Two Questions For Practicing Day Traders

padutrader said:
forgive my presumptuousness but i want to tell you one thing which cost me hundreds of thousands of usd because i did not pay enough attention to it

it is the process of reversal

markets do go from bull to bear with one pattern but mostly the reversal takes place with some sort of trading range: sometimes just a one bar doji, sometimes a simple trading range with horizontal boundaries and sometimes quite complex ones like converging or broadening patterns which can cause a lot of damage to any inexperienced trader's account.

while i am supposedly experienced, i have not realized the simple fact that if markets go from bull to bear, this means the bears have first to negate the power of the bulls with an equal and opposite force.

so this usually results in a trading range.

sometimes the bulls regain control of the market to cause a breakout from the range but usually this BO is met with renewed opposition from the bears which then causes the BO to fail .....

this leads to a lot of market volatility around Markert turning points which is enough to embarrass most of the traders,with the exception of the most knowledgeable.

i have realised that this has been the cause of most of losses and i know i am not alone in this.

one example of a reversal is seen in the chart of ES below. a trading range doji was preceded by trading range broadening patterning that was the basis of a short trade in progress live. The stop was just above the doji which provided a dream like RR..... ES in one of it's more generous moods. View attachment 324917
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Thanks. Sounds right to me.

Did you make money on this trade?
 
Sprout said:
Days that wreck and liquidate Retail Ricks

Those days are straight gambling.. look on forexfactory, they have one of the more useful economic calendars.
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I should be OK if I strictly practice PRM? Cut my losses and let my profits run, so net positive?
 
ironchef said:
Back to my live day trading test. After 13 days of live trades, the statistics are similar to the paper trades except profit came down from 1.2% to about 0.5%. However, that is not what bothers me. What really bothers me is when I drilled down to the details, the statistics looked too much like a random process: a 50/50 coin flip. Here are the statistics:

Live Trades:
# of trading days: 13
# of winning days: 8
# of trades: 317
% of winning trades: 49.7%
Average # of trades per day: 24
Min # of trades in a day: 6
Max # of trades in a day: 37
Average profit per day in %: 0.5% of the trade size

Paper Trades:
# of trading days: 53
# of winning days: 46
# of trades: ~1500
% of winning trades: 50%
Average # of trades per day: 28
Min # of trades in a day: 10
Max # of trades in a day: 50
Average profit per day in %: 1.2% of the trade size

I can calculate the p-value to see if the outcome is statistically significant but I already know the answer: It is not, because if I removed two big winning days out of 13, it is breakeven. Those two days are statistical anomalies.

I will complete the test in a month but as of now I don't think I have a winning strategy unless I can make some changes.
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Just finished trading this morning and need to correct the live trade statistics:

I miss-counted the number of trades. The paper trade statistics remains the same and here are the updated live test results after three and a half weeks:

Live:
# of trading days: 17
# of winning days: 12
# of trades: 233
% winning trades: 45.5%
Average # of trades per day: 14
Min # of trades in a day: 6
Max # of trades in a day: 37
Max drawdown in a single trade: $6.56 (on $1K per trade)
Max drawdown in a day: $15.84 (on $1K per trade)
Average profits per day: $5 (on $1K per trade), a free Big Mac
 
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