Claudia123
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Risking 2 to make 1 is fine but not best of advice for a 'newbie' I would suggest.
Newbie dilemma
- Thread starter dimsdaletraders
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Risking 2 to make 1 is fine but not best of advice for a 'newbie' I would suggest.
dimsdaletraders
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next newbie dilemma. Do I get involved in what could just end up as a pointless flaming session? *thinks for a nanosecond* nnaaaaaaaahhh! LOL
okay.
Alan: Thanks very much for the advice about trading stocks on a different index. It’s yet another thing I’ve now listed to look at in more detail this weekend (for which, read: “the bleak wasteland when the markets are closed”). I’ve never even heard of the emini Russell 2000, so that will be my first task. “If you want to trade a market with good price action and fast profit potential” sounds to me like something I want to be at least looking at.
Jon: I was a bit confused at first by your posts, thought maybe I was missing something. So I’m now devouring your “swing and positional trading threads”, and lords! I’m up to maybe page 20, and I think I’ve learned more in an hour than in the last six weeks. I’ve had to pause to eat, but they’re bookmarked. I’d love to talk more. I can’t explain why, but this kind of trading just seemed to touch a chord in the way that Forex et al (so far) hasn’t, and IMO, if you want it from the ABC, those threads are gold.
ceydababy and Dommo: your input here is valuable too IMO, when you are as new as I am, if only as a reminder that you are right, there ARE no easy answers, and that no decent trader worth his salt is going to hand out his edge on a BB website...or ANY website. I wasn’t asking them to, mind you, which I think (hope?) they recognised, hence the helpful replies. But I have to take issue with you on the idea that there is nothing valuable to be gained from T2W. Gods, if we baby traders read nothing more than the stickies for our own FOI we’d learn more than most so-called trainers offer for a four-figure price-tag. And hell, if I can’t tell the difference yet between genuinely helpful advice, no matter how varied, and “Charlie large-spuds” making his noises, then I’ve no business trading at all. Black Swan and Claudia, in particular, have been amazing. They have no intention of telling me “how they do it”, and I wouldn’t dream of asking them to. They, and the other responders, have just offered their input, their experience, and their time. For free. Nuff said.
Virtuos0: as far as “playing to my stengths” is concerned, I’m intrigued, and it’s something I think I’m going to lay out in writing. Sadly, my editorial knowledge is more to do with understanding the use of the Oxford comma and how to write a snappy headline, but you’re right. Priceless macroeconomic information for almost every country in the world slides by under my nose while I wrestle with whether they use the honorific “Mr” in the Far East. But it got me thinking about my strengths, and what kind of trader I am. I can’t credit this to its author, because although I read every word at the time, I now can’t find it. But there’s a thread on this site somewhere that talks about the difference between fear-based traders and greed-based traders. I recognised myself as an FBT in every word. So I’m going to do as the thread (and you) advise, and write down what I think are the strengths and weaknesses of being that kind of trader *adds yet another note to my “trading things to do this weekend” list* (btw, my husband’s business may have gone under after 20-odd years, but I’d still give you 100:1 that he could find you the best pension deal in the market *grins*)
If I’ve missed anyone, I’ll be back. Right now, I’m celebrating my first “epiphany”. I went short last Friday on a stock that has given me nine pips, and I’m celebrating. But I’m not celebrating the “win” (hell, with my lil "learning" pot, I spend more than that on a takeaway pizza). I’m celebrating the fact that for the first time since I started trading, seven weeks or so ago, I have run a trade that had a plan from start to finish. I went in at my predetermined point, my stoplosses were properly set, and my exit point had a pre-determined strategy that worked. I think I’d have been as happy if I’d ended up in a loss. Because the trade was RIGHT. It was elegant, neat, and *I* was in control from entry to exit. EUREKA!
(Dam*it, wish I was getting paid by the word, I wouldn’t need to trade *g*)
Hugs to all, and keep on truckin!
Tess
okay.
Alan: Thanks very much for the advice about trading stocks on a different index. It’s yet another thing I’ve now listed to look at in more detail this weekend (for which, read: “the bleak wasteland when the markets are closed”). I’ve never even heard of the emini Russell 2000, so that will be my first task. “If you want to trade a market with good price action and fast profit potential” sounds to me like something I want to be at least looking at.
