Minimizing drawdowns vs maximizing gains

. It is extremely frustrating to exit and watch it move on without you. At present, as long as I get at least 2 to 1 on average I am happy. I dont think it is reasonable to expect much more than three to one so my exit is really determined by my risk on the trade. I take the trade when the spread to the next support or resistence is at least twice the distance to my stop and I exit at that s/r. I dont see how you can catch the big moves unless you are trading off larger timeframes and willing to use fairly wide stops. As I said in another post I think the short term trader should be happy with small consistent profits.
 
A monkey can sit at a keyboard and churn and have a lot of small winning trades. There are perhaps some lucky monkeys out there, but they are just the survivors left out of a pool of thousands. Put 1,000 complete newbies in a daytrading room and tell them that scalping is the way to success. Come back a year later, and 10% of them will still be there and they will think they are geniuses. Some of them will write books and teach seminars. They are Frauds.

To really come out ahead, you must have BIG WINNERS. The ability to have winners bigger than your losers is the only real edge.

Rather than impulsively closing a winning trade, try using trailing stop orders and just letting your winners do what they are going to do. The truth is you never really know how far anything is going to run, and a trailing stop will keep you from giving back all your profits.
 
Originally posted by dotslashfuture
A monkey can sit at a keyboard and churn and have a lot of small winning trades. There are perhaps some lucky monkeys out there, but they are just the survivors left out of a pool of thousands. Put 1,000 complete newbies in a daytrading room and tell them that scalping is the way to success. Come back a year later, and 10% of them will still be there and they will think they are geniuses. Some of them will write books and teach seminars.
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How true!

Originally posted by dotslashfuture
To really come out ahead, you must have BIG WINNERS. The ability to have winners bigger than your losers is the only real edge.

Rather than impulsively closing a winning trade, try using trailing stop orders and just letting your winners do what they are going to do. The truth is you never really know how far anything is going to run, and a trailing stop will keep you from giving back all your profits.
More...

I am not quite sure how to interpret this. Are you saying scalping can never be consistently profitable?

Also, what do you mean the ability to have bigger winners than your losers is the only real edge? Are you telling me that you do just the same as all the monkeys (look at this moving average or that RSI), you have no innovation except the fact that you are going for "home runs" and that makes you consistently profitable?
 
You're in a 5 pt trade, you hope it's a 10 pt trade, you fear it's a zero point trade. I can predict the future quite accurately. Here's is what will happen if you don't take your 5 pt profit. You will soon be in a 6 pt trade which you are now feeling a lot better about, or you will be in a 4 pt trade which you are starting to think may just be one of those things.

So now what are you gonna do? Not much problem, if I'm in a trade I think might be just one of those things, poof, I'm outa there. If I'm in a trade I'm feeling good about, I'm sticking around.
 
illiquid, I know I post too much and get on some peoples nerves, but I have been couped up alone and writing my thoughts is really bringing it all together.

I have this same thought going now on a couple of threads, and it is namely, when to take a profit. For me always the greatest and most perplexing problem.

This problem is what first sparked my interest in trading systems.
I am working on a system using target trading. I started a thread about it. But here's the deal

In your example, you have a 5 pt profit, what to do? My system answers one very important question, namely, how much do you need to meet your goal?

See, the big problem which makes me stumble along the way is I know all the odds and probablilites but I think for some reason the particular trade I am in is more important than all the other trades I will make afterwards. So I lose site of the fact that this trade I am in and not sure what to do with is just one part of the plan I set up when I was of sound mind and body.

So, if I can set up a target system,when your trade hits 5 points, you look at your targets and see where that puts you. If you have been in the hole, and you need 7 points to hit your target, then you know right there that taking the 5 will not meet your goal. (There would be other targets to consider, this is just the vulgar idea)

If you have already exceeded your goal, then you got it made, you can relax with this one, take your profit anytime, right now if you want and go out for a walk, or put in a wide stop and forget about it, or sit there and enjoy playing it for the very last tick.

See, what it is, is now you know something which you didn't know before, hence the confusion of what to do.

There is no system yet, I don't even know what the targets will be let alone the values for those targets, but it doesn't make sense that there should be confusion at 5 points unless 5 points coincides with something on the chart, so the problem must be in the head. Because the solutions usually given to this type of question are starting to sound pretty hollow to me. You are not asking is the market going to go up or down, you are only talking about what is going on in your account.

So then the question is, is it ever proper to ignore the market and focus on your account?

And that is what I don't know.
 
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