Wot To Do

[barjon]

A "Wot Happened Next" with a difference.

The scenario is that you are a breakout trader. You have entered at the black line with a stoploss at the white line. It's gone really well with great momentum, but now that's stalled.

You are in clear air with no previous price action up at this level, so how would you plan to play it from here?

 

[counter_violent]

A "Wot Happened Next" with a difference.

The scenario is that you are a breakout trader. You have entered at the black line with a stoploss at the white line. It's gone really well with great momentum, but now that's stalled.

You are in clear air with no previous price action up at this level, so how would you plan to play it from here?

Wot instrument is it?

 

[barjon]

Wot instrument is it?

not tellin'

 

[spinola]

Wot are the objectives of the individual breakout trader ?

 

[Splitlink]

Ok, here's what happened to me, yesterday. I bought Footsie for 6668 because I "thought", "hoped", "knew" that it would go up. My original SL was 6648, but I had to do my usual train ride and decided that I did not want to take the risk and moved it up to 6660. As you can see, there was a spike that went down to 6642.5 and price reversed and ended the day much higher than my entry. If I had not moved my stop higher. I would have lost 20 points instead of 8. Notice that I used the word "if". There is so much conjecture involved and so many ifs and buts in trading that the end result, in all the decisions one makes, comes down to luck and random trading. One of the reasons that I am still alive and kicking is a 6th sense which keeps my risk within acceptable limits, so that I can trade again.

It is no use, IMO, talking about volatility and other, what are to me, highly complicated theories, when there is an unknown factor in the equation. That factor is a "joker" or wild card in the pack that makes the whole thing random. The terrible thing about all this, for many people, is that it is the result of a lot of work and research. I believe that trading must be kept more simple than that, otherwise, it gets to be not worth the effort.


Thread: What Happens Next Reply to Thread

 

[spinola]

bought Footsie for 6668 because I "thought", "hoped", "knew" that it would go up. My original SL was 6648, but I had to do my usual train ride

What are your objectives , Split ?

 

[WR1]

A "Wot Happened Next" with a difference.

The scenario is that you are a breakout trader. You have entered at the black line with a stoploss at the white line. It's gone really well with great momentum, but now that's stalled.

You are in clear air with no previous price action up at this level, so how would you plan to play it from here?

probably do nothing
as were up late and missed the breakout!

and if its the Euro or many of the others it will retrace soon enough leaving the trader in loss

but does really depend on the instrument and TF (somewhat)

 

[Shakone]

Stop under the doji

 

[spinola]

Discretionary Trading - Objectives 1st.

Discretionary - Left to or regulated by one's own discretion or judgment.

So thousands of differing judgements because there are are thousands of different individuals. (on these boards say)

Now, each one of those thousands will have, or ought to have formed their own objectives when approaching a market.

If they don't know what their own objectives are , then they shouldn't place any trades until they understand their own objectives.

But if they have placed a trade without any objectives known to themselves, and they're ' stuck into ' this trade , as above in the opening post, they should close it immediately , as they've just won the lotto , because ? they are attempting to trade without objectives.

IMHO

 

[Splitlink]

What are your objectives , Split ?

At present, my objective is to give my reasons for believing that trading is random--At least, in the short term.- If you need to trade longer term you need deeper pockets.

 

[wallstreetwarrior87]

Ok, here's what happened to me, yesterday. I bought Footsie for 6668 because I "thought", "hoped", "knew" that it would go up. My original SL was 6648, but I had to do my usual train ride and decided that I did not want to take the risk and moved it up to 6660. As you can see, there was a spike that went down to 6642.5 and price reversed and ended the day much higher than my entry. If I had not moved my stop higher. I would have lost 20 points instead of 8. Notice that I used the word "if". There is so much conjecture involved and so many ifs and buts in trading that the end result, in all the decisions one makes, comes down to luck and random trading. One of the reasons that I am still alive and kicking is a 6th sense which keeps my risk within acceptable limits, so that I can trade again.

