Lost 31 ticks.
However, I waited for the set up I was looking for. It just didn't work. Now, there were clues that maybe it wasn't likely to work....we were still kind of close to the open and it hadn't seemed to have picked a side yet, so perhaps I could be more accurate with one trade a day if I watch for making sure a trend has been established, and get the pullback into the trend....which is what my trading system is suppose to be based on. However, even though it lost, I'm happy with how I did. I also felt almost zero anxiety over this trade. I placed it and knew it was either going to work or not. It was a little frustrating when it didn't go straight up as I wanted, and I really thought about closing the trade early, but I didn't, because, I have decided to stick to my rules I worked with a while ago that seemed to lead to profitability.
My rules are:
28 ticks for a stop loss
At 30 ticks profit the stop loss will automatically move to -14 ticks. (This rule is new.)
60 ticks for a target.
And I let the trade play out.
This puts all the pressure on finding one good entry. With time, I am very confident that I can become accurate with this plan. When I tried this before, I did take a lot of losses, but at 1:2 risk to reward, it was still profitable.
Two changes are different from before. 1. I am using a 28 tick stop loss. That's because the spread really does weight the probabilities against the wins, and I wanted it to be a little closer to evening out the losses and profits. 2 losses should be 60 ticks after fees and 1 win should be 58 ticks after fees. One win does not bring me back to break even after 2 losses, but it will be close.
The other change is to move to 14 ticks
below BE when the trade has gone into profit 30 ticks. The reasoning behind this is that when I look over my trades, there are very few trades of the trades that make it to 60 ticks that ever retrace more than about 20 ticks, and most of the time, that retracement happens before the trade gets into 30 ticks profit. So, it's just one way to limit the losses, but still give the trade enough room to play out. The reason I'm not moving to BE exactly, is that I've had too many good trades stopped out right at BE. I think there's something about my entries that attracts price to retrace right to that point, probably because I sometimes take a break out, and those are obvious places to retrace too. I keep thinking I need to study these areas better, because they would make great entries....the reason I don't try harder is that if you know you want to be in a trade and it's really moving, it rarely retraces right to where you want it to to get in. In other words, the best trades rarely retrace to ideal entry points, at least with the way I trade.
I have decided that if there are ever net losses of $70 below today's beginning balance, or if I ever take 5 losses 5 days in a row, 1 trade only per day, then I will take at least at least a one week break from this account and trade demo until I have the statistics I need to be profitable before going back to trading Micros again. That means the account could drop to about $85 lower than today's starting balance if a last trade is taken right at $70. This gives me a loss limit I'm OK with.
The most important factor in this plan, is that I'm very comfortable with it. I like trading it. I know ways to study that should improve it. I like all of my rules. I don't plan to change my rules. There is no reason this plan should not work. If I can't do it live, then the problem is the psychological aspect of switching from demo to live, because this plan worked before on demo.
