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In a sense, yes that's bad. You need to have a very high win percentage to keep from losing long term. And even then, you run the risk of losing several trades in a row that make profitability for that week or month almost impossible.
I am speaking about your per-trade results only. I'm not sure about the per-day part but I don't think that's really good either.
It looks like you are scalping, but why are you cutting your winners so short?
I take any profit I can get which might be 1 to 5 ticks and hold onto my losses until my daily loss limit is triggered which is set at $200. I can understand the logic behind letting my winners grow and cut my losses quick but that doesn't seem to work for me in practice. The more I post the more I realize I have no edge and not really any strategy. I may need to stop trading for some time and evaluate what I am doing here before I throw more money at it.
The best thing that has happened to me recently with my trading has been paper trading. I finally take it very seriously, so I can identify mistakes, reinforce good behavior, and become a better trader. All for the price of a data feed and the time I spend doing it (valuable lol).
I would suggest paper trading until you can get things working right.
Trade 1
Long @10:49am EST
Entry 3878
Exit 3881.75
Result +$18.75
Trade 2
Short @11:03am EST
Entry 3894
Exit 3891.75
Result +$11.25
Trade 3
Short @1:16pm EST
Entry 3894.75
Exit 3891.75
Result +$15.00
Trade 4
Short @2:24pm EST
Entry 3912.50
Exit 3910
Result +$12.50
Trade 5
Long @2:47pm EST
Entry 3912
Exit 3914.50
Result +$12.50
Trade 6
Long @3:09pm EST
Entry 3908
Exit 3912.25
Result +$21.25
Daily Result +$91.25
Of note: Crude oil trading with a 66 handle, amazing!
Also, I am monitoring the ES market trying to figure out when its safe to reenter the ES market. So far I am still staying in the MES market due to volatility.
Hey blackgrey,
I looked through your journal and I am wondering what you are doing. You do not write much about a strategy or approach you have for the market.
Furthermore I see big losses month after month. Please excuse me if I am wrong, but to me, it looks like you are gambling.
I went over the last two pages and calculated your average winner and average loser. (Everything in Dollar)
Average Winner is 15.
Average Loser is 88.
And that is BEFORE commissions.
Taking commissions into account you would need a win rate close to 90% to ONLY BREAK EVEN!
Which you do not achieve.
You had around 80% over the last 42 trades. But even IF you get it to 90%, that would still be only breakeven...
Sure, looking only on the last two pages is not statistically significant, but you provide a monthly overview where it is not looking much better.
I see that you have switched to the MES.
With the MES you are taking more ticks. On the ES you took only one tick. Now you take 6-8 ticks in one trade.
Why would you not do that with the ES? They basically make the same moves so you can get the same ticks with the ES. The dollar amount of the trade (when not based on account size) should not be the deciding factor to exit a trade.
Not that I would advice you to go back to the ES. I would stay on the MES and preserve my capital until I proved to myself that my strategy was working.
Have you calculated the basics like your winrate and your average winner/loser?
Am I gambling? Yes this is gambling. I have admitted in my journal that I have no edge to speak of. Sometimes I get lucky and other times I do not do so good. Paper trading does not do much for me, I really like playing with real money and putting real risk on the table.
With regard to my monthly overviews: Yes they have revealed that I have been a net loser. I have been trading the ES since about November and have taken losses every month since then. I used to calculate my average win rate and average win size, etc. but found this does not help me very much.
Going back to my decision on which market to trade: I was trading the ES for the last couple of months before switching to the MES just this week because of volatility. When trading the ES I was usually taking a 1-3 tick winners 15-20 tick losses on the other side of the ledger. Obviously, if I want to trade the ES profitably I have to reduce my losers. Trading the MES is much less taxing on me and I am willing to wait for my winners to grow a little bit larger.
About my strategy: Like I said I have no real edge and go in and out of various strategies. I have been trading off and on since 2010 and the most consistent strategy I have followed over this time is buying lows and selling highs which is very general and hard to pin down.
In summary I am having fun and enjoying trading a lot. I will keep trading the MES until the volatility comes down a bit. Hopefully, I shed a little bit of light on my situation. Thank you again for your response. This type of thing helps me out a lot.
Then we have a different approach to the market. Maybe you have enough capital that it doesn't hurt you to lose 1 to 2k every month. I still could imagine that there are more fun ways to spend that amount of money. But I am not here to judge. And thank you for being open about it.
It could help you by showing you if you can expect to win or lose money. Take your numbers as an example.
In the worst case you have 1 tick win and 20 tick loss. To calculate your break even: 20/(20+1)=0,95
That means you would need a 95% winrate to only break even!
In the best case scenarios you have 3 tick winners and 15 tick loser. Then you still would need a 83% win rate to only break even!! And again, that is before commissions. It gets worse if you add commissions.
I can guarantee you, that if you stay on this path, you will lose all your money...
Yes! You also have to think about letting your winners run longer. You are already doing it on the MES.
If the MES is less taxing on you, that indicates to me, that the money you are risking on the ES is maybe not insignificant to you? If that is the truth, then you should stop the gambling approach, trade less size and think about changing and/or refining your strategy.
Having fun is important. But if you are in the markets to make money and/or your losses hurt you financially, you have to rethink what you are doing here, because right now, based on your numbers, you will lose your money.