Sunday, May 9, 2010

A Game Plan

Last night I had a long talk with Awais on all things trading... and came up with some "Ah Hah" moments during the conversation that spurred me onwards. Lets not forget that I had been legitimately making money on my live account until this past few weeks when I went off the deep end. I have one setup (my original pullback setup) that just works. So i'm going to just trade that and only that.

The "Ah Hah" moment was thanks to Awais who said he had changed his trade management. Awais never gets to par. At least not in the way most of us do. He will use a hard safety stop and then mentally observe price action and watch for ques that say it might be a good time to sacrifice the position. I get tons of pars, a lot of times on moves that tend to work and work well. But I don't participate because I remove myself from the signal after a measly 3-4 tick move in my favor. Frankly, that's noise in most markets.

I can't tell you how many times i've written in this very blog that I was "high ticked out" or "it kicked me out at par by a tick then went +20 in favor". So i'm going to be simming my one setup this coming week but relaxing the management HEAVILY. Not just on the pars, but on the exits as well. I need my setups to get greater than 2:1 and for that they have to be allowed to run big. My fear all along has been taking losses. Even the idea of -1 tick was revolting to me. But that has distracted me from getting wins, let along any big wins. I'll be much richer if I have a few 3-4 tick losses here and there rather than a bunch of pars if I can replace those pars with 15-30 tick winners.

So this week i'll be on sim trying to relax that management and see how it plays out. Depending on how it goes i'll go back to live next week.



E-Mini Player said...

Good luck bro! You'll do great...just read the market and don't force your will on it. On some trades, you may get a 4:1 R:R, and on others, you may have to settle with 1:1. Go with the flow :-)

Market student said...

Have you considered trading micro lots ?

Tilly Gibbons said...

Keep on asking this type of questions... Money is grave