Trading to NOT LOSE vs Trading to Win

[trader99]

i have the mindset of trading to lose - let me explain - i trade with a large stop in place - when i trade all i really care about is hitting that stop. by focusing on losing that trade the results are opposite of when i used to have expectations to win. i know it may seem crazy but i want to lose and that's all i think about except when i am forced to take action to exit a winning trade. i can't wait to exit a profitable trade so i can get back and focus once more on my potential loss. inverted thinkers make money the riches are in the opposite direction of the sheep.

interesting Mark. I don't like large stops. Maybe it works for you and others. I like to keep my losses small. Get base hits all day long and the occasional big winner when it comes.

If you have large stops, then what's your winning target? Are you getting 3R? 4R?

 

[MarkBrown]

interesting Mark. I don't like large stops. Maybe it works for you and others. I like to keep my losses small. Get base hits all day long and the occasional big winner when it comes.

If you have large stops, then what's your winning target? Are you getting 3R? 4R?

my risk reward is 3-4 to 1 i hardly ever get a stop hit because i reverse the trade well within the stop range.

example on compression i may go long be up a point or two when it slams me into a reversal which i then exit. the stop was never even close way out there.

but in my mind because i was long on 911 in the sp, i was on the phone with a bond broker when the second plane hit and went long 30's which saved me.

i only focus on potential catastrophes and actual trading is just a sideline distraction. keeps my mind clear.

 

[trader99]

My personal opinion is that you're trading too much stuff. I really don't see how you can watch these different, uncorrelated instruments and still try to day trade them. I only watch ES/NQ.

I also think that to say you want to pull 50 points out consistently is really quite short sighted. There is no way to predict what the day will give, and I'm sure you know this as well.

Perhaps these discussions would go easier if you shared some charts of where your trades are. But absent that, its fairly easy to see what you should do with regards to wanting to hold longer. Just look at your trades, lets say past 100 trades, and count how many would hit 20 points profit, 50 points profit, etc. (before hitting a fixed stop) The win rate will drastically go down of course for the higher number of points you hope to gain. But if you see that there are at least a few in there, then perhaps it will make more sense to hold longer.

If lets say you have 3 winners for 10 points now, but just one of these went 50 points, then obviously 1x50 points is bigger than 3x10 points. But psychologically, you will have to put up with more break even trades, and the pain of having a nice profit and watching it slip away. There will be no way to predict where your 50+ point winners will be, so you just have to put your trades on and leave the targets alone to either hit, or stop you out. And of course not be in any way damaged and prevented from putting on the next trade.

Seaweed,

You are right. I trade too many things. Most of my profits today came from just CL and QM. NQ, NG, MNQ were just modest profits. But I was monitoring all of them to see where the big action was coming from. Once I saw it was coming from CL i focused on it. Had I just been focusing on NQ then I would have missed out on the action on CL.

I made about what I made an entire day at my normal corporate job trading CL/QM this morning. And it's only 9AM PST. LOL. Love it!

Wash. Rinse. Repeat. Until I can consistently make several thousands a day(preferably $4K-$5K/day). Then I will consider what's next. To get there I need to trade more than 1 lots. Even on 1 lots today, I could have made 5x what I made which was already nice had I HELD onto winners longer. That's the hard part. If it's a trend day then it makes sense to hold on longer. If it's not then you gotta do the base hits. Today was a trend day.

There's always another day to improve. kaizen. Constant and never ending improvements!

Now I gotta work non-trading activities. hehe.

 

[humbletrader2016]

Also, I think it's the wrong approach to try to capture 100pts on NQ. Those are rare days! Usually you need fundamentally or news driven events for big moves. That's why individual stocks are better for big moves. Or news days. Today some news came out for CL and it has really nice moves.

Actually, these rare days are often driven by signals triggered from bigger TFs which you can tell next time if you concentrate on analyzing them.

 

[Seaweed]

Actually, these rare days are often driven by signals triggered from bigger TFs which you can tell next time if you concentrate on analyzing them.

Would you be willing to expand on this? Attached is the hourly and daily NQ chart. Is it evident to you on these charts? (other than the obvious swing low from about March 8) The red arrow highlights the day in question.