Jon: I was a bit confused at first by your posts, thought maybe I was missing something. So I’m now devouring your “swing and positional trading threads”, and lords! I’m up to maybe page 20, and I think I’ve learned more in an hour than in the last six weeks. I’ve had to pause to eat, but they’re bookmarked. I’d love to talk more. I can’t explain why, but this kind of trading just seemed to touch a chord in the way that Forex et al (so far) hasn’t, and IMO, if you want it from the ABC, those threads are gold.
ceydababy and Dommo: your input here is valuable too IMO, when you are as new as I am, if only as a reminder that you are right, there ARE no easy answers, and that no decent trader worth his salt is going to hand out his edge on a BB website...or ANY website. I wasn’t asking them to, mind you, which I think (hope?) they recognised, hence the helpful replies. But I have to take issue with you on the idea that there is nothing valuable to be gained from T2W. Gods, if we baby traders read nothing more than the stickies for our own FOI we’d learn more than most so-called trainers offer for a four-figure price-tag. And hell, if I can’t tell the difference yet between genuinely helpful advice, no matter how varied, and “Charlie large-spuds” making his noises, then I’ve no business trading at all. Black Swan and Claudia, in particular, have been amazing. They have no intention of telling me “how they do it”, and I wouldn’t dream of asking them to. They, and the other responders, have just offered their input, their experience, and their time. For free. Nuff said.
Virtuos0: as far as “playing to my stengths” is concerned, I’m intrigued, and it’s something I think I’m going to lay out in writing. Sadly, my editorial knowledge is more to do with understanding the use of the Oxford comma and how to write a snappy headline, but you’re right. Priceless macroeconomic information for almost every country in the world slides by under my nose while I wrestle with whether they use the honorific “Mr” in the Far East. But it got me thinking about my strengths, and what kind of trader I am. I can’t credit this to its author, because although I read every word at the time, I now can’t find it. But there’s a thread on this site somewhere that talks about the difference between fear-based traders and greed-based traders. I recognised myself as an FBT in every word. So I’m going to do as the thread (and you) advise, and write down what I think are the strengths and weaknesses of being that kind of trader *adds yet another note to my “trading things to do this weekend” list* (btw, my husband’s business may have gone under after 20-odd years, but I’d still give you 100:1 that he could find you the best pension deal in the market *grins*)
If I’ve missed anyone, I’ll be back. Right now, I’m celebrating my first “epiphany”. I went short last Friday on a stock that has given me nine pips, and I’m celebrating. But I’m not celebrating the “win” (hell, with my lil "learning" pot, I spend more than that on a takeaway pizza). I’m celebrating the fact that for the first time since I started trading, seven weeks or so ago, I have run a trade that had a plan from start to finish. I went in at my predetermined point, my stoplosses were properly set, and my exit point had a pre-determined strategy that worked. I think I’d have been as happy if I’d ended up in a loss. Because the trade was RIGHT. It was elegant, neat, and *I* was in control from entry to exit. EUREKA!
(Dam*it, wish I was getting paid by the word, I wouldn’t need to trade *g*)
Hugs to all, and keep on truckin!
Tess
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alan5616
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Hi Viruuos0,
I'm rather puzzled by some of your comments. How can "letting profits run" keep you in a bad trade? Surely, the fact that you've made sufficient profit to let it run makes that a good trade, doesn't it?
The market is always where it's supposed to be and, if you're on the right side of the current market belief structure, then that is a good trade.
Seriously the best way to learn is to lose money. It's gonna happen I don't care what advice you take from here, you WILL LOSE.
There's nothing like burning through pound notes to sharpen the mind and your first point of call will be how to stop losing forget making cash in the first instance.
If you've made any money up to this point, with the greatest of respect you've probably been a bit lucky.
You'd probably learn more about trading and definitley about yourself by loading £5k in to a spreadbet account rather than paying some guru to "teach" you.
All tihs talk of risk/reward and running profits are probably a bit premature.
PS.....Just read your post. Not being negative but with a weekend course under your belt and a few weeks trading I don't know if you could tell who was faking it and who was actually doing it. I refer to your comment about sussing the "charlie large spuds"
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B
Black Swan
dimsdaletraders
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heya again ceydababy.
Yup, well can't argue with that. Mind, I didn't have 5k spare, and in any case only wanted to risk 1k while I was in my apprenticeship, but I've been trading with "real pound notes" since day 1. And yeah, of COURSE I've lost money. At one point I was almost 9% down on my overall a/c, and I don't for a second imagine it will be the last time, even with a 1% per trade limit.
So far, in six weeks trading, I've had 19 trades that hit my entry point and activated (I'm pretty cautious *g*). Of those, 12 made a loss, six made a profit, and one is still live. Of the losses, I look back now and see that most were just "stupidity tax". I started trading October 26th, and my journal for those early trades says things like:
"Nov 6th: shouldn't have been in this at all; stupidity tax! I messed up the order, rushing to get it on in the morning after a 'traders' tip'. GET A GRIP!"
and
Nov 12th: Ouch. Stopped out at 434.95, after the third "test bar" in less than a week. Okay, two were post-entry, but still. LESSON: stay away from stocks with test bars until you understand them."
and
"Nov 19th: Shouldn't have been in this, stupidity tax! not enough daily volume, therefore too volatile, and got caught in the pre-9.30 playground. STICK TO THE RULES!"
