[Marko23]

Originally Posted by Mr_black »

MA's are like a mirror with delayed reflection for PA

You look at them as a smoothed picture or sum of the past -- what it is from it's very definition.

If so, what indication of the future gives it to you that cannot be read from the price?

[forrestang]

Originally Posted by thalestrader »

and you can access a download link to Market Wizards for the Wienstein and Baldwin interviews at this link:

4shared.com - free file sharing and storage - download

Did I get the wrong link? I just looked at both the table of contents and used the search function but didn't see either of those two names. It's late and I could be mis-reading the suggested reading.

[Marko23]

One aspect about patrader's approach that recurred to me this morning:
when you enter near the apex of a wedge, you enter in an area of low volatility; you enter "in mild times" so to say.

Price may not develop a rebound but one should be able to cut a loss short.

[DugDug]

Marko23 - good point about an entry whereby - even if you are wrong the loss is not likely to run away from you, and hurt too much....

[Gabe2004]

Originally Posted by thalestrader »

I picked.

Thank you,

Thales

I made you some more to choose from.

Gabe

[thalestrader]

Originally Posted by forrestang »

Lately, I've been feeling better about trade management, and have begun to stop fretting over the possible future outcome of each of my trades ... at the very least it has allowed me to focus on not worrying about every trade being a winner, because I am at least a bit confident that I have a pretty solid way of management..

I received a PM relating to this issue. This question did not come from Forrest but from someone who lurks this thread (no problem, lurkers welcome!). But please, folks, if you read this thread and you do not post, that is fine. For years I was but a serial lurker. But if you have a question about the material in this thread, please ask it here in the thread, as you are probably not the only one with the question.

Anyway, the question asked about ptting together a trading plan. This trader had decided to include in his plan a proposal to quit for the day after two losses. I do this as well. But I realize I may not have been as clear as a might. You see, I take a lot of losses and break even trades. Very, very small losses. When I say I quit after two losses, I mean I quit after two more or less full stop losses or their equivalent. I have tried to move the topic of money management here in this thread toward position sizing and the use of R-multiples, but the subject has not gained very much traction.

Basically, if you are risking, for example, 2% of equity/trade, that is your R-unit size. If you take a trade with a 1R risk, and your profit target is three times as many ticks as you stop loss, then you have a 3R profit target. This means you are risking 2% on the trade, and if the trade runs to full stop, your loss is limited to 2%. If the trade proceeds to your profit target, then you will have made a 6% profit.

My trades areall sized to the R-unit. So if you see me post a trade that has a 40 tick risk, and the result of the trade is I pull the rord for an 8 tick loss, my loss on that trade is not 1R, it is only 20%of my initial risk, or .2R. So, if I am trading, and I have three such small losses, I am not done for the day, as I am not down by even 1R.

If, however, I take a full stop of -1R, and then three more losses of-.3, -.5, and -.4,, my losses for the day would be -2.2R, and I am done. Once I am down that much, I start to lose my discipline, so I discipline myself to stop trading to preserve whatever shred of it I have left.

So, yes, I quit after two losses. But it is two losses construed as two risk units. I had assumed folks wouldn't think I'd quit for the day after two -7 or -5 tick losses, as my initial stops were, say, -20 ticks and -40 ticks on each trade respectively. If my total risk on the two trades was initially -60, but my actuakl loss was inly -12, I am still well below a -1R loss for the day, let alone a -2R loss which would trigger my "kill switch."

And yes, -2R days happen.

I hope that clears things up.

Best Wishes,

Thales

[thalestrader]

Originally Posted by forrestang »

Did I get the wrong link? I just looked at both the table of contents and used the search function but didn't see either of those two names. It's late and I could be mis-reading the suggested reading.

Sorry Forrest and Folks, that was Stock Market Wizards.

Try the .pdf below. Mark Weinstein's interview starts on page 156, and and Tom Baldwin's starts on page 178.

I also think Larry Hite's interview is very good as well. You will find that on page 87.

Best Wishes,

Thales

[idaxtrader]

Thank you very much for the link to the first market wizards. I have been looking for that in e book form for years and could never locate it. Know I can put it on my droid and read insprational stories when I'm on the train or bus. Thanks again!!!!