Working on Consistent Profitability

[tlow]

Quote from Bolimomo:

Same question that I posted to Matcha: Today...

$TRIN = 0.2-0.3 most of the day
Advancers to Decliners Ratio - 6 to 1...
The right mindset should be trying to look for a "bearish" moment to long.

Maybe I just dont have the experience, but I do watch the TRIN and from what I have seen, (nothing really to back this up other than whats in my head), it seems when the TRIN gets way off to one range or another ie 0.2 or greater than 2.3ish...it seems it likes to come back a bit off those ends.

I guess my other question would be...ya there is a 5-6:1 ratio of advancers:decliners, but that is over the day....we were so range bound after the early morning move, does the TRIN still hold water? In my somewhat uneducated/inexperienced opinion , today can be viewed as a sideways trending day and like you said the TRIN didnt move either. If the set-up is there, and the risk:reward ratio looks pretty good, is it wrong to against the TRIN?

Also, I don't want you to think I was thinking short all day...I wrote down a couple places where I could go long off the bottom of the channel but didn't feel as confident as in the trades. The best one coming around 9:30ish. Maybe I didnt' feel comfortable with the support established at 1075...who knows...like I said before, wasn't concentrating all that great today.

I definitely would understand your point if the market had made a bunch HH's with HL's all day, but it made one big jump then totally sideways.

Thoughts?

 

[tlow]

Bol, or anyone else:

I just read your comments in Matcha's journal:

"On a day like this... (Dow +200 to almost 300, bullish from the get go)...

Forget about any idea to short. Just FORGET IT.

The right mindset should be trying to look for a "bearish" moment to long. Shorts are not going anywhere.

Tomorrow too. If there is a moment near the opening where Dow -50... that's a good point to get long. Typically."

So are you bias going into the market tomorrow? I thought that was a big no-no? If Im understanding PA correctly, take what the market gives you, no?

Man, Im asking a lot of questions..still need to learn a lot

 

[GatlingGun]

Quote from volente_00:

I think the market answered your question.

Earlier today, you said an experienced trader does not go all in on one day trade... Help me understand your criteria for the amount you risk on one trade when you are really sure...

Cheers,
\gg

 

[Blotto]

Quote from volente_00:


I will give you a simple rule that will help you over the long run.


If cash is gapped up then never enter a long with the gap underneath. If the gap fills that day then you can take a long.

I can show you six times this year when following your rule would have caused a trader to miss out on an easy 20 points.

Don't try and box the market in. If it were this simple, there would be computer programs which could trade profitably in any instrument, in any timeframe, and their owners would soon suck all the liquidity from the markets.


tlow....if you are trading live may I suggest you stop until you are consistently profitable on paper. I've seen a few of your charts and you buy in the areas I sell and sell in the areas I buy....not good.

I'll see if I have time to send you some advice later this week by private route.

 

[NoDoji]

Quote from GatlingGun:

Earlier today, you said an experienced trader does not go all in on one day trade... Help me understand your criteria for the amount you risk on one trade when you are really sure...

Cheers,
\gg

You are NEVER "really sure".

If there's one thing to learn NOW, to believe with all your heart and make it part of your very core as a trader, it's that you are NEVER really sure.

On any given trade, ANYTHING can happen.

What if you are "all in" because there has never been a better setup in your entire life and news hits the wire that causes the market to gap against you and keep on running against you and you have no stop in place? That is NOT the time to be making a decision on how to handle a bad trade.

 

[tlow]

Quote from Blotto:

I can show you six times this year when following your rule would have caused a trader to miss out on an easy 20 points.

Don't try and box the market in. If it were this simple, there would be computer programs which could trade profitably in any instrument, in any timeframe, and their owners would soon suck all the liquidity from the markets.


tlow....if you are trading live may I suggest you stop until you are consistently profitable on paper. I've seen a few of your charts and you buy in the areas I sell and sell in the areas I buy....not good.

I'll see if I have time to send you some advice later this week by private route.

Blotto,

Ya I would love for you to take a look and mark up my charts...and yes, I am trading for real. Becoming profitable on paper...ya been down that route as I explained somewhere earlier...Ive tried somewhat hard to take paper trading seriously but I don't. Plus, I dont get all tied up in the emotions of trading while its on paper.

I've always been a lets get onto the real thing type person, whether its single water ski, surfing, job, chess, riding a bike, whatever. I take the learning much more serious when I do it for real.

Best analogy I can give for me is when I was learning how to surf...when the waves were 10ft+, my ability is at about 5 feet, and I know I shouldnt be out there because I will get my head crushed...went out anyway...learned real fast...but did take some major ones on the head

I know I am making mistakes and I know, probably most, of my entries/exits aren't good, but I need to learn for real. Plus I am enjoying the ride anyway...not getting off till I start doing stupid stuff that I don't correct

 

[Picaso]

Quote from NoDoji:

Ammo provided a great example this morning of how a professional manages an average down trade:

09-01-10 05:50 AM

sh 60.75 ,offer 62,63,64 going into employment #s in 25 minutes

09-01-10 07:59 AM

avg 62.5 out 68.75

All that said, fading a strong run can work very well ...until it doesn't.

I'm not sure I understand you here. Wasn't this a losing trade? Or are you using it as an example that although Ammo averages down he is also able to realize when averaging is not going to help him and simply cuts his losses?

 

[tlow]

Quote from Blotto:

I can guarantee that many traders did this and did well, as they knew the outcome in advance.

Sorry i missed this post .... not to be a smart ass or anything, but seriously, what do you mean by knew the outcome in advance?

 

[pspr]

NoDoji,

When are you going to write that trading course for those of us still struggling to put it together?

Oh, and can you buy Xspurt's "World's Best Trading System" when he retires next year and add that as a supplement?

http://www.elitetrader.com/vb/showthread.php?s=&threadid=205668&highlight=retire

Thanks. You're a Doll.

Quote from NoDoji:

You are NEVER "really sure".

If there's one thing to learn NOW, to believe with all your heart and make it part of your very core as a trader, it's that you are NEVER really sure.

On any given trade, ANYTHING can happen.

What if you are "all in" because there has never been a better setup in your entire life and news hits the wire that causes the market to gap against you and keep on running against you and you have no stop in place? That is NOT the time to be making a decision on how to handle a bad trade.

 

[NoDoji]

Quote from Picaso:

I'm not sure I understand you here. Wasn't this a losing trade? Or are you using it as an example that although Ammo averages down he is also able to realize when averaging is not going to help him and simply cuts his losses?

My point was that he averages down, but has a plan to exit when the price action voids the original setup. He takes the loss and re-evaluates.

"Wasn't this a losing trade?" Yes

Was Ammo a winning trader here? Triple yes.

Until you've had the experience where you assume price will do something and doesn't, and it keeps on not doing what you knew it would do and the more it runs against you the more it seems like now it HAS to turn around and it would be silly to take a loss now because it's about to turn around, and every time it turns around a little you feel like finally it's going to do what you knew it was going to do in the first place, but then it picks up and runs even further against you and then you think now it REALLY has to turn around and you'd look like the total fool for taking a loss now at the worst possible price, and then it runs even further against you until finally reaches the point where you are in real trouble and are forced to take the loss, until you've been through that, you have NO idea how big a winner a losing trade can be.