Trading the NQ: Take 2

[toucan]

Well as I was typing all that up, price made a run for 4524, the high put in after the open. I saw a trade present itself, so I took it. Couldn't stand the the pressure, so I got out for 2 ticks, right before it drops. I mark where the 2 pt stop was, and where the 5 pt target was. Seeing the small range today, I had my platform set up for 5 point targets. I think I would have gotten three 5 point targets today and 1 BE trade, which would have made up for yesterday quite nicely, but its impossible to say what would have happened.

while you were writing up this response, i was thinking of responding to your earlier chart... what I was going to say was: Seeing the small range today, I had my platform set up for 5 point targets. i didn't trade the nq today because of the small range prior to the equities open and given my initial stoploss/profit target. even after the equities open, the range was only about 14 points. But your idea of today using a 2 point stop and 5 point target was good and shows that you are thinking about how todays market moves might alter what you do today.

your early trade exit and your thoughts about not trading due to missing earlier trades can be overcome with time. i had the same problem early on and it took a long time for me to be able to watch trades go by and then later make a trade. hey it happens all the time and you have to evaluate each trade on its own merits. The good thing about the early exit was you still kept your loss small. too bad fear drove that early exit.

 

[k p]

too bad fear drove that early exit.

tell me about it! Could have at least gotten $100 to offset the losses yesterday a bit.

 

[NoDoji]

tell me about it! Could have at least gotten $100 to offset the losses yesterday a bit.

A simple suggestion: When you think about placing your order and your brain says "But what if it keeps going [up/down] right through [key level]" immediately yell as loud as you can, "What if it holds and I get 10 points of profit on this trade and it costs me less than $50 to find out!!!"

Derail the fear of loss (your 2 point stop loss will take care of your losses) and you're open to what the market has to offer you in exchange for your willingness to accept uncertainty

 

[MarketAddict]

tell me about it! Could have at least gotten $100 to offset the losses yesterday a bit.

Al Brooks said in one of his videos that when you trade you can't care.. And one way to do that is trade small size.. And I feel another way is to have confidence in your plan.. Without that you will always have fear...

 

[k p]

A simple suggestion: When you think about placing your order and your brain says "But what if it keeps going [up/down] right through [key level]" immediately yell as loud as you can, "What if it holds and I get 10 points of profit on this trade and it costs me less than $50 to find out!!!"

Derail the fear of loss (your 2 point stop loss will take care of your losses) and you're open to what the market has to offer you in exchange for your willingness to accept uncertainty

Can't argue with this. I think what really threw we off was just all the discussions yesterday. One not so great day doesn't exactly mean I'm still on the wrong path. I might not have all the kinks worked out yet, but I think I'm a heck of a lot further than the last time I was keeping a journal.

My stop loss is pretty damn small, and this one trade I showed especially was quick enough that the two point stop was above the last swing high, so I had everything going for me.

In the past, I was scared to lose because I didn't know what I would do next after the first loss. But clearly, as evidenced yesterday, I kept working it, not spectacularly well, but I kept at it. So I think I almost have enough in place to keep going forward... a tight stop, a reasonable idea of what I'm looking for to put on a trade, the ability to put on a few trades before I hit my daily stop loss even if they are all losers, and also a preset target of at least 5 or 10 points. (I failed on this last point today... LOL)

 

[k p]

Al Brooks said in one of his videos that when you trade you can't care.. And one way to do that is trade small size.. And I feel another way is to have confidence in your plan.. Without that you will always have fear...

Agreed. Can't go any smaller than 1 contract unfortunately. If I could trade 1/4 of a contract... I'd be set!

The plan is still the iffy part of course.

 

[i960]

Well as I was typing all that up, price made a run for 4524, the high put in after the open. I saw a trade present itself, so I took it. Couldn't stand the the pressure, so I got out for 2 ticks, right before it drops.

So why did you do this? I don't understand why letting it hit a 40$ stop is going to be the end of the world. You had a decent entry and a reasonable idea on the overall trade. It didn't even come close to putting real pressure on your stop - and even if it did that's completely normal. Do you really expect to have entries within 2 ticks of the absolute high right now? No trader does that with any consistency day in and day out which is why nobody uses 2 tick stops. So expect heat as part of the game.