I could go on, but I won't. Point is...do you really think I decided to learn to trade and thought I wouldn't lose, at the start? I wouldn't try to learn to play marbles for money without expecting to lose, until I knew what I was doing.
But nonetheless, if your motives for the warning are as good as I'm giving you credit for, then you still have my thanks. Because it never hurts to get the reminder!
keep on truckin
Tess
EDIT: for ceydababy. fair point. But "Charlie large-spudses" aren't confined to the trading world, and I've learned to spot them pretty fast in the big bad wide world. I'm just hoping that's one bit of knowledge that IS transferable! *g* Seriously tho, I'm reading all the advice, and appreciating it, from everyone.
cheers
Tess
Yup, well can't argue with that. Mind, I didn't have 5k spare, and in any case only wanted to risk 1k while I was in my apprenticeship, but I've been trading with "real pound notes" since day 1. And yeah, of COURSE I've lost money. At one point I was almost 9% down on my overall a/c, and I don't for a second imagine it will be the last time, even with a 1% per trade limit.
So far, in six weeks trading, I've had 19 trades that hit my entry point and activated (I'm pretty cautious *g*). Of those, 12 made a loss, six made a profit, and one is still live. Of the losses, I look back now and see that most were just "stupidity tax". I started trading October 26th, and my journal for those early trades says things like:
"Nov 6th: shouldn't have been in this at all; stupidity tax! I messed up the order, rushing to get it on in the morning after a 'traders' tip'. GET A GRIP!"
and
Nov 12th: Ouch. Stopped out at 434.95, after the third "test bar" in less than a week. Okay, two were post-entry, but still. LESSON: stay away from stocks with test bars until you understand them."
and
"Nov 19th: Shouldn't have been in this, stupidity tax! not enough daily volume, therefore too volatile, and got caught in the pre-9.30 playground. STICK TO THE RULES!"
I could go on, but I won't. Point is...do you really think I decided to learn to trade and thought I wouldn't lose, at the start? I wouldn't try to learn to play marbles for money without expecting to lose, until I knew what I was doing.
But nonetheless, if your motives for the warning are as good as I'm giving you credit for, then you still have my thanks. Because it never hurts to get the reminder!
keep on truckin
Tess
EDIT: for ceydababy. fair point. But "Charlie large-spudses" aren't confined to the trading world, and I've learned to spot them pretty fast in the big bad wide world. I'm just hoping that's one bit of knowledge that IS transferable! *g* Seriously tho, I'm reading all the advice, and appreciating it, from everyone.
cheers
Tess
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I'm merely giving you a genuine warning that not everything that glistens is necessarily gold.
From the original question you posted as you have been very vague in terms of what you are actually doing in terms of strategy/methodology I would imagine most people are struggling to give a concise answer.
The book might say "run your profit" but if you're short and the trend is long and you find yourself in profit I would be looking to book that very quickly.
From the original question you posted as you have been very vague in terms of what you are actually doing in terms of strategy/methodology I would imagine most people are struggling to give a concise answer.
The book might say "run your profit" but if you're short and the trend is long and you find yourself in profit I would be looking to book that very quickly.
GladiatorX
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What me meant is that; If in your head you always think ' Lets run this trade' then your always going to be over and under shooting - Zero-sum.
Conditions need to be percieved favourable OR you get out. If may be @ breakeven these conditions change or maybe @ 100% ...
If your mentality is ' I'm gon' let winners run' - Then what exactly does that mean? That you are going to set unrealistic profit targets? that your always going to hope for a big win and find it comes back to breakeven ?
Unless you have a genuine edge in your exit; In other words, your exit would be a profitable place to short. Then its always going to be zero-sum...
Letting profits run, Risk/reward - Its all non-sense. You don't just set a profit target and a stop loss and leave it, you can do, i'm sure.... But its not neccesary the best way to go about it; Another option would be to constantly adapt your target and stop loss in corespondance with market conditions.
In the end, all this stuff just changes the distribution, but not the bottom line, unless your exit too, gives you a genuine edge....
Saying ' Let profits run ' is like saying to an aspiring golf player ' Hit the ball in the hole ' ... Its not going to help you achieve MORE profits.
When you get it, you'll get it and you'll profit; No matter how much in advance you plan profit targets - All the advice you get; One day you'll understand when to exit for you.
The truth is, if you don't have an edge; it doesn't matter WHAT you do... So who cares, run profits, run losers, cut winners, whatever. Doesn't matter; When you know what you are doing and how you are trading you'll win; When you don't you won't.
