Supply & Demand + Price Action

[SunTrader]

I am not sure if I agree with the book.
You should enter trades when your conditions are fulfilled. Therefore, you should not risk more ("larger bet") if you feel the trade is extraordinary. Risk should stay the same. If the reward is higher (RR ratio), even better.
But I would not increase the risk.

Risk is of an event happening or not - ex, trade being a loser. Not an amount lost.

So based on historical testing or forward testing (actual money on the line, my preference) accounting for such things as time of day, day of week, and news releases, etc plus putting aside black swan events, risk for the most part, is the same trade after trade.

 

[s trader]

I am not sure if I agree with the book.
You should enter trades when your conditions are fulfilled. Therefore, you should not risk more ("larger bet") if you feel the trade is extraordinary. Risk should stay the same. If the reward is higher (RR ratio), even better.
But I would not increase the risk.

I agree with the book but it is very hard to do. It takes deep pocket and hours of experience or the fear can be overwhelming. I just have to be patient building up equity one step at a time until one day that urge to play big just comes naturally.

 

[Tradess0610]

Reminds me of the Herbalife fight (Icahn vs Ackmann). Pretty sure both of them had the gut feeling about the trade yet one of them lost a lot of money...

 

[SunTrader]

Reminds me of the Herbalife fight (Icahn vs Ackmann). Pretty sure both of them had the gut feeling about the trade yet one of them lost a lot of money...

Icahn didn't have a gut feeling. Just a large trading account, as well as others to pile on with him, that squeezed Ackman out.

Meanwhile years later HLF is @ $16.80 and its all time high back around that time was @ $61.77

 

[Ivano]

So dear OP, thank you for your availability in discussing US stocks, what is your strategy against bull and bear traps, or the tricks allegedly market makers do to get the Stop losses?