[diablo272]

Originally Posted by bathrobe »

Robert, I only place limit entries and I didn't get filled fully when price would trade my price but not through it, just a matter of fifo I guess. When the ES trades through they get filled instantly though. Same thing with exits.

How far in advance are you placing your orders for them to be partially filled when price doesn't trade through your entry/exit? I only have limited experience trading ES, though I am planning on switching from YM to ES sometime in the future. This topic interests me because often on the YM you can get filled when price doesn't trade through because the BxA is often actually spread by 1 point. Thanks.

[thalestrader]

Originally Posted by Mickey Caine »

Thought I would post this as it might then sink into my thick skull. Why oh why did I take that first trade (Red Arrow). Went long after only a 23.6 retrace and only 3 ticks from a floor trader pivot level. DUMB. But more importantly, why did I not take the next trade (white Arrow) ? A healthy retrace and sufficient room to get off my first target before hitting resistence.

Hopefully putting this down in black and white might help.

Hi there,

I don't know if you really wanted anyone to answer your therapeutic questions, but I thought I'd share a few observations.

1) Your first long trade, presuming it was in accordance with your established trading plan, was fine. You had a long entry signal, you entered and placed a stop loss, and your stop loss was hit, taking you out of your position with a very small loss. Excellent trade!

2) Your second question as to why you did not take the second signal is, as you note, a more important question, and one that is easily answered. I am again presuming that this was a signal for you to take a position in accordance with your established trading plan. Presuming such, then the reason you did not take the trade was that you feared taking a second loss.

3) Had you not feared the second loss, and had you taken the position, and assuming you would have managed the trade with some sort of trailing stop, you would have made a net profit on the two trades.

Success at trading is not about eliminating losing trades and only making winning trades. Trading is about managing risk by keeping your losing bets small in extent compared to the size of your winning bets. Success in trading is the cumulative effect of all of your bets (winners + losers) and not your winners alone. In other words, a focus on a high winning % almost always leads to a trader who is in the end a net loser. I know more than a few traders who brag about winning 70%, 80%, even 90% of their trades. Yet the average losing trade is 8 times larger than the average winning trade. I'd rather be a trader who only wins 40% of his bets, but whose average winning trade is 2 or more times larger than my my average loser.

You obviously have the discipline to enter a trade and place a stop loss. That means you are ahead of 95% of the folks who trade. Yes, 95% - and the percent who trade without an active stop loss is probably closer to 99%. On Friday I watched as a trader with my firm took a position in a stock with no stop loss, cursed as the stock moved against his position, and then doubled down by adding 1000 shares to his initial 1000. I then watched as he cursed the market for being wrong as the stock decined another 1.50 from his second entry. He does not like taking losses. He regularly averages his losers, only to suffer a greater loss. On Friday that one trade wiped out his profits from the last two weeks. You are miles ahead of this guy, and he's a pro (being a professional in this sense has everything to do with employment status and nothing to do with soundness of one's approach).

Now, you need to stop letting losses rattle you and knock you off your game. In Market WIzards, Larry Hite has a wonderful line where he says that being a trader, he is amazed at how much you can make from being wrong. What he meant, of course, is that losses do not matter. They are part of the game. The winners will more than reward you for the losses you experience.

Best Wishes,

Thales

[bathrobe]

Originally Posted by diablo272 »

How far in advance are you placing your orders for them to be partially filled when price doesn't trade through your entry/exit? I only have limited experience trading ES, though I am planning on switching from YM to ES sometime in the future. This topic interests me because often on the YM you can get filled when price doesn't trade through because the BxA is often actually spread by 1 point. Thanks.

Usually a few minutes, though sometimes 20-30 minutes if I am waiting for a pullback.

[Mickey Caine]

Thanks Thales.

Really appreciate your comments. You presume correctly. Fear really is my biggest problem.

However thanks to your comments, have now patted myself on the back, as I always trade with a stop, I never move it away from price and I never average down on a trade. You may well have given my confidence a wee boost there. I shall read your post again on Monday morning before I start trading. I also liked the idea posted earlier re putting a post it note around screen saying "Follow your Plan" each time you do not follow that plan. I will make sure I can still see my screen by lunchtime.

Thanks again.

[brownsfan019]

Regarding trading the ES w/ limit orders, IMO you should assume that price must TRADE THROUGH your level to get a fill. As BR has said, if it just touches your level, you may get partial or no fills. That is one difference of trading the ES vs. YM or even NQ for that matter. If you are reviewing previous ES charts and you see that price touched your level, don't assume you would have been filled. Sometimes there's 10 contracts traded there or 1000. If it's low, you more than likely will not get filled.

[atto]

Originally Posted by brownsfan019 »

you should assume that price must TRADE THROUGH your level to get a fill.

Exactly. Simulator results are not reliable, so you need to assume that price went past your entry. Rarely will you get a live fill at low or high tick. A small word of wisdom: when your entry setup works perfectly, you might not get filled on a limit. When it doesn't, you'll always get filled. If your entry strategy nails low or high tick often, consider using market orders (or stops).

[jonbig04]

Originally Posted by atto »

Exactly. Simulator results are not reliable, so you need to assume that price went past your entry. Rarely will you get a live fill at low or high tick. A small word of wisdom: when your entry setup works perfectly, you might not get filled on a limit. When it doesn't, you'll always get filled. If your entry strategy nails low or high tick often, consider using market orders (or stops).

You are exactly right. I am never using another limit ever again.
Well ok maybe I will....but not very often!

[brownsfan019]

Atto brings up a very good point - if you enter on limit orders, your losses are GUARANTEED to fill; meanwhile your wins MIGHT fill.



If that seems backwards to you (like it does for me) considering entering on buy stop or sell stop orders. Your winners are GUARANTEED to fill and your losses MIGHT fill. Personally, I only enter on buy/sell stop orders - I want to buy into strength and sell into weakness; not buy into weakness and sell into strength.

Just