New Trader tired of breaking even - Help!

Quote from ElCubano:




As usual great advise from Triple A.....My question is what do you consider a profit that shouldnt be let go into a loss????

not really knowing your time frame, here is a question for ya.

lets say you enter long @ 25 with a stop @ 24.50 target @ 26...If the stock runs to 25.35 ( after entry )and starts to head down from there ( maybe just a pullback or a reverse ). Would you get out at entry price or let it hit your stop????? or do you trail???
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Hi ELCubano...I've noticed nobody has answered your question, so I'll put my 2 cents worth in. I know a guy whos been trading for about 22 years and this is how he trades the S&P.

When he puts on a trade, he'll risk about 6 ticks. If the market gives him 12 ticks, he'll raise his stop to breakeven. I'm not sure how you would correlate that with stocks, but maybe this helps.
 
22k should be enough for two or three emini. If you could get 3 or 4 points out of NQ or 1 or 2 points out of ES, the you could make some nice profits. I know some people are just doing that. But they are trading more than 10 contracts so they could get enough money for living.
 
Quote from IndexTrader:

Quote from Deb Trader:

"I don't know much about e-minis or futures. Haven't read those chapters yet. What is your opinion of them?"

Quote from IndexTrader:
***At this stage of your learning curve, stay away.

Wish you luck nevertheless.
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actually it take only 3 months to learn.
 
Quote from ElCubano:




My question is what do you consider a profit that shouldnt be let go into a loss????

not really knowing your time frame, here is a question for ya.

lets say you enter long @ 25 with a stop @ 24.50 target @ 26...If the stock runs to 25.35 ( after entry )and starts to head down from there ( maybe just a pullback or a reverse ). Would you get out at entry price or let it hit your stop????? or do you trail???
More...

The way I look at it is I say there is a noise zone, then there is a point where the trade is clearly in profit. When that happens, I don't want to let it go to a loser. You don't have to let it retrace all the way to breakeven, but you can't let it go red.

In your example probably I would want to get out at 25.25 if I was daytrading. I would just take the .25 most times. I would say if it had gone to .35, it would be a mistake to let it go to a loss. For futures, I would probably give it more room because getting filled is not so much of a problem. Depending on how it was trading, if for example, I had 2 or 3 full ES points in hand, then I would say it would be a big mistake to let it go to a loss. I don't like to trail a stop because you are always getting out on weakness. At the same time, you have to be aware of how far a retracement is likely to go and decide if you can stand it.

Protecting break even can be frustrating because it will often kiss your exit point , then rally the minute you are out. I look on that as the price of insurance. You are not just protecting your money either. There is a big psychological cost to having a winner end up as a loser. Think how the Browns and Giants players felt Sunday.
 
Yes and I advised any beginners to paper trade.

Now so as not to be accused again of using elite for promotion don't ask me to send the name of the services. I will answer the persons that has already asked me. I intended to answer only to the guy who opened the thread. In fact I won't be here tomorrow for a few days.


Quote from dbphoenix:



Like I said, the cost of the service is not as important as the cost of the losing trades one takes based on the advice. If there's no way of verifying the accuracy of the advice, it's just the same old snake oil.

--Db
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Quote from ElCubano:




As usual great advise from Triple A.....My question is what do you consider a profit that shouldnt be let go into a loss????

not really knowing your time frame, here is a question for ya.

lets say you enter long @ 25 with a stop @ 24.50 target @ 26...If the stock runs to 25.35 ( after entry )and starts to head down from there ( maybe just a pullback or a reverse ). Would you get out at entry price or let it hit your stop????? or do you trail???
More...

Upon entering Long @ 25 with an initial stop @ 24.50

then it climbs to 25.35 and starts to head down...

NEVER let a profit turn into a losing nor breakeven trade.

Thus, for me...I would exit the position about 25.05 or at whatever price to cover the cost of the commissions on a round trip trade.

That first stop is your initial stop...

I highly recommend you to trail your stops as the price continues in your favor.

If your entry is good...you'll know right away.

Not using a trailing stop to protect profits is one of the most damaging psychological thing a trader has to deal with when the paper profits becomes actual losses.

