Plan the Trade

It has to be said, this is easily the most frustrating business to be in... I've resisted the idea of having automated limits, because my EW wave counts and views are constantly changing, so i would rather keep the flexibility of chasing a profit with my Stoploss...

With that said, look at this for a set-up. I still use Fibs when and where i feel it applicable. Here we have the 61.8% retrace level of prior wave, simultaneously at a nice prior wick. Trend is down, so we are looking to get back onboard and a reaction at that level, would back up the idea that it is corrective to the Short (lower to follow);



I missed the ideal entry, but the way PA was printing, it was time to take the plunge and i was just in time.



The trouble is, for some reason this time i decided to be aggressive with my stoploss chase. Why, with all the evidence, i really do not know, cos this happened very shortly after;



I like to think that a profit is a profit and can never be a mistake once you've covered your original risk, but 'Ouch'!

It begs the question, if i'm still nervy on 'Sim', how the hell will i ever run anything when 'Live'? We all know how different it really is. I keep thinking i'm ready, but then i think, No! - experience, experience, experience...

I've still so much to iron out (imo)

*that said, i look back to a year ago and it's obvious to see the improvements. I had a wobble a couple of weeks ago, but seem to have found some rhythm again. Trouble is, those wobbles, where you suddenly find yourself down 50/60 in a session, scare the sh*t out of me and i feel there is no way i could trade my way out of it.

In reality, if i found myself up a few hundred ticks after a few weeks, i know i would have to accept that those bad days are part and parcel of the whole business plan, like it or not.

Good day today!

Quite a range at this point

Wow just came back from lunch what a Dump could. someone post a 30 second chart

Heres your 30sec view . . .

Some nice setups especially around 86

So what are you guys thinking related to stopping if 'x' amount of loss in one session? Coming up with risk/reward and target of wins is easier for me, but what about when to walk away and come back the next day?
Ideas?

CG, here's a question for you. After, you hit that button, does 100% of you stand by your decision?

And when I say 100% I mean totally everything you have?

Imho, until I'm there psychologically I'm not fully ready. I can taste it though

Its a good way to say it.

Yeh, it's a great question!

I would have to say, 'No'... PA thereafter will often shake me out of a trade, sometimes to my benefit, but also (as i've highlighted umpteen times), to my detriment.

It's the million dollar question, i suppose. Should we interfere with regards to stoploss before the trade has either gone in our favour, or the opposite and stopped us out? If not, when do we move it?! +6? +10? +15 etc. I think we've all tried various stoploss methods and i don't think there is any one answer, the results always vary.

I struggle psychologically with seeing multiple +1's after a deep (wave B/2) retrace nicks you out, only to miss the big gain that follows.

Again, what's better? suffer -6/-8 or -10 on standard stoploss placement, by not moving it when +6/+8 or +10, but then catch a +25/+30 the next time by withstanding a quick stop run...

I honestly think the only answer to that is to stress the importance of banking more than the original risk. So a 2 x risk as a target makes sense to me.

I feel every trade is different and thus i simply can not bring myself to trade mechanically, with auto +1/+10 limits etc. That doesn't mean that i think my idea of keeping some flexibility is better - simply that viewing charts with an EW eye, means i can no longer view it without automatically trying to label PA in waves, cycles or phases. That doesn't mean that i always can do so successfully, simply that i try to make sense of PA in that way!

I absolutely understand the need of a business plan and the necessity to trade like a robot, as Harold rightly points out, so maybe i've got a long way to go yet!

In any case, even when i am right and recognise that a pullback is corrective (i expect the trend to continue thereafter), it is still too difficult to run the position all the way, due to the fear of it pulling back deeply when you're showing a healthy profit, even if it does go on to print a new HH or LL thereafter.

I am still influenced by what has previously just happened and that needs addressing. What i mean by that is, often when i have an aggressive or confident mood and opt to try to run a position, only to see a +15 come back to +1... and well, lets face it, that is very poor trade management.

Thereafter, having slapped yourself, you then change next to a grab mentality and bag a +10/+12 and that is always the trade that goes on to a +30/+40 etc virtually in a straight line!

That is when i can see the clear benefit of having set auto-limits.

Ultimately, you can go around and around in circles trying to find the best trade management settings for ever. They will always vary, so as i say, i think the only important criteria is aiming for a 2 x risk as target. So long as you achieve it once or twice in a session, it should prove to be the difference...

