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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Dan Duchardt who wrote (15211)	2/10/2002 5:04:57 PM
From: KymarFye	Respond to of 18137

Congratulations on the winning streak, and, FWIW, I think you'd have to be pretty darn unlucky for tomorrow morning to be a big-gap-up-AND-explode. We both know that Apak's examples were intentionally exaggerated. As for the overall orientations - accumulate small wins/cut losses short vs. higher win pctg./avg. win while accepting larger drawdowns/losses - you could even argue that all B's are A's and vice versa in alternate time frames. So I don't know whether I'm a B or an A, though, as may perhaps be obvious, the prescription of breaking bad, p/l- decimating habits is precisely the one I'm focusing on - and I still don't understand why Apak thinks it's a delusionary "dead end." Over recent weeks, I've seen myself careen from B-ism to A-ism and back again many times, and I know that shifting impulsively or erratically from scalp to trend mode is yet another recipe for disaster. It's probably advisable to the novice to concentrate on one or the other - not that, even when a true novice, I was all THAT good at following advice (unless it was really bad)... The third alternative, and the one in which, I confess, I've maintained a more abiding interest, would propose that market action within an appropriate probability framework can reveal whether it makes more sense to scalp-and-run (or just run!) or to hold-on-for-dear-trends. For unclear situations (possibly the majority of the time), or even in ones that seem rather clear, there's also the option of taking off half or some other fraction of a successful trade at the cessation of a direct move or the reaching of some reasonable initial target, and holding the rest at least until some new datum appears to negate or confirm the possibility of follow-through.

To: Dan Duchardt who wrote (15211)	2/10/2002 5:30:37 PM
From: Apakhabar	Respond to of 18137

You make good points about the dangers of over-trading if the stop is set too short. But if I were Trader A my first thought would be not that I was afraid of risk, but rather, that my criteria for entering a trade were faulty. Same for any trader getting stopped out all the time, assuming the stop allows for a reasonable jiggling, which ought to be anticipated. If you're still getting stopped out consistently, do you really want to increase the size of the jiggle? That is the easiest thing to do, yes, but is it the safest? You might instead think about what makes you take a position. Apparently some feeling, some belief, or some indicator induces you. Why not try ignoring that "advice" from yourself? You've heard people say that successful trading is so often counterintuitive, why not try it? Sure, you will miss some opportunities, but over the long haul, if consistent trading is your goal and not a quick strike to riches, then you've got to learn to accept missed opportunities as a price to pay for better entries.

To: Dan Duchardt who wrote (15211)	2/10/2002 9:11:59 PM
From: Echo	Respond to of 18137

Dan, I can definitely identify with the constant small losses scenario. For quite a long time I was constantly finding myself getting stopped out for many small losses. Eventually it seemed that I was practically expecting to be stopped on every trade, thereby guaranteeing the losing outcome of my trades. As a result of this I tended to cash in on any trade that showed me a small gain because I grew fearful of losing that little positive cashflow, and often sat back and watched the trade go on to significant gains after I had exited. After reviewing my trades for the last year and listening to some common trading wisdom, I came to the conclusion that I was not ready to accept the loss that my stop point would produce if hit because my position was sized too large, so I was mentally defeated before I even put on the trade. I therefore got exactly what I expected from the trade, i.e. a losing trade because my stop was hit. To correct that, I have changed my trade strategy this year so that I now set my stop way beyond the intra-day market noise (I mostly swing trade), typically 1.5 times the average 10 day intra-day range. I then size my position accordingly so that my OUCH point is not reached when my stop is hit. This has helped in that I have already accepted the possibility of the loss, and I mentally know that it cannot hurt me anymore as I am sized appropriately. I then just sit back and let the market do its thing, with profit taking orders already in the market. This new positive expectancy from the trade has helped me on a physcological (sic) level and trading is fun once again. Echo