Trying to Get Started again

[wallstreet1928]

thanks for the advice charlton especially when you mention taking 75% and leaving 25%, its a good idea nad needs to be implemented.

what I usually do is increase my stop loss as I go further & further into profit.....but the 75% rule is a better idea!!

 

[yongp]

I would recommend a top-down approach using multiple timeframes. Determine what the market and its sectors are doing first at different timeframes ranging from 60 down to 1 min. Explore how an individual stock's movements relate to the sector and market over these same timeframes. Is there any correlation ? Do some stocks move more than others compared to their sector/market ?

I no longer use volume extensively . I used to be very interested in the analysis called VSA - volume spread analysis. This was proposed by Tom Williams in his book "Undeclared secrets that drive the stock market", which was later revamped by Tradeguider software as "Master the Markets". However the market has changed since he drew up the original concepts and programmed trading results in the distortion of volume, such that it doesn't reveal what it used to reveal.

With regard to lowering your stops, one thing you can look at is volatility of a stock. This is traditionally measured by indicators such as ATR (average true range), which is effectively the average movement in price over typically a 14 bar range at the timeframe you are trading in. As long as the market retains its current characteristics then this will provide some measure of how far you can expect the stock to move in that timeframe. Still, I think it is better to have a more inteligent get-out, which recognises conditions are no longer suitable for the trade to continue, using the stop as last resort.

However you shouldn't lower your stops, because if the trade is really going against you the chances are that you have got the direction wrong or missed the exit signals and it is likely to continue that way. Get out when the loss is minor and then you can trade in the opposite direction if the right signals are there.

There is no shame and nothing to beat yourself up about in making a losing trade. There is shame in not having a pre-planned trading strategy or not following it.

Charlton

Thanks for the great advice Charlton! i guess sticking on with a a few time frames from top down would give a bigger picture. I've done this but problem of indecision between a number of TF. A silly thing i did was changing between TF to find one/few that supports my belief on price action, and that's forcing the market to behave what i wanted to see.

cheers.

 

[jumpingjackcider]

Hey it happens. There is a rule for having stops but the most important rule about stops is to not change them. I would also sugguest you get a proper education. I am not sure where you are based but you good trawl a few free seminars and get to know as much as possible for free. Think as your loss as an education rather than a big mistake keep trading

 

[ejtrader]

i never thought about using an assisted broker. Perhaps that's why I've been over-trading too. Read the other three of JR's books. However, found that entering at a tick below the Ross Hook or when #3 is taken out was dissappointing as most of the time, prices will have a pullback and that went smack onto my stops.

cheers!

Hello,


I know what u mean about the ross hook, but u have to recognized it is meant for trending situations. I have had the same situation happen to me a lot when it was ranging (didnt realize it right away). Also depending on what your trading/volatility, the stop should be placed further back. I usually use the ross hook when it breaks a range or looks like it is about too. Its safer to offset if the break is very weak but i tend to wait too long. I dont exactly follow the ross hook to a T but i use the general concept.

The assisted broker has really helped (added commission kinda sucks but i got my margin requirement cut in half for intraday). I still overtrade but it doesnt really hurt unless i over trade after a loss (angry trading) but im working on that and broker does calm me down faster (ie convincing me to take time off).

I found my stop loss placement has improved 10 folds after getting assistance. Prior to having a broker i was iffy on my placements, sometimes opting not to, but maybe due to a sense of obligation to the broker i kept putting in stop losses (for my own benefit of course too). At first, i kept getting stopped out when i didnt want to but over time i started to recognize whether to put it close if or further away depending on if the price action looks like itll continue my way (trending) or if it looks like it was big retract (maybe range or change of trend). Just keep at it, dont have to follow the book 100%, adapt it to what u feel works.

Also, maybe u can change up what u trade. Each different thing has their own characteristics, and some might fit your style better than others so try around to see whats more profitable for u. For example, crude tend to trend nicely for a few days at a time so i like trading that but ive tried other stuff but just weren't as profitable (ie gold but i find it challenging due to choppiness). I just was lucky to start on something that was trendy and i kept going with the trend. My losses r usually big retractions and they arent actually losses but loss of paper profit.


Hope that helps

 

[new_trader]

I might give it a try. What about the DAX? Do you trade it too?

yongp, do not follow foolish advice about 'easier' instruments to trade. Utter nonsense. If there were an easy instrument to trade, E-V-E-R-Y-B-O-D-Y without exception would trade it. Do you see? Trading isn't a silly computer game where you get to choose the level of difficulty until you make progress..

 

[ejtrader]

yongp, do not follow foolish advice about 'easier' instruments to trade. Utter nonsense. If there were an easy instrument to trade, E-V-E-R-Y-B-O-D-Y without exception would trade it. Do you see? Trading isn't a silly computer game where you get to choose the level of difficulty until you make progress..

Of course there is no 'easy' instrument to trade. However, everyone has their own style of trading. I think certain instruments with their specific characteristics r better suited for some over others. Whether they get used to trading it or the volatility fits their risk appetite, most traders will have a favorite instrument they like to trade and, if profitable, one can say its an 'easier' instrument for them to trade.

Anyways, i do think it good to try many instruments to find one thats more profitable for the trader. Furthermore, in my opinion,for beginners fast moving volatile markets r more difficult because it requires quick reaction and flexibility that usually comes with more experience.