My journey to long term consistency

This is a discussion on My journey to long term consistency within the Trading Journals forums, part of the Reception category; Both the G and WA positions are already closed: G simply went up at the point I bought it and ...

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Old Sep 16, 2015, 1:09pm   #17
Joined Aug 2015
DrSafari started this thread Both the G and WA positions are already closed:

G simply went up at the point I bought it and hit my stop loss

G
Type: short
Amount: 50 shares

Opening rate: 33.44
Stop loss: 34.16
Opening time: 9:57:30 am 9/15/2015

Amount risked: 36 €

Close rate: 34.17
Net P/L: € -36.33
Closing time: 9:14:06 AM 9/16/2015

g_short_close.jpg

---------------------------

WA suddenly dropped a lot so I moved my stop loss slightly above the break even point. Sadly then it rose again and went through it. I'm looking for a good entry point to reopen this one if an uptrend doesn't establish itself.

WA
Type: short
Amount: 50 shares

Opening rate: 74.68
Stop loss: 76.26
Opening time: 10:00:41 am 9/15/2015

Amount risked: 79 €

Close rate: 74.66
Net P/L: € +1.37
Closing time: 12:58:08 PM 9/16/2015

wa_short_close.jpg

Next time I will try to use the same timeframe as the first charts for my opening position are hourly and the ones for my closing position 15min interval.
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Old Sep 18, 2015, 10:19am   #18
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DrSafari started this thread I took on another short position at WA at 74.17 and currently it's down to 72.17 being in the +100€ profit zone. I moved my stop loss to +40€. I don't remember precisely but my original stop loss was risking around 60€. This trade is going good. Should have journaled it immediately but didn't have the time. When the position is closed I'll add a chart with my entry and closing point.
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Old Sep 18, 2015, 10:49am   #19
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Your initial stops and adjusted stops are based on technical price levels, not on monetary amounts, right?
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Old Sep 18, 2015, 11:53am   #20
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Quote:
Originally Posted by options-george View Post
Your initial stops and adjusted stops are based on technical price levels, not on monetary amounts, right?
Yes, my original stop loss is based on technical price levels. But my adjusted one isn't. Isn't it so that you should take into account your risk management rules for that so if you base your adjusted one on monetary amounts (relative to your original monetary amount) it would be correct as well? Provided that your original one is based on technical price levels?

If not, how else should I do it?

Last edited by DrSafari; Sep 18, 2015 at 2:21pm.
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Old Sep 18, 2015, 3:31pm   #21
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DrSafari started this thread Closed my short WA position at € 121.74 profit. Around my soft target. Funny thing is, I was just thinking I shouldn't hold my position over the weekend, that would be stupid cause I would probably lose a lot of my profit due to slippage. So I had to close it soon because market would close in an hour. Right at that time it started going up. Why? My guess is other guys were thinking exactly the same and started closing their short positions as well. Either what I'm saying now is bat**** crazy or I'm starting to understand the market better.

I will update with a chart with opening and closing prices. See you guys on monday

Current equity: € 4,622.15
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Old Sep 18, 2015, 5:32pm   #22
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Hi DrSafari,
Well done on your WA trade. The really impressive thing you did was to re-enter after you were stopped out the first time. That's an area a lot of traders struggle with psychologically, as they're still suffering from a loss first time around or annoyed with themselves for giving back a profit to the market.
Quote:
Originally Posted by DrSafari View Post
. . . Isn't it so that you should take into account your risk management rules for that so if you base your adjusted one on monetary amounts (relative to your original monetary amount) it would be correct as well?

If not, how else should I do it?
First off, there are no 'shoulds' or 'shouldn'ts' in trading. Well, precious few anyway. Those that there are tend to be universally accepted truths such as these: Mark Douglas on Emotionless Trading.

