Missing profit because I was disciplined near TP | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

Disciplined life -> Disciplined trading -> Success 8 replies

till being disciplined trader! 3 replies

A Journal To Keep Myself Disciplined 0 replies

The Disciplined Trader - Mark Douglas - Audio Book? 0 replies

Mark Douglas - Disciplined Trader - Summary 4 replies

Attachments: Missing profit because I was disciplined near TP
Exit Attachments

Missing profit because I was disciplined near TP

  • #1
  • First Post: Aug 4, 2017 1:47pm Aug 4, 2017 1:47pm
I am thinking about this. I have for example now GBPJPY sell, TP at 145.27, sold at 146.34.

My TP is at support level, it might be strong support. It has been testing lower price at july 24 and 21. But what if this time it does not reach my TP and then takes my trailing stop, and I miss much more profit because I was having discipline and waiting.

Bottom red line is TP, middle red line is trailing stop.

So I might loose this gap of profit if the price does not make few points left to hit. I win few more points, but I risk much more. So maybe I should be taking profit now and not risk?

Another option is to set minimal trailing stop. But price moves up and down constantly, so I am not fan of the minimal trailing stops, it feels like if it can reach that trailing stop, it will when I would use real money. maybe broker will cheat on me and will try to make me less profit
Attached Image
  • #2
  • Aug 4, 2017 4:40pm Aug 4, 2017 4:40pm
I often say, that money management won't turn a losing strategy into a winner. In other words, if you don't have an edge, no matter how you vary your SL and TP method, you won't make money on the long run.

That being said, it is much better to decide on a money management method, and stick to it. If you use TP, let price hit either that, or your SL. If you move to BE after certain pips, keep moving to BE. If you use trailing stop, keep trailing the stop. Because on the long run, if you vary stuff, and sometimes let price go to your TP, sometimes take profit earlier, sometimes trailing SL, sometimes moving to BE and leaving it there after, will hurt your expectancy overall.

I use TP, and as price moves in my favor, I keep reducing the SL, then after a certain pips in profit, I move to BE, and leave it. And I manage my trades the same way, always.

So overall if you decided to use TP, then let the trade be, even if it is close to your TP. If you keep cutting your trades early, those missed pips can add up to a considerable amount. I know, because one of my biggest sticking points was cutting good trades too early. Even though I've cut losers early too, but as I kept cutting the winners, I was progressing very very slowly, and it was super frustrating.

BUT if you ask about this exact example, I would close the trade, if it would be like on the picture. The reason for this is, that the market is closing for the weekend. I hold trades overnight if I have to, but my rule is to not having open positions through the weekend. That has additional risks on its own.
Price and volume reveals everything. The market moves on supply and demand.
  • #3
  • Aug 4, 2017 5:01pm Aug 4, 2017 5:01pm
You seem all confused in your head. What is exactly your question ?
Don't give up on your dreams. Keep sleeping.
  • #4
  • Aug 4, 2017 10:49pm Aug 4, 2017 10:49pm
No one can tell you what is best to do in your situation. You have to experiment with what works best and then stick to it, as what ever that happens to be will be reflective of your own strategy.
  • #5
  • Aug 4, 2017 11:02pm Aug 4, 2017 11:02pm
This is when trading becomes an Art, not a science.

A
Humans are naturally hardwired to avoid and detest uncertainty.
  • #6
  • Aug 4, 2017 11:14pm Aug 4, 2017 11:14pm
Quoting Darastonius
I often say, that money management won't turn a losing strategy into a winner. In other words, if you don't have an edge, no matter how you vary your SL and TP method, you won't make money on the long run. That being said, it is much better to decide on a money management method, and stick to it. If you use TP, let price hit either that, or your SL. If you move to BE after certain pips, keep moving to BE. If you use trailing stop, keep trailing the stop. Because on the long run, if you vary stuff, and sometimes let price go to your TP, sometimes...
I have calculated how often do I need to win to be breakeven in that situation:

when calculating price was 144.387, TP was 144.17. So 217 points till TP.

Trailing SL is 1000 points.

So I loose 1000 points or I win 217 points in that situation. So I need to win 217/(1000+217) = 82 % of time.

I need to win quite frequently, but we are near strong support support level + weekend as you mentioned additional risks. To make profit - I need to win more than 82 % of time. Do I believe I win significantly more than 82 %? No. Sometimes I will win, sometimes not. But does not look like I will make huge profit from this.

I closed the trade, before I have read the post to avoid risk.

ANother option I was thinking about - maybe to move SL to 217 points, so that TP : SL would be equal. THen I would need to win 50 % of the time to be breakeven. Looks like less requirement. But also less room for prive to move back.


Quote
What is exactly your question ?
take profit earlier to avoid risk of losing big or not near level?
  • #7
  • Aug 5, 2017 5:43am Aug 5, 2017 5:43am
If you take your profit earlier than your strategy rules dictate, then you are no longer trading your strategy.

The rules of your strategy (e.g. Take profit at 'x' level) should have been worked out in advance, and most importantly, back-tested back-tested and back-tested some more, so that you've fully proven to yourself that this strategy is profitable.

Only then will you have the confidence to strictly follow the strategy's rules. If you find yourself tempted to break those rules, that shows that you lack confidence in your strategy, and I would recommend some further back-testing until you establish to your satisfaction that the strategy (and its rules) are sound and profitable.

