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KEY RECENT POSTS
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- September 8 2010 Word On Conviction
- September 2 2010 Trade and Performance Review
- September 1 2010 Midday Review Squeeze
- August 30 2010 Trade Review Premise Over Pattern
- August 11 2010 Overlay and Trades Detailed Post
- July 29 2010 Overlay and Trades
- My Current Trading PlanTrading Plan (Revised)
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You need to have a low before you can make a new high. You need to hit a new low in life before you can be the trader you want to be.
Note To Myself:
The first move and premise is always going to be the most correct and natural. Do not put yourself into a defensive position later in sequence because you cannot commit to the aggressive nature of a proper execution.
The first move and premise is always going to be the most correct and natural. Do not put yourself into a defensive position later in sequence because you cannot commit to the aggressive nature of a proper execution.
When you introduce a stop and a target/break even mechanism into a setup, the probability is that you lose or go break even in either direction most of the time unless you make a discretionary decision.
In trading, randomness almost always leads to losses and losses can lead to more randomness.
Blog Archive
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2010
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January
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- January 29 2010 Overlay, Trades, and VIDEO Commentary
- January 29 2010 ES Prep Posted
- January 28 2010 Overlay, Trades, and VIDEO Commentary
- January 28 2010 ES Prep Posted
- January 27 2010 Prep Overlay
- January 27 2010 ES Prep Posted
- January 26 2010 Overlay, Trades, and VIDEO Commentary
- January 26 2010 ES Prep Posted
- January 25 2010 Overlay, Trades, and Commentary
- January 25 2010 ES Prep Posted
- January 22 2010 Overlay and Commentary
- January 22 2010 ES Prep Posted
- January 21 2010 Overlay, Trades, and VIDEO Commentary
- January 21 2010 ES Prep Posted
- January 20 2010 Overlay, Trades, and VIDEO Commentary
- January 20 2010 ES Prep Posted
- January 19 2010 Overlay and Light Cmmentary
- January 19 2010 ES Prep Posted
- January 15 2010 Overlay and Commentary
- January 15 2010 ES Prep Posted
- January 14 2010 Overlay and VIDEO Commentary
- January 14 2010 ES Prep Posted
- January 13 2010 Overlay and VIDEO Commentary
- January 13 2010 ES Prep Posted
- January 11 2010 ES Prep Posted
- January 8 2010 Overlay and Commentary
- January 8 2010 ES Prep Posted
- January 7 Overlay, Trades, and VIDEO Commentary
- January 7 2010 ES Prep Posted
- January 6 2010 Overlay, Trades, and Commentary
- Good Comment This Morning
- Janaury 6 2010 ES Prep Posted
- January 5 2010 Overlay, Trades, and VIDEO Commentary
- January 5 2010 ES Prep Posted
- Janauary 4 2010 Overlay, Trades, and VIDEO Commentary
- January 4 2010 ES Prep Posted
- Some Thoughts Ahead Of A Return To Action
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January
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On Monday we had a trend day up. (Long term money coming into the market from the End of Year/Month Mutual Fund contributions) You tried 2 shorts at the top because their risk reward was good. Both failed.
ReplyDeleteNow you have Tuesday which is likely to be a narrow range day (easy to back test this theory after trend days) and you get 2 break even trades although you had 4 plus points in your favor.
Question: Why do you not consider changing your money management rules to take into account the likelihood that a narrow range day with responsive buying/selling most likely is unfolding and reduce your point target - or trade multiple contracts on these days and exit half your position?
Good morning. That is a good question.
ReplyDeleteOn Monday, the trade I tried to hit was a long at the open and I screwed up the entry and mistakenly went short by middle mouse clicking the wrong side of my DOM.
The shorts at the highs were just probing bets.
The morning after trend range is a higher probability bet in most cases. I believed the market would breakout yesterday however.
Playing the range is more probable which I have acknowledged. this is more of a scalping approach.
The problem yesterday is there was no way I would have faded the move up and taken all that heat.
I get the concept of super high probability and only getting clobbered by a squeeze occasionally. I do not know if it is for me.
I read about this working for other traders but I have yet to see any execution charts of live trades.
I do not think I could be consistently profitable risking 3-6 points or more and taking 1-2 points profits.
This can be done more efficiently by managing risk by size and not using stops.
I trade small size and my edge is created by letting my winners run and having small losses.
This is the most efficient way I have to be profitable with small size. As I increase contracts I will take a hybrid approach.
Regarding my exit on the first trade yesterday, I had no way of knowing that the move would stop at 4.5 points open equity.
My only exit opportunity was to take a 2 point profit. It was not worth it to take 2 points and risk missing a potential 10 point run.
There are a lot of ways to trade the stucture that can work.
This topic is one of the most difficult.