Seems to me you haven't made a firm decision on what kind of trading (scalping or swing) to do. I think it is because you love to trade and want to do both, which is great. You might try establishing a second account for longer term trades. You could be holding a nice position while scalping in your other account. I think IB lets you switch between accounts in the same TWS.
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NQ Trades RT
- Thread starter AFterburner
- Start date
Seems to me you haven't made a firm decision on what kind of trading (scalping or swing) to do. I think it is because you love to trade and want to do both, which is great. You might try establishing a second account for longer term trades. You could be holding a nice position while scalping in your other account. I think IB lets you switch between accounts in the same TWS.
Quote from AFterburner:
I got stung for 20 points...
I wasn't mentally prepared to execute a contingency plan...
If anyone has any intelligent thoughts about this, I'd like to hear them. Thanks.
Hi AFterburner,
As traders we never know when those psychological trade problems sneak up on us...
If we did...we'll all be multimillionaires.
An excellent contingency plan is to have a hard stop in place...
somewhere that tells us we are wrong if this number gets hit...
Hard stops takes us out of the trade to allow us to reevaluate the situation and not miss the next profitable opportunity.
I guaranteed while you held that Short position and the market moved against you those +20 points there were other trades...possibly Long signals.
Therefore, with that said...another contingency plan is to not ignore trade signals in the opposite direction while still in a open position...
As for holding overnight...subjecting a position to all the possible geopolitical events, breaking world news...
A hard stop is absolutely a requirement.
Without such...one bad trade wipes out a dozen or so good trades very easily.
Most traders I know that lose the shirt on their backs...isn't because a position went against them overnight...example from a Monday to a Tuesday...
Its because a position went against them over the weekend...
Further, your strength is knowing how to read the tape based on your prior journal and a few comments in this journal...
Think about this...you can't read the tape over the weekend
That alone should tell you to use a hard stop when holding over the weekend...
Last of all, I'm not sure if I remember you ever posting that you exited a position at a profit...prior to reaching your profit target and directly into (trade reversal) a new position in the opposite direction because of a new profitable opportunity...
another trade signal.
Something that merits exploring...an advance level of trading for those like you that already know how to make money.
NihabaAshi
Quote from peterfigliozzi:
Man I was 0 for 3 today. In fact i've noticed that I get whacked just about every Friday. Have you noticed any correlation like that?
Yes, I have. The last hour and a half on Friday afternoon has burned me many a time. I tend to be goal oriented and sometimes I'm just shy for the week and trying to make it up. So there are a confluence of negative factors.
On Tuesdays I've found that it pays to be patient for entries and also selling resistance and buying support seems to work well (as opposed to going for breakouts). This is because Tuesdays seem to me to be more range based and may also have a countertrend bias.
I used to blow a ton of cash on these two days and they still give me problems if I don't remember to be aware of their tendencies. I think that Tuesday can be a good producer, but that Friday afternoons are best avoided. However, option expiration afternoons will usually become obvious near the close.
Quote from NihabaAshi:
Hi AFterburner,
Last of all, I'm not sure if I remember you ever posting that you exited a position at a profit...prior to reaching your profit target and directly into (trade reversal) a new position in the opposite direction because of a new profitable opportunity...
another trade signal.
Something that merits exploring...an advance level of trading for those that already know how to make money.
