Doc, my passion gives me much stress...

[cooter]

If the job is a relative sinecure, that easily and comfortably puts $$$ on your family's table, then by all means, go for it.

But if it really doesn't make you happy, you'll soon be disillusioned and leave anyway.

It all depends upon your goals in life. Make money, feed your family, and be happy.

[Dogpile]

thanks for the input fellas.

I have this post-it on my computer which I got from a great book I read "Trading In The Zone" by Douglas.

Fear <==== Correct Mindset ====> Reckless

could also read as,

Insecurity <==== Correct Mindset ====> Overconfidence

I find myself drifting from one side to the other of this little balance. I have learned to control this somewhat by using mechanical strategies for entries and instant hard stops on all trades.

I have a few years worth of mortgage money saved. I do make money every month --it is the intra-month dry spells that cause stress. Actually, the real cause of the stress is the seeming random factor at work in the market. I love my set-ups -- but there is a certain randomness to how they work over the course of a week or a month because of the stop-loss factor. Sometimes your stop works by a few ticks and you make big money. Other times you get stopped to the tick and you lose. Other times you are just off on your gameplan and you stop out quickly and happy you did cause the market takes off in the other direction. I do truly believe in stops. There is just this funny game I play with the market for that percentage of your overall trades where the market tries to hunt down your stop before proceeding with what it wants to do. Sometimes your stop holds, other times it doesn't. This has been a never-ending process of how to set stops. But I chat with traders every day on this and this happens to everyone so I know its not just me. So you go on some run where you just feel cursed. Other times, your stop holds and you feel like you are a fine-tuning monster.

Thanks again all. Always good to work on some psychological stuff -- such a big part of this biz.

[brownsfan019]

Dog - it sure sounds like you are advanced in this wonderful biz, so I would caution you to abandon ship now. I mean, you sound like you are at a point that others dream of achieving & obviously paying the bills right now is not a concern (which can often lead to immediate failure). Just learn how to deal with the stress a tad more and I think you'll be fine. I would not give up now, it sounds like you are close by how refined your last post was. Many noob's could never write something like that.

[jperl]

	Quote:	Dogpile
	Sometimes your stop works by a few ticks and you make big money. Other times you get stopped to the tick and you lose. Other times you are just off on your gameplan and you stop out quickly and happy you did cause the market takes off in the other direction. I do truly believe in stops.

Well Dogpile, since you raised the issue of stops, let me suggest you learn not to use them. If you were a newbie, I would of course tell you to use them, but you're not a newbie, so you need to learn some advanced techniques of trade management that allows you to turn a losing trade into a winner. I used to use stops all the time and was slowly bleading to death. Eventually, I learned how to do scale ins and reversals. That got rid of the slow blead. To do this requires that you change your mental set with regard to loss. You need to develop the idea of risk tolerance. How much of your capital are you willing to risk on any one trade. Once you do that, you can better manage your trades. Stops if you use them at all should be relegated to safty stops, far from your entry in case your whole system crashes due to power failure.

JERRY

[brownsfan019]

	Quote:	jperl
	Well Dogpile, since you raised the issue of stops, let me suggest you learn not to use them. If you were a newbie, I would of course tell you to use them, but you're not a newbie, so you need to learn some advanced techniques of trade management that allows you to turn a losing trade into a winner. I used to use stops all the time and was slowly bleading to death. Eventually, I learned how to do scale ins and reversals. That got rid of the slow blead. To do this requires that you change your mental set with regard to loss. You need to develop the idea of risk tolerance. How much of your capital are you willing to risk on any one trade. Once you do that, you can better manage your trades. Stops if you use them at all should be relegated to safty stops, far from your entry in case your whole system crashes due to power failure. JERRY

That's one theory Jerry.

I personally would never put on a trade w/o a hard stop. Takes those emotions right out of the trade when stops are placed in a protective position. And by protective I mean where your position has a 'get out' place that is respected and protective in case of power failures. Stop placement is just as crucial as the entry and exit, if not more; however I would never recommend trading w/o one.

[Dogpile]

<<you need to learn some advanced techniques of trade management that allows you to turn a losing trade into a winner.>>

hey man, that is good stuff. I would also like a magic potion that allows me to sleep with Hollywood actresses on the down-low.

