Re-entry after profit-taking

[PPC]

Anyway, curious why you think almost no professional traders re-enter same day? I mean all scalpers do, right? My idea would basically turn my system from a 2-3 trades per day system to a 4-6 trades per day system, usually lasting in a trade for 30-90 mins.

This needs clarification. The topic was about re-entering at S/R without any set-up, and not about taking multiple trades in the same index when there is another set-up.

In your first post you wrote “My entries are conservative to begin with, so I tend to enter fairly late into moves “, . . . . and once again from my experience, most professional traders strive to enter early in the trend cycle, i.e., at the lowest common denominator (e.g. beginning of the move, or on pullback, etc, ) . This allows them to have very tight stops plus plenty of overhead space for their trades to run in their favour before hitting first resistance. This concept is important when day-trading and equates into high expectancy.

From the limited info, your approach seems to be the opposite of that.

To clarify, a sound trading logic is to re-enter ONLY if there is a set-up at the lowest common denominator, but NOT late in the trend cycle WITHOUT a well-defined setup (without an edge) as you seem to be doing.

Therefore, it is possible that your late entries might be the problem, they might give you high win-rate for a tiny move at the expense of not leaving much of a room for the trade to go in your favour.

If there is no “meat” left on the bones, then optimising trade management might be futile exercise. Maybe you need to work on your entries and learn to pick more precise levels for entry, how to read the market dynamics, etc.

PS: most people are not good enough to be scalping, it’s best to stick to 5min charts or preferably higher TFs, and intraday trade stocks as well when indices are not setting up. Sure, one can make money scalping but it's not worth it in my opinion. There are better ways to spend life than being glued to the monitor, and easier ways to make money in the markets. Scalping is too overrated in my opinion. Scaping sounds sexy, but it is not.

 

[virtusa]

... and once again from my experience, most professional traders strive to enter early in the trend cycle, i.e., at the lowest common denominator (e.g. beginning of the move, or on pullback, etc, ) . This allows them to have very tight stops plus plenty of overhead space for their trades to run in their favour before hitting first resistance. This concept is important when day-trading and equates into high expectancy.

That's what I told on ET many times in past, but most people don't agree with that principle.

If you do a search on "good entries" posted by me you will find a lot of posts concerning the impact of good entries.
Most used argument from people who don't agree is: you cannot always have a very good entry", or "you will have a lot of fake signals".
My answer is: you can but it is very difficult to achieve. Can take years before you can.

The majority of people confuse "what is impossible" with "what is impossible FOR THEM". And with a little bit of help from their huge ego, they are sure it cannot be done.

"virtusa, post: 5538501, member: 517719"I watch the evolution of my trades in detail and check for:

• Good entries. My experience is that a good entry is vital for good performance. I only enter after a confirmation of the trend. I noticed that after that confirmation you are from start almost in profit with only small open losses, due to the volatility. This leads to closer stops, which leads to the potential of increasing the leverage. That makes much more money then trying to catch the bottom or top with large stops and logically much lower leverage and most of the time bigger open losses.
• P&L of each trade. And mostly the behavior/evolution of the LOSS side of the open P&L. Open loss should be small and have a short duration.
• Distribution. Should be assymetric. The more to the right (in profit zone) the better. The lower the lines is in loss zone the better. The more the top goes to the right the better as that means that my average profit per trade becomes bigger (so not the majority of trades with small profits).
• Expectancy.

This is the distribution I dream of.
View attachment 277511

 

[Dollardogs]

This needs clarification. The topic was about re-entering at S/R without any set-up, and not about taking multiple trades in the same index when there is another set-up.

In your first post you wrote “My entries are conservative to begin with, so I tend to enter fairly late into moves “, . . . . and once again from my experience, most professional traders strive to enter early in the trend cycle, i.e., at the lowest common denominator (e.g. beginning of the move, or on pullback, etc, ) . This allows them to have very tight stops plus plenty of overhead space for their trades to run in their favour before hitting first resistance. This concept is important when day-trading and equates into high expectancy.

From the limited info, your approach seems to be the opposite of that.

To clarify, a sound trading logic is to re-enter ONLY if there is a set-up at the lowest common denominator, but NOT late in the trend cycle WITHOUT a well-defined setup (without an edge) as you seem to be doing.

Therefore, it is possible that your late entries might be the problem, they might give you high win-rate for a tiny move at the expense of not leaving much of a room for the trade to go in your favour.

If there is no “meat” left on the bones, then optimising trade management might be futile exercise. Maybe you need to work on your entries and learn to pick more precise levels for entry, how to read the market dynamics, etc.