Trade management is very important my waiting to get up 10 before stop to 1 also can be hit at +1 then it shoots in correct direction. But those don't happen as often as you think when I get up over 20 and it's stumbling to make 25 i will take 15. Since target is 25 and stop is 13 it's basically 1 to make 2 which is a very nice risk to reward

About 3 months ago, i had a great run and was enjoying much success with a very aggressive approach. I was removing risk very quickly, even when +4 and thereafter being very active with chasing profits, using my stoploss, but it did result in many BE trades and thus comms was an issue, even so, with that included, it was a case of accruing ticks and who cares if you have 15/20 comms to pay, if you are bagging +45/+65 in a session?

Then it simply stopped working! I continued in the same vain and it suddenly resulted in non stop BE's and losses. Several -50/-60 sessions occurred in a row and i was left wondering how?!

That just goes to show that the market mixes it up constantly. Algo's change. What works one minute, often doesn't in a different phase... those phases also change in fractal terms - by that i mean, we are in a major Bull phase and have been for 10 years now. PA will be very different whenever we enter a Bear cycle.

This same pattern happens several times in a session, there are nice impulse trends and there are times of corrective chop. There is PA with high volume (typically during open hour) and there is different PA later in the day.

The great thing about the NQ combined with Futures and movement in Ticks is the sheer distance that she moves. It makes it possible to find set-ups occur at anytime and let's face it, we only need to find 2 or 3 winning set-ups in a session.

There's simply no substitute for Patience, Discipline and Experience!

To have even a chance of discipline, I believe it is necessary to identify a context within the market that fits an individuals style and personality. Might be a channel, flag - whatever, but it has to be our own and it has to show price behaving in a certain way. A repeatable set of conditions you alone have identified. I liked your channel idea btw

The great thing about Sierra is that you can test and test scenarios till the cows come home.

The patterns all happen when supply or demand triggers

Anyone got any ideas here?

A very good question ... my opinion ... it is critical to limit your risk per session .... I decided to limit it to the same amount of ticks as I plan to make ... 40 ... if I hit 40 ticks loss then something is not working either in the market or my head is out of sync with the flow of the market and the chances of blowing my account is great so I better stop.

I have been been doing stress tests during to past week to try and get past some obstacles that bugs me especially when I traded live. I dropped to the 5 second charts and traded the living day lights out the market for at least a hour and a half .... did everythings that I thought might work and that seemed to pop out of nowhere when I traded with the stress of a live account etc etc ... then analized the results so I can see and feel what works and what does not ... and sure enough ... the ONLY way of trading that consistently yields results was those supply and demand places where the chances of at least getting to BE was good ... and then taking profit in that same impulse wave before the next corrective wave hits. I will be trading normal again from today to see if it helped.

Another variable!

Is is best to set a rigid limit.... 20 ticks loss? 40? 100?

or is it possible that some days your emotions will be affected more than others?!)

I am definitely affected by outside factors, being generally quite a sensitive person. If i have troubles in my private life, they will affect my trading psyche for certain.

Who would have thought that the woman you find yourself living with, can also be a factor in your trading? Ok that might not apply to everyone, some people are thick skinned, but if i were with someone who'se personality clashed with my own and there was a big argument between us every few days, i wouldn't be able to trade... chemicals in the brain alter our emotional boundaries constantly. That's definitely applicable to me anyway.

I'm probably going to have a lower tolerance to losses than most and the only sensible solution i can come up with is what i've said before.... practice, practice, practice!

When something becomes routine, it is possible to follow that pattern.

Nothing wrong in being down 30 or 40 and then coming back from that, even if only back to BE for the session. In fact i think that is more beneficial than constantly winning.

I don't intentionally not post my losing trades. Just take it for granted that i am still having some bad trades inbetween. I probably should write down my results at the end of each session though, because if a typical week saw a couple of minus 30 days, but the other 3 resulted in a net gain of 70/80+ it's important to realise that you're winning!

Sorry this isn't a definitive answer to your question J)

Thanks for some feedback. I find this part of the trade plan (when to stop if down) is not discussed as often as set ups, targets, trade management, etc . . . . But it does matter

Of course you are right, but imho you have to be wired up and have your sh*t together up top to contextualise them.