Learn To Take Losses

[ironchef]

Trading with a hard stop you notice the ones that get taken out and reverse.
Trading without a hard stop and you notice the ones that just kept moving against you.
Could it be that your stops are too tight?


It's been years since I traded futures but at that time with IB at least my market orders were filled instantly. That was the objective of a market order, to get an instant fill, What recourse do you have if you don't get filled and the market runs away from you?
All my brokers and I trade with several, (All Canadian) give me instant fills on market orders.

You are probably right, I set very tight stops.

I trade single name. Even when I traded live, when I placed a market order at open, often I didn't get instant fill. I think there was a line and when there was imbalanced?

But I don't know, I am amateur retail.

 

[Quanto]

Dude, no, you don't second guess or outwit your own plan. Otherwise, what's the point of having a plan? You stick to the plan, always.

My scanner today found a trade to earn a credit of 0.70.
I tried 0.75 and got an immediate fill
This is like trying the MidPrice first.
If I wouldn't have got an immediate fill then I would have changed the order to the original 0.70.
So what?

 

[deaddog]

You are probably right, I set very tight stops.

I trade single name. Even when I traded live, when I placed a market order at open, often I didn't get instant fill. I think there was a line and when there was imbalanced?

But I don't know, I am amateur retail.

I'm also a retail traded. When there is an imbalance I get lousy fills. But they are
instantaneous

 

[Leob]

Understand that your NEXT trade and not current rolling trade is the most important trade can help.
Don't hurt your chance to win your next trade. The single trade is meaningless.

 

[ironchef]

I'm also a retail traded. When there is an imbalance I get lousy fills. But they are
instantaneous

I don't know. Maybe it was instantaneous (usually lousy too because bid/ask was wide at open) but the website (Schwab SSE) took its time to display the fill?

Now I watched bid/ask, wait till bid/ask returns to normal to place a market order.

 

[taowave]

Why on earth are you trading 1 minute charts?

I am too new to day trading. Still trying to figure out how to be consistently profitable. That is priority #1.

There are a zillion things on my to do list and it is one of them.

And trading 1 min charts manually, at the same time watching tick by tick and every trade has a different mental stop... I need to write an algo.

 

[ironchef]

Understand that your NEXT trade and not current rolling trade is the most important trade can help.
Don't hurt your chance to win your next trade. The single trade is meaningless.

Very interesting comments sir.

The standard way I traded was true "rolling", one after another like riding the wave, one exit became the next entry making the right exit most critical. Setting stop loss was difficult and tricky when that became the next entry. When I hit the rhythm it was exhilarating and printing money. But when I was out of sync, it was disastrous.

I found the method quite profitable but very nerve wracking, and for me emotionally unsustainable.

Current approach is picking my entry very carefully, make one trade per cycle based on what I learned from @volpri's posts. Less profitable because I don't ride the wave but much higher win rate. Overall profitable and probably more sustainable over a long period?

 

[countryBoy641]

Great advice. I, for one, like to trade for trading sake. Money is secondary. There's no better feeling than having executed my trades exactly to the plan--win or lose.

Yup.
I usually view trading as a giant video game, expensive.
I have 4 monitors, all charts.
I have free CNBC (TOS from my Schwab account).
If I put the TV show on, it's usually muted.

 

[oshjdf]

A lot of risk management threads, posts by elite traders on ET and all trading wizards on Schwager's books said learn, practice how to take losses is one of the most important keys to trading success.

However, no one really spelled out exactly what that meant and the steps, processes of learning how to take loss.

Two questions for those willing to answer:

1. What is your definition of the right way to take losses and,

2. how do you practice and learn the how to?

Thank you.

1. The trading system with positive expectancy has defined SL when the entry order is sent.

2. Follow the rules of the trading system (regardless the outcome of the trade ~ hit TP/SL/trailing SL. Compliment yourself such as "good trade" based on how discipline you were following the trading system rules, not on the outcome of the trade ~ hit TP/SL/trailing SL).

 

[ironchef]

Why on earth are you trading 1 minute charts?

You sounded just like @padutrader. All other day traders on ET also told me to go, at a minimum, 5 minute charts.

Why? I developed this day trading approach using 1 minute chart by accident and decided to stay with it until I could finish testing. I copy my other post and paste it here for you:

The standard way I traded was true "rolling", one after another like riding the wave, one exit became the next entry making the right exit most critical. Setting stop loss was difficult and tricky when that became the next entry. When I hit the rhythm it was exhilarating and printing money. But when I was out of sync, it was disastrous.

I found the method quite profitable but very nerve wracking, and for me emotionally unsustainable.

Current approach is still 1 minute, but picking my entry very carefully, make one trade per cycle based on what I learned from @volpri's posts. Less profitable because I don't ride the wave but much higher win rate. Overall profitable and probably more sustainable over a long period?

Next projects: trading 5 minute charts and trading butterflies. So much to do not enough time.