ES frustration today

[brownsfan019]

	Quote:	torero
	I'll have to say that if you see at that moment the trade seems to go against you, you exit. Then the next moment it does turn your way, you get in. This is the problem is that AT THAT MOMENT, what you see and interpret changes from one setup to another. This is what I consider trading on the fly, unplanned. If I come in with the trade, I have to know beforehand where I will be proven wrong, some resistance or support area, a valid objective level. Seeing the tape doing something I don't like at that moment doesn't give me enough to exit, because the next moment can be favorable. To me this is unplanned trading, intuitive trading. If you have it, great! if you don't, your account won't last long).

tor - I would think that trading by the seat of your pants can make a lot of money. For your broker. You are correct that certain traders could make this a profitable strategy, but for most retail traders (and especially newbies) this is a one way ticket to blowing up your account, especially in futures.

[Anonymous]

So many things to say.

Let's start with this. Mark Fisher is/was one of the biggest oil traders on the floor of the NYMEX. The Phantom of the Pits, as his name implies, was a large Pit trader in the S&P's amongst others.

As pit traders they have strategies that allow them to enter and exit positions on a very quick basis. It is not unheard of for any pit trader to enter a position long, go to neutral (sell the position) and then go long again in less than 5 minutes time. Commission cost are not of a concern to them. Nor are strategies that take time to develop (like a cross over-more later).

Hence if you have a method that does not allow for multiple entries or quick re-entries, exiting quickly becomes a problem.

BTW, just because it is in a book may not make it true, but I know that Mark has made more money trading than I have. I know he trades with size few people do. When he opens his mouth........

At the very least I want to listen.

How else is Knowledge passed on? If you are not fortunate enough to have a mentor, don't you have to rely on screen time and books?

No assertion that what I say is Gospel. It is more to spark ideas than define action. I don't use ACD anymore and would really not recommend it. However it is worth knowing how a real(pit) trader thinks.

Take a position, don't get married to it, get out quickly and be ready to get back in just as quick.

I have decided to break up the posts.

[walterw]

Keymoo I think you brought a topic that most of us traders have some emotional attachment.... this F&/%$k stops has made us suffer enough in our trading history... now if you are open minded (I think you are, you bring a very sensitive topic with great sincerity) I would like to share with you a little hint as to timing that may help or not but can add a nice educational input to this entire thread.... tell me if you are interested and I will post it, otherwise no problem... cheers Walter.

[Anonymous]

And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit.

And their experiences invariably matched mine-that is, they made know real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade (sit) than hundreds did in the days of his ignorance.--Edwin Lefevre Reminiscenses of a Stock Operator, p. 68-69.

I believe in surrendering to the market. In being in tune with the market. I believe in sitting tight. In fact, I do not exit a trade with a profit. I move my stop until that time where the market hits it. Being early, however, is not the same thing as being right. Being early is the same as being wrong.

So what are the ways to exit with a profit?

1. Being stopped out.

2. Exiting a position because the day session is about to end and you are a day trader.

3. Emergency situation that is going to take you away from the computer screen. And thus not allow you to watch the position.

If price move against you, things are different. Do you really need to wait for your stop to be hit to know you are on the wrong side? If your initial stop is based on an area where if hit, all conditions (for your trade)would be changed, then waiting for the stop to be hit still makes little sense. Before it is hit, you know you may be right on direction but are wrong on timing.

Why not get out, with the intention of re-entering when price starts moving in the direction of the initial trade?

A market moving sideways would be the same thing. The non-directional movement means you are wrong on timing, but could be right on direction. Here a "price band" should be used. If price is such that your position is +8 pips to -8 pips after X amount of time, exit. If you enter the trade and price moves -10 pips/ticks against you from the start-get out. Even with your stop was placed 20 pips/ticks away. These numbers are pulled out of a hat, so don't focus on them rather the concept itself.

Two bars later if price takes off, Jump back in.

