I'm having trouble with my trading

[volpri]

The market is designed to f$ck the majority


In the end
The only thing you can control
Is the risk


Never enter a trade without these 3 predefined variables


Entry
Exit
Hard stop

I don’t agree. There is no conspiracy between institutions and the myriad of successful traders to screw the majority of all the wonderful traders on ET. It is not like they are sitting around saying “uh oh here come the ET’ers. Lets screw them out of their little trading accounts.”

Traders lose because they have not yet honed their skills enough to recognize where the winning pressure is, in the markets, and they have not developed strategies and tactics to exploit those pressures. GS isn’t sitting around say “here come the MA crossover traders..let’s nail their hides to the wall.”

In reality GS is probably trying to screw some other institution. They are after the big bucks not the little does.

There is no wide overarching conspiracy designed to screw retail traders unless it be by HTF’s and one can trade out of their zone.

I would add one can control risk, but also ones assessment of probabilities, reward, risk as a trade unfolds. The problem is traders make an initial assessment and since they are looking for certainty in the markets (and there is none and never will be) they tend to stick hard and fast to their initial trade structure REGARDLESS of what pressures subsequently are screaming at the trader. No sir...it is “damn the torpedos full speed ahead. I am sticking to my SL and my PT and I don’t give a toot what the market is saying after I structure my trade and take a position.” After all they have been taught.. “never move your SL”. This sounds good on the surface but is IMO pure unadulterated



The market is flexible..uncertain..and changes...thus, should i be, as a trader, if I wish to extract $ from the market. Rarely do I enter a trade that after entry I am not assessing constantly reward/risk/PT AND changing them as the trade develops.

If I have to walk away from the computer I’ll leave things as they are structured because I am not there to observe and see the changes in pressures.

Therefore, I can control my risk..probabilities...reward.. to some degree, by continual assessment.

Gentlemen..we have been taught wrong by the many gurus who want to sell certainty to us.......

 

[SimpleMeLike]

I too prefer high probability trades. However a trader has to consider risk/probability/reward from two angles. The INITIAL risk based upon ones preferred risk methodolgy...points...$$$..catastrophic...PA based...etc. Then a trader should consider ACTUAL risk. That is, how much the trade went against the trader before going in his favor reaching his typical PT. It that actual risk is alot less than the initial risk then this is most likely a high probability trade and the trader would be smart not to follow the profit trail very far but lock in the profit while he can. He will still be getting good RR based upon actual risk and actual PT. For example:

Say ES is trading at 2804 and a trader enters there puts a SL at 2801 and a PT at 2807 a 1:1 RR. This is his initial risk and PT. So, entry is made. As the trade unfolds 1 minute later it moves in his favor to 2806 and at some point during that 1 minute it actually only went 1/4 point (or 1 tick) against him. Suddenly it is now at 2806 and still has not reached his initial PT of 2807. What is he to do? I know exactly what I would do. I am exiting at 2805.75 and I am locking in my actual profit which at this point is only paper profits. So I am out of the trade. What was my final RR trade based upon ACTUAL risk I endured during this trade and ACTUAL profit I made during this trade? I risked 1 tick and made 7 ticks. Isn’t 7:1 good? That is a great trade!

So....why would I choose to exit a trade so fast that in actuality only caused me to suffer small risk and gave me good reward also so fast (good reward comparing initial and actual RR). See when i first entered i had to structure my trade with the best info I had at the moment. That structure projected 1:1 RR (see above). But that is a “projection.” Nothing more. As we all know the market can do anything..anytime..at any speed and WILL in fact do so. That is why actual risk/actual profit correlated with time in the trade is a good way to assess if the trade “in actuality” ended up being a high probability trade or not.

So, in my example above I did not know for sure when I structured my trade IF it was for sure gonna be a high probability trade. As it ended up it was. I mean almost immediately I am 7 ticks in the money (on paper) having only risked 1 tick. This trade panned out to be a high probability trade. Now why exit and lock in my paper profits? Simply because when the market gives me high probability I best make haste and lock any profit in because the market is not gonna give me high probability/big reward/low risk....at least not for very long...LOL. I cannot have my cake and eat the icing too and expect ice cream and coffee thrown into the deal. This is where most traders make a mistake intraday. They get greedy thinking “market went my way and fast and I only risked 1 tick. This baby is going to the moon...I see BIG bucks on the horizon and not just a little doe (money LOL) so I am holding for a huge gain.” So they use their greed to hold.

Me I am thinking “the market just gave me a gift ..quick profit..low risk...high probability...it went my way very fast...great reward to risk ratio (7:1)...so I am using my greed and exiting converting my paper profit into real profit.”

I don’t give a hoot what my original trade structure was. That was temporary. That was my best projection. That was what I had to work with at the moment. I did the best I could with what I had. But at the time I didn’t know “how” the market would reach my PT or my SL for that matter. Nor did I know IF it would. Nor did I know WHEN it would.