NihabaAshi
Reversals are definitely advanced. I have found that they work most effectively when the trade is just starting out and you realize you have made a mistake, or if you find in a strong trend against you, and in both cases I use them only for recouping losses. Reversing winning trades can work well too, but only for quick scalps. If mismanaged, reversals will wipe you out. The main reason for this is because your position size is effectively doubled. This is extremely important to remember. For example, assume that you are always in. You start the first trade long with 25 contracts. You reverse short with 50 contracts. You reverse long with 50 contracts. Short 50. Long 50. Even though you are only trading 25 contracts, it has the effect of 50 after the initial entry. That's how I got killed on Friday. Originally I saw the tape was pointing down. During Trade 4 I saw that it wasn't working out anymore. That's what prompted me to go long on Trade 5. Then suddenly I found myself down 6 points and I thought that maybe shorting was going to work after all. Since I had wanted to see a quick hit to 1510 from 1520, I thought a reversal seemed like the way to go. But the real problem was that I see things very well, but I see them early. Instead of waiting for a long entry after seeing shorting wasn't working, I got right in. Then I got tricked on the final exhaustion move to the down side. Even that would have been OK had I remembered that I needed to keep reversing (this is the third strategy for reversals). In other words, when I saw support at 22.5, I should have reversed. Also, pivot points are necessary for this strategy (in this case the pivot point would have been 24) So I would reverse long at 23.5 and short at 24.5. At this point it should be obvious that this takes some skill. Before my tape reading skills were fully developed, I did this a lot more. I called it shadow boxing. I would bounce around throwing a few jabs buying support here and selling resistance there until I found myself in a position to land a decent punch for an extended move. I might take a few small hits but once I landed on the right path it made up for it. For strategy one (realizing a mistake shortly after entry) a good example is Friday, January 16, 2004 Trade 6 although in that case the times were disjointed. For strategy two (victim of strong trend) a good example is today (although I didn't take it). The main trick to strategy two is accurately judging the momentum. The best entries are the first pullback or inflection point. Today that was shortly before 3:00 at 1542. The major problem is that psychologically it is very hard to take that kind of trade. At that point I was down 9 points, and your mind is thinking "it can't go another 9" (for a wash that is). However, it usually does. One problem is that I think human nature craves a reversion to mean ("normal"). I find that the rational human brain is a great hindrance in that respect. Couple that with the fact that the brain tries to anticipate/predict magnitude (almost exclusively), but magnitude is a lie. Rarely can you see magnitude. You can see direction with almost absolute certainty, strength/momentum (taking into consideration traps) with some certainty, support/resitance with certainty, but magnitude is elusive. By experience I can anticipate magnitude with accuracy but only at the time of entry. After entry, the brain becomes very deceived about magnitude. One type of deception is not exiting a profitable trade at an exit signal because it looks like it will keep going and going because of greed combined with that "winning feeling". Not to mention the fact that market action looks very bullish at a top and vice versa. I realize this post may be hard to understand (and I'm just beginning to scratch the surface!). It comes from experience though, not some "trading book" (I can't stand that stuff).
SLD 1550 OPEN 09:31:49
BOT 1545 CLOSE 09:59:26
BOT 1540.5 OPEN 10:11:00
The pain I feel is overwhelming. I got killed yesterday and then today it ends up coming all the way back and then some.
I exited Trade 2 at 1535 luckily enough. I then went long again at 1530.5 which wasn't the greatest idea. I am fighting the tape because deep down I gave up on going short yesterday. I think capitulated would be a good word for it. I'm hoping to be able to get out of Trade 3 at 1531.5 which would represent the breakeven point for the day. Then I will try to reenter short going for 1510.
I exited Trade 2 at 1535 luckily enough. I then went long again at 1530.5 which wasn't the greatest idea. I am fighting the tape because deep down I gave up on going short yesterday. I think capitulated would be a good word for it. I'm hoping to be able to get out of Trade 3 at 1531.5 which would represent the breakeven point for the day. Then I will try to reenter short going for 1510.
SLD 1525.5 CLOSE 13:17:55
Tuesday, January 27, 2004 Trade 4
SLD 1525.5 OPEN 13:17:55
I am feeling really beaten down right now. Almost to the the breaking point. I thought for sure that I would be able to get 1531.5, but I finally gave up. If this trade doesn't work it will break me.
Beaten but not broken.
Tuesday, January 27, 2004 Trade 4
SLD 1525.5 OPEN 13:17:55
I am feeling really beaten down right now. Almost to the the breaking point. I thought for sure that I would be able to get 1531.5, but I finally gave up. If this trade doesn't work it will break me.
Beaten but not broken.
BOT 1521.5 CLOSE 15:11:06
Normally I would just hold onto this trade, but I have a feeling that there will be a gap up in the after hours session.
Normally I would just hold onto this trade, but I have a feeling that there will be a gap up in the after hours session.