Working on Consistent Profitability

[NoDoji]

Quote from tlow:

1.) Still really struggling with taking profits when there is a 15-20 tick move. I think this may come down to identifying chop/slow moving markets. There were 2 trades today that wound up a t B/E's and the more appropriate thing would've been to get out for a 10-12 tick gain, instead I just watch the thing like a deer in headlights run back to my stop.

In just 2 days of live trading, the moves to B/E I think are already coming out as a glaring flaw in my trading. Im going to stick with the moves to B/E for the time being, BUT I think as I do a better job taking set-ups and not forcing my way into market, the moves to B/E will stop.

You should make a decision whether you are scalping for 10-15 tick gains or whether you are trading off a 3-min or 5-min chart for price swings. If you're trading around the 3/5-min time frame for price swings the only reason to take a profit less than 20 ticks is if a valid stop-and-reverse setup appears (which can happen; I had a couple back-to-back today before finally catching a 30-tick wave).

Moving stops to b/e too quickly will suck the life out of your potential profitability. Nearly every time I've cheated and moved my stop after 7 or 8 or 9 ticks, I've been stopped out of a good trade. Sometimes even 10 ticks is too soon. I now sometimes just leave my stop until target zone is reached. I take a few more losses, but boy do I catch the runners now.

 

[tlow]

Quote from NoDoji:

You should make a decision whether you are scalping for 10-15 tick gains or whether you are trading off a 3-min or 5-min chart for price swings. If you're trading around the 3/5-min time frame for price swings the only reason to take a profit less than 20 ticks is if a valid stop-and-reverse setup appears (which can happen; I had a couple back-to-back today before finally catching a 30-tick wave).

Moving stops to b/e too quickly will suck the life out of your potential profitability. Nearly every time I've cheated and moved my stop after 7 or 8 or 9 ticks, I've been stopped out of a good trade. Sometimes even 10 ticks is too soon. I now sometimes just leave my stop until target zone is reached. I take a few more losses, but boy do I catch the runners now.

Ya I think I need to recognize those "stop and reverse" or change of signal type trades. And/Or maybe a trade thats just not going anywhere. one of the trades today I was short around 9:00PST at the 85.51 level and then it made the break for .35 but then just hung in the .40ish range for like 10 minutes...I had no idea what to do...
I was going to get out on the 9:25 reversal bar on 5m but that would've been like a 3 tick profit so i figured just hang on at my b/e but only to get stopped out a few minutes later.

Looking back I feel like I should've taken my 10 ticks and walked away and waited for the chop to dissipate and/or the action to pick and wait for better set-ups.

Its definitely a tough thing...I want to catch those 30+ tick runners but then on the flip side making 10-15 ticks 2-3 times per day vs a b/e will add up quick.

 

[NoDoji]

Quote from tlow:

Ya I think I need to recognize those "stop and reverse" or change of signal type trades. And/Or maybe a trade thats just not going anywhere. one of the trades today I was short around 9:00PST at the 85.51 level and then it made the break for .35 but then just hung in the .40ish range for like 10 minutes...I had no idea what to do...
I was going to get out on the 9:25 reversal bar on 5m but that would've been like a 3 tick profit so i figured just hang on at my b/e but only to get stopped out a few minutes later.

Looking back I feel like I should've taken my 10 ticks and walked away and waited for the chop to dissipate and/or the action to pick and wait for better set-ups.

Its definitely a tough thing...I want to catch those 30+ tick runners but then on the flip side making 10-15 ticks 2-3 times per day vs a b/e will add up quick.

85.51 was great short entry and the expected move was to the lower channel line, which would've been a breakout of the LOD (and MAJOR support, which would be expected to take price straight to 84.67). So you either leave a stop above previous R (85.79) or you scratch the trade and re-evaluate the action. What technical reason was there for taking a 10-15 tick profit, other than after the fact, when you know what happened? An absolute minimum target for me on that trade would've been a test of 85.29. If it didn't get there, then I watch my 16 ticks turn into 1 tick and I either try a long or wait for another short setup. But if it did get there and broke and followed through the way it does more often than not, you're looking at a possible 100-ticker. For me personally, it's very stressful to take a 10- or 15-tick profit out of a trade that then moves a full point in my favor, but it's absolutely meaningless to stop out b/e if a minimum profit target doesn't materialize.

There's nothing wrong with scalping for 10-15 ticks, but I doubt you'll ever be satisfied until you choose which method you're going to trade. There's no way to know in advance whether a trade will get to its expected target zone or if it will fail to do so.

Try it for a few days, just set hard targets at 10 or 15 ticks and find out how well it works for you.

 

[tlow]

I thought that price had to break thru the .27-.39 levels with some momentum to really make a good push downwards. I figured there just wasn't enough momentum in the market at the time...and then a last support zone around .10ish levels before it really nose dived.

Anyway, I think I may try leaving my stop in place for a few days. I was thinking about how you mentioned mentality of missing a big move...I think Im the same way...Getting stopped out 2-3 extra times sucks but one nice move (vs a b/e) and those stopouts are wiped away.

 

[tlow]

Kinda a so-so day...I felt like I really didn't trade all that great. Im putting a list together to work on my major weaknesses/flaws in my trading. I think the flaws lead to poor trades and have the ability to compound themselves quickly.

So Far in no particular order...

1.) As stated yesterday, working on taking 15-20 ticks of profit
2.) Moving the stop to B/E vs. not
3.) Missing fills...still dont have a great system in place for this...happened twice today where I had a limit/stop order in place and it ran up exactly to my entry point but I didn't get filled...this definitely leads to more problems, especially if the trade goes my way HAD I been filled....start finding ways to "enter the market" I need a better plan for this.


