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718

When I read this, I have to say that I fully understand the emotions you are describing and that they are probably common to 99% of all traders.

However, I think the answer to this is not in your strategy at all…

The issues you are describing are entirely in the field of risk/money management. For example, you say:

Firstly, you can wait for the confirmatory break-out from that consolidation zone before entering and, secondly, you place your stop on the other side of the zone to close out if the breakout is a fake. You know from your strategy that whenever the breakout is real then you will make more from the trade than you would lose if it is a fake. It is just simple money management. You risk management determines the position size/stop distance relative to your equity.

I know from your posts that you already focus a lot on your risk considerations and that is very good. But I think you may be failing to link this with your actual trade decisions.

Would I be right in thinking that whilst waiting for a set-up you focus on your strategy and risk/money issues - but as soon as you are actually in a trade that all goes out the window and you just watch the price moving and wonder if…

Like it! :smiley:

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719

No, I would never change it. There is no need. My strategy is indicative rather than definitive. It offers me situations that might be profitable and I like to add a lot of personal discretionary input to the decision process. That is simply because that is where I find the pleasure in trading and brings me closer to understanding and recognising the nuances of my market.

On the other hand, I very rarely enter a trade without the “blessing” of a set-up from my charts! :slight_smile:

This depends on one’s motives. If one is only interested in making money then I agree there would be little reason or motivation to look beyond one’s own method - in fact, it could even be detrimental to do so!

But if one is generally interested in trading then one is automatically interested in what others are doing and what works for them. If one is generally interested in art and likes traditional landscapes it doesn’t mean that one doesn’t also look at Salvadore Dali or Magritte…

There are many ways to set up a chart and decide what to put on it. Just as there are many fashions that determine what people wear. What suits one does not suit another - but it is all of interest.

I am a day-trader but I do not spend much time on charts. I do my analysis in the morning, decide what I am looking for and set things up…and then leave it. I usually do one trade in the European session and sometimes another during the US session, and that is it. In both sessions I am usually in and out within 1-2 hours and I’ve been paid (or sometimes not :slight_smile: ) and then I am free - and stress free - all the rest of the day :slight_smile:

I read some forums and other media whenever I am in the mood to see what other traders are up to. I have a passion for trading per se and for the markets in general. Whenever I read about someone’s approach that catches my interest I look into it - just like stopping and staring at someone else’s car in a car park that catches your eye - it doesn’t mean you would want to buy it for yourself.

My wife is not interested in cars. For her, a car is something that gets from A to B safely, economically, and reliably and doesn’t burden the environment, and that is it, no need to look further. I, on the other hand, love cars and driving. Whenever I take my car for service I ask for a courtesy car that interests me, like a new EV, for example. But it doesn’t mean I will buy one. I also follow F1 and rallies. But that doesn’t mean I want to drive like that around my own town :smiley:

Trading is such a vast subject. It covers all kinds of products, each with their own backgrounds and interactions on both micro and macro levels. It makes you look inside yourself and find things you didn’t know were there. It works on all kinds of principles found in other businesses everywhere and yet has its own very unique features. And it is a personal challenge where there is no fudging of the results. You either win or you lose - but, either way, the journey is so fulfilling! :slight_smile:

But it is time to get on with some of those “other things”! :smiley:

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720

Gotcha. So, it’s more for personal interest; not about searching for a more profitable strategy. I understand.

There are so many different strategies, dynamics, and perspectives when it comes to trading. You’ll never be bored!! haha

721

I had several losses today. One of them was a trade I wasn’t sure about taking. There were two other pairs with the same mixed signals, so instead of trading all three I only traded one, just to see what would happen.

It didn’t go well. I suspected it was better to stay out, and I was right. At least I didn’t take the other trades as well.

One trade, GBP/AUD, I moved my SL down to lock in some profits, and price turned against me. It’s ok. I got some profit. I’ll examine the trade later to see what I could have done differently.

There were two trades that really bothered me. One of them I should have entered but didn’t follow my strategy. The other, I had the right entry, but I closed too early when it was consolidating. I saw price action indicating that it could be a reversal sign. But it was a fakeout and I closed instead of holding.

This means I have to add some plan about how and when to close. I actually did already, but maybe I need to add some more details.

I picked up some good experience this week. There are three trades I want to examine this weekend.

This process is awful. I’m gonna vent for a little bit. This learning process is tough. I feel like an onion, and I’m constantly peeling off layers. I hope I have something sweet in the middle, like a cherry or a chocolate chip.