It is no use, IMO, talking about volatility and other, what are to me, highly complicated theories, when there is an unknown factor in the equation. That factor is a "joker" or wild card in the pack that makes the whole thing random. The terrible thing about all this, for many people, is that it is the result of a lot of work and research. I believe that trading must be kept more simple than that, otherwise, it gets to be not worth the effort.


Thread: What Happens Next Reply to Thread

To be fair, it was not a joker, it was the NFP, which is known beforehand. A joker surely appears when not expected?

On NFP data we do expect a reaction, and the reaction causes all the bottom pickers to be forced out.

Consider what happened the previous day on the FTSE;

Do you really think the powers that be would allow mere mortals to get long at the bottom after "they" had done all the hard work to allow them to get the prices "they" wanted? Knowing the next day, they could off load as much as they wanted? Bottom line - too many people tried to intrude on their party!

Unfortunately, tight stops can not be used in this "random" situation.

Also something else to consider; The data was better than expected, but the initial reaction was down to take out the bottom pickers, before shooting upside. Still random activity?

Im not one for trying to convert anyone's thinking, but it does pose food for thought, does it not?

As always, each to their own

 

[counter_violent]

Ok, here's what happened to me, yesterday. I bought Footsie for 6668 because I "thought", "hoped", "knew" that it would go up. My original SL was 6648, but I had to do my usual train ride and decided that I did not want to take the risk and moved it up to 6660. As you can see, there was a spike that went down to 6642.5 and price reversed and ended the day much higher than my entry. If I had not moved my stop higher. I would have lost 20 points instead of 8. Notice that I used the word "if". There is so much conjecture involved and so many ifs and buts in trading that the end result, in all the decisions one makes, comes down to luck and random trading. One of the reasons that I am still alive and kicking is a 6th sense which keeps my risk within acceptable limits, so that I can trade again.

It is no use, IMO, talking about volatility and other, what are to me, highly complicated theories, when there is an unknown factor in the equation. That factor is a "joker" or wild card in the pack that makes the whole thing random. The terrible thing about all this, for many people, is that it is the result of a lot of work and research. I believe that trading must be kept more simple than that, otherwise, it gets to be not worth the effort.


Thread: What Happens Next Reply to Thread

And if you didn't use a stop, when you got home, wudda been a happy chappy
Ever thought about adding up all those small stop outs over a month, then using their combined total to place a longer term trade? Just asking !

 

[Liquid validity]

Stop under the doji

That one stuck out with me too, not because of the doji.
Its simply the only reference point that hints of weakness.

TBH I would pull the plug where it is.
It could be a stock RNS - but UK the vast majority of UK RNS are 0700 pre-open.
Its obviously after open - no gap.
I doubt its daily as the range for one day compared to the others looks too big.
I'm guessing its intra day timeseries, something susceptible to a news release.
Knowing Jons dislike of FX, I reckon an index - probably not a top priority
release - prior range not tight enough, breakout bar not big enough.
An index, midway or at least a few hrs into session, m5-m1 timeseries at a guess.

 

[spinola]

At present, my objective is to give my reasons for believing that trading is random--At least, in the short term.- If you need to trade longer term you need deeper pockets.

Cheers Split, here is my view on it.

This is a discretionary trading thread dealing with discretionary trading, and I think you might be best suited to developing a mechanical approach if you are drawn to random market theory, because attempting to apply a subjective decision making process (discretionary) to a market which the trader believes is random, is a classic trader mismatching principle , in my view.

A mechanical random market trader, has no need to attempt to understand market moves, ' the train ride ' as you put it, if one is approaching it with a 'the market is random mindset. '

That would explain a traders emotional reflex response when he attempts to trade a random market using his discretion. The mismatch exists because the traders own objectives are not formed or understood yet.

In short -

Random Market trader needs a mechanical mind and mechanical method approach. The correct match.

Non Random Market Traders needs a discretionary mind and method approach. The correct Match.

Correct matching means there will be less internal conflict arising, and the trader can concentrate on mastering his approach because his objectives are known, understood. That understanding frees him to execute his known objectives.

This is my own thoughts/theory on it. To me, it also passes the common sense test. Of course to you/others it might not hold true as self evident.


