No generally it is not based on recovering losses but occasionally I will do so just for a mental reset. A loss recovered sets up the mind for a fresh start. Usually though profit-taking is based on PA. That decision is generally based on momentum. It is not just that price makes it to a certain point but just as important is "how" if made it there. Grinding or with gusto. Two exceptions are in the case of SPBL (small pb bull trends) and Small PB bear trends. They are very strong trends but they are grinding up or down. This is program buying. In small PB bull trends every PB is bought by an institution regardless of sellers. In a small PB bear trend every PB is sold by an institution regardless of buyers.
Why do traders find it difficult to make money?
- Thread starter Waylen
- Start date
Here are my last trades for the day.
I went long 1c @ 5367.00 which at the time was near the bottom of a then narrower channel. It went against afetr I decided to not lock in a small profit two bars later.
I then averaged down (or scaled in LOL) 3 bars later adding 2c's at 5358.00. So now have 3c's long. I exited those later 2c's @5362.00 for a 4pt gain. My initial contract was still in play. Finally, twelve bars later I exited my initial contract at 5369.50 for a 2.5 pt gain. As a scalper I simply do not like these sort of trades. They take too long and I miss other opportunities to scalp. I don't like watching too many trades at once. Focus is key in scalping. Nevertheless, I was in so I held but as you can see the trades took near 1.5 hours to play out. I don't like that when scalping.
After my initial entry a few bars later I widened the channel. A scalper has to do that too as long as the channel has not reversed to a bear channel or an obvious TR. At one point is was almost a TR. But remember in effect a channel IS a trading range..just a slanted TR.
In these last trades all long trades so entries are in green and exits in orange.
So today I was showing how with 1c channels can be traded if broad enough and volatility is enough. IN the last trade I did average down but it was the only trade today that I did that in. So, here you have it...that is how I trade channels. If you are a scalper you may wish to print these out ...study them...and practice doing it on a SIM.
Gotta go. Have fun trading!
Volpri
I went long 1c @ 5367.00 which at the time was near the bottom of a then narrower channel. It went against afetr I decided to not lock in a small profit two bars later.
I then averaged down (or scaled in LOL) 3 bars later adding 2c's at 5358.00. So now have 3c's long. I exited those later 2c's @5362.00 for a 4pt gain. My initial contract was still in play. Finally, twelve bars later I exited my initial contract at 5369.50 for a 2.5 pt gain. As a scalper I simply do not like these sort of trades. They take too long and I miss other opportunities to scalp. I don't like watching too many trades at once. Focus is key in scalping. Nevertheless, I was in so I held but as you can see the trades took near 1.5 hours to play out. I don't like that when scalping.
After my initial entry a few bars later I widened the channel. A scalper has to do that too as long as the channel has not reversed to a bear channel or an obvious TR. At one point is was almost a TR. But remember in effect a channel IS a trading range..just a slanted TR.
In these last trades all long trades so entries are in green and exits in orange.
So today I was showing how with 1c channels can be traded if broad enough and volatility is enough. IN the last trade I did average down but it was the only trade today that I did that in. So, here you have it...that is how I trade channels. If you are a scalper you may wish to print these out ...study them...and practice doing it on a SIM.
Gotta go. Have fun trading!
Volpri
In summary 8 trades today counting the last averaged down trade as two trades over all.
Seven winners and 1 loser. That is close to an 87% win rate. As I have often said a scalper should "grab" profits and do their best to maintain a high win rate.
So:
1. Grab profits before they slip away because of the probing action of markets.
2. Maintain a high win rate
3. Always watch context; in this case from "the get go" a bull channel all session.
4. Use proper trading strategies for the larger context. In this case channel trading strategies.
5. Watch "how" price is made and not just the fact it did reach a certain point. Watch momentum to determine PT and even taking losses. Note how I just went ahead and took profits on that very last exit (2.5pts) because momentum just wasn't there to warrant holding for more.
6. Use wide enough SL's to give the trade a chance to work in your favor.
7. Exit with a loss immediately when PA behavior indicates it is probably better to do so instead of waiting for your initial SL to be hit. I did that on my one losing trade a good ways before any proper initial SL would have been hit.
8. Above all blame no one for your losses. Accept personal responsibility for whatever happens to your account during the session. It does no good to blame institutions, the fed, manipulation or anything else. It will cloud and poison your mind and ultimately affect your trading. It is a market rife with uncertainty and constant probing pressures bullish and bearish. You job is to read those pressures correctly and try to capitalize on them. If you are successful, your account will grow over the long haul.
9. If you are not successful then accept the fact that you are just not "good enough" yet. So, keep working at it but I strongly suggest just do so a SIM. When you can make it work consistently on a SIM then you have at least a 60% to 70% chance of making it work in a live real account if you can execute regardless of your emotions when trading money. If you cannot make it work on a SIM don't go to a real money account. It won't work and you will likely just bust your account and become demoralized. Just keep practicing on a SIM until you train yourself to execute as needed for each trade and until you have the techniques down to a "second nature" level where you don't have to talk yourself into entries or exits when live. You just do it! Let PA and your techniques do the talking to you.
