A lot of traders are looking for perfect entries where there is nearly no drawdown at all. It gets by far more difficult to do this on every trade or most trades one is entering. How do you get these entries ? Are you looking for special patterns or candles in the market ? Do you need a (large) set of conditions which needs to meet ? Or do you look for higher timeframes and then go in to lower timeframes to finetune the entry ? Or is it a mix of those ? Or do you have a totally different approach ? (and I do not mean news trading here.)
perfect entries or (nearly) zero drawdown trades, how to get it ?
- Thread starter TrAndy2022
- Start date
Minimal drawdown doesn't mean catching tops and bottoms.
They are tight setups where the Stop / Entry difference is minimal.
There could be many ways to justify a tight stop placement.
Based on the depth of market: Behind a Big Order
Based on market structure: Tiny base's depth
Based on candles: Doji, inside bar breakout ..
Personally if I use a really tight stop,
Then I want to play a continuation setup.
Otherwise the stop is likely going to be hit.
When the market is limit up / down,
You can buy one tick below / above the limit,
If you're lucky the price bounce against the limit.
Done it during the COVID crash but this is stupid of course.
I don't like to buy at support or sell at resistance,
Instead I trade the reversal candle wise.
They are tight setups where the Stop / Entry difference is minimal.
There could be many ways to justify a tight stop placement.
Based on the depth of market: Behind a Big Order
Based on market structure: Tiny base's depth
Based on candles: Doji, inside bar breakout ..
Personally if I use a really tight stop,
Then I want to play a continuation setup.
Otherwise the stop is likely going to be hit.
When the market is limit up / down,
You can buy one tick below / above the limit,
If you're lucky the price bounce against the limit.
Done it during the COVID crash but this is stupid of course.
I don't like to buy at support or sell at resistance,
Instead I trade the reversal candle wise.
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By the way ...
I really think tightness is key to making money,
"Making several hundred points and hardly risking anything."
Because the smaller the risk, the bigger the size and the greater the reward.
However we can't cut corners,
There need to be a reasonable logic.
Otherwise we're going to be shaken out.
By optimizing for something,
We degrade something else.
The trade has to be well balanced ^^
But yeah ...
Continuation patterns, on smaller time frame,
Towards the direction of the HTF trend is a nice one.
I really think tightness is key to making money,
"Making several hundred points and hardly risking anything."
Because the smaller the risk, the bigger the size and the greater the reward.
However we can't cut corners,
There need to be a reasonable logic.
Otherwise we're going to be shaken out.
By optimizing for something,
We degrade something else.
The trade has to be well balanced ^^
But yeah ...
Continuation patterns, on smaller time frame,
Towards the direction of the HTF trend is a nice one.
This is called an "edge" and I highly doubt anyone will openly divulge it for the asking.
BTW there is no "perfect" entry. It's all about risk:reward.
I feel that I am always fighting with an AI when I place my order. Throw in a "test" order with price further away than the current price and see how it reacts. When it moves closer, then move the order again until it does not react. That's probably the baseline. Then again, morning vs afternoon market. There is no sure fire method of getting in low and out high or vice versa.
Inside info, which is illegal for everyone except members of congress and perhaps a few other government officials.
You hedge out some of the risks. Can do it using convex payoff instruments, tracking the value of a portfolio or basket, trading a synthetic future or index, or making sure you're not on the wrong side of the rates market.
When you trade, you will have losers, lots of them. This is like trying to find a unicorn. Go find him, I will give you a bazillion dollars when you find that unicorn. That unicorn must actually, be breathing, running. No fake cartoons or anime. Ask Bernie Madoff how he traded 77 straight times without a single losing trade? This seriously, has to be one of the dumbest questions asked in the ET message boards. If the ET troll just did some research, the lowest percentage of drawdowns was 28% I read which was backtested on his trading system but, had wild fluctuations too in the process. A lot of the others, had 50% or more drawdowns.
You have a bazillion dolllars?