There are some more issues, but I feel these are the biggies that lead to more errors. I think from an emotional side, "missing fills" is my biggest problem...really frustrates me b/c I feel like I had the trade set-up ALMOST perfect and I get that close on teh entry the trade most likely goes where I want it to further compounding the notion of "oh man, I would have X amount of ticks right now had I gotten filled."

Anyway, on to today...I had a couple B/E trades in the morning that again cost me. My initial short trade was fine and then got stopped out...looked for a reentry...reentered fine...only to be stopped out for a b/e again. I think I may just give NoDs advice a try and see how it goes not moving the stops for a couple of days and see how comfortable I am with it.

next, I was able to catch a fair chunk of the move down, but I was set-up ready to go in much earlier and didn't get filled...I had sent a limit sell order in at 85.41 which it hit around 8:13...actually this is a bit curious, my chart is showing 85.42 as the high tick around that time...hmmm, Im surprised this didn't get filled.

Anyway, obviously, would've been nice to ride that pony all the way down...but I looked for other entry points only to get a full stop out to the tick (so frustrating) when it made the first break at .92 level...i did however, reenter again at 84.73 to catch some of the ride.

My other missed fill trade was for the double top around 9:50. Again, limit short at 84.41...went to the tick but didn't get filled...again reenter at the LOD break at .11 only to get stopped out.

Finished the day up with up a couple tries at fading the move, real low risk, tight stop stuff...but nothing worked, miss id the support levels just a bit and got stopped out

Overall I give the day a C...with all that movement, I expect myself to do better and trade better.

Stats on the day:

Total Trades: 10
Winners: 3
Losers: 5
B/E: 2
Avg. Win: 27.67
Avg. Loss: -8.2
Total Ticks: 43
Total Win Rate: 30%

I also thought I would start throwing up my trades if you guys are curious, want to criticize or critique or any other "C" word.

 

[bigsnack]

Tlow,

I've been reading regularly (as you know). Today I finally broke down and opened a CL chart to SIM on.

I think I am in love.....

The ES seemed like an aging turtle after taking a crack at this thing for an hour or so.

 

[tlow]

Its pretty fun to trade...Im not going to lie..

If you go live...I would be curious to see how ToS handles your fills. I really didn't want to deal with the higher commissions AND potential for bad fills/slippage

I think an indirect thanks goes to NoDoji as she was the one that really pointed me and told me to give it a hard look.

 

[bigsnack]

All my order placement goes through Infinity, so unfortunately I won't be able to comment on the TOS fills.

I'm not going to get too cocky right out of the gate, as that will surely lead to a beatdown of epic proportions I'm sure.

My r:r increases from 2:1 on the ES to almost 4.5:1 on the CL. If you don't mind me asking, what is your initial stop? -6 seemed a tad too tight for me, but -8 kept me in every winning SIM trade I took.

Cheers to you and NoD! I might actually be swayed....

 

[tlow]

Quote from bigsnack:

All my order placement goes through Infinity, so unfortunately I won't be able to comment on the TOS fills.

I'm not going to get too cocky right out of the gate, as that will surely lead to a beatdown of epic proportions I'm sure.

My r:r increases from 2:1 on the ES to almost 4.5:1 on the CL. If you don't mind me asking, what is your initial stop? -6 seemed a tad too tight for me, but -8 kept me in every winning SIM trade I took.

Cheers to you and NoD! I might actually be swayed....

I may not be the best person to ask...maybe Nod or another seasoned trader can chime in...

but for me, i started out with a max stop of 17 ticks...i have moved that max to 15, however, the majority of my stops hover in the 8-12 range....if it gets over 12...the entry usually isnt all that great. Anything under 8, it usually a fade trade thats super low risk and/or a place where the is lots of s/r and a stop out means it going to run the other way, in which case, I usually flip.

The CL definitely holds s/r levels pretty well so you may not need a whole lot of wiggle room if your entry is good.

 

[NoDoji]

Quote from tlow:

3.) Missing fills...still dont have a great system in place for this...happened twice today where I had a limit/stop order in place and it ran up exactly to my entry point but I didn't get filled...this definitely leads to more problems, especially if the trade goes my way HAD I been filled....start finding ways to "enter the market" I need a better plan for this.

Missing fills is easy to correct, place your orders a few ticks inside. Sometimes you're right on the money and just don't get filled. In that case you have to decide if it's worth giving up a few ticks to get in right away (with-trend usually is; counter-trend I won't chase).

The easiest way to always get in is to use stop orders to enter in the direction of price movement. If a stop order doesn't get filled it means price never went your way far enough to prove the trade worthy of entry at that point in time.

Quote from bigsnack:

If you don't mind me asking, what is your initial stop? -6 seemed a tad too tight for me, but -8 kept me in every winning SIM trade I took.

If you get into a trade with limit orders at specific levels, sometimes stops can be very small (I had a trade I entered that way yesterday with a 3-tick stop). Most of my trades triggered by way of stop orders have a 12-15 tick stop.

Quote from tlow:

if it gets over 12...the entry usually isnt all that great.

Many times my with-trend entries have non-survivable stops (the S/R level outside which the stop should be placed is greater than my 15-tick maximum). I will trade these anyway, because the price action is so strong in my favor, that's why the S/R level is farther away. The entry is, IMHO, really great; it means I'm trading a strong move in the direction of the move. These are often my most profitable trades.

The more trading experience you get, the more you'll realize that trying to pick perfect top/bottom or exact pivot point entries not only keeps you out of great trades (missing fills), it can get you in trouble because you're assuming price will do a certain thing instead of letting price prove it's actually doing that thing.