So..what happens to the big bucks greedy trader? He holds. Market never reaches his PT target (which by the way he moved to an even bigger one based upon his greed). Suddenly the market whips right back down evaporating his 7 tick profit runs through his 2801 SL and he is trying to catch his breath long enough to hurtle an insult at the market followed by throwing his coffee cup on the floor all the while screaming...”I am an idiot. I SHOULD HAVE taken my profit while I could have now I am down 150 bucks. Am I ever gonna learn trading?”

His mistake was to base probability upon projections (which is by the way necessary to do at first) without then further refining the risk/reward/probability equation based upon “actual” price action. So he loses and then complains about “chop and noise” in the market. He determines never trade chop again without realizing the market is ALWAYS chopping. Take a 15 minute chart showing trend. The pb’s within the bar show up as chops on a smaller TF chart.. chips a flying. Soon the tree falls. LOL.

Of course there are exceptions to all of the above. In strong BO’s with “follow through” a trader will want to assess the probability again based upon actual PA. For instance:

30 minute chart. 4 minutes left to finish the bar. The bar is a big trend bar and appears to gonna close in the top 1/4 of the bar, Quick look at a 15 minute chart. Three bull bars all closing on their highs or near their highs or near their highs with gaps between the close of each bar and the high of the previous bar (denotes urgency). Trader looks at 5 minute chart. Several bull bars in sequence with gaps as described above and all pb are small bear bars or doji’s (denotes urgency).

All this points to a measured move at least the height of the BO to the first PB. In such a case I would hold or add to a position on a PB. Since trading off a 5 min chart I would project measured moves on it.

However we must realize only 10% or less of the bars on a chart are strong BO’s. So, yes take advantage of them when they show up but don’t base strategy and tactics on them for the other 70% or 80% of the bars.

There is NO noise. The market chops for a reason. Noise (as defined by traders) can be traded using proper strategic and tactical measures. A trader just got to know “when” to do “what”.

PS a trader must never ignore the larger context regardless of what the market presently is doing. That too needs to be factored to any probability assessment, initial or actual.

If a trader is consistently giving up paper profits and allowing them to turn into losses he has not yet learned to properly assess the probability/reward/risk equation.

The markets can be tight and stingy but they also “give” rewards all day long. The market giveth and the market taketh. The edge is knowing how to exploit the giving and how to deploit the taking. ROFLMAO did I just coin a new word or has it been around? It just popped into my head...

Gotta jump.

Bye

Thank you so much volpri. I will respond when I leave work. Thanks

 

[ironchef]

The problem is traders make an initial assessment and since they are looking for certainty in the markets (and there is none and never will be) they tend to stick hard and fast to their initial trade structure REGARDLESS of what pressures subsequently are screaming at the trader. No sir...it is “damn the torpedos full speed ahead. I am sticking to my SL and my PT and I don’t give a toot what the market is saying after I structure my trade and take a position.” After all they have been taught.. “never move your SL”. This sounds good on the surface but is IMO pure unadulterated


The market is flexible..uncertain..and changes...thus, should i be, as a trader, if I wish to extract $ from the market. Rarely do I enter a trade that after entry I am not assessing constantly reward/risk/PT AND changing them as the trade develops.

Gentlemen..we have been taught wrong by the many gurus who want to sell certainty to us.......

Wait, most professionals and experts here told me I should stick to my plan, not second guess and keep changing the parameters: Plan your trade and trade your plan.

Instead, you are saying plan your trade and change your plan?

 

[qlai]

 

[Turveyd]

Surely you are kidding. I got married in 1978 to a beautiful, supportive, caring woman. Why would I want to screw that up with hookers and on top of that screw my trading mind up with drugs? I trade futures not wives or other women.

Thats not the traders dream or ethos, we all trade for cocaine and hookers have you not watched any trading films or shows. *


* Even if we don't thsts what we say, never done drugs personally at all.

 

[ironchef]

View attachment 202420

As in spending money like water?

 

[qlai]

As in spending money like water?

 

[Overnight]

View attachment 202427

 

[SimpleMeLike]

I too prefer high probability trades. However a trader has to consider risk/probability/reward from two angles. The INITIAL risk based upon ones preferred risk methodolgy...points...$$$..catastrophic...PA based...etc. Then a trader should consider ACTUAL risk. That is, how much the trade went against the trader before going in his favor reaching his typical PT. It that actual risk is alot less than the initial risk then this is most likely a high probability trade and the trader would be smart not to follow the profit trail very far but lock in the profit while he can. He will still be getting good RR based upon actual risk and actual PT. For example:

Say ES is trading at 2804 and a trader enters there puts a SL at 2801 and a PT at 2807 a 1:1 RR. This is his initial risk and PT. So, entry is made. As the trade unfolds 1 minute later it moves in his favor to 2806 and at some point during that 1 minute it actually only went 1/4 point (or 1 tick) against him. Suddenly it is now at 2806 and still has not reached his initial PT of 2807. What is he to do? I know exactly what I would do. I am exiting at 2805.75 and I am locking in my actual profit which at this point is only paper profits. So I am out of the trade. What was my final RR trade based upon ACTUAL risk I endured during this trade and ACTUAL profit I made during this trade? I risked 1 tick and made 7 ticks. Isn’t 7:1 good? That is a great trade!

