Some Technical Questions

[Straitjacket]

Hello everyone, noob trader here. Learning the ropes by observing intraday prices and making macro calls on a paper trading account.

I would appreciate some help with a couple of technical questions... FYI - I am paper trading the ES-mini only with 2-5 average trades/day.

1 - I always have a mental stop loss (rarely change it). However, I don't have a profit target whatsoever. Therefore, I am having trouble measuring theoretical risk/return in my trading journal. My exists are entirely discretionary depending on my prepped outlook for the day. What would you suggest? (I have a risk/return calculated from the trade itself, but that doesn't tell me much about the conditions that the trade was taken.)

2 - I am taking paper trading seriously. For some reason, it actually feels like real money. Has anyone actually experienced this because it goes against what everyone says. So far, it as intense for me as when I was shorting small caps a few years back.

3 - I am adding one tick to my trades in the journal + $4 round trip. Do you think this is appropriate?

4 - When trying to document my decision making, I am unsure of what to track. Would any of you have suggestions for other things to document beyond just the trades themselves?

5 - I am doing well so far, but worried about risk management. My trades tend to go well when I wait for the price to go against my thesis coupled with a widening of my stops. All of this feels to me like it increases the risk and this seems to be against what I've read. Any advice on how to approach this dilemma?

Thanks in advance.

 

[dozu888]

these questions are secondary... you need to have a winning strategy first... winnings should come from logically explainable reasons... right now you don't... it will take you years to come up with something that you can explain why you win.

 

[murray t turtle]

Hello everyone, noob trader here. Learning the ropes by observing intraday prices and making macro calls on a paper trading account.

I would appreciate some help with a couple of technical questions... FYI - I am paper trading the ES-mini only with 2-5 average trades/day.

1 - I always have a mental stop loss (rarely change it). However, I don't have a profit target whatsoever. Therefore, I am having trouble measuring theoretical risk/return in my trading journal. My exists are entirely discretionary depending on my prepped outlook for the day. What would you suggest? (I have a risk/return calculated from the trade itself, but that doesn't tell me much about the conditions that the trade was taken.)

2 - I am taking paper trading seriously. For some reason, it actually feels like real money. Has anyone actually experienced this because it goes against what everyone says. So far, it as intense for me as when I was shorting small caps a few years back.

3 - I am adding one tick to my trades in the journal + $4 round trip. Do you think this is appropriate?

4 - When trying to document my decision making, I am unsure of what to track. Would any of you have suggestions for other things to document beyond just the trades themselves?

5 - I am doing well so far, but worried about risk management. My trades tend to go well when I wait for the price to go against my thesis coupled with a widening of my stops. All of this feels to me like it increases the risk and this seems to be against what I've read. Any advice on how to approach this dilemma?

Thanks in advance.

%% Paper trading can help learn levels; but never really feels like the real thing, nor is it the real thing. And it feels like that, for you; most have to ignore most feelings....

Find out what they mean by ''its a bull market you know'' [200dma; its not rocket science] Thanks..

 

[qlai]

observing intraday prices and making macro calls

I am not clear ... Are you strictly day trading - flat by the end of day?

 

[Straitjacket]

I am not clear ... Are you strictly day trading - flat by the end of day?

Yes exactly - I’m always flat by end of day.

 

[dozu888]

Yes exactly - I’m always flat by end of day.

you are wasting your time.

I am saying this as a 20 year veteran, having made enough from the market for financial freedom.

read thru my posts and see if this style makes sense to you.

your questions are irrelevant.. simply waste of time.

or - switch to landlording... the success rate is far higher

 

[Overnight]

...
5 - I am doing well so far, but worried about risk management. My trades tend to go well when I wait for the price to go against my thesis coupled with a widening of my stops. All of this feels to me like it increases the risk and this seems to be against what I've read. Any advice on how to approach this dilemma?

Thanks in advance.

You're only going to understand this truly when you go live. E-micro equity futures in 3 weeks. Or you can do it now with things like MGC or M6E, but you may not like it.

2 - I am taking paper trading seriously. For some reason, it actually feels like real money. Has anyone actually experienced this because it goes against what everyone says. So far, it as intense for me as when I was shorting small caps a few years back.

I did as well. But when I went live, it became more serious than sim could ever replicate.

Don't be scared by it, just DO IT on a micro.

 

[qlai]

For some reason, it actually feels like real money. Has anyone actually experienced this because it goes against what everyone says.

That's how it should be ... if you treat it like real thing, there should be minimal impact once you go live(obviously there still will be!). The moment you say - What the hell I'm just practicing ... I will NEVER ACTUALLY do this once I go live - you are wasting your time, IMHO.

When trying to document my decision making, I am unsure of what to track. Would any of you have suggestions for other things to document beyond just the trades themselves?

This brings memories Below is my pre-trade check list and post-trade scoring that I used for swing trading(mixed with day trading). Hope it gives some food for thought.

I always have a mental stop loss (rarely change it). However, I don't have a profit target whatsoever. Therefore, I am having trouble measuring theoretical risk/return in my trading journal. My exists are entirely discretionary depending on my prepped outlook for the day. What would you suggest? (I have a risk/return calculated from the trade itself, but that doesn't tell me much about the conditions that the trade was taken.)

I'm not sure I completely understand this one. One thing I used to do is compare my result to the hindsight results. For example, I would look at the chart at the end of the day and calculate how much money I would have made if I traded it perfectly (based on my rules but without doubt/hesitation/mistakes). Then I would compare it with how I actually traded. With time, we want our real trades to come close to hindsight results.

My trades tend to go well when I wait for the price to go against my thesis coupled with a widening of my stops.

I think Maximum Adverse/Favorable Excursion (MAE, MFE) are good stats to have. It gives you a feel for stop placement and gives you and idea of how much money you are giving up on exits.

NOTE: IMHO, while it's good to keep the stats, if you don't have an edge it will not matter and you might get confused even more. I remember reading this advise in books - make sure you know what your edge is - and I could not understand what they meant. So for what it is worth, try to concentrate on what your edge is ... why is something more likely to go up then down ... why after you enter? [hint: TA by itself is not an edge] Good luck!

 

[qlai]

read thru my posts and see if this style makes sense to you

What style? You are a sentiment trader? It's kind of hard to learn/replicate don't you think? I don't say it with disrespect, just trying to understand if it is any different from buy-and-hold. Do you have practical suggestions or give names of famous traders who use this method (please don't say you are the only one good at it)?

 

[dozu888]

What style? You are a sentiment trader? It's kind of hard to learn/replicate don't you think? I don't say it with disrespect, just trying to understand if it is any different from buy-and-hold. Do you have practical suggestions or give names of famous traders who use this method (please don't say you are the only one good at it)?

replicating the trading or the financial freedom?

for the latter I have posted a few times about playing the positive sum game.. $1k a month for 20 years, plumber can million... everybody can replicate.

the trading - yes, sentiment.. my pro boys do it all the time, but they have maybe better tools to gauge, and they have control of media... easy to replicate? no... but what is easy in trading?

you start with 13% a year, get that IRR up there to 15%, won't take long to million.. easy math.

this 'flat at the end of day' stuff, only for losers who still live in mom's basement, and have no other skill to find a job, in this hottest job market.