A new Life, A new Career, A new Dream - I am a Trader

[TraderRavi]

Hello Jain bro,

Previously I was actually facing this issue when I was choosing an entry location and keeping a stop at 8-12 points below the entry level. Most of the time my stop was getting hit and after that market was moving in the desired direction. It was then I realised and asked my self why I am keeping a stop of 12 points ? Why not a stop loss of 25 points. The answer was 25 point stop was way out of my risk taking capability on a single trade. Then the next question was even If i can afford a risk of 25 points stop on a single trade, Is that any guarantee that it wont get hit ??

So the first requirement of stop placing came as it should be chosen as the level, which when hit will invalidate your trade premises. Lets say I am anticipating a breakout pullback setup long setup. So let the bears show what all they have got. And my stop will be below that point and if price will reach the stop level, then It should invalidate my long setup, and no more I will be looking for a breakout pullback long trade.

Therefore now my approach is determine the initial stop level, choose an suitable entry close to stop (minimize the risk), Once entry triggered manage the trade actively rather than choosing an entry first and keeping a stop below 10-15 points below that.

Sometimes after the stop region is defined, I don't find a proper entry level/pattern, and I have to let the price go, as the trade setup does not favour my risk reward ratio. for example yesterday after 1PM i did not find a trade favouring my risk reward ratio, so no trades were done after 1 pm.

Lastly, whenever a stop is getting hit it means either we have an early entry, or our trade premises is an invalid one. So we must look deeper in to our trade analysis method If price is moving in our expected way or not. And stop loss is a risk management exit, and is there to minimize the loss and keep us alive in the game. So it should be welcomed.

Regards
Taiki

very good post bro, sometimes my SL gets hit so fassttttt , because of bad entry.........

 

[VJAY]

Hello Jain bro,

Previously I was actually facing this issue when I was choosing an entry location and keeping a stop at 8-12 points below the entry level. Most of the time my stop was getting hit and after that market was moving in the desired direction. It was then I realised and asked my self why I am keeping a stop of 12 points ? Why not a stop loss of 25 points. The answer was 25 point stop was way out of my risk taking capability on a single trade. Then the next question was even If i can afford a risk of 25 points stop on a single trade, Is that any guarantee that it wont get hit ??

So the first requirement of stop placing came as it should be chosen as the level, which when hit will invalidate your trade premises. Lets say I am anticipating a breakout pullback setup long setup. So let the bears show what all they have got. And my stop will be below that point and if price will reach the stop level, then It should invalidate my long setup, and no more I will be looking for a breakout pullback long trade.

Therefore now my approach is determine the initial stop level, choose an suitable entry close to stop (minimize the risk), Once entry triggered manage the trade actively rather than choosing an entry first and keeping a stop below 10-15 points below that.

Sometimes after the stop region is defined, I don't find a proper entry level/pattern, and I have to let the price go, as the trade setup does not favour my risk reward ratio. for example yesterday after 1PM i did not find a trade favouring my risk reward ratio, so no trades were done after 1 pm.

Lastly, whenever a stop is getting hit it means either we have an early entry, or our trade premises is an invalid one. So we must look deeper in to our trade analysis method If price is moving in our expected way or not. And stop loss is a risk management exit, and is there to minimize the loss and keep us alive in the game. So it should be welcomed.

Regards
Taiki

Nice taiki......
same thing happened in my crude trades earlier ...I kept 6 point s/l every time...it worked good for 2-3 months ...then i feeled start of hitting s/l and price move in direction with reentries....so I too changed it same as you thought ...

 

[jain.er]

Thanks Taiki v good post about SLs

So one must have a SL level ready before making an entry (as per ones risk reward)

Just a small example.

If we are looking to make an entry at PB of HOD say 6100
NF breaks 6100 goes to 6115 and then give a PB
say our SL is 6098; then how should we make an entry (in case we assume 10 points SL)

Can we use limit order @6108 or is there any other way to make entry in the PB

 

[akrsrivastava]

Hello Jain bro,

Previously I was actually facing this issue when I was choosing an entry location and keeping a stop at 8-12 points below the entry level. Most of the time my stop was getting hit and after that market was moving in the desired direction. It was then I realised and asked my self why I am keeping a stop of 12 points ? Why not a stop loss of 25 points. The answer was 25 point stop was way out of my risk taking capability on a single trade. Then the next question was even If i can afford a risk of 25 points stop on a single trade, Is that any guarantee that it wont get hit ??

So the first requirement of stop placing came as it should be chosen as the level, which when hit will invalidate your trade premises. Lets say I am anticipating a breakout pullback setup long setup. So let the bears show what all they have got. And my stop will be below that point and if price will reach the stop level, then It should invalidate my long setup, and no more I will be looking for a breakout pullback long trade.

