Struggle taking profits

[wxytrader]

That's the dumbest thing I heard coming from you. And you've been trading for what, 25 years??

1) Most important rule in trading is to go for trades with the highest reward and lowest risk.
2) With that in mind, you should have calculated how much to make and how much to lose in a given trade ahead of time.
3) Based on that calculation, you should know EXACTLY where to enter and where to exit.

I'm usually forgiving when noobs make these silly-ass comments, but when self-proclaimed "veterans" make these foolish remarks ... it's time to bring out the firing squad.

Yeah you guys say that everybody says that but nobody here can read charts lol. If you don't know the statistical chances of certain price levels, how the heck are you going to know what your expected value is???

 

[schizo]

Yeah you guys say that everybody says that but nobody here can read charts lol. If you don't know the statistical chances of certain price levels, how the heck are you going to know what your expected value is???

Oh, so you're more qualified to talk about stats, Mr. Elliott Wave who never posts a single trade in realtime? LMAO.

 

[Q.E.D.]

That's the dumbest thing I heard coming from you. And you've been trading for what, 25 years??

1) Most important rule in trading is to go for trades with the highest reward and lowest risk.
2) With that in mind, you should have calculated how much to make and how much to lose in a given trade ahead of time.
3) Based on that calculation, you should know EXACTLY where to enter and where to exit.

I'm usually forgiving when noobs make these silly-ass comments, but when self-proclaimed "veterans" make these foolish remarks ... it's time to bring out the firing squad.

I do disagree with your points, but disagree even more with your style of stating it.

I have no idea of your background / trading experience, and while point 1 sounds logical, it's virtually impossible to find trades with "highest reward and lowest risk." After 10s of thousands of trades over 30+ years -- including managing funds -- often the biggest profits --and losses -- come from areas that would have seemed illogical.

One important characteristic of traders; One has just been humbled by the markets -- or are about to be.

It would seem you have had at least some recent success in trading, but based on your 3 points, I doubt that will last for long.

 

[PPC]

Price doesn't care about silly r/r's or where you entered or where you target might be.

I trail my stop (Chandelier type) based on PA and how I define trend. Certainty not on what a MA does or 1x1, 2x1 or 3x1 so-called risk.

@SunTrader and @tiddlywinks are actually correct, the price/market simply does not care about anyone’s R/R. The reason is that exiting at certain fixed R/R multiples is not based on the actual price behavior and/or trade logic.

Fixed R/R are just abstract levels that have nothing to do with reading the price/market and letting the price decide when it’s time to exit. This comes at the expense of expectancy. Expectancy = (win rate * average win) – (loss rate * average loss)

In swing and intraday trading, most of the time there are pre-existing (surrounding) market structures at which the balance of probability shifts, and therefore these structures are the most logical places to (target) exit, i.e.; just before the price starts retesting these market structures. Obviously if the trade is not progressing as expected, then one can exit earlier. Either way, the R/R should never be past these market structures, and that’s the problem that many fixed R/R traders face.

Alternatively, trend traders can trail their stops or sell into strength (depending on market conditions). I’m not a trend trader, but if I occasionally trade EOD TF, then I do it with options.

Ultimately, there is no right or wrong way to trade, nevertheless I think that the trade management should be consistent with the TA method the trader uses for analyzing the market, and not just slap on some abstract fixed R/R exit.

The R/R that the trader is seeking should be assessed before the trade is put on, to see if there is actually “space” for the trade to reach the R/R the trader is shooting for. Unless it’s a trend trade on EOD TF, then it can get more complicated . . .

 

[taowave]

IMHO,there is no one correct method of trading.
There are some universal truths,but that would apply to size/leverage and playing great D.
Sure, there are others,but when I look back at the absolutely dumbest.most painful things I have done,the above immediately comes to mind.

I do agree that one shouldnt slap on trades based on some arbitrary R/R,but if one has done the work,i.e backtesting,and believes in a systematic approach to trading,I see nothing wrong with trading with a set R/R ..

As a derivatives trader,any time I put on a Vert,Fly,Calander/Diag, I am trading with a fixed R/R,though the latter are fuzzy..

If you are good at your craft,or brilliant(not me),theres lots of ways to make money

 

[traider]

IMHO,there is no one correct method of trading.
There are some universal truths,but that would apply to size/leverage and playing great D.
Sure, there are others,but when I look back at the absolutely dumbest.most painful things I have done,the above immediately comes to mind.

I do agree that one shouldnt slap on trades based on some arbitrary R/R,but if one has done the work,i.e backtesting,and believes in a systematic approach to trading,I see nothing wrong with trading with a set R/R ..

As a derivatives trader,any time I put on a Vert,Fly,Calander/Diag, I am trading with a fixed R/R,though the latter are fuzzy..

If you are good at your craft,or brilliant(not me),theres lots of ways to make money

no naked short options?

 

[taowave]

I do ratios,but there is only a fixed reward,so the risk is much fuzzier ,and not in a warm and fuzzy way

The other trades are much cleaner as to risking X to make Y...

 

[schizo]

I have no idea of your background / trading experience, and while point 1 sounds logical, it's virtually impossible to find trades with "highest reward and lowest risk." After 10s of thousands of trades over 30+ years -- including managing funds -- often the biggest profits --and losses -- come from areas that would have seemed illogical.

After 30 years and you still don't know what a low risk/high reward trade is? Had you said 3 years, I would have certainly understood. But you get zero sympathy from me. Sorry if I sound downright condescending, but so be it.

BTW this morning's rally is a low risk and high reward trade.

DAILY

5M

 

[cesfx]

I do ratios,but there is only a fixed reward,so the risk is much fuzzier ,and not in a warm and fuzzy way

The other trades are much cleaner as to risking X to make Y...

Ratio with fixed reward?

You mean on the credit side of like a back spread?

 

[taowave]

Typically a 1 x 2 or 1 x 3 ,Long 1 short 3..I should have said max reward as in difference between strikes plus credit/debit..Fixed was a poor choice of words..