722

One good thing I forgot to mention regarding the trade I had a good entry but closed too early:

I was right! My entry was spot on! I have to be grateful for that. Knowing when to jump in is half the battle!

I got this!! Let’s go! Let’s go! Let’s go!!!

723

I remember a post a while back ,a member said the markets are completely random and you quoted that I disagree the markets are predictable after year s of experience I know this now ,I realise there are lots of different "meaning s "to this response but it be interesting to hear what you meant John

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724

There are certain points in the market where the odds favor a change in direction. However, they are just odds.

Sure markets are not random completely but by accepting that each trade you make has no one specific
outcome (namely a win) you don’t get nearly so attached to an outcome. And as a result, you can trade with a clear(er) head.

The incessant internal dialogue that comes with needing a certain trade outcome is a large part of why we fail as traders.

Now, just because you set a stop loss does NOT mean you have accepted that anything can happen. This is all explained well in the Mark Douglas book Trading in the Zone.

In short its nonattachment to a specific outcome. And that mindset is hard to achieve particularly when we are already on a bad trading run.

It’s the same reason why the Samurai adopted Zen, the last thing you need as a foe is wielding his sword at you is an internal dialogue saying you may be about to get killed.

Such nonattachment can also be found in top sportsmen and women. If you are worried about what the crowd is thinking, you going to choke.

I am surprised that you say I use the word ‘prediction’ in a previous post. I am very much against that specific word - so apologies if I ever used it.

In the book Better Share Trading by Darryl Guppy he talks about the two camps of trading styles, the prediction camp and the probability camp. The prediction camp has a woefully poor record when it comes to trading - I read that book a long time ago and the concept was burned deep into my brain - so I do find it surprising I used the word at all.

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725

Thanks for the explanation, understood yes Im in that mindset now after a few years, the markets are predictable.but yet random , The markets are very much alive and can be choatic or “stubborn/indifferent” at times . I never read in the zone book, but in the early years listened to it several times and watched his presentations,
The quote what always always stays with me anything possible. Outside of trading exceptional bad luck dose happen in life , the world’s events ,who would have predicted what has happened over the last five years .The unpredictability of sport at times is what makes it interesting .

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726

Funny you said that. I’m taking time today to study consolidations, and I took a note on a particular set-up within the consolidation.

It’s a candle that I would normally say, ¨yeah, trade that.¨ But I’m trying to avoid certain trades.

There are trades that fit my strategy very well and some that I’m actually forcing. The ones I’m forcing are trades that COULD be a good trade, but there are conflicting signals. Those are the trades that have a lower probability of success.

And I’ve taken them out of desperation. I’ve written in an older post that there are no certainties; just probabilities. The trades that fit one’s strategy are of higher probability.

I’ve taken too many trades that have low probability of success. Those are the ones I’m trying to avoid now.

Frankly, I think it all comes down to patience and precision.

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727

I’m taking time to study more consolidations. I found a nice consolidation zone on AUD/CHF on May 2021. It seemed pretty difficult and I didn’t understand how to analyze it. I just took it one step at a time and followed my strategy.

The problem is that there are some trades that end in losses, and there’s nothing you can do about it. Sure you can move your SL to BE, but then you could miss out on a nice trade when price retests your entry then moves in your favor.

That’s one problem: you can’t always move your SL, but if you do then don’t be upset if you miss the swing.

The other problem is that in a consolidation zone some trades end without an exit signal, then your fat profit returns to zero. I’m looking at a couple of those trades, and those losses are necessary because you just have to let the trade work itself out.

That’s the part that’s awful. Imagine your profit is 5x your risk, and then your profit not only goes to zero, you lose money because price hits your original SL.

Or just move SL to BE and deal with the consequences.

I’m just thinking how I’d feel trading that consolidation zone. You can’t just close a trade because you think, ¨hey that’s some nice profit¨. You could be closing your trade waaaay to early.

Depending on the nature of the price action, I just have to take that loss.

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728

@dushimes

I have not been paying attention to this thread much - please remind me what you see as an exit signal?

Please tell me timeframe you’re timeframe too.

Sorry for my ignorance on this thread of yours.

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729

No worries, it’s really really long…so, don’t worry about it. haha

Of course it depends on the situation. But my exit signs are usually marked by hitting a support or resistance TL on D1. I do however check W1 or M1 for reference.

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730

@dushimes

How do you define support or resistance with this type of trading? I will try to look back over the thread - IMO there is always an exit signal - something you said does not always occur in these setups.

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731

Exit signals it’s all is and buts even with lots of experience.Im doing ok as a trader these days but the dilemma I still have is do I become purely a day trader and scrap holding on to trades over night . regardless ,if a substantial profit is made.

