Millionaire Traders - Market Maker or Market Taker?

[Cy_M]

Quote from jbt:

Cy after three entries if it still goes against you - how much do you let it ride? And also when you do get hit how bad is the hit? Is is 4 or 5 times your average win?

Very rarely, all 3 go against me, I usually collect 2 or 3 and when the market lingers while I'm still scalping within my scalps, I continue with the sub scalps. Having said that, I do not use stops and, only reverse or exit completely if the reason I took the trade in the first place changes. The other exception would be a catastrophic stop, if the market jumps 1 to 2 points against me in less than 1 minute, I vacate the trade.
My average win is about .75 and the loss is about the same. My system gets me out very quickly, sometimes prematurely but it's worth it, IMHO the worst that can happen to a trader is to allow the losses run.

Cy

 

[nzbryant]

Quote from jack hershey:


Peope look at the markets all day long and do not ever see what is there. The crayola knows. And some people harvest what the crayola knows. Could it be anyother way for these kinds of people. Certainly not. They can recognize each other in a New York minute, as well.

Nice. 'The crayola knows'. You could be a philosopher poet

 

[jbt]

Quote from Cy_M:

Very rarely, all 3 go against me, I usually collect 2 or 3 and when the market lingers while I'm still scalping within my scalps, I continue with the sub scalps. Having said that, I do not use stops and, only reverse or exit completely if the reason I took the trade in the first place changes. The other exception would be a catastrophic stop, if the market jumps 1 to 2 points against me in less than 1 minute, I vacate the trade.
My average win is about .75 and the loss is about the same. My system gets me out very quickly, sometimes prematurely but it's worth it, IMHO the worst that can happen to a trader is to allow the losses run.

Cy

Couldn't agree more. Catastrophic stop is critical for so many reasons - power goes out, connection drops you have an emergency that pulls you from the trade etc.

It sounds like you trade stocks, if so what would be your catastrophic stop on position. BTW some traders I know set a stop as % of ATR rather than hard money stop - what do you do?

 

[jbt]

Quote from RedDuke:

My trading style does not implement scaling in or out. I am all in or out. I do use tight stops, but that Ok with me, since if the trade does not move into green relitively fast, I will close it and wait for next opportunity. I do let the wiining trade ride, but I am extremly impatient when it comes to cutting losses.

Red Duke - how much time do you give your trade to work? And have you ever had times when you busted out of trade only to see it skyrocket your way?

The reason I ask is there are two school of philosophy on the subject. Some traders argue that if the trade has not hit your stop there is no reason to get out, while other say that if it is not moving your way right away you are most likely wrong.

I have an idea which side you are on, but can you tell us why?

 

[RedDuke]

Quote from jbt:

Red Duke - how much time do you give your trade to work? And have you ever had times when you busted out of trade only to see it skyrocket your way?

The reason I ask is there are two school of philosophy on the subject. Some traders argue that if the trade has not hit your stop there is no reason to get out, while other say that if it is not moving your way right away you are most likely wrong.

I have an idea which side you are on, but can you tell us why?

Sure, plenty of times when my stop is hit, and within 1-2 ticks the trade does go in the way I anticipated, but that’s the nature of the beast. It is like being a casino, the players will win here and there, but as long as every hand is played the house has the edge. That is my way of trading, being the house, the key is to take every single signal.

I am in the second camp, if it does not move my way after certain time, the momentum is not there and I will exit. I actually learned this after reading Mark Fisher “Logical Trader”. I am sure you have heard of Mark, he owns one of the largest clearing firms on NYMEX. For anyone who have not read this book, I highly recommend it. I trade of constant volume bars, and if the trade does not move my way within 3 bars after entry, I will exit it. Volume bars capture momentum very clearly, and if it is not there after 3 bars, the odds are decreasing, so it is best to move to side lines.

 

[jbt]

Quote from RedDuke:

Sure, plenty of times when my stop is hit, and within 1-2 ticks the trade does go in the way I anticipated, but that’s the nature of the beast. It is like being a casino, the players will win here and there, but as long as every hand is played the house has the edge. That is my way of trading, being the house, the key is to take every single signal.

I am in the second camp, if it does not move my way after certain time, the momentum is not there and I will exit. I actually learned this after reading Mark Fisher “Logical Trader”. I am sure you have heard of Mark, he owns one of the largest clearing firms on NYMEX. For anyone who have not read this book, I highly recommend it. I trade of constant volume bars, and if the trade does not move my way within 3 bars after entry, I will exit it. Volume bars capture momentum very clearly, and if it is not there after 3 bars, the odds are decreasing, so it is best to move to side lines.

Read Fisher's book know it well. One of the best insights he has is that if the instrument is moving hard one way and no one can explain why, then get on board. By the time the reason is obvious the move has occurred.

That happens in FX at least once a year where you get a break out or break down and no one can figure out why but the move has persistence and makes good profits for those who join it.

 

[Cy_M]

Quote from jbt:

Couldn't agree more. Catastrophic stop is critical for so many reasons - power goes out, connection drops you have an emergency that pulls you from the trade etc.

It sounds like you trade stocks, if so what would be your catastrophic stop on position. BTW some traders I know set a stop as % of ATR rather than hard money stop - what do you do?

My cat stp is at 5 pnts trading ES.
Like I said, I do not use regular stops, I,m in and sub scalping within my scalp until my original reason to have taken the bias changes. I usually make most of my profits from the sub scalps and will be happy to exit the original scalp covering it's comms at +.25 but, by then I've already made a a point or 2 from the subs.
If on the original entry I make .5 or more within seconds, will take them and just be appreciative.

 

[Trader0062]

Quote from jbt:

Couldn't agree more. Catastrophic stop is critical for so many reasons - power goes out, connection drops you have an emergency that pulls you from the trade etc.

It sounds like you trade stocks, if so what would be your catastrophic stop on position. BTW some traders I know set a stop as % of ATR rather than hard money stop - what do you do?

As Oscar saids "STOPS ARE IN EMOTIONS ARE OUT"

 

[jack hershey]

Quote from nzbryant:

Nice. 'The crayola knows'. You could be a philosopher poet

Its going to be my Bloomberg greeting tag tomorrow.....lol.....

I do not use stops either. I do recommend that others do while learning. Refer to the chart I made of the 12 ways and use the number 8 or 9, the spike offset set up.

 

[plodder]

Quote from jack hershey:
Its going to be my Bloomberg greeting tag tomorrow.....lol.....

If you can stay out of jail. Look at what google\\\'s cache turned up:

Quote from jack hershey:
I have access to your bank account number so begin to back off.