Today is 20 May, I managed to grow 10% of my acc by mid of May, but now end up losing 10% of my account by today. haha, why la...I am figuring where is the problem. After thinking, I conclude this:
If you use this system to get a fixed TP for every trade with RR 1:1, I might be ending up no win no lost by end of the month, or win very little because this system for me is about 55%-60% accuracy.
I will follow Sonic's original rules from now on, by moving SL to BE once I hit my first TP, and trail it on, if I really caught the trend, I will win...
I Don't Have Any Advice, But I Tell You My Opinion. I Prefer To Divide My Position In Two Parts, After 40 Pips, I Will Close Half Of My Position Size, And I Will Close The Other Half Proir To S&R, Channel Line, PPZ, ect. And After Closing Half Of My Position, I Bring SL To BE For The Second Half.
There Are Three Different Kind Of Market You May See In A Day :
1) Bullish
2) Bearish
3) Consolide Or Range Market
So When SonicR System GIVES YOU The Setup For Entry, Three Things May Happen To You :
1) Your SL Hit Quickly If You Where Wrong (This Happens Rarely With This System I Think, But Not Very Rare
)2) Your SL Hit Because Of False Breakouts That Shows You The Market Is Range. Like Last Thursday I Think.
3) Price Moves To Hit Your Target.
In Case 1, You Can Improve Your Entry Buy General Trend , S&R Or Thing Like That IF It's Not Just A Losing Trade. You Can Minimize This Kind Of Lose By Improving Your Entries And Upgrade Your Strategy And Getting Used To It.
In Case 2, Mostly It Is Losing Trade (It's Just My Opinion, No Formal Statistics !) But You Can Improve It When You Check Higher TFs And Understand When Price May Move Back A Little To Gather Momentum For The General Move. This Kind Of Market Happens Much More Often These Days And You Can Mostly Prevent Your Losses By Analysing The Wave, Because In This Market, Waves Are Not Clear Enough To Enter In Most Of The Times.
In Case 3, You Will Take Profit And You Will Go Back To Bed With A Smile On Your Face ( Or Mind !!) Anyway, The R & R Ration Should Not Be 1:1, Because You Are Paying Spread And If The Market Is Moving In Your Direction, Why Just Getting A Little Portion Of The Profit ? Even In Range-Markets, When You Set Your SL To BE, Your Losses Become Much Lower. And By The Way You Take Some Profit To YOur Account By Closing Half Of The Position.
In Conclusion, I Think EveryBody, Including Myself Should Get Use To Any System. Even If It's 55% - 60%, I Think If You Improve Your Analysis, It Will Improve. And For Me 70% Accuracy With More Than 1:1.5 Risk/Reward Ratio Is A Good Target
And I Know That You Know "A Deep Understanding About Market Is Very Improtant Before Getting Successful In Any Trading System", And Every Professional Trader, Never Stop Learning About This Concept, So By Improving It, Our Trades Will Be Much More Accurate.
Here Is Some Words By Marty Schwartz, A Successful Trader :
I Will Copy All Of The Notes That I Took From An Interview From Him, He Is Trading Stocks, But Many Concepts Are The Same, Some Of Them May Not Be About Your Post, But I Thought It's Good To Read Some Of Them Again :
And, if I am wrong, I am going to use risk control and stop myself out
X dollars away. That is the most critical element.
When did you turn from a loser to a winner?
When I was able to separate my ego needs from making money. When I was able to accept beingwrong. Before, admitting I was wrong was more upsetting than losing the money. I used to try towill things to happen. I figured it out, therefore it can't be wrong. When I became a winner, I said,"I figured it out, but if I'm wrong, I'm getting the hell out, because I want to save my money and goon to the next trade." By living the philosophy that my winners are always in front of me, it is not so painful to take a loss. If I make a mistake, so what!
One of the most suicidal tilings you can do in trading is to keep adding to a losing position.