[jperl]

	Quote:
	I personally would never put on a trade w/o a hard stop. Takes those emotions right out of the trade when stops are placed in a protective position. And by protective I mean where your position has a 'get out' place that is respected and protective in case of power failures.

The problem with hard stops is just that. They are static. They don't allow for any change in the market dynamics while you are in a trade. How many times has your stop been hit, and then the price action reverses back to your entry? Probably more times than you are willing to admit. Or how many times has the market blown through your stop, only to reverse and come back to your entry? The point is, when you are in a trade, you have to manage it. That doesn't mean just sitting on your hands like a newbie waiting for either your stop to be hit or your profit target to be hit. It means being proactive in the trade like most pros are.
JERRY

[MrPaul]

	Quote:	jperl
	The problem with hard stops is just that. They are static. They don't allow for any change in the market dynamics while you are in a trade. How many times has your stop been hit, and then the price action reverses back to your entry? Probably more times than you are willing to admit. Or how many times has the market blown through your stop, only to reverse and come back to your entry? The point is, when you are in a trade, you have to manage it. That doesn't mean just sitting on your hands like a newbie waiting for either your stop to be hit or your profit target to be hit. It means being proactive in the trade like most pros are. JERRY

Interesting point Jerry, I honestly would have disagreed with you 6 months ago.

I know exactly what you mean though. I have had the amazing opportunity to work amongst some highly skilled seasoned professionals and that is surprisingly exactly what they do.

It wasn't until I fully accepted the fact that 90% of the information I had been fed through trading texts was just plain "off" and in some cases outright dangerous to my trading capital.

These guys were buying into down moves building 100-400 lot positions on the ER2 or ES and not using a hard stop. They were averaging down/up, adding to the position, trimming some off, moving their "stops" and completely dancing with the markets. At first I thought they were crazy until they would unload their positions an hour later at huge sums of profit after a rally or decline.

It took me a little while but I soon learned that there are a few stratospheres of expertise and trade management, when you start to reach the upper echelon you wont find what you need at Barnes and noble any longer. It just simply doesn't get printed.


P.S I'n not saying that anyone should trade like that, I just wanted to shed light on the fact that there are many very sophisticated ways of managing a trade that include not using a hard stop and waiting for it to get hit or not.

[Dogpile]

well for me and given my style... if my set-up doesn't work right away (within first 5 minutes) then the odds of it working at all drop off to something probably close to 50/50, perhaps worse.

just today, a short set-up, I took it and stopped out quickly for a loss (less than 5 minutes). I re-entered at a better price because the market didn't carry big off that move, it was a shakeout move. I recognized this and re-entered. I ended up making my loss back and some profit and put myself in position to make a big win while locking in the gain with a trailing tightening stop. This is just my style. You can dance with the markets and still use hard stops.

it has also happened where my stop goes off before my chart has even caught up with the real-time price. this is usually some mid-day unscheduled news that causes a very fast move in the market. my stop takes me out a few minutes before briefing.com can tell you what the news even was, much less react to it. I have just found that trading is like a Rubik's cube, you will never get that 6th side. Every method has some drawbacks, including use of stops. But the tradeoffs favor them IMO.

did you see the move in the DAX yesterday? dropped -123 points in 2 minutes. that is what, $6k per contract? man, electronic markets can get sick sometimes.

[brownsfan019]

	Quote:	jperl
	The problem with hard stops is just that. They are static. They don't allow for any change in the market dynamics while you are in a trade. How many times has your stop been hit, and then the price action reverses back to your entry? Probably more times than you are willing to admit. Or how many times has the market blown through your stop, only to reverse and come back to your entry? The point is, when you are in a trade, you have to manage it. That doesn't mean just sitting on your hands like a newbie waiting for either your stop to be hit or your profit target to be hit. It means being proactive in the trade like most pros are. JERRY

But what you are discounting is the ability to re-enter a trade. I would much rather exit trade A at an acceptable loss and re-enter trade B (in the same direction as trade A) and allow that trade to work. I have no doubt that if you are trading hundreds of lots that you can be more flexible as described here. Personally, I am usually in the 30-50 lot range and personally, I don't want to be averaging into a loser or sitting on a 50 lot wondering when I might exit at a loss. My stop losses are predetermined and measured. And as long as you have the flexibility to re-enter in a scenario as you've outlined, that's a much better proposition in my opinion. I'd rather be wrong once and then right, than wrong once and holding onto a large loss that just gets larger. And larger.