1. Please note that I never said "the trade feels" wrong. I have only talked about getting out at predetermined levels in both price and time. In other words, a plan that is repeatable. Not that much discretion here.
I also talked about jumping back on board. I said if you method only produces a signal to enter on a mov. average cross, for example, if you get out then you need another cross to get back in. For this type of entry, getting out is NOT good, because you can not get back in quickly. Moreover, with the cross example, before you can go long again , the moving averages have to tell you to go short. So this not actually the situation we are discussing here.
2. The one thing that all successful traders share is this: survival.
They have survived the learning period long enough to get to a place where the are now able to make money. Capital preservation is key. You can not make money tomorrow if you lose it all today.
I would have to agree with the POP: trading is a loser's game. He who loses best, wins. If you can take the losses and still be around to take advantage of the wins, you make money. You become one of the few.
95% lose in this game. That does not mean the other 5% got that way by winning from the start.
I am reminded of the story of a new trader that got a job on the floor of the CME. What was the first thing he learned? Some secret method held tight and known only to the coven of pit traders? No. He was taught how to get out of a losing position 100 times out of 100. Note getting out here does not mean setting a stop and waiting; it means recognizing you're on the wrong side and taking yourself out.
a. If it is just about winning, why would so much time be spent on handling losses?
b. If it were just about setting stops to be hit, why would so much time be spent on getting out of bad trades?
c. (although not what we are talking about here) If it were about winning trades, why wasn't the trader given that INDICATOR so many losing traders are searching for?
3. As far as over trading. Two things: being right and sitting tight. This keeps the amount of trades made down. And the other is what trades you enter to begin with. With
VSA it is possible to enter trades at the point where the Mark-up phase is just about to begin or beginning. A trader can position himself to take advantage of the supply/demand imbalance and thus by pass that channel, sideways movement. In short, selectivity on signals coupled with being right and sitting tight. But if you find yourself in a go nowhere trade, get out. If it then starts to move, be nimble enough to jump back in.
Again, jumping back in does not mean getting in just because. You should have clear rules for entry and re-entry. Maybe you have to look for a add on signal as your new entry point, that is a choice you would make. But the concept of getting out, then getting back in does suppose a nimble approach. Which is why the people who are writing about it most, tend to be floor traders.
4. Once a stop is in place it should never be removed. And it should not be moved except in the desired direction of the trade. Putting in a stop in the first place is for protection. There will be times when the market moves against you too fast for you to get out sooner. A stop can also help you define certain market conditions or where price is on the "playing field". But the idea that only at that price do you know you are wrong is felonious at best. Especially, since most people use stops not based on what the market is telling them but on account size. If you have a 20 tick stop, you can't realize you are on the wrong side of the trade after the market moves 15 ticks against you (5 pips short of your stop)?
In truth, good stop placement usually means stops are further away than most people would want them to be. The market doesn't care how much a trader has in his or her account. The market will, however, tell a trader where the optimal place to place a stop is. But for most traders this place can be too far away. Now, why not place a stop at the level dictated by the market, but have a mental stop (much closer and more in accordance with risk parameters) as you real stop? Which is essentially what I have been suggesting.