NoDoji...

[dbphoenix]

Quote from Visaria:

Say your trading plan is working, you're making loads of money and then you have a severe drawdown. Can you handle it?

If the plan is working, there won't be one.

Edit: Unless one incorporates severe drawdowns into the trading plan, which doesn't make a whole lot of sense.

 

[NoDoji]

Quote from dbphoenix:

If the plan is working, there won't be one.

Edit: Unless one incorporates severe drawdowns into the trading plan, which doesn't make a whole lot of sense.

This is my answer, too.

I had severe drawdowns when my "plan" consisted of 1) put on trade based on where price should go, and 2) hold the position (averaging if necessary) until it comes back to at least break even or hits this absolute disaster stop that's so far away there's just no way price will get there. :eek:

 

[Visaria]

Ok, forget "severe" drawdown. Let's say a mild drawdown. I assume the plan accommodates this. The point is, can you handle the "mild" drawdown or do you fall apart?

 

[NoDoji]

As an intraday scalper, I consider more than three losses in a row to be an unusual drawdown

I'm not sure what actual stats are among consistently profitable traders who trade based on a well-tested plan, but I suspect that scalpers rarely have losing days, day traders rarely have losing weeks, and short term swing traders rarely have losing months.

 

[Swan Noir]

As a scalper what is your typical profit target in CL?

Quote from NoDoji:

As an intraday scalper, I consider more than three losses in a row to be an unusual drawdown

I'm not sure what actual stats are among consistently profitable traders who trade based on a well-tested plan, but I suspect that scalpers rarely have losing days, day traders rarely have losing weeks, and short term swing traders rarely have losing months.

 

[dbphoenix]

Quote from Visaria:

Ok, forget "severe" drawdown. Let's say a mild drawdown. I assume the plan accommodates this. The point is, can you handle the "mild" drawdown or do you fall apart?

Depends on what you mean by "mild". But if the plan is thoroughly tested and consistently profitable, there won't be any unacceptable drawdowns, therefore no "falling apart".

I know what you're going for here, but the fact is that most "plans" are neither thoroughly tested nor consistently profitable, much less both. Most traders don't even know (a) what a thoroughly-tested, consistently-profitable plan is, much less (b) how to develop one. And even if they did know (a) and (b), they probably wouldn't do it because it takes time and effort, and it's so much easier to just take a big bunch of it and throw it against the wall to see what sticks.

 

[NoDoji]

Quote from Swan Noir:

As a scalper what is your typical profit target in CL?

If I'm scalping in a range around a flat 5min 20EMA my typical target is 10 ticks. If I'm trading actual "in-plan" setups I shoot for minimum 20 ticks. If there's a key level in line to be tested I tend to hold for that test unless a double attempt fails, then the trade will turn into a smaller scalp.

 

[Vozdovac]

Quote from NoDoji:

If I'm scalping in a range around a flat 5min 20EMA my typical target is 10 ticks. If I'm trading actual "in-plan" setups I shoot for minimum 20 ticks. If there's a key level in line to be tested I tend to hold for that test unless a double attempt fails, then the trade will turn into a smaller scalp.

What about the ES, TF, or NQ? I think you mentioned that you've
traded the ES before.

 

[toolazy]

Quote from NoDoji:

If I'm scalping in a range around a flat 5min 20EMA my typical target is 10 ticks. If I'm trading actual "in-plan" setups I shoot for minimum 20 ticks. If there's a key level in line to be tested I tend to hold for that test unless a double attempt fails, then the trade will turn into a smaller scalp.

you cant load more than 10 contracts with this kind of stops else risking htf will take you on. and if they do, and you start having losing days, more and more, what is the plan ? When do you stop trading ?

 

[kut2k2]

Quote from Visaria:

"Everybody has a plan until they get punched in the mouth."

- Mike Tyson

"People were asking me [before a fight], 'What’s going to happen?,' " Tyson said. "They were talking about his style. 'He's going to give you a lot of lateral movement. He's going to move, he's going to dance. He's going to do this, do that.' I said, "Everybody has a plan until they get hit. Then, like a rat, they stop in fear and freeze.' "

What I like so much about the quote is that its application stretches far beyond boxing. It really has meaning in any area of life, whether the blow comes from a health issue, losing your job, making a bad investment, a traffic jam, whatever.

It's how you react to that adversity that defines you, not the adversity itself.

"Exactly," Tyson agreed. "If you’re good and your plan is working, somewhere during the duration of that, the outcome of that event you're involved in, you're going to get the wrath, the bad end of the stick. Let's see how you deal with it. Normally people don’t deal with it that well."

He laughed. There's another way to spin his famous quote:

"How much can you endure, buddy?" he said. "Most talkers, they can’t handle it."

This comes from the age-old military wisdom:

No battle plan survives contact with the enemy.

The market can't exactly be regarded as 'the enemy' but it will do unexpected things and only adaptable traders will stay on top of it.