What I don't get is why, knowing you have sabotaged yourself this way countless times, you do not absolutely force yourself to stop doing it. Like literally and physically removing yourself from the ability to alter the trade after you put it on and just letting it play out. Every time you don't ignore that monkey response you're just hurting yourself long term. It is absolutely imperative you force yourself to get past this and you cannot be successful unless you do it. You will not be able to trade long term with perfect entries and tight stops such that you never have to worry about adverse movement. It's not a viable strategy in the real world and even if it were you'd still be avoiding dealing with that behavioral problem if you don't plant your feet right in front of it and take a stand for yourself.

 

[k p]

So why did you do this? I don't understand why letting it hit a 40$ stop is going to be the end of the world. You had a decent entry and a reasonable idea on the overall trade. It didn't even come close to putting real pressure on your stop - and even if it did that's completely normal. Do you really expect to have entries within 2 ticks of the absolute high right now? No trader does that with any consistency day in and day out which is why nobody uses 2 tick stops. So expect heat as part of the game.

What I don't get is why, knowing you have sabotaged yourself this way countless times, you do not absolutely force yourself to stop doing it. Like literally and physically removing yourself from the ability to alter the trade after you put it on and just letting it play out. Every time you don't ignore that monkey response you're just hurting yourself long term. It is absolutely imperative you force yourself to get past this and you cannot be successful unless you do it. You will not be able to trade long term with perfect entries and tight stops such that you never have to worry about adverse movement. It's not a viable strategy in the real world and even if it were you'd still be avoiding dealing with that behavioral problem if you don't plant your feet right in front of it and take a stand for yourself.

You're absolutely right.

When my day doesn't start out good, it usually goes downhill quick. Today, when I skipped good trades that worked, I wasn't all too happy with myself. Then when this opportunity came up, I was mostly thinking that if it didn't work out, I didn't think I would put on another trade, and since I can never tell which trade will work, I have to be prepared to take a series of trades, which I couldn't do since I already skipped good ones. That is really what I thought at the time.

This is also why I want to use a tight stop, because I want to make sure I have a few chances at getting it right. With putting on my first trade so late in the day, I knew I wouldn't keep working it anymore. So I figured if I can't trade properly, might as well just get out. In a way, it was a bit of gamble to just get in, and think, ok great, I didn't lose. This is also something else that keep coming up for me. I'm not trading to win, I'm trading to not lose. This explains why in the past, I had always taken 4 or 5 point stops (even 20 points twice... yikes), and yet, I hardly allowed myself to take any profits.

Logically I do know better, and I know I can do better, but I just wasn't up to it today.

Thanks for trying to drill this into me yet again.

 

[Redneck]

Both these statements are inaccurate KP

Interesting. What I mean with the first is I think that if I plan to take a REV at a key level and get in right at the level, I could almost keep a tight 2 point stop, so if price overshoots by more than 2 points, its more than likely that the reversal didn't/wont happen. But if I buy a breakout, maybe a RET after the breakout, lets say 3 or 4 points above the level, then a logical stop would be below the actual level that price broke out from, so in this case, I'm thinking a 4 or 5 point stop would be prudent just in case price tests the level again that before was resistance but now could be support.

As for the second, I'm not sure why could would be inaccurate. Some traders prefer scalping and require a high win rate, whereas another trader might be going for big win, attempting to catch a bottom of a huge move, try a few longs and get stopped out a few times, but keep trying to eventually get that huge move back up. To me, these two strategies are like night and day. (although I guess both make sure of a tight stop, but the win rates would be much different)

KP

Ubo would like me to respond to this - however I don't want to derail what you've got going on presently

If it okay to respond - cool

If not - cool - I'll PM him..., or respond in chit chat

Keep on Truckin

Thx
RN

 

[k p]

KP

Ubo would like me to respond to this - however I don't want to derail what you've got going on presently

If it okay to respond - cool

If not - cool - I'll PM him..., or respond in chit chat

Keep on Truckin

Thx
RN

Thanks for the consideration in asking.

Please feel free to answer. I'm getting quite firm with what I'm doing in my head, so I'm not scared of getting derailed and look forward to reading the answer myself.