With the above in mind, regarding your question, my view is that it sounds as if you're trying to impose your money management rules on the market. It couldn't care less! There are no rights or wrongs, but I suggest you adjust stops to sensible technical levels rather than saying 'I've risked X, therefore I want my profit to be 2X, 3X' - or whatever. The problem with fixed ratios based on amounts risked is that one ends up putting stop loss and take profit orders in technically poor positions. That said, there are traders who do exactly this and swear by it. Do what you're comfortable with and works for you.

Quote:
Originally Posted by DrSafari View Post
. . .So I had to close it soon because market would close in an hour. Right at that time it started going up. Why? My guess is other guys were thinking exactly the same and started closing their short positions as well. Either what I'm saying now is bat**** crazy or I'm starting to understand the market better. . .
No, you're not crazy. Often in the last twenty minutes or so of the U.S. session there is a reversal as traders flatten their positions, taking profits or simply bailing because they don't want the overnight risk. Similarly, the opening half hour can be a bit haywire as market open orders are triggered. Then the day settles down and takes its course.
Tim.
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Old Sep 19, 2015, 2:53pm   #23
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DrSafari started this thread
Quote:
Originally Posted by timsk View Post
Hi DrSafari,
Well done on your WA trade. The really impressive thing you did was to re-enter after you were stopped out the first time. That's an area a lot of traders struggle with psychologically, as they're still suffering from a loss first time around or annoyed with themselves for giving back a profit to the market.
Thanks! And yes indeed I have struggeled with this in the past. The thing that helped now was that I determinded up front that if an uptrend wouldn't establish I would take a short position again, and so I did.

Quote:
With the above in mind, regarding your question, my view is that it sounds as if you're trying to impose your money management rules on the market. It couldn't care less! There are no rights or wrongs, but I suggest you adjust stops to sensible technical levels rather than saying 'I've risked X, therefore I want my profit to be 2X, 3X' - or whatever. The problem with fixed ratios based on amounts risked is that one ends up putting stop loss and take profit orders in technically poor positions. That said, there are traders who do exactly this and swear by it. Do what you're comfortable with and works for you.
How I do it is that I try to abide by my fixed ratio's if possible. Of course I also look at the technicals, if I get stopped out by the slightest noise I would put it higher of course. But that is already taken into account by my first stop loss and the adjusted ones are relative to that one so unless the volatility of the stock changes it should be sensible in my eyes. As for profit levels, I try to picks stocks that realistically can make 2X profit if I've risked X, but in reality i always let my winning stocks run and continue to adjust my stop loss, kind of like a trailing stop loss. With this trade I happened to close it manually because market would close soon and wouldn't want to hold the position over the weekend and the profit taken happened to be my soft target which I obviously was happy about but it could just as well have been more or less. It's not that I absolutely stick to my ratio's at all costs.

The one thing I'm still not too sure about is to when to move my stop loss when I'm in the profit zone. So far I kind of use a trailing one so that the distance between the actual price and the stop loss is always the same (except when i've reached my target that's when I move it closer to actual price) but I'm not sure if that's the best way to do it.


Quote:
No, you're not crazy. Often in the last twenty minutes or so of the U.S. session there is a reversal as traders flatten their positions, taking profits or simply bailing because they don't want the overnight risk. Similarly, the opening half hour can be a bit haywire as market open orders are triggered. Then the day settles down and takes its course.
Ok! Thanks for the clarification.
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Old Sep 19, 2015, 3:03pm   #24
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DrSafari started this thread Here are the technicals of that trade

WA
Type: short
Amount: 50 shares

Opening rate: 74.17
Opening time: 2:22:43 PM 9/16/2015

Stop loss: (information not available anymore, that's why I should have logged it sooner)
Amount risked: around 60€

Close rate: 71.75
Closing time: 4:25:20 PM 9/18/2015
Net P/L: € +121.74

Chart is a 15 min chart. Green arrow is open, red one is close

wa_short_open_close_16_09_15.jpg
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