But, lets face it, we're all nutters in this game.

 

[Forexmospherian]

I actually agree with a lot of the other guys comments here - and if you have not got some type of plan in advance - for all scenario's - then really you should not be taken a breakout on anything ;-)

Couple of other points though - besides as the others have said - ie what is it on - what time frames etc - my point - what time was it at - ie was it within 9 mins either side of an hour change or the same on even a 30 min time frame change ?

My first reaction - would be - if you are in profit its stalling - take some profit - or all of it if you are just scalping.

Ideally you want to take over 50% off - ie 60 -80% - then you can allow yourself a slightly larger stop below the doji if you want to - and still end up with a profit on the exercise

If in doubt - take some profit - some or all - that's up to you.

Also agree with one of the guys comments about the wild card - ie the players and liquidity providers.

We already know one of the tricks of certain players in placing a load of pending orders - just above were they help take price too - with those who think they are in the know - then thinking great - there's loads of big lots just 3 - 5 pips higher - if we get there we fly

However these nice players - then cancel their pending stuff and place new orders full on - in the reverse direction ;-))

As we know a 1 point or 1 pip net profit is far better than even a 1 pip loss - but no way unless you are 90%+ accurate can you keep aiming small wins with stops above 5 - 7 pips - even 10 pips is just too big.

However if you can keep taking scalp trades and you catch a good quick move that allows you to take part profit and stick the rest with a stop in profit - you can then switch off - and not worry - and just hope that it does go you way - for a bigger reward.

If it does - so what - you have not lost on the exercise ;-)

i am sure what ever you tell us - there could be some "sting in the tail" none of us have mentioned ;-)

Regards

F

 

[barjon]

Wot are the objectives of the individual breakout trader ?

I'll let a few others have a look before I move it on. So far shaky, LV and forxmos have taken the plunge. I don't think instrument or TF (happens to be H1) is important since the question is more to do with exit management.

So far as objective is concerned, sure, but that's quite difficult in clear air unless you use some multiple of risk or, say, a fib extension type thing. And it does run counter to the "let your trades run" point of view to some extent.

 

[Splitlink]

And if you didn't use a stop, when you got home, wudda been a happy chappy
Ever thought about adding up all those small stop outs over a month, then using their combined total to place a longer term trade? Just asking !

Do see what I mean by bringing the word "if" into the equation? I never said that I did not re-enter but my loss on that trade was 8 points. I did not know where to place my stop, I admit it. Fortunately , I moved it up because I had to go out. If I had not gone out I would, probably, have tried to close manually and my loss would have been much more. I do not feel that there is anything clever about all this. I believe that it is random, luck, call it what you will, but it, surely, is not skill.

 

[wackypete2]

TBH I would pull the plug where it is.

Ditto. Get out now. It looks as if I got about 2R on the trade if I exit now.

If more information was available:
If I knew the direction of the major trend and it's up then exit 1/2 now and move stop to 1/2 way between entry and exit points. If the major trend is down exit the entire position now since I would expect a large retrace.

Peter

 

[cablemonster]

A "Wot Happened Next" with a difference.

The scenario is that you are a breakout trader. You have entered at the black line with a stoploss at the white line. It's gone really well with great momentum, but now that's stalled.

You are in clear air with no previous price action up at this level, so how would you plan to play it from here?

Something you may want to consider is how you think short term traders are positioned prior to the breakout and post the breakout. If you feel you have a better understanding of one of these scenarios you may want to use that information to your advantage.

 

[counter_violent]

Do see what I mean by bringing the word "if" into the equation? I never said that I did not re-enter but my loss on that trade was 8 points. I did not know where to place my stop, I admit it. Fortunately , I moved it up because I had to go out. If I had not gone out I would, probably, have tried to close manually and my loss would have been much more. I do not feel that there is anything clever about all this. I believe that it is random, luck, call it what you will, but it, surely, is not skill.

The skill, if you will, is in NOT putting stops where they WILL be taken.

Ftse chart for yesterday. Have a think about it !