D read what he was supposed to read (It's an irony that I had started blogging seriously on TRADING for D, yet he seems more interested in my non-trading related postings!), so I am resuming my blogging activity.
This has gotta be the most comical of all my trades - paper and real (NOT the YG - that was the trade I closed earlier today):
This has gotta be the most comical of all my trades - paper and real (NOT the YG - that was the trade I closed earlier today):
It was a trade I shouldn't have taken (wrong timeframe), but I went in anyhow.
I was looking for a trade.
I had spent 9:30 - 11am staring at a chart that had obviously made a lower high, fallen back below 1280, and DID NOTHING.
And I can't stand not having done anything. So, I went in at the 12:35 candle (circled in grey on chart below), and set my profit target at 1210.
I was looking for a trade.
I had spent 9:30 - 11am staring at a chart that had obviously made a lower high, fallen back below 1280, and DID NOTHING.
And I can't stand not having done anything. So, I went in at the 12:35 candle (circled in grey on chart below), and set my profit target at 1210.
What happened next was typical of what had been happening for the past few sessions - the trade went against me almost immediately.
Since I've set my profit target, I decided to take a shower.
That was a clear sign of me giving up.
I told D to take over the trade.
He did, and closed my trade at 1225 (I entered at 1226.25 with 2 contracts).
A while later, he came in to apologize, coz NQ had gone below 1210.
I said it was ok. There was really nothing to be sorry about. It was the wrong entry anyway.
I had totally lost the ability to catch a plunge.
I no longer know what I am doing.
With ER2, I used to have a plan.
I either went in pre-market for a swing with a stop loss in place, or I scalped without a stop, and ran whenever I started losing by a few ticks.
With NQ, the first few days were good - I could catch the plunge at the moment it plunged.
Then I started to have to sit through major retracements before I could get my targeted profit (there were occasions where I simply couldn't cut my loss when the loss was up to $3000!).
I always ended up getting my $1000 over profit, coz we're basically in a bear market, and NQ always ended up at a certain fib level (138.2/ 161.8). And since I tend to give a lot of buffer (my profit target is always far away from that level), it was not at all difficult to get the profit I wanted with the contract size I was trading.
But those were paper trades.
Seeing a loss of $3000 was NOT NICE, but it wasn't devastating. So I had always held on, coz what I was focusing on was my destination. I didn't care how I got there, as long as I got there.
Would it have been different if I were using real money?
I would think so.
Now of course I could rationalize that if I could get away with that kind of trading system (if I could call it a system in the first place) 10 times out of 10, then i should just trust that it will work in real-money trades.
But I couldn't convince myself to use such a method. It was a method that works only when there isn't a stop loss.
I just need to be wrong once to have a substantial portion of my account wiped out.
What I am looking at is more than a position sizing problem.
Even when I scaled down to 5 contracts, I sat through the same retracement.
It's extremely frustrating to be able to visualize mountains and flags before they even took shape, yet not knowing where to enter without taking a huge loss on paper first.
Like I said, with real money, I just need to be wrong once to suffer a huge setback.
The problem that I've been having with NQ is that I don't cut loss.
When I'm supposed to scalp, I don't run when I'm supposed to. When I decided to stay for a longer trade, I don't set a stop loss.
All my rules are thrown out of the window.
I kept insisting I know where my destination is, but I hadn't given much thought to how I get there.
If I keep getting hitchhikes like that, I could get murdered before I get to my destination.
I know it has something to do with the target I set.
With ER2, I didn't really have a daily target - I just took whatever I could get from the market.
Was I happy with my results?
Not really.
So I set a higher target.
Without this higher target in mind, I could start trading NQ right away with real money.
But I don't want to.
I am giving it another shot at achieving my target of 1k a day with a reasonable risk to reward ratio.
And I will let time tell me if I am naive, greedy, or just simply nuts.
Since I've set my profit target, I decided to take a shower.
That was a clear sign of me giving up.
I told D to take over the trade.
He did, and closed my trade at 1225 (I entered at 1226.25 with 2 contracts).
A while later, he came in to apologize, coz NQ had gone below 1210.
I said it was ok. There was really nothing to be sorry about. It was the wrong entry anyway.
I had totally lost the ability to catch a plunge.
I no longer know what I am doing.
With ER2, I used to have a plan.
I either went in pre-market for a swing with a stop loss in place, or I scalped without a stop, and ran whenever I started losing by a few ticks.
With NQ, the first few days were good - I could catch the plunge at the moment it plunged.
Then I started to have to sit through major retracements before I could get my targeted profit (there were occasions where I simply couldn't cut my loss when the loss was up to $3000!).
I always ended up getting my $1000 over profit, coz we're basically in a bear market, and NQ always ended up at a certain fib level (138.2/ 161.8). And since I tend to give a lot of buffer (my profit target is always far away from that level), it was not at all difficult to get the profit I wanted with the contract size I was trading.
But those were paper trades.
Seeing a loss of $3000 was NOT NICE, but it wasn't devastating. So I had always held on, coz what I was focusing on was my destination. I didn't care how I got there, as long as I got there.
Would it have been different if I were using real money?
I would think so.
Now of course I could rationalize that if I could get away with that kind of trading system (if I could call it a system in the first place) 10 times out of 10, then i should just trust that it will work in real-money trades.
But I couldn't convince myself to use such a method. It was a method that works only when there isn't a stop loss.
I just need to be wrong once to have a substantial portion of my account wiped out.
What I am looking at is more than a position sizing problem.
Even when I scaled down to 5 contracts, I sat through the same retracement.
It's extremely frustrating to be able to visualize mountains and flags before they even took shape, yet not knowing where to enter without taking a huge loss on paper first.
Like I said, with real money, I just need to be wrong once to suffer a huge setback.
The problem that I've been having with NQ is that I don't cut loss.
When I'm supposed to scalp, I don't run when I'm supposed to. When I decided to stay for a longer trade, I don't set a stop loss.
All my rules are thrown out of the window.
I kept insisting I know where my destination is, but I hadn't given much thought to how I get there.
If I keep getting hitchhikes like that, I could get murdered before I get to my destination.
I know it has something to do with the target I set.
With ER2, I didn't really have a daily target - I just took whatever I could get from the market.
Was I happy with my results?
Not really.
So I set a higher target.
Without this higher target in mind, I could start trading NQ right away with real money.
But I don't want to.
I am giving it another shot at achieving my target of 1k a day with a reasonable risk to reward ratio.
And I will let time tell me if I am naive, greedy, or just simply nuts.
1 comments:
Jules,
Here's my thoughts. Going for 10 points a day with 2-3 trades isn't scalping IMHO. On the NQ a scalp by my sights is about 1-2 points. So you either need 5-10 scalps to reach this target or recognize that you are actually going for larger swings that will require larger stops and significant retracements.
Either of these methods can work but a scalp requires getting in and out fast - you either make it or lose it - no holding on. If you are position daytrading you only have 1-2 trades per day and much larger stops. Also IMHO it is hard to win 10/10 days. 8 or 9 out of 10 ain't bad.
LT
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