PS: most people are not good enough to be scalping, it’s best to stick to 5min charts or preferably higher TFs, and intraday trade stocks as well when indices are not setting up. Sure, one can make money scalping but it's not worth it in my opinion. There are better ways to spend life than being glued to the monitor, and easier ways to make money in the markets. Scalping is too overrated in my opinion. Scaping sounds sexy, but it is not.

This gives me a lot to think about, thanks! You're totally right that my entries need work too. I'm hoping the entries will get earlier as I gain more experience and confidence, but in the meantime, I'm realizing I need to be a little quicker to grab profits too, because if I'm late to enter and ALSO late to exit, I squeeze myself out of profit on both ends of the trade. This happens to me a lot. I'll enter conservatively about 1/3 into a move, but then my trailing stop method is just giving too much back. For now, I'm working on solving the problem on both ends, and I'm hoping I can start consistently grabbing the middle 50% of 2-3 swings per day.

And I totally agree with you on scalping, but I guess my definition of it is a little different than yours. Most scalpers I'm familiar with are doing like 10-20 trades a day. I'm doing 3-5 over a few hours on the 5m chart. It's intense, but it's not like I'm staring at the candles from 8:30 to 4:00 because I set alerts and check back in only when necessary.

Oh and as far as re-entries, sorry if I wasn't clear. I meant grabbing profits at your profit target immediately, and then waiting out a pullback to decide whether or not to re-enter in the same direction if it looks like the trend will resume and has more continuation in it. Based on my own strengths and weaknesses, I think I can make that work fairly well, but it's gonna take some practice to be sure.

 

[SunTrader]

OP it seems won't see this but for those who do similarly, trading not to lose - it never works long term.

Scalping, when done right, is trading with the PA flow. Not just multiple trades for quick profit.

 

[Redneck]

OP

Don't overthink this shit - it's trading.., not rocket science


You exit.., and conditions (however you define them) showing there another setup to go the same direction - take it..., just as you would if conditions (however you define them) are showing to enter the opposite direction..., or that it simply time to sit on your hands

Part of our job is to never "out think" price / the mkt

Get out of your own way and do your job

Besides - you have a stop in place should it not work

Nothing else to it

RN

 

[Dollardogs]

OP

Don't overthink this shit - it's trading.., not rocket science


You exit.., and conditions (however you define them) showing there another setup to go the same direction - take it..., just as you would if conditions (however you define them) are showing to enter the opposite direction..., or that it simply time to sit on your hands

Part of our job is to never "out think" price / the mkt

Get out of your own way and do your job

Besides - you have a stop in place should it not work

Nothing else to it

RN

Amen Redneck!

 

[darktv]

Daytrading question I'm really stuck on related to profit-taking, and the perennial catch-22 of "letting runners run" without giving back too much of your profits when the runners come up lame. What I'm wondering is does anyone here employ a re-entry strategy to work around that problem?

What I'm envisioning is very simple. As soon as you enter, you determine the expected spot of strongest resistance. You exit as soon as that spot is hit. If you were right, and it reverses to where your initial stop woulda been, then you're a genius! You basically guarded all of it. If it looks like you're wrong, and it busts through resistance, then you re-enter, but only risk back to your original stop as though you'd never left the trade.

Result: on all the trades where you were right to exit, you're basically guarding 100% of possible profits. On all the ones where you were wrong to exit, you've at least re-entered to catch most of the remaining move. And on ones where you're fooled into re-entering but it reverses on you anyway, you still close out at a profit, perhaps slightly smaller, assuming your re-entry was at a slightly worse price than your exit point.

Curious if this kind of re-entry approach has a standard name? Do you think it's the worst of both worlds or the best of both worlds?

For context, I daytrade QQQ, and I'm worried that I'm just asking too much from the moves QQQ has in it. My entries are conservative to begin with, so I tend to enter fairly late into moves, and then my stop method is wide enough to "let runners run." It works like a charm when they do run, but I have too many trades where I'm up about 100 or even 150 cents, and my stop loss lets it run all the way back to break-even. These trades piss me off more than a loss.

Don't over trade ... dopamine you know

 

[darktv]

Amen on the last couple weeks, I've really been getting whipsawed to death! But it's forced a couple epiphanies I needed to have about what was still wrong with my system, so at least I think I got some value for the losses.

Curious where you're getting these very precise statistics from. 92%? 99.36%?

The whole show is made for retail traders to loss money ... Think think think

 

[Dollardogs]

Tried this for a month in case anyone's curious. Results very mixed so far, breakeven win rate for a slight net loss.

 

[HuntingBenjamins]

Now certainly wasn’t the time to do it. I lost 98% of my “wins” for the year between august and September. Got a good lesson on the whole thing about learning when to cut your losses. Saw a lot of things that my rookie outlook wasn’t expecting to happen. In fact things that there was no way it could possibly happen. But here I am….lol!