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Intraday money mgmt question - what would you do??
- Thread starter xtrhvydty
- Start date
Quote from Cocaine:
When the market is good and your method is really synching you step it up, not take the rest of the day off.
Exactly.
When you are in a zone, you don't leave, you embrace it and push for more!
You don't see ballplayers say - I was in such a zone that I told the coach he better bench me b/c tomorrow might be better...
If you live for tomorrow's trading day, you'll never see what's in front of you today. Talking about tomorrow sounds like survival talk... If I can survive today, I will be back tomorrow!
Quote from volente_00:
Where do you get those odds from ?
So you are saying press today and slack tomorrow because odds are it won't be good ?
Every single day offers a trader an opportunity to do thier very best.
I'm saying that if you are in sync TODAY, THEN EXPLOIT IT. Don't even talk about tomorrow.
There's no time for tomorrow when you are tearing it up RIGHT NOW.
So for those who advocate to keep pressing.
where do you draw the line on stopping ?
If he loses on the next trade does he keep going ?
2 losers and then stopping ?
Give back all of his gains and still keep pressing ?
Without knowing the trader's style it is really hard to advise him because for all we know he could have an inverted r to r ratio and that next trade may wipe out the previous 4 winners.
where do you draw the line on stopping ?
If he loses on the next trade does he keep going ?
2 losers and then stopping ?
Give back all of his gains and still keep pressing ?
Without knowing the trader's style it is really hard to advise him because for all we know he could have an inverted r to r ratio and that next trade may wipe out the previous 4 winners.
I'm trying to give you the benefit of the doubt because you've been here since 2002 and I guess I assume you make consistent money. Who knows, maybe you do not. Your choice of words here is alarming though. "Luck" and "gambling" arent even in my vocabulary when it comes to the markets. When the day is good, I keep trading. I dont rest on my laurels. When the day is rough, I am even more patient and disciplined. You adjust to the MARKET, not to your P&L.
The OP said it was a good day and things are clicking. Why stop? Makes absolutely no sense unless you trade based on fear and then, subconsciously, the fact that you would consider calling it a day means you dont really trust your methods.
The OP said it was a good day and things are clicking. Why stop? Makes absolutely no sense unless you trade based on fear and then, subconsciously, the fact that you would consider calling it a day means you dont really trust your methods.
Quote from volente_00:
So you say keep gambling and step it up as in increasing size ? until you get a loss because you have to be in the market if you are winning ?
That is a pure gamblers mentality.
Quote from Cocaine:
I'm trying to give you the benefit of the doubt because you've been here since 2002 and I guess I assume you make consistent money. Who knows, maybe you do not. Your choice of words here is alarming though. "Luck" and "gambling" arent even in my vocabulary when it comes to the markets. When the day is good, I keep trading. I dont rest on my laurels. When the day is rough, I am even more patient and disciplined. You adjust to the MARKET, not to your P&L.
The OP said it was a good day and things are clicking. Why stop? Makes absolutely no sense unless you trade based on fear and then, subconsciously, the fact that you would consider calling it a day means you dont really trust your methods.
Without knowing about the op trading style and statistics you really can't advise him. Maybe his method hit's 90-100 % during morning trading but his afternoon average drops to 30-40 % ? Do you still think he should keep trading ?
The fact that he asked on here, tells you he fears that a loss is coming due to his 100% win streak. You can trust your methods all you want but you can't hide from the probabilites that that method produces.
So if you are having a winning day, what makes you decide to stop trading ?
Ok, fair enough. For all I know he could just be closing his eyes and pushing buttons. But didnt you tell him to quit for the day on the first page? Wouldnt that be considered advising him?
Quote from volente_00:
Without knowing about the op trading style and statistics you really can't advise him. Maybe his method hit's 90-100 % during morning trading but his afternoon average drops to 30-40 % ? Do you still think he should keep trading ?
The fact that he asked on here, tells you he fears that a loss is coming due to his 100% win streak. You can trust your methods all you want but you can't hide from the probabilites that that method produces.
Quote from Cocaine:
Ok, fair enough. For all I know he could just be closing his eyes and pushing buttons. But didnt you tell him to quit for the day on the first page? Wouldnt that be considered advising him?
I took the conservative approach without knowing all the info.
But back to your thoughts,
if you are winning for the day, what determines when you stop trading ? Do you always feel the need to be in the market if you are in sync ?
The market is open for 6 1/2 hrs a day and within that time there is opportunity. I stop trading when the market closes and opportunities for how I trade, cease to happen. I know full well I have zero idea of how many good trade setups will occur on any given day so I sit here and wait to pounce. I also know that I have the experience to understand how to wind it back if its a slow day and also to keep focused and aggressive when its a good day.
So to answer your question, I dont take afternoons off or anything like that based on my P&L. If I do have to take an afternoon off its because I have a prior engagement that I must attend (which happens pretty infrequently). Few things in my life outside of trading, require attention during mkt hours.
So to answer your question, I dont take afternoons off or anything like that based on my P&L. If I do have to take an afternoon off its because I have a prior engagement that I must attend (which happens pretty infrequently). Few things in my life outside of trading, require attention during mkt hours.
Quote from volente_00:
But back to your thoughts,
if you are winning for the day, what determines when you stop trading ? Do you always feel the need to be in the market if you are in sync ?
I described all the options with the thoughts that actually go through my head. But in reality, I know the right answer, for me anyway, is #2. I believe I have to transcend the psychological barriers to trading success. This is a must. If the markets change and my systems require tweaking, sure, reduce size until consistency returns. This is where a thorough biz plan, accurate records and statistical analysis are critical.
...but if I skip a signal, or lose on signal I took, what is the difference? They both result in X less acct balance. If I miss a valid signal which succeeds, then take the next valid signal, which in turn fails, I have still lost X. It's essentially a basic axiom of trading - take all valid signals.
In Ari Kiev's book, "Mastering Trading Stress", he cites this to be a common mistake, even at the hedge fund manager level.
The idea is this: Develop a goal which you believe you can achieve. Develop a system/approach which has a feasible chance of attaining these goals. Now, the system dictates position size, valid signals, money mgmt etc. At this point, focus on the setups/system, not the money. The monetary goal IS used in the system development, but should not be the focus thereafter. The only focus should be consistency and loyalty to the system. Any reduction in position size should already be a predetermined element of the system, not based on current emotion or stress.
Easier said than done, but since when was trading easy?
As a side note, the markets close at 2pm where I live, so I go to the mountains everyday, anyway.
: )
...but if I skip a signal, or lose on signal I took, what is the difference? They both result in X less acct balance. If I miss a valid signal which succeeds, then take the next valid signal, which in turn fails, I have still lost X. It's essentially a basic axiom of trading - take all valid signals.
In Ari Kiev's book, "Mastering Trading Stress", he cites this to be a common mistake, even at the hedge fund manager level.
The idea is this: Develop a goal which you believe you can achieve. Develop a system/approach which has a feasible chance of attaining these goals. Now, the system dictates position size, valid signals, money mgmt etc. At this point, focus on the setups/system, not the money. The monetary goal IS used in the system development, but should not be the focus thereafter. The only focus should be consistency and loyalty to the system. Any reduction in position size should already be a predetermined element of the system, not based on current emotion or stress.
Easier said than done, but since when was trading easy?
As a side note, the markets close at 2pm where I live, so I go to the mountains everyday, anyway.
: )