10. Remember we traders operate in a fog. A sea of uncertainty. Learn to embrace uncertainty and see it as a challenge.
11. Don't forget to reward yourself occasionally and by all means send the wife on a shopping trip to Dillards and not some "el cheapo" clothing store. Remember "if momma ain't happy ain't nobody happy."
12. Enjoy trading. Have fun! Be passionate about it if possible. You have one life to live then you leave. Money cannot buy happiness but it has been known to cause a "smile or two."
NOTE: At least for some of the trades I managed to show a chart with my entries and indicate my SL beforehand then follow that with a chart showing what happened and my exit. That is extremely hard for me to do as while I am typing as the market can often does moves thus making things look like an after the fact chart. Most charts are posted after the fact (after entries and exits are all done.) This can happen because when scalping, followed by making comments, the durn trade can be over and done with before one can type their entry, comments, and a rationale. But to compensate for that today I show all the trades for the entire session, not just the winner but all trades taken and completed as indicated by my trading platform I am using for the session.
All these trades shown today were on a 5m chart. Some days I will trade a 1m chart. Seldom do I trade a 15m chart but occasionally will glance at one to compare it with PA on a 5m chart and to locate visually just where that 5m chart PA is taking place on the 15m chart. I have at times looked at a 30m or even 60m chart but by far find it unnecessary to do so when scalping.
Have a great weekend and arise bright and early on next trading day next week, enthused and invigorated, ready to trade!
Seven winners and 1 loser. That is close to an 87% win rate. As I have often said a scalper should "grab" profits and do their best to maintain a high win rate.
So:
1. Grab profits before they slip away because of the probing action of markets.
2. Maintain a high win rate
3. Always watch context; in this case from "the get go" a bull channel all session.
4. Use proper trading strategies for the larger context. In this case channel trading strategies.
5. Watch "how" price is made and not just the fact it did reach a certain point. Watch momentum to determine PT and even taking losses. Note how I just went ahead and took profits on that very last exit (2.5pts) because momentum just wasn't there to warrant holding for more.
6. Use wide enough SL's to give the trade a chance to work in your favor.
7. Exit with a loss immediately when PA behavior indicates it is probably better to do so instead of waiting for your initial SL to be hit. I did that on my one losing trade a good ways before any proper initial SL would have been hit.
8. Above all blame no one for your losses. Accept personal responsibility for whatever happens to your account during the session. It does no good to blame institutions, the fed, manipulation or anything else. It will cloud and poison your mind and ultimately affect your trading. It is a market rife with uncertainty and constant probing pressures bullish and bearish. You job is to read those pressures correctly and try to capitalize on them. If you are successful, your account will grow over the long haul.
9. If you are not successful then accept the fact that you are just not "good enough" yet. So, keep working at it but I strongly suggest just do so a SIM. When you can make it work consistently on a SIM then you have at least a 60% to 70% chance of making it work in a live real account if you can execute regardless of your emotions when trading money. If you cannot make it work on a SIM don't go to a real money account. It won't work and you will likely just bust your account and become demoralized. Just keep practicing on a SIM until you train yourself to execute as needed for each trade and until you have the techniques down to a "second nature" level where you don't have to talk yourself into entries or exits when live. You just do it! Let PA and your techniques do the talking to you.
10. Remember we traders operate in a fog. A sea of uncertainty. Learn to embrace uncertainty and see it as a challenge.
11. Don't forget to reward yourself occasionally and by all means send the wife on a shopping trip to Dillards and not some "el cheapo" clothing store. Remember "if momma ain't happy ain't nobody happy."
12. Enjoy trading. Have fun! Be passionate about it if possible. You have one life to live then you leave. Money cannot buy happiness but it has been known to cause a "smile or two."
NOTE: At least for some of the trades I managed to show a chart with my entries and indicate my SL beforehand then follow that with a chart showing what happened and my exit. That is extremely hard for me to do as while I am typing as the market can often does moves thus making things look like an after the fact chart. Most charts are posted after the fact (after entries and exits are all done.) This can happen because when scalping, followed by making comments, the durn trade can be over and done with before one can type their entry, comments, and a rationale. But to compensate for that today I show all the trades for the entire session, not just the winner but all trades taken and completed as indicated by my trading platform I am using for the session.
All these trades shown today were on a 5m chart. Some days I will trade a 1m chart. Seldom do I trade a 15m chart but occasionally will glance at one to compare it with PA on a 5m chart and to locate visually just where that 5m chart PA is taking place on the 15m chart. I have at times looked at a 30m or even 60m chart but by far find it unnecessary to do so when scalping.
Have a great weekend and arise bright and early on next trading day next week, enthused and invigorated, ready to trade!
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Discipline and patience
Seems very simple, yeah? Well, guess again!
Seems very simple, yeah? Well, guess again!
Why do traders find it difficult to make money?
Because it is a skill to be profitable as trader. You need a lot of screening time to be a good discretionary trader. And discretionary trading is where the big edge comes from and not from backtested systematic things. See this latest science study attached as proof.