Therefore now my approach is determine the initial stop level, choose an suitable entry close to stop (minimize the risk), Once entry triggered manage the trade actively rather than choosing an entry first and keeping a stop below 10-15 points below that.

Sometimes after the stop region is defined, I don't find a proper entry level/pattern, and I have to let the price go, as the trade setup does not favour my risk reward ratio. for example yesterday after 1PM i did not find a trade favouring my risk reward ratio, so no trades were done after 1 pm.

Lastly, whenever a stop is getting hit it means either we have an early entry, or our trade premises is an invalid one. So we must look deeper in to our trade analysis method If price is moving in our expected way or not. And stop loss is a risk management exit, and is there to minimize the loss and keep us alive in the game. So it should be welcomed.

Regards
Taiki

As you enter a setup area, first identify your stop loss point, then check your target location. After this check your entry point. Does the entry point confirm to your acceptable R:R. If yes , then take the trade.

 

[Taiki]

Thanks Taiki v good post about SLs

So one must have a SL level ready before making an entry (as per ones risk reward)

Just a small example.

If we are looking to make an entry at PB of HOD say 6100
NF breaks 6100 goes to 6115 and then give a PB
say our SL is 6098; then how should we make an entry (in case we assume 10 points SL)

Can we use limit order @6108 or is there any other way to make entry in the PB

Okay, So price has pulled back and your stop loss region is defined at 6098.
That means, once 6098 is breached no more you will be looking for long setup, as it has invalidate your trade premises.

Now after stop loss level is identified next I will check for the targets, assuming a pivot high made at 6015, that will be my target 1, where I will book part of my profit (if I am trading with multiple lots).

Now again why should I say fixed 10 points for my entry - stop loss distance ?? Let the price tell what will be the best entry level, I will simple choose to take it or leave it. If I wish to play for R:R as 1:1 then my entry should not happen beyond 6005.5. This will be my entry limit as per risk reward.

Now I have my stop loss defined, target 1 identified, and last entry limit known. Now on micro scale (1min) I need to check for candle patterns if they supports my trade premises. If yes I can put a buy stop order at 6005 and once triggered, i will place the stop loss order and will manage the trade.

On the other hand if price stalls and give better R:R before 6005, that will be my entry level.

Regards
Taiki

 

[Taiki]

Trade on 23 Oct 2013

Yesterday was a good day to trade, trend was smooth and easy to pick. But later in the day failed to carry the double bottom long move.

Regards
Taiki

 

[Taiki]

Trade on 24 Oct 2013

The morning rally was a continuation of previous day uptrend. Did not get any entry location as per my analysis. Price broke out the S/R level at 6240 and the high was made at 6267. I was looking for weakness in pullback for a BPB/BOF setup. Though the pullback was not smooth but the chart and swings marked in red area shows clear weakness in bullish momentum and rising of bears.

Had attempted 3 trades in this area but scratched them with minimal points in hand.

The 4th and 5th trade gave good movements and made my day. Another good day to trade. Did not trade after 5th one.

Regards
Taiki

 

[Taiki]

A shitty day today

Market was range bound after 2 day's of big volatility. Got whipsawed a little in the early sideways range. Exited few good trades early because of doubts. Few early entries also did cost to me..

Net a loosing day.. Did 5 trades, 12 points loss..

Regards
Taiki

 

[DanPickUp]

A shitty day today

Market was range bound after 2 day's of big volatility. Got whipsawed a little in the early sideways range. Exited few good trades early because of doubts. Few early entries also did cost to me..

Net a loosing day.. Did 5 trades, 12 points loss..

Regards
Taiki

Never mind, the next good possibility comes soon. Enjoy your weekend, analyze what can be improved and what went wrong and here we go again. :thumb:

I also made a mistake today by not having the patient to wait for my pre calculated entry and get stopped out. I know what I did wrong, so patiently waited for the next entry level and this time it is ok. Shorted Mini S&P 500 at a level at 1752.50 and have a look at where we are now . So mistakes are part of the business.

Take care / DanPickUp

 

[Taiki]

Hello All,

I have a little problem here on keeping updates on my trading logs. I want to know how everyone else store their daily trade logs ??

I have been using an excel sheet to keep my trade logs, with columns as
Date, Contract, Trade Type, Entry Time, Entry Price, Lot Size, Exit Time, Exit Price etc..

The problem I am facing with this, lets say I entered NF with 2 lots at once. but exited 1 lot at target 1 and exited the second at target 2. So in this case shall I record the Exit Price as the average price between my two exits ?? Else if I am making a second entry in my table then the second one is missing the entry price. And in that case it will be counted as 2 trades for the day, where I have done a single trade. So I am real confused here.

I am thinking of making an excel - Access driven application to store them in Access DB, but that will need some time, and I want to keep it simple. So just want to know how others handle this ??

Regards
Taiki