 

[humbletrader2016]

Would you be willing to expand on this? Attached is the hourly and daily NQ chart. Is it evident to you on these charts? (other than the obvious swing low from about March 8) The red arrow highlights the day in question.

View attachment 203650

Check out my ES screenshot. I'm not going to tell you which TF that is. It's one of main TFs that I used to determine intraday trend reversal. I removed a lot of stuff on that chart to make it simpler for you to see. Notice how prices on both ES and NQ keep hitting on black line (i.e. black arrows) yesterday without breaking below. This is one way to help me figure out how strong intraday trend is so I won't go against it if I'm a swing trader.

 

[Seaweed]

Notice how prices on both ES and NQ keep hitting on black line (i.e. black arrows) yesterday without breaking below. This is one way to help me figure out how strong intraday trend is so I won't go against it if I'm a swing trader.

View attachment 203651

I take it the black line is a moving average of some sort?

The area you highlight via the black arrows is I think the action today. What is more pertinent, IMO, is that low in NQ today was at 7150, and it lined up perfectly with the ES hitting 2801. Both of which I call "round numbers". The fact that it also lined up with your moving average would certainly have been icing on the cake if you're the type of trader looking for multiple reasons to enter.

But I think the original question was how to know that, on the morning of Tuesday April 4, it was going to be a hugely trending up day. I know why the NQ and ES reversed where they did at roughly 09:50, but to know that this was a day where you could hold for 100 NQ points is the mystery. As the day develops, sure, it starts to look like a trending day, but by this point, if you trying to hit 10 point trades, you're already out if you got in at the bottom.

 

[Seaweed]

Check out my ES screenshot.
View attachment 203651

Although you don't discuss the red arrows, I noticed on second glance that you do also highlight this area as well, which I think would line up with the open on Tuesday. What it looks like you're pointing to is a simple cross-over of your green line and dashed black line. I'm not sure what your indicator is on the bottom, but perhaps this also gives you some sort of clue as to the upcoming trend? I'm not big on indicators so don't follow them at all.

 

[humbletrader2016]

I take it the black line is a moving average of some sort?

......................

But I think the original question was how to know that, on the morning of Tuesday April 4, it was going to be a hugely trending up day. I know why the NQ and ES reversed where they did at roughly 09:50, but to know that this was a day where you could hold for 100 NQ points is the mystery. As the day develops, sure, it starts to look like a trending day, but by this point, if you trying to hit 10 point trades, you're already out if you got in at the bottom.

Tuesday April 4th???

Well, the methods I used on June 4th is the same method that I used on May 28th when a huge drop began as shown with black line (check time stamp of my entry) and etc. That said, I used to use this setup to trade weekly spy call & put options for years which I'm very confident that it gives more than 10-point each time when it gets triggered. Also, it took many years to master this setup to the point where as soon as I enter my trade, momentum is so strong that I can avoid time decay eating in while trading directional options.

Besides, like I mentioned in one of my previous posts, this is a setup E which means it is a very large setup with a big swing which is suitable for swing trading style because it takes a lot of patient, gut and time to hold. I tend hold until momentum dies or when it hit major S/R line from very big TFs that it couldn't break. If I hold it overnight, I stay up all night to keep an eye on it so I could exit as soon as momentum dies. This is the main reason why I don't trade weekly option anymore because I can't exit overnight when momentum dies.

Otherwise, if I were to aim for around 10-point, I used setup C or D to do the job because these large setups are meant for daytrading, not scalping for a point or two like setup A or B.

 

[Seaweed]

Also, it took many years to master this setup

Thanks for the write-up. Is there anything you can say about the dashed black line and solid green line? Are they just moving averages? I also don't recognize that indicator you have below.

For me, indicators are really just a derivative of price, so not the holy grail that most would think. But they can of course add structure to reading the market. Since they are calculations of past price, they will compute in a predictable fashion, and hence their consistency in displaying what it is they display can be useful so that you don't start making stuff up in your head. You seem to use them quite religiously though, and to great affect it seems!