If the price you paid is the same that the 'herd' can get 32 minutes later, then you are probably not in a trade worth being in at the time. Good or Bad trades should mean whether or not you followed your rules, your trading plan. If you did, the trade is Good. If you did not. The trade is Bad.

Here, good or bad trades (no caps) means a trade that is moving both in your direction and doing so with increasing momentum. That is, you want to take advantage of the Supply/Demand imbalance (order flow) as to be entering just prior to or at the start of the mark-up phase.

From a VSA/Wyckoff perspective sideways channels are accumulation or distribution phases. As a trader there is little value in entering during these phases. They can last for some time and the longer they last the more dramatic the subsequent move is. Trader should seek to enter as the mark up phase begins and the order flow is on his side. It should be noted that the longer term investor should be looking to enter during these phases.

Another thing to consider is this: Capital tied up in a trade has an opportunity cost. Most people do not trade multiple tradable (although they should), and if you have capital tied up in a trade that is going nowhere, that is money that can not be put into a market that is moving. Trend followers need trend. Some market somewhere is always trending. If a trend follower has capital tied up in a trade that is not trending, he is missing out on the very thing that gives him is edge-trend.

[brownsfan019]

	Quote:	PivotProfiler
	Take a position, don't get married to it, get out quickly and be ready to get back in just as quick.

And that is one way of trading. Another way is to be confident in your entry and stop level and then let the trade work. This will reduce commission costs considerably and help prevent overtrading.

[brownsfan019]

	Quote:	PivotProfiler
	So what are the ways to exit with a profit? 1. Being stopped out. 2. Exiting a position because the day session is about to end and you are a day trader. 3. Emergency situation that is going to take you away from the computer screen. And thus not allow you to watch the position.

4. Have set profit targets before entering the trade and exit when these price levels are hit. Which in turn, can also lead to the possibility of entering a trade in the same direction as the previous trade once the initial profit is taken out.

	Quote:
	If price move against you, things are different. Do you really need to wait for your stop to be hit to know you are on the wrong side? If your initial stop is based on an area where if hit, all conditions (for your trade)would be changed, then waiting for the stop to be hit still makes little sense. Before it is hit, you know you may be right on direction but are wrong on timing.

Until my stop is hit, I am not wrong. I do need my stop to be taken out to show me that I am wrong. Until then, I have a great possibility of reaching profit.

	Quote:
	Why not get out, with the intention of re-entering when price starts moving in the direction of the initial trade?

This is a possible rule to follow when trading. I personally choose to just let my trade go and either prove me wrong - by hitting my stop - or prove me right - by taking my profit target out.

	Quote:
	A market moving sideways would be the same thing. The non-directional movement means you are wrong on timing, but could be right on direction.

I would rather get to the party 'early' than too late. Now, if you work under the assumption that your direction is correct, then why on Earth exit the trade? If you are correct, but early - why can't you just sit tight and give it some time?

	Quote:
	Another thing to consider is this: Capital tied up in a trade has an opportunity cost. Most people do not trade multiple tradable (although they should), and if you have capital tied up in a trade that is going nowhere, that is money that can not be put into a market that is moving. Trend followers need trend. Some market somewhere is always trending. If a trend follower has capital tied up in a trade that is not trending, he is missing out on the very thing that gives him is edge-trend

This is really just a function of the size of the account and the size of the current trade working. If you are trading e-mini's at $500 margins, you can trade 5 different markets on a $2500 account. If a person is over-leveraged in one trade, then something needs to be adjusted to the rules that are being followed. Now, I will aslo mention that trying to focus on too many markets for a newbie can be distracting and overwhelming. I personally trade 3-4 markets as I prefer to focus extensively on a small number of markets and understand how they move and react vs. trying to trade multiple futures, forex, options, and stocks.

Pivot - great discussion here. I hope others do not take offense to this discussion, but I hope we are providing a few sides of the story to the OP and others reading. Hopefully our experiences of trading can help some other traders thru the very difficult learning curve...

