I'm back! Trying to trade NQ
- Thread starter amitman
- Start date
Wow, finally someone who has a clue.
I actually considered this time stops idea and happy to see it does work will backtest it.
In case you're out because of time, is there's a limit of time before you can re-enter a trade in the same direction or does it depends purly on the entry signals?
to re enter in same direction, your method need to have a great way to stop "move-pause-move" , mean continuing trend after a pause
Everyone is different, experience, price knowledge, emotional control, losing percentages, aggressiveness etc... At this time in my life I have radically changed four years ago from very aggressive to drop of 60% of what I was. Aggressive works if you are younger and have emotional control, so you can take signals on next bar, you will usually make more profits BUT you will have more losses(providing your methods are profitable to begin), so it comes down to one's system, if R:R is same, you will be draining money out of your account, have to at bare min. have 1.5 to 1 reward to risk, So I am much much more conservative and have to wait for my conservative signals. That doesn't mean I trade one trade an hour cause I scalp and in 90 minutes of trading I ave 10-33 trades, but but am not going to take trades I use to do cause I know R:R was better than what I do now, but losing percentages were much higher.
What often is not discussed in forums when not to trade strategies, having equal R:R and 60/40 win rate is like breakeven with fees and slippage in day trading. Many want to pull the trigger, but does your Trading Plan lack a chapter of when not to take signals, I have backtested other acquaintances methods and they often lack when not to take good signals. I often think most new traders are 1.5 trades per day they wished they didn't do as that would make them into breakeven traders. So I trade ES the most, but it does transfer same concept to any market, just different values and regarding Nasdaq being more sloppy cause lack of volume so a bit longer in ranges. One minute bar in ES is 10 points or greater, I won't trade for next twenty minutes, I keep ten period ave of day session range, so say price is near the high ten day range and I get a long signal, I will do either check price structure to see if continuation exists, seek greater pullback by 50% or pass on the trade. I also keep track of upswing and downswings of past ten days. A swing is one completed trend, so ES been of late 9-12 points, at 8.75 I am taking regular trades, at 9 and depending on price structure I determine what is going on. If I see Head & Shoulders, I am looking for reversal, so there are times where if there is 2 ticks from where I will sell it, I will go long for 2 ticks to reverse into short. If downsloping trendline on 60 minute chart is coming in where I want to take a long, I will pass on the trade. If I see each previous pivot high only being broken by 1-2 ticks, price gives rounding appearance and to me trend is near ending and looking for shorts. So these strats will stop me or change signals for deeper retracement and risk half as much, but I don't get hoggish, I maintain same 2.00 point targets.
With all due respect, I must disagree. Beginners as a group have little to no idea how to develop a bias that is reasonably accurate. Which is why they so often trade the wrong side (one need only review the journals, particularly the "real-time" journals, to see this). This does not mean that they should guess the direction around the open, but they should at the very least test whatever they are using to determine this bias of theirs to make sure it is something more than wishful thinking. This may be nothing more than a restatement of your "figure out a way to develop some sort of directional bias for the day", but it's something I want to emphasize.
I have corresponded privately with traders trying to get this who literally cannot, psychologically either short or long based on their bias. One in particular thinks the world should have come to an end years ago and as a result he is incapable, literally, of taking a long, and he often sells short all the way up. Like DbPhoenix says, a read of just a few journals and you will find posts like this: "I saw this trend line break and retrace entry for a (short/long), but I didn't take it because my bias (for the day, week, the rest of my life) was (long/short). I like handle123's recent post "I can't back test bias."
I think you misunderstood where I am coming from. I see many newbies trading both long and short all day long, trying to capture these short term moves, and I see few having any kind of success over a long period of time.
The stock market in general has a very long term, upward bias. Therefore, just by playing the long side alone, you have at least a tiny edge in your favor.
In regard to developing a bias for the day, I refer to the work of Toby Crabel, Mark Fisher and similar traders who employ quantitative methdologies to develop a bias for the day.
Once you develop a bias for the day, then employ a strategy to exploit that bias. Some days it will work, other days it won't, but over the long run, you should come out ahead, assuming you've done your research and have developed a sound entry and exit strategy along with proper risk management.