Scalping with a hard stop loss

[expiated]

I use... Envelope 11sma 0.01 and 0.04 mainly, enter with direction in the 0.01 or play the range. Use a BB 22sma 1.8dev, only play the 11s outer range with 22sma direction, then the BB outter becomes my SL level,which stops me holding 11 direction changes against me until bust lol

I'm working on a couple of big projects right now, so all I'm doing at the moment is some practice trading on the side in an effort to reach a point where I can generate all the income I need from day trading full-time once the projects are completed (and be finished with working for clients).

I've therefore altered the setup I posted on Thursday (Post #42) to get rid of anything not directly related to scalping...

The envelopes are standard, but the moving averages are proprietary in that they are smoother, hence easier to interpret, than regular MAs. I've traded in the past without the big losses I'm currently seeing (see image below) but though the gains were steady, they were also relatively small.

What I'm trying to do now is totally eliminate the BIG losses evident on the above chart while KEEPING the big gains, chiefly by using the blue moving average for direction and the yellow moving average for exits.

(P.S. Also, 75% is a relatively low success rate for me historically. When I was scalping without trying to capture any big gains, my daily success rate would typically be anywhere from around 85% to 100%.)

 

[Turveyd]

I'm working on a couple of big projects right now, so all I'm doing at the moment is some practice trading on the side in an effort to reach a point where I can generate all the income I need from day trading full-time once the projects are completed (and be finished with working for clients).

I've therefore altered the setup I posted on Thursday (Post #42) to get rid of anything not directly related to scalping...

View attachment 196990

The envelopes are standard, but the moving averages are proprietary in that they are smoother, hence easier to interpret, than regular MAs. I've traded in the past without the big losses I'm currently seeing (see image below) but though the gains were steady, they were also relatively small.

View attachment 196992

What I'm trying to do now is totally eliminate the BIG losses evident on the above chart while KEEPING the big gains, chiefly by using the blue moving average for direction and the yellow moving average for exits.

(P.S. Also, 75% is a relatively low success rate for me historically. When I was scalping without trying to capture any big gains, my daily success rate would typically be anywhere from around 85% to 100%.)

2 Projects to get done by the end of the month, then trying to go back to replacing income via trading to, you my long lost brother ??

Bigger losses are caused by stronger market, you could wait it out, not get to far into the red October time and get back to a small profit and repeat, these days wrong side of the market is very quickly 200pts in the red and account margin called.

here is my setup!!

 

[expiated]

Bigger losses are caused by stronger market, you could wait it out, not get to far into the red October time and get back to a small profit and repeat, these days wrong side of the market is very quickly 200pts in the red and account margin called.

I'm a simple guy, so I'm not sure what the above means, but I like the image you attached...it looks very intuitive, which I always regard as a positive sign...



There really should not be any big losses when I am managing my positions because it is so blatantly obvious when things have "gone south" in a manner of speaking. What I now call Numerical Price Prediction uses forecast models that purport to predict almost exactly what price will do (if interpreted correctly) in the near future, so as soon as price does NOT behave as expected, it is immediately clear the model no longer applies and it is therefore time to exit the corresponding trade NOW!

There IS no holding on to a position in the hope of a change in market sentiment, so there should never be heavy losses. I regard stop losses as a fail-safe mechanism for minimizing losses when I cannot monitor price action, but if managing my positions, or if I can automate my system, which I am currently looking into, there should be virtually no losses to minimize in the first place.

 

[Turveyd]

I'm a simple guy, so I'm not sure what the above means, but I like the image you attached...it looks very intuitive, which I always regard as a positive sign...

View attachment 197015

There really should not be any big losses when I am managing my positions because it is so blatantly obvious when things have "gone south" in a manner of speaking. What I now call Numerical Price Prediction uses forecast models that purport to predict almost exactly what price will do (if interpreted correctly) in the near future, so as soon as price does NOT behave as expected, it is immediately clear the model no longer applies and it is therefore time to exit the corresponding trade NOW!

There IS no holding on to a position in the hope of a change in market sentiment, so there should never be heavy losses. I regard stop losses as a fail-safe mechanism for minimizing losses when I cannot monitor price action, but if managing my positions, or if I can automate my system, which I am currently looking into, there should be virtually no losses to minimize in the first place.

I have a habit of thinking the move my way is going to be the start of a turn back my way, then it goes against and lower and repeats and I get trapped, moved to a hard SL to stop this, always get back in after all.

HOPE is the mind killer and my main issue I've been working on last 6 months.

I always monitor, never leave a trade un attended.

 

[expiated]

From Post #33
Wednesday, January 16, 2019
I’m reaching the conclusion that scalping with a hard and fast stop loss is not the best route for me to take. I believe I would be better served by using a dynamic stop loss triggered by reversals in market bias/sentiment as defined by the relationship between price action and key moving averages.

I think I've come up with an extremely simple system I can easily automate based on key insights/settings from my Numerical Price Prediction Forex trading system, but it's yet to be tested as just conceived...

I should know whether or not it actually works in real-life application within the next day or two.

(There are a couple of scenarios I didn't address—not because they were overlooked—but solely because my primary goal was to simply express the main idea.)

 

[syswizard]

This is a MACD sort of set-up....no ?

 

[bone]

This is a MACD sort of set-up....no ?

There exists in this world a Mathematics PhD from Berkeley who did seminal work in cryptography and AI and has to date made over $20B and counting trading in the markets. And he absolutely would not have the stones to insinuate 'powers of prediction'.

 

[expiated]

This is a MACD sort of set-up....no ?

No...I rejected the use of MACD, ADX, RSI, CCI, stochastic oscillators and the like back in 2015. I only use moving averages and moving average envelopes. The lower panel in the above image is simply a horizontal representation/display of the relationship between the instantaneous moving average and the authorization channel.

 

[expiated]

There exists in this world a Mathematics PhD from Berkeley who did seminal work in cryptography and AI and has to date made over $20B and counting trading in the markets. And he absolutely would not have the stones to insinuate 'powers of prediction'.

At Renaissance, algorithms made Jim Simons a Wall Street billionaire.

In the late seventies, not long after he won the Veblen Prize, Simons founded a small investment firm in an office park near Stony Brook. Simons made his first million dollars by his early forties, his first billion by his sixties. He hired researchers to analyze large amounts of data about stocks and other financial instruments, in order to detect previously unseen patterns in their fluctuations. These discoveries gave Simons a conclusive edge.

He initially tried his hand at currency trading, and then at commodities, but he didn’t enjoy the experience. It was the investing equivalent of wet-lab work. “It was fundamental trading, not systematic,” he said. “It was very gut-wrenching.” He felt that there must be a more statistical way to make money in the market. “I looked at the price charts and analyzed them, and they didn’t look random to me,” he says. “They looked kind of random, but not completely random. I felt there had to be some anomalies in this data which could be exploited.”

He hired another mathematician, whom he’d met at the I.D.A., and they began to create models that predicted the direction of currency prices.

Renaissance has had an unprecedented run. Bloomberg Markets, in an article last year, called the firm’s signature product, the Medallion Fund, “perhaps the world’s greatest moneymaking machine.” For nearly three decades, it has gone up by eighty per cent annually, on average, before fees.

At seventy-one, he retired, turning the fund’s management over to two speech-recognition experts whom he’d brought on board in 1993, Peter Brown and Robert Mercer. Simons told me that “language is very predictive,” and he foresaw that Brown and Mercer could apply their skills to the markets.

 

[syswizard]

Simons told me that “language is very predictive,” and he foresaw that Brown and Mercer could apply their skills to the markets.

However, the markets are not very predictive....so this move doesn't make sense.