TF Trades 1/28 - What Happened

Vinay's comment re my trades on 1/28:

Hi Jules, I am wondering if you use any stop losses and why did you take such a big hit on that last trade? What kind of R:R are you using?

I Scalp ES and from experience, it is very difficult to recover from big point loss during the day if you are scalping. It is better to choose low risk entry trades.

My reply:

Hi Vinay,
No, I use no stop losses, and that's going to be banned from now on.

I took a big hit on my last trade coz I had gone in without confirmation of what I think was forming - namely, a bull flag/pennant. I ASSUME it was going to be that after TF left its consolidation base.

A proper entry calls for the actual formation of a flag. But there was none of course.

I was aiming for TF to reach 480. It didn't of course.

I sat on my loss coz I didn't believe that TF was going down. It did, of course, and went down fiercely.

Judging from the speed of the downward move on a bullish day, I knew with near certainty that it was going to come back up. But I had entered the trade at 3am (PM EST), and there was simply not enough time for me to see what was going to develop.

I exited at the floor of my trendline, at a loss that I think I can still recover emotionally from. What I lost in that trade was what I had made in the past 7 sessions - I refuse to risk losing more. It was no longer about trading my conviction. It was about getting out before I'm crushed emotionally. And I had to get out before market close because I don't hold my trades overnight.

I don't use any R:R. I don't believe in 2:1 or 3:1 in daytrading the futures. I believe in using a volatility stop (a mental stop for me, which has been 6 to 7 points recently), and take whatever the market wants to give. So far, because of my fear of having a losing day (coz losing days ruin my morale), I've been cutting my profits way too soon.

For the past 2 months, trading has solely been about pampering my senses, and about getting around my psychological barrier instead of dealing with it.

Not going to happen anymore. This is NOT the way to trade. If I'm going to continue to be lily-livered for no good reason, I might as well quit trading.

Yes, I totally agree with you that in scalping, it's difficult to repair huge damages. It's idiotic to scalp profits, and daytrade losses.

Thanks for your note, Vinay, and happy trading today (Thurs) :-)