Nothing I seem to do is right...

[shadowninja]

So I place a trade based on my strategy (which when back tested and paper traded looked far too good to be true!). A trade goes in my favour, I think great I close at what I think is decent profit... And then the market carries on and in some cases I could've made double...

So next time i think, i know, i'll let it run, so then the market comes back and quite quickly a winner becomes a loser...

So now i'm thinking, i'll move my stop to break even once i'm say 20 pips in profit because surely break even is better than my stop being hit and then as soon as i do that my stop is hit, i'm out at break even and the market carries on in my intended direction..

Out of these three occurrences, can you tell us which happens the most according to your records?

Are you trading forex?

 

[LiamH]

Liam

You entitled your thread "Nothing I seem to do is right". It might be of little direct help to your account at the moment, but take heart in the fact that you are doing something right which is recognising the issue, stepping back and asking for advice.

You can see already from the replies that there is an abundance of experience coming to your aid, as well as providing useful advice to others who are in your position or might head that way.

I couldn't comment on the strategy at this stage because I cannot see what you have been doing, but I am sure you will get plenty of useful advice once you have provided some chart examples

Charlton

Thanks Charlton - Of all the trading advice I have read (a fair bit), the most useful by far is to be found in this forum!

I'll get some charts up on Thursday

 

[LiamH]

Out of these three occurrences, can you tell us which happens the most according to your records?

Are you trading forex?

Yep, I trade forex...

What happens most of the time is I move my stop to break even for the market to come back and close me out. Or I take profits far too early (20pip profit with 50pip stop) through fear of that happening.

It seems that whenever i let a trade run it comes back to bite me - If i don't let it run, most times I could've made more pips - It's very rare that i get out at any where near the optimum time.

Through problems like these the slightest retracement will have me close my position through fear of making another loss.

 

[oiltanker]

mark douglas 'trading the zone' book should help deal with the emotional element.

as for getting out too early and too close/far stops. those are errors of emotional trading .

if you use stoch to get into a trade use an ma or ma cross to get out.

 

[shadowninja]

Yep, I trade forex...

What happens most of the time is I move my stop to break even for the market to come back and close me out.

If this is the most common occurrence then don't move your stop until you have what you think would be profit you reasonably expect to achieve (based on your research). With a 50 pip stop, wait until you see 50 pips profit then move your stop. Take 20 pips profit with a 50 pip risk will drain your account. Demo trade your idea for a few weeks on Oanda.com or ETX.co.uk.

Note that different forex pairs have different characteristics; some retrace well into your stop before going on to hit target. It's the way things are. Stick to one pair until you get a good feel for how it moves and fakes.

 

[LiamH]

mark douglas 'trading the zone' book should help deal with the emotional element.

as for getting out too early and too close/far stops. those are errors of emotional trading .

if you use stoch to get into a trade use an ma or ma cross to get out.

I don't use stochastics or ma's because I wouldn't know how to set them up to best utilise them... How would you setup a moving average for the purpose of getting out of trades i.e. how would you decipher how many periods are best?

 

[LiamH]

If this is the most common occurrence then don't move your stop until you have what you think would be profit you reasonably expect to achieve (based on your research). With a 50 pip stop, wait until you see 50 pips profit then move your stop. Take 20 pips profit with a 50 pip risk will drain your account. Demo trade your idea for a few weeks on Oanda.com or ETX.co.uk.

Note that different forex pairs have different characteristics; some retrace well into your stop before going on to hit target. It's the way things are. Stick to one pair until you get a good feel for how it moves and fakes.

I understand the drain on account - This is what's causing me the headache... As i've been posting in this thread i've realised the obvious - Fear is driving my decisions, BIG TIME.

Quite often I don't see 50 pips... I'm that paranoid about letting profit turn into loss that as soon as I think the price won't retrace back to a level i move the stop - Quite often this is only 20 pips or so and I know it sounds daft but i've only just realised that this is my main problem

 

[shadowninja]

It sounds like you're trading intraday; I suspect an MA cross on your hourly chart wouldn't cross for ages and you'd see a lot of profit disappear by the time the cross took place... something to experiment with, I guess.

 

[shadowninja]

Quite often I don't see 50 pips... I'm that paranoid about letting profit turn into loss that as soon as I think the price won't retrace back to a level i move the stop - Quite often this is only 20 pips or so and I know it sounds daft but i've only just realised that this is my main problem

So you go from a 50 pip stop to a 20 pip stop? Unless you're scalping, 20 pips is far too tight. And if you are scalping, then 50 pips is far too big.

Do you tend to see the price shoot off to 100 pips profit? If so, why not set a 100 pip target and a 50 pip stop, then walk away?

 

[wasp]

Sounds to me like you have a pretty weak plan.... Especially when you do one thing and it does the other, then you do the opposite and so does it.

