to test and fail to take out either the 80 MA or the 200 MA (preferred)
2. Possible entries on the test (preferred), on the failure, and on the first open lower than the 3 period MA. (Blue lines)
3. Stop loss estimated at 2pts min (today's vol)
4. Also notice that entries that lean on confluence of 200MA and a pivot are preferred. The pivot becomes the stop loss point.
First and preferred entry occured at 1262.75, stoploss is a close at 1264.75
Second entry is open of the next bar at 1262.25. Minimum stop loss is 2 points (1264.25)
Third entry is the first bar that opens below the 3 period MA. We see that bar open at 1261.75 with a stop loss at 1263.75 min.
As can be seen all entries would have resulted in a clear profitable trade.
Trade management options are as follows;
1. Hold a single contract, taking profit with discretion
or
2. Scale out of multiple contracts at 2, 3, 5. 7 and 10, leaving at least 1 contract to run to end of session.
In this case the trade would have resulted in profit of approximately 6 points if held to end of session on 1 contract
or
Scale out would have resulted in profit at 2, 3, and 5. The final contract held to end of session could have been liquidated for profit of 6 points.
There are a number of ways to approach these ideas if you are looking for a method
1. Setup your charts and start scrolling back through the days.
2. Keep a paper record of trades, entering data as you need to learn whether the system will produce an acceptable result. Make sure to enter a significant sample size.
3. Use an Excel spreadsheet to tabulate and process a significant sample of data for your evaluation.
4. Enter a significant sample of data into a software program designed for backtesting and evaluate the results.
What you don't do is simply trade it because you read it here in this thread and it looks like it works.....
Good luck,
Steve
1. Setup your charts and start scrolling back through the days.
2. Keep a paper record of trades, entering data as you need to learn whether the system will produce an acceptable result. Make sure to enter a significant sample size.
3. Use an Excel spreadsheet to tabulate and process a significant sample of data for your evaluation.
4. Enter a significant sample of data into a software program designed for backtesting and evaluate the results.
What you don't do is simply trade it because you read it here in this thread and it looks like it works.....
Good luck,
Steve
and of course, to finish the work of evaluating a possible systems approach, one would want to find examples of choppy action, as well as examples showing transition from short to long setups.
Ultimately you would have to write and test rules for each condition and evaluate a significant sample to determine whether you have a viable approach.
Now before signing off I have something to confess. I have already done the testing of this "system"....As a result I know quite a lot about it, including why it doesn't work....
and how to "modify" or "fix" it so that it does work.....The questions I have for struggling traders is....what is the main problem this system has?....What can be done to make it a workable approach?
I look forward to your comments.
Steve
Ultimately you would have to write and test rules for each condition and evaluate a significant sample to determine whether you have a viable approach.
Now before signing off I have something to confess. I have already done the testing of this "system"....As a result I know quite a lot about it, including why it doesn't work....
and how to "modify" or "fix" it so that it does work.....The questions I have for struggling traders is....what is the main problem this system has?....What can be done to make it a workable approach?I look forward to your comments.
Steve