Backtesting is boring and laborious, but it's the only way to properly build confidence in a strategy.
  • #8
  • Aug 5, 2017 7:34am Aug 5, 2017 7:34am
Quoting SPeedFANat1c
{quote} take profit earlier to avoid risk of losing big or not near level?
Watch how the price reacts near your take profit level. If the move seems strong with large blocks coming to the market, give it a chance to touch your take profit. If it seems hesitating with rejections around that level, grab the money and move on. Check out also the news that may affect how the price reacts. If some news is coming, better close the trade if you are in good profit. Otherwise, it may reverse sharply.
Also, if you are trading intraday, it depends on the time of the day. If it's late, most operators would have gone home, and price would likely consolidate or even pullback or reverse in the next trading session.

Hope it helps.
Don't give up on your dreams. Keep sleeping.
  • #9
  • Aug 5, 2017 8:56am Aug 5, 2017 8:56am
Quoting SPeedFANat1c
{quote} I have calculated how often do I need to win to be breakeven in that situation: when calculating price was 144.387, TP was 144.17. So 217 points till TP. Trailing SL is 1000 points. So I loose 1000 points or I win 217 points in that situation. So I need to win 217/(1000+217) = 82 % of time. I need to win quite frequently, but we are near strong support support level + weekend as you mentioned additional risks. To make profit - I need to win more than 82 % of time. Do I believe I win significantly more than 82 %? No. Sometimes I will win,...
I'm gong out on a limb here, but from your 2 posts, you sound like a new trader, right? If your strategy is to take profits at the first S/R level, then that is what you must do, regardless of what PA does after you are out of the trade. However, you seem to be thinking about how to violate your trading rule, and instead of taking profits, holding on to the next S/R level. I'm guessing that you're wondering if that is the right thing to do, or a smart thing to do. No one here can answer that for you, especially since you are risking 4 pips for every 1 pip you gain. You need to spend more time thinking this through before asking for advice. IMHO. Good trading and best wishes!
  • #10
  • Aug 5, 2017 12:52pm Aug 5, 2017 12:52pm
If you are trading with unbelief, then you have to fix that problem. If you do not think your strategy works, you should not be trading it. Your instinct and your math have to agree or you will be ineffective. Concurrence between the two does not mean you will win, but that you will accept the loss and have a strategy to deal with it.
You cannot be extraordinary by being normal
  • #11
  • Aug 5, 2017 3:42pm Aug 5, 2017 3:42pm
Quoting SPeedFANat1c
I am thinking about this. I have for example now GBPJPY sell, TP at 145.27, sold at 146.34. My TP is at support level, it might be strong support. It has been testing lower price at july 24 and 21. But what if this time it does not reach my TP and then takes my trailing stop, and I miss much more profit because I was having discipline and waiting. Bottom red line is TP, middle red line is trailing stop. So I might loose this gap of profit if the price does not make few points left to hit. I win few more points, but I risk much more. So maybe I should...
You're getting too worked up over this. Relax. There are no absolutes in trading. A lot of the time the trader is just guessing as to whether the price is going to keep moving in his direction or if that pullback is going to be too big to sit through. I decided at some point that the solution is emotional, not scientific, meaning I take profit as soon as I start to feel nervous. I don't want that tight feeling in my stomach all day long and I want to sleep comfortably at night. So, once I start to feel nervous I either close manually or set a very, very tight stoploss.
  • #12
  • Last Post: Aug 27, 2017 7:08am Aug 27, 2017 7:08am
Quote
If you take your profit earlier than your strategy rules dictate, then you are no longer trading your strategy.

Quote
However, you seem to be thinking about how to violate your trading rule, and instead of taking profits, holding on to the next S/R level.

ok, but if I decide in advance that my TP is at level, but also if the price moves down x, my TP is earlier then I am not breaking my rule, because rule allows it.

Quote
Only then will you have the confidence to strictly follow the strategy's rules. If you find yourself tempted to break those rules, that shows that you lack confidence in your strategy, and I would recommend some further back-testing until you establish to your satisfaction that the strategy (and its rules) are sound and profitable.

I do not want to spend time coding complicated robot when I do not know if my strategy works. So I am already backtesting, just that I am doing with current data, not hystorical. Of course that process will be slower, but maybe I will find that at least it does not make me huge losses, then maybe I could code a robot.

I have tested various strategies which I see quickly they bring loss, so I did not have to spend time coding robot. Of course there is a chance that short term loss does not mean anyting, but combining with the fact that I am new at this, it is likely that the strategies I tried are wrong.


Quote
If some news is coming, better close the trade if you are in good profit.
m\maybe good idea. Or maybe better to add tight SL, becasue on those news you can hit good profit in short time also.

Quote
I'm gong out on a limb here, but from your 2 posts, you sound like a new trader, right?
yea, I have started studying this at end of march. So its 5 months - no profit. Bit of time, but I see I learn things at least and have a hope and motivation. I like this that once you enter trades, you have more free time, unlike with poker where you have play - you stop playing - you stop profiting. I liked poker also because of potential freedom it gives, but forex if it works out for me, should give more freedom.


Quote
If you do not think your strategy works, you should not be trading it.
How will I find what works for me then?

Quote
I decided at some point that the solution is emotional, not scientific, meaning I take profit as soon as I start to feel nervous.
And you do things depending on emotion? I think its wrong thing to do.

Quote
I want to sleep comfortably at night.
I do not have this problem. Dont invest money which you cannot afford to lose and you can sleep well
0 traders viewing now