Properly test ONE set of parameters (ie 60min chart, looking for 100 points a move average so 30pip stop).

Then run that for 2 weeks and see if the statistics run in or out your favour otherwise you will keep chasing your tail.... (hypothetically of course!)

 

[shadowninja]

That's exactly my thinking. Need to accept that losses WILL happen. It may even be 50/50, but with a 100 pip target and 50 (or 30) pip stop, your account will grow.

 

[wasp]

Have a read of my journal too, its a tad long I know but its this reason I started it.

 

[foredog]

If you're trading Inside bars, wait for the small IB's this is where the market's consolidating, if the first bars 100 pips and the next is 90 then yes it's an I but there still far too much chopping about and your Risk/Reward ratio's too high, because you need it to go 100 pips just to put you onside if you're win rate is 50%.

 

[LiamH]

Cheers for the replies

When i say, go from 50 pips stop and move once i see 20 profit I meant that once 20 points in profit I tend to move the stop to lock in the 20 which is obviously bad because the trade doesn't have any room to move.

It's funny how you can read warnings from experienced traders like yourselves over and over again then go and make that very mistake as soon as you start trading - Or at least I have.

foredog - Cheers, I never knew to look for the small IB's - I had just been taking any as as a sign of consolidation.

Wasp - It's not so much that when I try one thing it does another, I've realised through this post that it's just me screwing it up.. If I left my stop well alone and trail the price with a 20% trailing stop once my stop loss distance has been made in profit (50pt stop, 50pt profit, move stop to lock in 40pt profit) and then trail from there maybe things will go better.

I just have to stop taking small profits and moving the stop too close.

I feel pretty stupid really, making a pretty obvious realisation on a public forum

 

[wasp]

I feel pretty stupid really, making a pretty obvious realisation on a public forum

I wouldn't worry about that! That's what the forum is for! Hell, I have a whole journal dedicated to being a useless **** when I started it and now I manage 5 accounts and trade stupid amounts of money.........

Everyone starts somewhere and unless you work to eradicate the problems, work through them and iron out the folds, you'll become part of the 90%..

Practice, trial and error, come up against each issue and solve it and you'll become a better trader.

imho.

 

[shadowninja]

When i say, go from 50 pips stop and move once i see 20 profit I meant that once 20 points in profit I tend to move the stop to lock in the 20 which is obviously bad because the trade doesn't have any room to move.

Yes, we know what you're doing. You call it locking in profit. We call it tightening stops.

 

[nine]

Liam,

Trading can be considered to consist of a number of phases and one must master each. One must also have a plan for each. One must also realise that you frequently can't tell if the market will continue up or come back down - all you can do is have a plan and execute it.

Given your small account I suggest you cheat on Barjon's original suggestion. This means that for the moment you accept that you won't get the big home runs for now. But you always miss out on something so mentally give them up now.

Ok. Your entry is probably fine. Your trade management is rubbish.

Heres (half) a plan for exiting:
- exit half at some point before the next resistance to forward motion (you need to review your old trades to see where this should be). this is the short, take profits on half your position because this is the point where 75% of trades get to and its enough to give you comfort. it should have a positive expectancy. trade this with real money.
- exit half with some extended strategy (trailing stops behind resistance, some number of atrs behind, some tightening strategy (whatever)) trade this with paper money as you dont have enough to do both yet.

Work on getting a clear written plan. Work on getting consistency of execution. Make some money on the first half. When you get enough then add in the second half.

This will:
- give you a plan
- give you practice in executing a take profit strategy and a big run strategy
- give you a chance to accept winning and losing as part of a series and to accept NOT KNOWING as just fine as long as you know what you will do.

 

[Mikeyfx]

Hi liam, lots of great advice here, i think i understand how you are trading and if i can offer you any advice it would be this. you enter a trade based on your system, you set a stop based on point where would be clear you were wrong about entering in the first place, imo the amount of pips away this stop is is irrelvant it should be the logical place which signals you where wrong to enter. ok simple enough, if trade going in your favour you can either continually move stop to next logical point of exit (where it would signal that trade has turned against you) where this is in pips again is irrelevant or you exit in profit at a predertimined point of logical exit i.e. s/r.
in an ideal world we could risk 50 to gain 100 etc etc but market is not ideal and we have to take what it gives whatever that might be.
you have stated (and is generally held) that entrys are not the problem and that exits are, i would beg to differ as a more refined entry stratergy geared to high probability trades would lead to a more succesful return to which exits just become a formality i.e. a logical trailing stop or a predertined exit.

hope that helps in some way and good luck .

 

[blackcab]

I feel pretty stupid really, making a pretty obvious realisation on a public forum

Liam, nothing about this thread sounds stupid to me - rather, the opposite. I've already learned some good things from it and I'm sure others will too. Good luck and take heart - it already sounds like you know what you're doing.