Because it is a skill to be profitable as trader. You need a lot of screening time to be a good discretionary trader. And discretionary trading is where the big edge comes from and not from backtested systematic things. See this latest science study attached as proof.
Hey volpri. Appreciate and agree with your posts as always.
My thing is though, your above list won't do much for you without having a proven edge that has produced verified positive expectancy over time.
So I think a good question for someone with your experience level that seems to hold their own at this point would be:
What content would you direct to study or advice would you give to aspiring traders towards developing said edge? Because without that at the center I'm pretty certain the rest won't help.
Take care.
I know it depends and varies, but would you say in general, when you trade 1 contract without averaging down, that your risk / reward ratio is something like 2:1? Maybe even 3:1? Thanks in advance!
First let me say in RR I use the first R as the reward number and the second R as the risk number. Others TRADERS do the opposite. From your wording of the concept I am assuming you do the risk number first then the reward next?
So, read my numbers I quote below as reward to risk.
My initial RR is upside down in probably 90% of the trades, however, my ACTUAL RR after the trade is over is often 2:1, 4:1, even 10:1 or 12:1 on occasion. The way I calculate my actual RR is after I enter a trade how much did it go against me, plus 1 tick, before I exit with a profit. In other words, that is what actually happened. So, had I placed my initial SL at that point (i.e. the actual adverse movement against my position) then with the 1 tick added my SL would have been hit.
I use an initial PA SL that usually is upside down because I am a scalper of 1 to 8 points (small profits vs swinging) and my initial SL has to be based upon PA and volatility of the moment to give the trade room to work. I want that initial larger (usually larger) SL in there in case some event happens that cause the market to plunge or surge thus protecting my account against huge losses. In summary, the initial SL is usually upside down RR, and is used to give the trade room to work, and used to protect my account from catastrophic price action.
When I do get a very good ACTUAL reward to risk say like 8:1, 10:1 or more it is usually because I got in very early on a BO, just before it took off, thus my position experienced very little adverse movement. Sometimes just a tick or two adverse movement. Or it can be because my PA reading was spot on for that particular trade. I have days where my entries are not so good as my read is off so I too am compensating by using the usually larger PA/volatility SL and that gives the trade room to work.
For example: in trading Trading Ranges I will start shorting in the top 1/3 WITHOUT necessarily waiting for any particular trading signal bar. My initial will be a wats outside of the top of the range. How far outside is a product of the present volatility. And I will scale in or add to my position if price moves against me after my first entry. If my PA read was very accurate it may head south in the range right after my entry and with very little adverse movement before going in my favor. If not, it may go against my initial position and I will add to it. Why! Because I know most BO’s of a TR fail so I fade the BO even if that means averaging down. And I use a wide enough stoploss.
But depending on “how” price is doing “what” it is doing when in the top 1/3 of the TR I may look for a signal bar and may not take the first signal but wait for a second signal to make my short entry. Hopefully I am not being confusing here? Often I wait for no signal bar but just start shorting in the top 1/3 or I may wait for a signal bar if the PA at the moment tells me it is better to wait. However, that said I more often do the former as opposed to the latter.
In BO’s if I get in later then my necessity my initial SL is bigger because it has to be at the bottom of the BO (if a bull BO), opposite if a bear BO. So depending on “when” I get in on the BO it can be a very large INITIAL RISK but often ends up being a very small ACTUAL RISK.
I have gone the long way around to answer your question so to answer it directly: in your wording of RR (i.e. risk to reward) yes often my INITIAL risk will be 2:1, 3:1, 4:1: even 6:1 depending on where I manage to get in on the move. That is , I may be risking initially (emphasis on initially) twice the amount or three times the amount to my profit target. But My PT is hazy. 1 to 8 points (not set amount) when I take my profit depends mostly on PA and momentum once I am in the money.
In short, I rarely consider any specific RR. They are both contingent of PA and volatility. I just place them (SL) and take them (PT) as I see what price HAS done (for SL placement and “how” price is acting for profit taking be it 1 point or 8 points or in between. PA and volatility dictate to me my SL placement and my PT point. I never use a set RR as I cannot dictate to the market what it can or should do. I know traders want the good math. Good reward to risk so they will backtest trying to find good entries and exits that render good math. They will work for a while then no longer work. Then they optimize which may cause things to work a little bit longer, then optimization stops working. The final step is they then abandon the strategy.
As a discretionary trader my approach to the markets is different. I let the market dictate to me or “show” me where I should place my SL and when I best grab my profit. I no longer approach it with a set RR or PT. There are 81 5m bars in the ES session. Movement takes place on every bar. That means money can be made or lost on most any bar. But some are more conducive than others! And institutions move the markets. Their pressures on the market for price patterns…..triangles…flags…trading ranges…channels…etc. These patterns existed in charts 80 years ago and they are still here in todays charts even though 70% or more of the trading in done by computers. That just tells me people write the programs and the programs behave they way the people conceptualize. It may be computers taking the trades but people designed the computer programs!
So there you go! I just made a short story long!