Stop predicting

[murrica]

Anyone have any thoughts or experiences to share with counter trend trading against a main winning position?

e.g. -- establish a longer term winning long position in, say, ES. Counter trend trade the short side with NQ or YM.

Just an idea to mitigate risk and FUD with being primarily a counter trend trader. Thoughts?

 

[kid.fx.cross]

Quote from murrica:

Anyone have any thoughts or experiences to share with counter trend trading against a main winning position?

e.g. -- establish a longer term winning long position in, say, ES. Counter trend trade the short side with NQ or YM.

Just an idea to mitigate risk and FUD with being primarily a counter trend trader. Thoughts?

yeah, you got burned trying to "predict" and "Like a dog returns to his vomit, a fool returns to his folly."

 

[murrica]

Quote from kid.fx.cross:

yeah, you got burned trying to "predict" and "Like a dog returns to his vomit, a fool returns to his folly."

Got it, and you are the one advocating taking large positions. Riight. Yes, I got burned trying to predict: my ideas were correct, but the timing stunk, and the position size was too large / stop loss too tight. It's just one strategy of many, anyhow.

The idea was fairly simple, it would be just hedging against the primary position that is with the trend, not taking a full counter trend position. So your comments are not applicable here, and certainly not constructive. I had asked in the beginning of the thread for constructive input. Thanks.

Anyone have constructive input or experiences with this?

 

[murrica]

Quote from kid.fx.cross:

might a suggest more of a money management strategy?

first off, you will never read about me because I never commit all my money to one position

but I do, like you said, start off with a 94% commitment

if I'm right, I make a lot of money on that trade

much more and with less risk than if I started small and added

I put it all on with a tight stop on 25% of the position

If the stop gets hit I enter a new stop for what would have been another 25%

I also enter a new stop to enter to bring me back up to 100% at what was my original price

I keep doing this until I have a minimum position on with no stop

so a bad trade will have a minimum position with no stop and 3 orders to enter 25% at a time if it ever finally starts moving my way

a good trade has a full load and a stop for 25% which is way the hell down there

profit is taken when the whole account hits the target. So it is not dependent on any one position. And everything is always spread, so I can survive any fundamental news.

This strategy will allow you to trade really big, way out of what would have been your comfort zone, but keep you from stubbornly hanging on to a position which you feel should be right, and the market is just plain acting irrational.

It doesn't make sense unless you have been burned many times many ways. The drawdowns can be substantial. The daily swings will be much more than you were previously comfortable with. Trades can last weeks or months.

But then again, sometimes on a good day they only last hours, or even just a few minutes.

Nothing special about my particular strategy, it could be one of many, it's just a response to "predicting." In that, I feel time and energy are better spent developing your money management skills rather than your predicting skills.

Ok, just want to make sure your described strategy is clear to me. I had just glanced at it previously and it just struck me as overly risky when I read the part about 'substantial drawdowns', so admit to not fully reading it through.

1) "And everything is always spread, so I can survive any fundamental news." -- Can you clarify 'everything is spread'? Example?

2) "so a bad trade will have a minimum position with no stop" -- If you are holding on to a loser with additional realized losses in the worst case, isn't this still 'stubbornly holding on' to a loser, and also exposing the account to some large, additional, unknown risk? In this case, is there any uncle point in case the market just keeps going against you on the remaining losing position?

3) "but I do, like you said, start off with a 94% commitment" -- Can you give a concrete example of what 94% allocation in your case means, exactly? What is your per contract capital allocation (with example)? e.g. $10k per ES, 10 contracts full size position on a $100k account, or whatever.

4) "The drawdowns can be substantial." -- Can you give an example of worst case draw downs?

 

[failed_trad3r]

Dont use stops, but reduce your leverage instead. Dont try to be a Livermore.

Well it remains to be seen if this is good advice, anybody can get lucky anyway.

 

[kid.fx.cross]

just like my local hardware store. They've been in business longer than I have been alive. One year they bought a whole load of snow shovels and it was the first year in a long time it never snowed all winter long.

They didn't go broke trying to "predict" it would snow.

They manage their money well. They are still selling those snow shovels every year.

you say you want to stop "predicting" and then the first thing you do is try to come up with a better method of "predicting."

 

[murrica]

Quote from kid.fx.cross:

just like my local hardware store. They've been in business longer than I have been alive. One year they bought a whole load of snow shovels and it was the first year in a long time it never snowed all winter long.

They didn't go broke trying to "predict" it would snow.

They manage their money well. They are still selling those snow shovels every year.

you say you want to stop "predicting" and then the first thing you do is try to come up with a better method of "predicting."

Just hoping to avoid an unrelated semantics discussion which has surely been beaten to death by a golf club in the historical posts on this forum, and hoping for responses to my four inquiries in my previous post.

And, your method of response is still non-constructive. Please kindly provide relevant and constructive input if you wish to continue posting to my thread.

Thanks.

 

[kid.fx.cross]

Quote from murrica:

Just hoping to avoid an unrelated semantics discussion which has surely been beaten to death by a golf club in the historical posts on this forum, and hoping for responses to my four inquiries in my previous post.

And, your method of response is still non-constructive. Please kindly provide relevant and constructive input if you wish to continue posting to my thread.

Thanks.

worst case drawdown is 100%

another thread asked, "What was the last hurdle?"

My answer was, "Overcoming the fear of losing it all."

I am very conservative. The hardest part was buying something that was going up or had already gone up. You almost always get bad fills at the worst possible time. It's very counter intuitive. I like to buy low and sell high. And start small. That's what I had to overcome.

 

[murrica]

Quote from kid.fx.cross:

worst case drawdown is 100%

another thread asked, "What was the last hurdle?"

My answer was, "Overcoming the fear of losing it all."

I am very conservative. The hardest part was buying something that was going up or had already gone up. You almost always get bad fills at the worst possible time. It's very counter intuitive. I like to buy low and sell high. And start small. That's what I had to overcome.

Ok, thanks for your response.

Yes, buying something that is already going up is something I am trying to work on for my own trading.

Worst case draw down of 100% is illogical, IMHO. (As is any substantial drawdown, for that matter). I did this in the past with my risk capital and it is the worst way to gamble. Taking a loss via an automated stop, manual stop, or some hedge, is absolutely necessary. In the above examples from my original post, getting out of the trade prevented profits, but eliminated potential further loss. This strategy has absolutely kept me in the game.

Your input on your money management approach is appreciated -- still hoping to get some clarity on it, however.

 

[kid.fx.cross]

Quote from kid.fx.cross:

worst case drawdown is 100%

another thread asked, "What was the last hurdle?"

My answer was, "Overcoming the fear of losing it all."

I am very conservative. The hardest part was buying something that was going up or had already gone up. You almost always get bad fills at the worst possible time. It's very counter intuitive. I like to buy low and sell high. And start small. That's what I had to overcome.

a good money management strategy will put you in, sometimes at a profit, sometimes at a loss.

so, I have very little in common with a breakout trader, and conversely with a Martingaler. Because good money management requires you play both sides of the aisle. And show no allegiance to either.

It helps if you predict right, but predicting is no longer mandatory for survival. Anybody can make money if they predict right.

Like I said at the beginning, perhaps it would be more profitable to devote time and energy to money management rather than predicting.