Bank your money and move on to the next trade.

Also, if a trader is consistently getting stopped out for small profits via their trailing stop to only watch it turn around for more points...

the problem is the trailing stop methodology.

Such are easily fixed.

Nothing worst than to watch money fall off the tree and its not picked up...instead its left there lying on the ground to degrade in the dirt.

P.S. Read this about my opinion about getting out at breakeven...its a quote from an earlier post...

"I often see a lot of traders...for example...exit a position at their entry price and call it BREAKEVEN when in reality they had a loss because of the cost of the trade.

Trading is a business and breakeven trades need to (at minimum) include the cost of commissions...

exiting at a better price.

I guess that brings to surface that old trade saying...NEVER let a profitable trade turn into a loser...

maybe it should have said...NEVER let a profitable trade turn into breakeven."

NihabaAshi
 
Regarding the issue of e-mini's versus stocks, I think someone with a $22k account who wants to trade pretty much has to go with the futures. First, they are faced with a real problem in the PDR. Second, a decent platform like RealTick is expensive relative to the size of the account. Third, commissions can be an issue. IB charges $4.80 a RT for the e-minis, which are equivalent to about 800 shares of QQQ.

Actually I think the futures are safer than stocks because there is better liquidity, certainly better liquidity than in penny stocks, and execution tends to be instantaneous. Also, the futures move enough during the day that you don't have to carry positions overnight.

For a newbie with any size account, there is a simple algorithm to determine how many contracts to trade: ONE CONTRACT!!! Do not hold a losing trade overnight under any circumstances.
 
Quote from NihabaAshi:




Not using a trailing stop to protect profits is one of the most damaging psychological thing a trader has to deal with when the paper profits becomes actual losses.

NihabaAshi
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Just so there is no confusion, when I say I don't like to use a trailing stop, I don't mean let your accrued profit go to break even. I mean I don't automatically trail a stop, mental or hard, x points below the high or whatever. I try to exit on a spike or at S and R or on a reversal bar, etc. If the trade is out of gas, I want to get out immediately and not wait for the trail to get hit. I do think it is a good idea not to let more than 50% of accrued profits be lost under any condition, once you have a trade go substantially in your favor.
 
Quote from harrytrader:

Now everybody tells you it is a business, but this is abstract so concretly this is illustrated here:

http://keplerweb.oeh.uni-linz.ac.at/trading/moneyMan1.htm

...
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Harry,

Can you please stop bringing to surface the issue about commercial or promotion links.

It has become old news.

Say your peace and move on.

Now...besides that...

thanks for the link. I've read it and copied this out of it...
________________

"...The market is ticking, and is now showing a small profit. Here is where the true test of your nerve will be played out. Where all those other traders are going to try to scare you out of your position, so they can get in. Will you know when? No, of course not. No one knows how long a position will go in one direction.

This is where position size again plays a crucial role. What will happen if you enter with only one position? Well, when you exit, that's it. You will now have to wait for another trade.
And if you try to hold out for the big trade, you will have a lot more losers or break-even trades.

With multiple contracts, you have many more options. First, have a profit objective that is larger than your stop loss points. It is important that it is larger. You can see why in the example above.

This is where you will exit some of your positions for profit. Now with the use of trailing stops, you are going to sit back and try to go catch a big move. You will never know when it will happen, but it is critical that you are there when it happens..."
________________

There have been past posts here at EliteTrader about scaling in and scaling out of positions.

If a trader is experience and successful...it's arguably (in my opinion) an excellent trading tactic to add to a trader's trading methodology.

I use Scaling Out of profitable positions more often than not.

When I'm wrong on the remainder...it gets stopped out for profits via the trailing stop.

If I'm right on the remainder...it captures big points.

Scaling out is more for experience traders and I don't recommend it to Beginners because Beginners should only be trading with minimum until they are consistently profitable with the minimum.

Way too much pressure and stress for newbies to be trading with size.

After that (experience and consistent success)...they can experiment with scaling out of positions with size.

P.S. You can send me a p.m. if you want to know how to upload your charts without linking to them.

NihabaAshi
 
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