You liquidated your long position very well on October 19. Did you think about actually
going short?
I thought about it, but I said to myself, "Now is not the time to worry about making money; it is the
time to worry about keeping what you have made." Whenever there is a really rough period, I try to
play defense, defense, defense. I believe in protecting what you have.
Whenever you get hit, you are very upset emotionally. Most traders try to make it backimmediately; they try to play bigger. Whenever you try to get all your losses back at once, you aremost often doomed to fail.
After a devastating loss, I always play very small and try to get black ink, black ink. It's not how much money I make, but just getting my rhythm and confidence back. I shrink my size totally—to a fifth or a tenth of the position that I trade normally.
The great thing about being a trader is that you can always do a much better job. No matter how successful you are, you know how many times you screw up. Most people, in most careers, are busy trying to cover up their mistakes. As a trader, you are forced to confront your mistakes because the numbers don't lie.
I always check my charts and the moving averages prior to taking a position. Is the price above or below the moving average? That works better than any tool I have. I try not to go against the moving averages; it is self-destructive.
Before putting on a position always ask, "Do I really want to have this position?"
After a successful period, take a day off as a reward. I've found it difficult to sustain excellent trading for more than two weeks at a time. I've had periods where I can be profitable for twelve days in a row, but eventually you just get battle fatigue. So, after a strong run of profits, I try to play smaller rather than larger. My biggest losses have always followed my largest profits.
This next rale is a major problem for me; I'm always trying not to break it. The rale: Bottom fishing is one of the most expensive forms of gambling. It's OK to break this rale on occasion if you have sufficient justification.
That brings me to my next rule: Before taking a position, always know the amount you are willing to lose. Know your "uncle point" and honor it. I have a pain threshold, and if I reach that point, I must get out.
The most important thing is money management, money management, money management. Anybody who is successful will tell you the same thing.
The one area that I am constantly trying to improve on is to let my gains ran. I'm not able to do that well. I'm always working on it. To my dying day, I'll probably still be working on it.
Yes. If you're ever very nervous about a position overnight, and especially over a weekend, and you're able to get out at a much better price than you thought possible when the market trades, you're usually better off staying with the position.
Why do most traders lose money?
Because they would rather lose money than admit they're wrong. What is the ultimate rationalization of a trader in a losing position? "I'll get out when I'm even." Why is getting out even so important? Because it protects the ego. I became a winning trader when I was able to say, "To hell with my ego, making money is more important."
What is the best advice you can give to the ordinary guy trying to become a better trader?
Learn to take losses. The most important thing in making money is not letting your losses get out of hand. Also, don't increase your position size until you have doubled or tripled your capital. Most people make the mistake of increasing their bets as soon as they start making money. That is a quick way to get wiped out.
Marty Schwartz's story should encourage those whose initial attempts at trading have met with failure. Here is a trader who was unsuccessful over a ten-year period, managing to lose enough money to keep himself near broke, despite consistently earning good salaries. Yet, Schwartz was eventually able to turn things around and become one of the world's best traders.
How did he do it? There were two essential elements. First, he found a methodology that worked for him. Throughout his losing years, Schwartz used fundamental analysis to determine his trades. It was not until he immersed himself in technical analysis that he became successful. The point here is not that technical analysis is better than fundamental analysis, but rather that technical analysis was the methodology that was right for him. The key lesson is that each trader must find his or her own best approach. The second element behind Schwartz's transition to success was a change in attitude. As he describes it, he became successful when his desire to win took precedence over his desire to be right.
Risk control is an essential element of Schwartz's trading style, as attested to by his incredibly low drawdowns. He achieves this risk control by always knowing his "uncle point" on any trade. No doubt, his approach of sharply reducing position size after large losses, as well as extended winning streaks, contributes heavily to his success. The rationale for reducing position size after a destabilizing loss is apparent.
Regards,
Basber
Trading methods are designed to put the odds in our favor, not predicting.
