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I have been trading for 5 years, about 6 months ago I have made 100% profit from my original stake, than I lost 120% back, hence started to develop doubt.
I generally places my position on key support and resistance level but my old problem is moving stop to break even too soon and mainly only day trade nasdaq futures.
Upon hitting the loss of 120%, I starting to trade mini nasdaq in order to examine my own fear and greed as well as to learn again, I started to see where was my mistake used to be.
Hence I would like to see knowledge for a few question
1. How many percent of your account is considered as an appropriate stop loss amount for a single trade?
2. Should you trail your stop at all? To ensure get profit or should you place your trade and walk away, I find it extremely difficult to swallow if I am 10 to 20 ticks away from profit target and price came down and hit my stop loss. Although I understood that placing the trade there and walk away will ensure better profit
3. How much should be a average range of risk/reward that people usually used? I used to target 5xrisk as a reward, recently I revised my stop to wider and targeted 2.5 of my risk as reward.
Thanks for sharing for anyone who is kind enough to help me.
I have struggled with this same thing. Previous posts have rec setting the stop and target and walking away. Perhaps that would work for some but for me I have had to write out my trading plan. If the trade goes against me then my plan which I must follow requires me to get out. Of course this is much easier said than done but adherence to my plan is required for me to trade. A final thought is I would prefer being out of a trade wishing I was in than being in a trade wishing I was out.
I think is a good advice. I have my trade plan but sometimes I can not respect (move my stop). By the moment the best solution is trade with micros. I am trading with micro ES and by the moment I am following my rules.
Thanks.
Sounds like you are no stranger to Trading psychology principles, but if I could offer what has helped me execute trades more perfectly (A mix of Mark Douglas, FT71, and I’m sure countless others).
For arguments sake let’s assume one has a valid edge with 60% winning trades. This means that the outcome of your very next trade can’t be known. It could be in the winning 60% or losing 40%. You don’t know until it hits your stop or your target. You have to truly accept that no one trade means anything, and your edge can only play out over a series of trades. When you really believe that at your core, moving your stop makes no sense, because that is simply one of the trades that wasn’t going to be part of the winning 60%. Hitting the stop was going to be proof of that (until you moved it) and you could have moved on to the next trade which is what you need to do to let your edge play out, but now you are stuck in a loser. I guess the trick is not knowing this but BELIEVING it which can only be achieved by executing perfectly like this for an extended period of time until it gets ingrained in your soul and it would seem ridiculous to do it any other way. This 4 part series by Mark Douglas does a good job of hammering this principle.
Dear delux9,
thanks for your comments. I think this is the clue, to BELIVE in my trade numbers. For this reason I left the mini ES and right now I am trading micro ES. I can control my emotions. I can follow my rules becasue now I do not lose 200$ in one trade, lose my control and I want to fight against the marke and recvery my money. Now I lose 20$ and I say myself "ok, I follow with my system"
Regards,