So....why would I choose to exit a trade so fast that in actuality only caused me to suffer small risk and gave me good reward also so fast (good reward comparing initial and actual RR). See when i first entered i had to structure my trade with the best info I had at the moment. That structure projected 1:1 RR (see above). But that is a “projection.” Nothing more. As we all know the market can do anything..anytime..at any speed and WILL in fact do so. That is why actual risk/actual profit correlated with time in the trade is a good way to assess if the trade “in actuality” ended up being a high probability trade or not.

So, in my example above I did not know for sure when I structured my trade IF it was for sure gonna be a high probability trade. As it ended up it was. I mean almost immediately I am 7 ticks in the money (on paper) having only risked 1 tick. This trade panned out to be a high probability trade. Now why exit and lock in my paper profits? Simply because when the market gives me high probability I best make haste and lock any profit in because the market is not gonna give me high probability/big reward/low risk....at least not for very long...LOL. I cannot have my cake and eat the icing too and expect ice cream and coffee thrown into the deal. This is where most traders make a mistake intraday. They get greedy thinking “market went my way and fast and I only risked 1 tick. This baby is going to the moon...I see BIG bucks on the horizon and not just a little doe (money LOL) so I am holding for a huge gain.” So they use their greed to hold.

Me I am thinking “the market just gave me a gift ..quick profit..low risk...high probability...it went my way very fast...great reward to risk ratio (7:1)...so I am using my greed and exiting converting my paper profit into real profit.”

I don’t give a hoot what my original trade structure was. That was temporary. That was my best projection. That was what I had to work with at the moment. I did the best I could with what I had. But at the time I didn’t know “how” the market would reach my PT or my SL for that matter. Nor did I know IF it would. Nor did I know WHEN it would.

So..what happens to the big bucks greedy trader? He holds. Market never reaches his PT target (which by the way he moved to an even bigger one based upon his greed). Suddenly the market whips right back down evaporating his 7 tick profit runs through his 2801 SL and he is trying to catch his breath long enough to hurtle an insult at the market followed by throwing his coffee cup on the floor all the while screaming...”I am an idiot. I SHOULD HAVE taken my profit while I could have now I am down 150 bucks. Am I ever gonna learn trading?”

His mistake was to base probability upon projections (which is by the way necessary to do at first) without then further refining the risk/reward/probability equation based upon “actual” price action. So he loses and then complains about “chop and noise” in the market. He determines never trade chop again without realizing the market is ALWAYS chopping. Take a 15 minute chart showing trend. The pb’s within the bar show up as chops on a smaller TF chart.. chips a flying. Soon the tree falls. LOL.

Of course there are exceptions to all of the above. In strong BO’s with “follow through” a trader will want to assess the probability again based upon actual PA. For instance:

30 minute chart. 4 minutes left to finish the bar. The bar is a big trend bar and appears to gonna close in the top 1/4 of the bar, Quick look at a 15 minute chart. Three bull bars all closing on their highs or near their highs or near their highs with gaps between the close of each bar and the high of the previous bar (denotes urgency). Trader looks at 5 minute chart. Several bull bars in sequence with gaps as described above and all pb are small bear bars or doji’s (denotes urgency).

All this points to a measured move at least the height of the BO to the first PB. In such a case I would hold or add to a position on a PB. Since trading off a 5 min chart I would project measured moves on it.

However we must realize only 10% or less of the bars on a chart are strong BO’s. So, yes take advantage of them when they show up but don’t base strategy and tactics on them for the other 70% or 80% of the bars.

There is NO noise. The market chops for a reason. Noise (as defined by traders) can be traded using proper strategic and tactical measures. A trader just got to know “when” to do “what”.

PS a trader must never ignore the larger context regardless of what the market presently is doing. That too needs to be factored to any probability assessment, initial or actual.

If a trader is consistently giving up paper profits and allowing them to turn into losses he has not yet learned to properly assess the probability/reward/risk equation.

The markets can be tight and stingy but they also “give” rewards all day long. The market giveth and the market taketh. The edge is knowing how to exploit the giving and how to deploit the taking. ROFLMAO did I just coin a new word or has it been around? It just popped into my head...

Gotta jump.

Bye

Good write up volpri,

I trade intrday markets as well. I agree with you are saying. From experience, I have notice just because I set my profit target at a price, market may not get to that price and I have to management the trade and make decisions.

Here are 2 examples today related to what are you saying.
Red arrow is entry
Black arrow is stop loss
light blue arrow is profit target
Purple arrow is actual profit taking

Both trades had decent R:R in beginning, butttttttt after trade is placed market does it what it wants to do. Of course, in my sheriff hindsight mind "damn if only I had more patience intial profit target would have gotten hit"

 

[trader1974]

A couple of weeks ago, I had the privilege of meeting again and having dinner with a great friend and former boss of mine. At the end of dinner, he asked me what had been the greatest teaching of my greatest adversities. Clearly, I replied that humility. And he replied: "Without a doubt, humility is very profitable."