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Spot on Bob- One thing to add. When you find a style that fits, you have to recognize when it doesn't work and you must abandon that style immediately when those conditions are present. I will get absolutely beat up when the market "goes nowhere" and I am very aware of this. Probably why RVOL is so critical to my days success or failure... If my thesis fails I kind of have to accept the other side to make things better- if the adverse move does not give enough schwag, I stand to be wrong twice in a single day and that can cut pretty deep if I've built two full positions. A "great" trader could recognize the operating conditions and change their "style" to accommodate immediately; Unfortunately, more often than not (for me), there is simply not enough time to process the information when in a painful situation so I've found it best to accept that my style cannot always work and when its not working, abstinence is best.
I think I understand your general philosophy on how you make gains. I like how you have recognized and come to grips with the various compromises inherent in choosing any style. Thank you for taking the time to share!
You're welcome. As you can see there were several reasons why I ultimately ended up using an approach that relies heavily on both pyramiding into and scaling out of trades and explaining it this way, was the only way in which I could explain why I think multiple contracts are so crucial to the way I do things. On another note, I have yet to hear of others shooting for 10R or 25R gains, yet I have seen moves of even larger magnitude in terms of R when I pyramid in this way.
Today I managed to bag 4R in gains by scaling out and exiting when I saw my gains evaporate too quickly. Usually I would have held through that, but for some reason I was just skittish today. The position would have been stopped out for 2R later, so even though I abandoned the position too quickly I have some ammunition for the rest of the week.
Regarding your day, I would suggest taking some time off, pondering over all the information you have been given and then just sieve through it all to decide what may work for you. My head would swim if I had gotten all of the different opinions you had and it would take me some time to sort through it all and then test the ideas I felt have merit.
Not to be a dick, but this is exactly what I hoped you would draw from this. I felt that if I just said it to you, it would have no impact and I'd sound harsh- finding that conclusion on your own is powerful!
I believe that @grausch said it best that he treats his trades as a position rather than multiple individual trades (paraphrasing here, so please correct me if this is not what you meant), and his job is to manage the position. This is how I think of it as well, when I do my daily review I'm judging each scale-in and scale-out in the context of the broader position and am not as concerned with each of them being profitable on their own. My goal is to walk away from the day in the green, if I have to have a few losing trades to make this happen then I'm fine with that.
Scaling is just one way to trade though and like everything else in this business there's not a one size fits all solution. I believe that @Silvester17's contributions to this conversation have illustrated that. There are times that AIAO will be more profitable on an absolute basis and there are other times that scaling-in and -out will work better, I think it's the trader's job to figure out which way (or a hybrid of the both) works best for them as an individual.
I recently adopted scaling-in and -out because I found that my directional bias on the day was more often than not correct, but my timing wasn't always perfect. I've wanted to be an AIAO scalper and have leaned my studies and effort over the past 2 years towards scalping as a result. What I've found though since I started journaling is that I'm pretty good at figuring which direction the market wants to move, my weakness oftentimes is timing (which I'm still working on). I threw in a golf example below that illustrates my thinking on this. Yes I still want to learn how to scalp successfully, but my overall goal is to be profitable. I can still work on my scalping technique, but if I can be more profitable leaning towards my strengths then I'd be foolish to be doing anything differently.
Take a golfer who wants to hit a driver like DJ and have a short game like Phil. This player spends most of his time on the range hitting driver and working on his flop shot. Then after a couple of months he does a meticulous study of his scorecards. This study finds that from 80-150 yards out he's consistently giving himself a makeable putt but when he's 50-80 out he's getting up and down only 40% of the time. If this golfer can recognize that the point of the game is to get the ball in the hole in the fewest shots then he can adjust his game accordingly to play to his strengths and dial down to a 3-wood off the tee giving himself 120 in rather than pounding driver every time. It's still important to work on his weaknesses but playing to his strengths will score better.
Swing changes take time, the important thing is that you're working at it.
@Tap In, I just want to say big thank you for a really awesome journal. The way you share both your struggles and tribulations are really inspiring and have definitely taught me a lot about both trading and trading psychology.
A big thank you to everyone who has replied and contributed their knowledge so freely too. I am not sure that you guys always realize just how much you contribute to making successful traders.
I know I could have just clicked the "Thanks" button about a thousand times, but it does not seem nearly enough for everything I have learned from this journal.
Thanks @bobwest for directing to this excellent journal.
I haven't gone thru all the posts here but this what my understanding for few posts
1. First, I felt like I am reading my mind in this journal or maybe all struggling traders goes thru same stuff
2. 30K combine is the main culprit of the issues here, it is very very difficult to follow the rules and own method.
3. Seems like Tap is also suffering from the same issue like me (I may be wrong here) i.e waiting for the trend reverse then somehow miss the entry then debate if trend has gone too far to enter and wait for that reverse again...this cycle continues
This will definitely help (very easy to say but difficult to follow)
1. Do analysis etc. (seems like Tap is doing excellent job in that)