Yes, I do have losing days. A long time ago ,I lost my shirt trying to trade UK stocks. I vowed to myself that there must be a way to be successful and, to cut a long story short, I found it in analysing the DOW and formulating ideas into facts and strategies that worked...... This has taken some 2 years of hard slog and dedication. The other important thing to remember is that I am NOT a full time trader. I trade for enjoyment and satisfaction and I trade infrequently. I also have great difficulty in coming to terms with shorting in a down market and that I have to get to grips with. Still, like everything, patience is a virtue and it will come in time. My biggest failing has been trying to trade whilst not being able to concentrate 100%.That is now resolved. Other issues have been not being able to resist trading for the sake of something to do. I'm an impatient sort of person. That's now sorted. Lastly, overcoming fear of losing. That's now gone having learnt from others on this BB about position sizing and % risk per trade. Now,when I trade, there is no fear and no greed. Simple mechanics of entering a trade that is safe, and exiting against given rules. What happens in between is now irrelevant and doesn't cause me any emotion .
I have no records of winners V losers to quote you..... I will say this though. On an up day, I would not expect to have ANY losing trades. Yesterday I got overconfident with playing with new ideas and got freaked out into closing so I ended up with 1 loser out of 8 trades. A while ago I managed something like 20 winning trades in a row scalping the DOW with FINS,but I had some help by way of D4Free charts that were always 10 seconds ahead of FINS. So see a move on D4Free and trade it in FINS for an instant win. That "loophole" is now closed
Please bear in mind that a lot of my work and analysis is "theoretical" i.e. they do not reflect my trading status. Being good at TA is no guarantee that you are going to be any good as a trader. As for shorting at the open, yes it was an opportunity, but I can't give trading 100% attention and concentration to what is happenening so I prefer to hang around and wait for the "bankable" setups that I describe. Yesterday I did take a trade on the first divergence, but I considered it a gamble with a resonable probability of success, given that the market wants UP at the moment. BUT it was still a gamble..... My philosophy is "safe" trading where the risks are known and the probability of a successful trade is stacked heavily in your favour. Does that really exist? I think so.
Trading the open is always tricky and most poeple advocate staying out of the market for the first half hour. To me , that makes sense. That's not to say that you can't get some handsome gains from trading the open..... The other thing is my "fear" of shorting as I mentioned earlier. Secondly, trading with SB at the open ,you can find that entering a short near the open the price maybe 30 points ahead of the real price. What if this is a bottom? You suddenly find yourself in a trade that is 50 points against you. closing this off is very difficult to do. You get into the mind set of holding on in the hope of it going back down. That is just suicide.
RS Switch. ( or SR switch in a down trend setup). This is where the price action/market changes from being in one trend, temporarily, to being back in line with the main trend. The TA action is delayed, in that you can't see it until after the event, but it is possible to be aware of the possibility of its occurance. It's just another tool to help confirm that a major trend is still in force, and that the main trend is not reversing. Yesterday, we saw what might have been a top at 8110 and the price started to look like a downtrend was forming, which it was. We were able to draw in a resistance line across the tops of the price. This was the downtrend resistance trend line. When the price broke to the upside, it subsequently bounced off that line nad treated it as if it was a support line. The second bounce confirmed this. Hence the R/S switch- a switch in a line that was resistance, and has now become support. The second level of confirmation is when the price forms a new higher low.(8098 @ 20:14) These are ideal places to add to your position size. With skill there would have been the opportunity yesterday to get close to double points with "safe" position additions. ( the pullbacks in the early session)
This game is all about stacking the odds in your favour. What is the probability of this move continuing? Is this move a pullback, or a reversal. Is this the top, or is there more to go? Do I recognise this as a safe setup entry and so on. Adopting an attitude of "I think it's going up" without proof or reason is , again, just plain suicide. That's how I lost my shirt. Going back to the short entry at 7800 yesterday. If Idid it, there was only 20 points left in the move. By the time you decide it's a bottom, you have lost probably 10 - 20 points. I said also my divergent entry was a gamble. It was . I have seen the open produce 4 peak positive divergence across 90 minutes before the "real" bottom was reached.......