[Anonymous]

	Quote:	brownsfan019
	And that is one way of trading. Another way is to be confident in your entry and stop level and then let the trade work. This will reduce commission costs considerably and help prevent overtrading.

The question boils down to this: at what point do you know you are on the wrong side of the trade? Does you stop have to be hit for you to know that?
Why not one tick before? How about 4 ticks before.

At some point prior to the stop being hit, you know you are on the wrong track. Why not exit at that point?

I guess I should of mentioned I also believe in UNDER TRADING IN BOTH SIZE AND FREQUENCY.

Hence I talked about entering at the right time to avoid the need to exit during the sideways action. Also note that I did not say jump aboard the market in the opposite direction. Here we are talking as if you got the direction right, just not the timing. Get out and wait. but be nimble.

And again, Pit traders are not worried about commissions. As I said, these two gentle men are pit traders.

[brownsfan019]

	Quote:	PivotProfiler
	The question boils down to this: at what point do you know you are on the wrong side of the trade? Does you stop have to be hit for you to know that? Why not one tick before? How about 4 ticks before. At some point prior to the stop being hit, you know you are on the wrong track. Why not exit at that point?

I am wrong when my stop is hit. Not one tick before or one tick after. That's it. Until my stop is hit, I am not wrong, even if the trade is in the red currently. A loss does not become real until the stop is hit or until a trader hits the flatten button prematurely.

	Quote:
	I guess I should of mentioned I also believe in UNDER TRADING IN BOTH SIZE AND FREQUENCY. Hence I talked about entering at the right time to avoid the need to exit during the sideways action. Also note that I did not say jump aboard the market in the opposite direction. Here we are talking as if you got the direction right, just not the timing. Get out and wait. but be nimble.

So, we want to be nimble and exit trades quickly, but also under trade? If you are quickly hitting the flatten button and then quickly re-entering, I believe that's the opposite of under trading.

	Quote:
	And again, Pit traders are not worried about commissions. As I said, these two gentle men are pit traders.

I understand that, but as RETAIL traders commissions are a factor, especially based on what has been negotiated. We are all retail traders here, not pit traders, so to ignore commissions is a mistake in my opinion. If you are trading the YM and paying $5 round trip, you've just added another tick to your stop losses. To me, that's something that needs consideration.

Until tomorrow, good trading everyone. Time for this trader to get off the computer already!

[Anonymous]

	Quote:	brownsfan019
	...Until my stop is hit, I am not wrong. I do need my stop to be taken out to show me that I am wrong. Until then, I have a great possibility of reaching profit.

If your stop is placed at a point where the conditions for the trade become invalid at your stop level that would be one thing. But you still should be able to see you are wrong on timing and Possibly right on direction.

Most people, however, use money stops. They base stops on the size of their account or on some risk to reward matrix. If your stop is based on how much you are able to lose, why not exit sooner once you realize that you are on the wrong side. You don't have to lose all of what you risked to be wrong.

This is one of the times that you can limit your losses. Sometimes the market will move against you and hit your stop. Other times the move towards it will be gradual and you can save capital by an early exit. CAPITAL PRESERVATION IS THE NAME OF THE GAME, AFTER ALL.

	Quote:	brownsfan019
	I would rather get to the party 'early' than too late. Now, if you work under the assumption that your direction is correct, then why on Earth exit the trade? If you are correct, but early - why can't you just sit tight and give it some time?...

As a trader I need movement. If the market is not moving then nothing is being done. If you believe that one of the edges an off the floor trader has, is trend, then why enter a trade when trend in not present? Yes, the assumption was that the direction is correct. What is not known is how long the distribution/accumulation phase will be. While you're sitting tight waiting for the market to be marked up or down, there may be another market being marked up or marked down.

***As for profit target exits:

I am glad they work for you. I believe exiting at a target is speculating on the future when it is not necessary to do so.

*****One more thing: I am very glad that we are able to have a civil debate on a topic without the name calling and boorish insults of the other sites. Thank you Soultrader for community such as this.