What is a "high probability, low risk" entry?
- Thread starter FireWalker
- Start date
Only you can define what 'low risk' is. Markets evolve, and what is working now will most likely stop working at some point.
Therefore, IMHO making money at trading is about a process and not about setups and entries.
Nitro basically recommends starting with the SPY with 100 share trades and taking signals from the ES, and increasing size as you become profitable.
My advice is that you must have rules that are written down, and you must follow them. Above all this game requires discipline. You must have discipline in developing your method and in executing it.
I believe it is too easy to fool yourself with paper trading, but I think it is useful for forward testing methods initially. Trading the 100 shares of SPY instead of paper trading will make it real, but keep your losses small.
Here is a post from dbphoenix that I think is a keeper,
08-21-03 03:35 PM from dbphoenix:
"I posted this elsewhere a day or so ago. It may be helpful, particularly if you remember that even though you may have experience trading, switching to a different type of trading, while not the same as starting from scratch, still presents many of the pitfalls that the usual newbie will encounter:
If you're still trying to "find your way", I suggest you forget about discretionary trading for the time being as it requires a certain subjectivity that new and newish traders just aren't capable of indulging in.
First, find a profitable strategy that has tolerable risks and drawdowns. If you find a great ES strategy that requires 10pt stops and potential 50pt drawdowns and the thought of that makes you sick, then you need to keep looking for a more compatible strategy.
Second, once you've found that strategy, test it yourself, not by "backtesting", but by going over old charts using the bar interval you plan to trade, bar by bar, maintaining a log of your "hard right edge" trades and noting any problems.
Third, if everything still looks good, paper-trade it until you show consistency in trading. Don't worry about the money. If the strategy is right and you're consistent in trading it, the money will be there. If you end up trying to second-guess the strategy or "feel" the trades, go back to step one.
Fourth, trade it for real. Here's where the discipline issues will come up, either because you get bored or because you haven't nailed down the rules or because you think you're better than the system. Work them out. Go back to three if you have to.
Only when you've achieved complete discipline, are able to execute your system flawlessly, are completely consistent in your trading, and can be objective about what you're doing will you be ready to introduce subjectivity into your trading. But, even then, if you get into trouble, you need only back up a step and return to your "comfort zone".
You can force discretion into your trading, of course, but you will most likely just postpone that day when you will be completely at ease with your trading. Take the time to build a foundation of discipline and confidence and you'll leave most of your peers in the dust. "
Good luck and use the search function as there are plenty of entries posted on this site, I think exits are equally important. Whatever you decide to use must fit your personality.
Therefore, IMHO making money at trading is about a process and not about setups and entries.
Nitro basically recommends starting with the SPY with 100 share trades and taking signals from the ES, and increasing size as you become profitable.
My advice is that you must have rules that are written down, and you must follow them. Above all this game requires discipline. You must have discipline in developing your method and in executing it.
I believe it is too easy to fool yourself with paper trading, but I think it is useful for forward testing methods initially. Trading the 100 shares of SPY instead of paper trading will make it real, but keep your losses small.
Here is a post from dbphoenix that I think is a keeper,
08-21-03 03:35 PM from dbphoenix:
"I posted this elsewhere a day or so ago. It may be helpful, particularly if you remember that even though you may have experience trading, switching to a different type of trading, while not the same as starting from scratch, still presents many of the pitfalls that the usual newbie will encounter:
If you're still trying to "find your way", I suggest you forget about discretionary trading for the time being as it requires a certain subjectivity that new and newish traders just aren't capable of indulging in.
First, find a profitable strategy that has tolerable risks and drawdowns. If you find a great ES strategy that requires 10pt stops and potential 50pt drawdowns and the thought of that makes you sick, then you need to keep looking for a more compatible strategy.
Second, once you've found that strategy, test it yourself, not by "backtesting", but by going over old charts using the bar interval you plan to trade, bar by bar, maintaining a log of your "hard right edge" trades and noting any problems.
Third, if everything still looks good, paper-trade it until you show consistency in trading. Don't worry about the money. If the strategy is right and you're consistent in trading it, the money will be there. If you end up trying to second-guess the strategy or "feel" the trades, go back to step one.
Fourth, trade it for real. Here's where the discipline issues will come up, either because you get bored or because you haven't nailed down the rules or because you think you're better than the system. Work them out. Go back to three if you have to.
Only when you've achieved complete discipline, are able to execute your system flawlessly, are completely consistent in your trading, and can be objective about what you're doing will you be ready to introduce subjectivity into your trading. But, even then, if you get into trouble, you need only back up a step and return to your "comfort zone".
You can force discretion into your trading, of course, but you will most likely just postpone that day when you will be completely at ease with your trading. Take the time to build a foundation of discipline and confidence and you'll leave most of your peers in the dust. "
Good luck and use the search function as there are plenty of entries posted on this site, I think exits are equally important. Whatever you decide to use must fit your personality.
Ditch with posts like that u only get newbs to try em and possibly lose money. Symmetrical triangles intraday are one of the most failure-prone patterns in the SPOOS. I'd say the win rate is more like 20%. Opposite of what u posted. But then again when u challenged u retreat into your cave, so bye.
Fire, first tone down your requests. Aim for 2 points a day for now. If u can do that, you can build size and live rich soon enuf. Second, noone's gonna come even CLOSE to laying it out here for you, believe me I've been here long enough (this is a dog eat dog business when it comes down to it). There's a guy called aphie here, with his first post he aimed for making 2 ES points a day (or was it 5 
), he posted about making enough to buy a new Porsche to piss of his ex-gf, etc. etc. He was the star of ET, and his enthusiasm was in the air... for maybe 2-3 months. He then gave up and now he's a regular only in Chit-Chat section. Lesson: dont be like him 
Be ready for the long haul, be humble, persisnt and ready to suffer
), he posted about making enough to buy a new Porsche to piss of his ex-gf, etc. etc. He was the star of ET, and his enthusiasm was in the air... for maybe 2-3 months. He then gave up and now he's a regular only in Chit-Chat section. Lesson: dont be like him Be ready for the long haul, be humble, persisnt and ready to sufferQuote from traderkay:
Fire, first tone down your requests. Aim for 2 points a day for now. If u can do that, you can build size and live rich soon enuf. Second, noone's gonna come even CLOSE to laying it out here for you, believe me I've been here long enough (this is a dog eat dog business when it comes down to it). There's a guy called aphie here, with his first post he aimed for making 2 ES points a day (or was it 5
Traderkay,
You keep complaining about that nobody wants to help newbies at ET. Your problem is that you can't get it, that it is not about the method, but it's the trader that makes up the edge. It requires a lot of hard work and persistence to achieve the proper level of determination, conviction and belief in your system to be able to trade profitably. This can't be taught on a message board. You'll have to put in those hours yourself. I remember, that i posted a setup i use about a year ago. I advised you to practice it for a month on a simulator. You thought that that was ridiculous. Today i still traded the same setup profitably. Get a grip on yourself, man. Pick a setup and start practicing it!
According to Mark Douglas (Trading In The Zone),
"There's an old trading axiom that 'The trend is your friend'.
It means that you have a higher probability of success when you trade in the direction of the major trend, if there is one.
In fact, the lowest-risk trade, with the highest probability of sucess, occurs when you are buying dips (support) in an up-trending market or selling rallies (resistance) in a down-trending market."