I understand this too is pointless.
dimsdaletraders
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Yup, another another fair point (dammit, I'm glad we're not playing crib, I'd be wiped out by now!)
I'm currently using just two "strategies", if you can call them that, that I'm developing as I learn. I'm EOD trading trends (strategy 1) and ranges (strategy 2). They are just baby strategies, and they are pretty much simple price-action supported by sector and index, involving trading with the trend or ambushing the break-out, using (very!) basic indicators (eMAS, MACD just for divergence/convergence, plus 25-day vol avs and a 500K vol criteria) just to support a "yes or no" decision, with stop-losses (obviously), risk management purely on the 1% and 3:1 basics, and then learn as I go along.
I'm now backing this up by reading everything I can get my hands on, here and everywhere else, particularly FA as a parallel to TA.
PS. If my sense of buoyancy looks like arrogance. it's not, I'm just one of life's Tiggers.
I'm currently using just two "strategies", if you can call them that, that I'm developing as I learn. I'm EOD trading trends (strategy 1) and ranges (strategy 2). They are just baby strategies, and they are pretty much simple price-action supported by sector and index, involving trading with the trend or ambushing the break-out, using (very!) basic indicators (eMAS, MACD just for divergence/convergence, plus 25-day vol avs and a 500K vol criteria) just to support a "yes or no" decision, with stop-losses (obviously), risk management purely on the 1% and 3:1 basics, and then learn as I go along.
I'm now backing this up by reading everything I can get my hands on, here and everywhere else, particularly FA as a parallel to TA.
PS. If my sense of buoyancy looks like arrogance. it's not, I'm just one of life's Tiggers.
dimsdaletraders
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seconded. See y'all tomorrow, and thanks again to all.
Tess
Tess
GladiatorX
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Well i'm a changing woman ceydababy.
GladiatorX
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Man, i meant man.
meanreversion
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Cut your losses and run your profits is like any saying.. it has some truth in it but is also not always applicable. What it does do is make you think about your exits.. focus always seems to be on entry points but the exits require considerably more thought and effort. A bit like Iraq and Afghanistan, easy to get into, very hard to get out of.
dr.blix
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i think the 'cut your losses' phrase can be interpreted in different ways.
i took it as a phrase to aid new traders, who are likely to sit on a large loss waiting for a reversal, whilst panicking when a trade is in profit and closing it, happy to take the smallest of returns just so their ego can remain intact 'because they got this one right'.
interpreting it in these terms of 'trading psychology' makes sense to me. rather than taking the phrase as something relating to more advanced exit strategies.
i took it as a phrase to aid new traders, who are likely to sit on a large loss waiting for a reversal, whilst panicking when a trade is in profit and closing it, happy to take the smallest of returns just so their ego can remain intact 'because they got this one right'.
interpreting it in these terms of 'trading psychology' makes sense to me. rather than taking the phrase as something relating to more advanced exit strategies.
This is very true. the careful TA we put into the entry for any position should also illustrate where we want to get out if the position goes into loss or if it goes into profit. These should be identified before the trade is opened - if you can't see an exit, don't go in.
TA is the best way to locate the exits: this should allow you to respect support and resistance etc. which will inherently, to some extent, also abide by the 'cut your losses, run your profits' saying. Of course, money managenment and risk:reward need to be considered too - there's no merit in holding a loser until your account is 50% down merely because you can see some support level way down there somewhere.
One way I have found it useful to build 'cut your losses, run your profits' into trades without becoming obsessive about it is to re-TA each open position at the close (I am a swing trader) and answer the question, if I was not already long here would I buy now? If I can't find a good reason to be a buyer, why would anyone else? Its the new buyers who make a price rise, not the number of people holding, price does not float up on its own. Without a continuous influx of new buyers, price will not rise.
B
Black Swan
IMHO Tom's advice on 'ere is second to none...fwiw I developed a habit that has become part of what I now consider to be an essential part of my edge/overall self management, which I'd taken on board by accident rather than design, only to then discover that seasoned traders laud it as essential...
I was (still am) more interested in some ways re. the potential loss as opposed to the potential pip gain when I pull the trigger. I can control the loss at the outset, I never move stops out, if I get stopped out the trade, or close the trade early, the market has generally turned in the opposite direction therefore I regard my small loss as the price to pay for information.
There is an often told anecdote regarding a v.famous trader who made/makes billions for his company but always stated with humility that he never quite got his exits right...
meanreversion
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I've met a lot of traders whose first objective is that the market moves sufficiently in their favour for them to bring their stop to breakeven. This may work depending on the timeframe in which you trade or the style you adopt, but I've never obtained satisfactory results in backtesting when quickly raising stops to breakeven (from 4hr up to daily). It might sound like a nice, intuitive thing to do, but then how much of trading is nice, comfortable and intuitive..
