ES 3min
Levels that I'm watching. Plus 776 & 782.
I have no idea if ES wants to test the high or the low, and I have no idea how I'm going to go about trading today. So far, using stops has been EXTREMELY uncomfortable and unnatural. If it takes doing something that feels totally unnatural to trade well, I'll choose sitting on a losing position over using a stop ANYTIME. Ok, that's not fair. Sitting on a losing position is absolutely in my blood, but damn, it's gotta be the most uncomfortable thing to do!
So far, scratching without waiting to be proven wrong, or outright sitting when my trade has not been proven a bad one has worked FOR ME (save the few times that I totally lost my mind and decided to inflict some REAL pain in order to learn). Trading without a hard stop has been stressful, but I feel in control. Putting in stupid bracket orders or simply a hard stop makes me feel like a really lousy stuntman that needs a safety net, or more aptly, a leashed dog.
I'm tired of wanting to do what's right. Why can't what's right be whatever that makes you money 80 - 90% of the time?? Now I've simply gone from feeling stressful to MORE stressful coz I really don't know what the hell I'm doing.
Why does wanting to be JUST me ALWAYS feel so wrong???
8 comments:
Jules,
Trading with stops is always harder. You have to be not only right about the direction of the market. You have to be right at exactly the right time.
The problem with no stops is that 5-10% of the time or less you will put yourself in a place you don't want to go. Also leverage needs to be a lot less to keep away from blowouts.
Trading is uncomfortable in general. That's how you know you are doing it right :P
LT
just a reminder, you get market waits for FOMC tomorrow + option expired week + rollover affect.
Choppy morning, stops were getting hit left and right. Volume was enemic, leaving the S&P mini locals to push the market around. Only ones making money were the market makers.
This is not the best environment for setting tight stops. I learned this the hard way and I'm still licking my wounds.
Regarding uncomfortable trading. There's an audio clip on the shadowtraders website and he talks about how the act of trading should be easy, no struggles and no work. Simply set your zones and sit back and watch.
The uncomfort and distress should be focused on the planning process. You're on your owon journey and I'm not sure how this will help you, but it gave me some perspective so I'll pass it on.
Keep pushing.
MVW, when trading the TF, I've always set a stop 7 points away (not a hard stop, but I honor it when it's hit. It's just more difficult to keep to stops that are too tight) whenever the market chopped around wildly. Worked out fine for me. When I decided to use a tighter stop since Dec, coz the daily range had gotten so miserably narrow, that was the beginning of my losing streak. I would say that I'm still very much in it right now (the losing streak). Until I've figured out what I want to do ie. to scalp with extremely tight stop or work with a fix volatility stop, I'll never be able to trade like before ie. set a reasonable stop, and take profit whenever momentum is not working for me anymore.
I tend to think that trading is not meant to be easy until you get to the point where you're trading with pure profit, and when you've set aside an amount that will see you through for the next 30 years. Then whatever you have in your trading account is really no different from monopoly money - your focus will then really be on the strategy. No psychological barrier.
"Trading is uncomfortable in general. That's how you know you are doing it right :P"
Vive la méthode Knotty Warhol!!!!!!!!!
Hi Jules,
As taboo as trading without hard stops are, I've met a lot (good) traders who use mental stops and utilize discretionary exit signals, and are profitable doing it so long as they are directionally correct and well disciplined. These traders also have very little patience for market noise - if the market does not behave, they close their positions and take a loss which is usually equivalent to a stick of bubble gum.
I find this style fascinating, however, countertrend trading without stops reminds me of my first week introduction to trading...ouch. For me, the other apprehension I have about trading without stops is that I don’t have enough skill to read every single tick on the chart and discern meaning from it.
You are right however to imply the only right way to trade is the profitable way, assuming your statistics are setup in your favor in the long term.
Thanks for sharing.
Hahaha....LONELY!! Why am I not surprised again that you'd be the only one who will understand LT? LOL!
MVW,
Statistically, not working with a hard stop, and not working with a tight mental stop had worked for me. I have documented the numbers on my performance review for 2008 (link is on the left). It was precisely after I started doing things differently that I started to totally lose it.
I have no idea when I started to go counter-trend. I probably had done it all along without my realizing it. When market was apparently moving up during my most profitable months, I had gone short mostly. Like I said, I'm a natural bear. Could have something to do with momentum. Plunging is always faster. I go with whatever that goes faster. It's only in the last month or so that I started seeing prices shooting up. No more climbing up laboriously. Bears running. Stampede always create crazy momentum.
Thanks for your notes :-)
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