Thoughts on Day/Swing Trading

[S-1585]

GAME OF WINNING AND LOOSING

In initial period we have no method....later we latch on to some method....it may be moving averages, camerilla pivot points, indicators, swings....etc .[/B]

Smart_trade

One point which I feel is important that one should try to understand himself during this period. Try to know yourself.
Everybody starts looking for different methods, alternatives as a part of learning or as a result of failure in 1 or 2 trades. Important is during this journey, identify what is best suitable for you, in terms of timeframe, in terms of method.
Person who is comfortable in trading chart patterns e.g. will trade pennants.
For the same script, another person who is comfortable with indicator might use MA or ADX to define trend and oscillator to enter the trade.
The point is one has to find his own comfort instead of running around methods. Once you find it, rest is automatically you will build strategy around it.

 

[Smart_trade]

One point which I feel is important that one should try to understand himself during this period. Try to know yourself.
Everybody starts looking for different methods, alternatives as a part of learning or as a result of failure in 1 or 2 trades. Important is during this journey, identify what is best suitable for you, in terms of timeframe, in terms of method.
Person who is comfortable in trading chart patterns e.g. will trade pennants.
For the same script, another person who is comfortable with indicator might use MA or ADX to define trend and oscillator to enter the trade.
The point is one has to find his own comfort instead of running around methods. Once you find it, rest is automatically you will build strategy around it.

Very true...one of the major reasons for failure in trading is people trade methods with which they are not comfortable...so there is always tension, anxiety before a trade and after a trade....there may be 10,000 ways of making money in the market and we need to just find 1-2 ways with which we are comfortable psychologically and emotionally. After every 2 loosing trades traders feel that their current method is no good and they have to find a better method....this unending search continues.

Smart_trade

 

[vishal4278]

Thanks for the Post

 

[preethi21]

I agree trading systems have a big role in Trading...

But i believe in money money management, position sizing , releasing risk, adding positions are the key factors in success
(adding position is the most most imp part to max ur profits ... and u need experienced skill to add positions and manage it)

Trading is an Art.... Once u got the track ... i can bet you u will love this amazing art.. You will enjoy it surely

good luck enjoy trading

 

[Smart_trade]

To take a trade or Wait for some more time...........

Once we have identified a competent trading method, we have to backtest it very rigorously for a long period. The backtest gives us an idea of the "nature" of the method, challenges it throws at you in real trading and prepares you for any situation in the market. Though backtest is not with real money so it cannot exactly simulate the trade environment but it definately is the second best to real trading to understand various issues you face in real trading.

Now comes another problem.....your method identifies a set up in real trading which now you are doing on it , the trade is about to trigger and now your mind starts playing games......." hmmmm the trade environment is still a bit hazy....bit unclear....let me wait for some more time....." It is my experience that all trades are a bit hazy initially....and the real money is made in between the point you start doubting about a trade and you and everyone else get confirmed about a trade......by this time the market has moved in favour of your trade and now all scramble to get in......the meat is over....also now the market is much away from your stops....so now the trade looses its Reward/risk ratio advantage.....and finally you miss the trade.
Many times this will be a big winner and you take a oath not to repeat these things in future but this pattern keep repeating one has to break out of this pattern........let us understand how professionals manage such dilemas.....

When a trade is about to trigger, even a good trader has the same issues which a new trader has......but he takes the trade knowing fully well that if it does not workout, he will get out of that trade with minimal damage.The reaction of successful and novice traders to the failed trade is totally different. The following is the reaction of a loosing trader :

1) Damn.....this trade again going in loss....how does market know I am in a trade so it goes against me..........game of operators.......a honest trader has no chance of succeeding........

2) I need a different tweak to this method.......

3) After such research I have taken a trade.....how the hell can it go wrong ??? I must take some more positions and average......

4) I should have waited for it to be more clear......

