Is trading easy?
- Thread starter nooby_mcnoob
- Start date
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NOT really hard\ except cutting a loss.
NOT really sure H123, or Millioarear e a pro\they have to pay overpriced data . TRU\worst losse$ are larger positions but no way are losses limited to that or even tight stops........................................................................................
Well, it of course all looks easy in hindsight, but there is nothing wrong with having your setups prepared after all. The thing though is that according to the link, the entry here would be after the break of the range. So if I'm reading it right, it would be at G, once it breaks above the previous highs. The stop would have to be around H, which is where the lows are, and the profit target is therefore at J.
Clearly this trade would work based on these parameters, but its only 1:1 trade really, so you need a very healthy win rate to make this work, and I highly doubt this would be the case more than 70% of the time. And lets also not forget that the up trend is broken if you are to consider that a trend line drawn from the open, which would be very steep, is broken.
Something similar happened today. When we get to K, its certainly not a clear up trend anymore, but neither was the above example at D,E,F. Here we have a nice pullback to a prominent swing low at K. Then L is a solid double bottom. At M we even have a higher high, and therefore when it gets to N, it looks like a last chance to enter, your so-called forced to take a trade! (still have no idea what you mean by forced...LOL) But as you can see, this set-up, if we zoom in on it, looks very similar to the others we have been talking about.
Clearly this trade didn't work out, and I'm not even suggesting its an ideal setup, but there sure would be many reasons to try a long to be honest.
Its of course only one example and nothing to draw a conclusion on. In one example the trade works, and in another it doesn't. If your reward is 3x or 4x your risk, then you're golden even if your win rate is only 50%. But before I think we can conclude how easy this trading game is, we have to look at a trader's entire list of trades for a week or month. You will easily hit a string of losses that will demoralize you.
Sure, the accomplished trader can probably just keep on trading through this drawdown, and it certainly is the right thing to do with a setup that you know works, but in order to call this game easy and be printing money, you probably need multiple strategies, and strategies for when a trade fails and how this will help set up the next trade for you. A losing trade after all can be an indication that the market is doing something different than you thought, and hence warrant completely switching your bias and techniques.
I think when it comes to these simple chart patterns, the secret is knowing when to take them and when to skip over. I think the trader who has thousands of hours of screen time is looking for other subtle information the market is giving in order to ascertain if the setup is ideal or not. Often they would want to see volume also confirm the setup perhaps, or looking for confluence between other markets. These simple patterns have been tested, and on their own, none of them perform spectacularly. As I mention in my reply above to nooby, the example you draw in results in equal risk and and reward, so you better make sure to have a high win rate in order for this to end up profitable.
But don't get me wrong, I do like the simplicity of TA and not cluttering charts with indicators. So your approach is rock solid with me. Would you be willing to discuss your long terms results and how this pertains to how easy you find trading to be?
That's where it gets complicated, on the right side of the chart. When you start on the left side of the chart and show what you did and why you did it, then trading is easy.
Showing what you did yesterday is easy. Explaining what you'll do tomorrow and calling trades in real time is a little more difficult.
Noaha I think your problem lies in that you are scared of losing money that is why you hesitate to take trades. You need to reduce your exposure to each trade to a level where if you lose it doesn't worry you.
From this level when you get comfortable you then gradually increase size. Paper trading imo won't help you doing this as you need skin in the game.
The big difference between D, E, F and K, L, N is not the triple bottoms (they look the same), but the bigger picture. Look to the left of the triple bottoms on the 2 charts. Do you think they are the same pattern?
I guess it takes thousands of screen hours to discern the difference in the big picture. TA by itself is useless if without context or the big picture view.
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Yes, exactly right. I used to trade the micro futures and have since switched to a leveraged ETF like SQQQ for the NQ proxy. This way, with 25 or 50 shares, I am essentially trading about 1/5 or lower the leverage of the NQ. So a 10 point move, which we know is nothing, would be $20 with MNQ, but now can be less than $5 with the ETF. It also makes scaling a bit easier and holding onto bigger profits because you aren't so quick to exit and lock in the small profit for fear of losing it.
They are somewhat different, but not by much. Both form a range after an up move. Perhaps with the KLN you can say the sideways action was already more extended, and especially after the top was in, whereas for DEF the top is much more recent, but given the 3900 level is also right there, there is plenty to lean on to attempt a long. I certainly wouldn't be shorting there, which you would do if you know for sure its going lower. It could have just as easily bounced again.