732

@greenscorpio

I’ve never had an issue with exits, but I use trailing stops - not sure if that’s what you guys are doing or not.

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733

No have to confess I don’t use them.I see every trade different and don’t have fixed rules different circumstances ,generally I don’t have real tight stops but even this is not set in stone,for instance i.might add to losing trades but not in a hazardous way ,or as a reaction to loss with the stop already in position, I also add to winners . Ideally the stop moved to limit loss, better still at least break even .

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734

Not at all. I never gave it a serious try. And my trades need a lot of breathing room. I’d rather just ratchet my SL manually.

How do you use your trailing stop? Based on the last retracement, or just a few candles behind current price?

735

My backtests pretty much point out the most obvious trades. Perhaps, I’m trading way too much. I have to accept that perhaps that’s the case. One recent analysis showed me that while trading a consolidation zone, I wasted four trades. They were all unncessary.

This morning, I tried to keep that in mind. I think I should focus on the obvious trades. Trades that pretty much throw themselves at your feet. So, this morning, there were a couple trades that I was tempted to take, but wasn’t sure the best way to trade it—I didn’t see anything suggesting which way price will go. I decided to stay out. It feels weird, but if there’s no suggestion to which way price will go, then the odds of trading it properly are against me. It’s a random trade, pretty much. I’d gonna try waiting more for trades where the odds seem in my favor.

Just because price is turning around, retracing, or I see a long wick, it doesn’t mean I should jump in. It’s not just the signal, but where the signal is happening. That may be a factor that I’m overlooking.

The past few days I’ve been trading a bit less and focusing on studying charts. It does feel a bit counterproductive, but I need some answers regarding my strategy, and I’ll only find them in the charts. I need more answers before continuing.

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736

So, I saw a GBP/SEK sell setup on D1, and I was scared to take it. I just checked it, and now there’s a big bear candle. I could have taken it, and I should have.

I took a look at my diagram, and it says I should have taken it. The funny part is that I even have a specific area on my diagram for that EXACT set up. But, I didn’t even look at my diagram. The fear is real.

Today was also my first day of not taking desperate trades. There were several trades I wanted to take, but I didn’t. I think I have a hard time telling the difference between ¨can¨ and ¨should¨.

I need to spend some time focusing on what my entry signals are and aren’t.

Here’s the rub: I want to get to a level where I don’t need to check my diagram; I just look at a setup and I know what to do. Sovos was right. He said I seem to lack confidence in my strategy.

I wasn’t sure if that was right, or maybe my problem was something else. But he’s right. The GBP/SEK sell trade was an example of that.

Here’s what happened when I saw that setup this morning. I saw the doji, and the next candle was slightly bearish. Normally, new candles pullback a bit before going in their true direction. I assumed that price was gonna go bullish for a couple candles, and then I’ll short it.

However, my strategy said to jump in because the trend will continue. Well, I didn’t even look. It didn’t even cross my mind.

I guess I was trying to be so cautious, that I didn’t think about taking appropriate risk.

Mark Douglas talks about being paralyzed with fear. That’s what I was.

It’s funny. I just had a thought that I should make my diagram easier to read. Perhaps. But, that wasn’t the case. I didn’t even look!

I have a friend who I talk to every week. He always casually asks how trading is going. Of course it’s the same. But, I’m getting tired of hearing myself talk about how it’s the same.

I’m tired of coming on here and talking about how it’s not going great.

There are ebbs and flows in motivation. Sometimes, I feel frustrated. But there’s nothing to be frustrated at. I have a profitable system, but not a profitable frame of mind.

The traders makes the strategy, not the other way around. But I’m not giving up. Quitting is not an option. I just have to keep peeling these layers. A snake can only shed its skin against sharp rocks.

OK, ok. I got it. I’ve taken so many bad trades that when I saw the correct signal today, I assumed it could ONLY end in a loss like the other bad trades. That means, I see bad signals and good signals the same way. I see them the same way because I’ve been mixing them.

I need to make a COMPLETE list of signals.

Edit: On second thought, I remember checking my diagram for that trade, but I didn’t scroll and follow the instructions which say I could be wrong 3 times, or scroll down and see the instructions I have for that exact setup…

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737

I put on some motivational speeches, and I’m getting my head right. I’m trying to think about the best way to organize my thoughts, my signals, and how to organize the steps…

I clicked on two different charts, and on the third one I found a list of signals like I was already thinking about…that I already started and forgot about. The work is about 40% done!

Let’s go! Let’s go! Let’s go!