Now let us see how a professional reacts.....he has taken a trade on a breakout which is not working out.....he will say....hmmmm I thought this trade will be a great winner....but market does not want to go in the direction of the breakout.....ok....no issues.....if the market comes back in the range it broke....I need to get out of the trade and re enter again if the necessary.....I will not wait till my stops are hit.....the breakout which I traded is not valid....so I am getting out....I will always get many more opportunities in the market ....thank you market.....see you in the next trade...

Once we start accepting that loosing trades are unavoidable in this game we must minimise the damage they do to our account and we should have no fear of loosing trade when the trade is about to trigger and we take a major step forward in our journey of becoming profitable traders.

Smart_trade

 

[rajputz]

Once we start accepting that loosing trades are unavoidable in this game we must minimise the damage they do to our account and we should have no fear of loosing trade when the trade is about to trigger and we take a major step forward in our journey of becoming profitable traders.

Smart_trade

Very well said smart trade sir. It is the heart of trading. Still we find it extreme difficult to train our mind accordingly. Hats off for you.

 

[S-1585]

To take a trade or Wait for some more time...........

Once we have identified a competent trading method, we have to backtest it very rigorously for a long period. The backtest gives us an idea of the "nature" of the method, challenges it throws at you in real trading and prepares you for any situation in the market. Though backtest is not with real money so it cannot exactly simulate the trade environment but it definately is the second best to real trading to understand various issues you face in real trading.

Now comes another problem.....your method identifies a set up in real trading which now you are doing on it , the trade is about to trigger and now your mind starts playing games......." hmmmm the trade environment is still a bit hazy....bit unclear....let me wait for some more time....." It is my experience that all trades are a bit hazy initially....and the real money is made in between the point you start doubting about a trade and you and everyone else get confirmed about a trade......by this time the market has moved in favour of your trade and now all scramble to get in......the meat is over....also now the market is much away from your stops....so now the trade looses its Reward/risk ratio advantage.....and finally you miss the trade.
Many times this will be a big winner and you take a oath not to repeat these things in future but this pattern keep repeating one has to break out of this pattern........let us understand how professionals manage such dilemas.....

When a trade is about to trigger, even a good trader has the same issues which a new trader has......but he takes the trade knowing fully well that if it does not workout, he will get out of that trade with minimal damage.The reaction of successful and novice traders to the failed trade is totally different. The following is the reaction of a loosing trader :

1) Damn.....this trade again going in loss....how does market know I am in a trade so it goes against me..........game of operators.......a honest trader has no chance of succeeding........

2) I need a different tweak to this method.......

3) After such research I have taken a trade.....how the hell can it go wrong ??? I must take some more positions and average......

4) I should have waited for it to be more clear......

Now let us see how a professional reacts.....he has taken a trade on a breakout which is not working out.....he will say....hmmmm I thought this trade will be a great winner....but market does not want to go in the direction of the breakout.....ok....no issues.....if the market comes back in the range it broke....I need to get out of the trade and re enter again if the necessary.....I will not wait till my stops are hit.....the breakout which I traded is not valid....so I am getting out....I will always get many more opportunities in the market ....thank you market.....see you in the next trade...

Once we start accepting that loosing trades are unavoidable in this game we must minimise the damage they do to our account and we should have no fear of loosing trade when the trade is about to trigger and we take a major step forward in our journey of becoming profitable traders.

Smart_trade

Very nice post sir. copied part of post here:
http://www.traderji.com/technical-analysis/50994-how.html#post529618

 

[HEM]

Trading is an Art.... Once u got the track ... i can bet you u will love this amazing art.. You will enjoy it surely

Very well said Preethi...:clapping::clapping:

 

[timepass]

...(adding position is the most most imp part to max ur profits ... and u need experienced skill to add positions and manage it)..

Preethi21, can you elaborate more (with examples if possible) on this ? Thanks in advance.

 

[ashwani chadha]

preethi21, can you elaborate more (with examples if possible) on this ? Thanks in advance.

what ever stop loss system you are using tkae next position when previous one is at break even and take third ,when second is also at break even