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When I say outlier, I mean something that is less than the average leg for your instrument. CL moves in 35-70 tick ranges most of the time, based on how I trade, its around 50. So I use 50 ticks as my target....I get a 50 tick trade every 7-8 trades...most of my trades are trailed out at 40 or 38 or 42 or 30...something less than 50. That being said, of the ones I trailed out, 95% of them I should have left alone. It seems the best trade management is no management at all.
I do not mean looking for that one day where it runs 300 ticks and I get 275 of them. Thats not how I currently trade, although I can see a day when that is part of my plan to some degree.
Have a great weekend.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
Brian, I used this term is exactly same meaning. I do lean more and more in a same direction as you do, and consider the tape now just an attempt to get a good timing, but no the actual reason to trade. Thus said, I value smoother equity curve even more than absolute returns, and therefore I can see a value in scaling out at typical rotation distance. However, the next step would be to add to the trade, by scaling in again if setup confirms again and I have my first part closed already. We had some pretty good discussions with @podski about this approach.
Slightly off the topic of this thread, but, on your recommendation (in the budfox thread), I watched the Kung Fu Panda movie last night. You're right, it's an excellent movie, and the relevance for trading, and anything else, is very clear.
"There is no secret ingredient." Huh. Wish I'd known that years ago.
Now I know why the name of your thread is a good choice Thanks for the experience.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
I'm going to try some BO / momentum entries this coming week, so let's set up some rules.
The key seems to be GET IN when the criteria is met that price is moving out.
Now, when the inevitable heat comes from price edge traders like me, do you add at some point
on this PB leg back into consolidation or is this a "wait and see" period to see if price truly continues?
I realize it is a fine line between scaling into a loser and adding to a position at this point.
Would the trade only be invalid if it attempts to break out the other side?
When is your "I give" point ? A set amount of ticks? A PA landmark? A volume Landmark?
... or just plain wrong, as it leaves you in the other direction ?
There's a pretty good example a few posts back in my thread.
I never add to a trade that is red. It has to be in profit. And I try to only add if the combined entry can be break even. This is gonna vary depending on what the structure looks like.
But I think it might be easier if we just talked on Skype. I can show you easier than I can type.
Send me an email or PM. We can set up some time. Today is good for me as I'm not trading or anything else for that matter.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris