Calming 

What timeframe are you using?

I trade using a 30 minute and daily chart. My average on the year is 35 points (140 ticks) per trade on 19 winning trades to give you an idea of how frequently I trade.

Calming 

Let me ask a question about actual trading. So, I sold 1 contract to see how long it would last. Found a good setup, etc. Got in, gradually moving my stop behind the high of the previous bar, then a couple of dojis happen that kicked me out. See the pic for the details. Question being, is it normal and to be accepted or is there a way around it?

Well, it's what you asked to have happen when you put your stop at that level. Price traded to your stop and out it went. Then price went back down and left you out of the trade.

(Not that anyone wouldn't want it to just ignore the stop if the bar is just going to turn back around . But you can't really know in advance, can you?)

The only option would be to not use a stop, which is dumb, or not trail your stop down, or at least not so closely to the price bars. For example, if you keep the stop very close to the highs of the previous bar, as you did, you are guaranteed to get stopped out the first time price moves just enough to go above that prior high, which will be very often.

Some people trail their stops behind the price movement, and some leave them where they were initially. If you trail them, you have to figure how close to do so, to avoid the small pullbacks such as what you got. If you don't trail them, you don't have an emergency exit in case price turns around before your price target is reached. So there are trade-offs and you will need to work out what you prefer.

Probably you were trailing too closely in this case. But you can see that there is no sure way to know how big the pullback will be, and you don't know whether it is just a short-term pullback or an actual price reversal.

Part of the game.

Bob.

Calming 

What else would be helpful to add?

You seem to have some basic setups. So, do lots of trades with them. See what worked and what didn't. Fix and repeat.

You can also expand your knowledge base, but there is a danger in getting too involved with too many complicated things. It's going to take some time. Go slowly, step by step.

For instance, I noticed you have Volume Profile and VWAP on some of your charts. These can be great tools, and if you are using them, fine. Nothing wrong with mixing in different styles.... So long as you keep it simple enough that you can make good decisions.

There's really no one "best" method, and I imagine that no one who has answered any questions for you so far has used exactly the same method as any other one. Just make sure that you can identify good reasons, as you see things, for your trades, and then execute them unflinchingly. And do a lot of them. Practice is the thing.

Bob.

Calming 

Let me ask a question about actual trading. So, I sold 1 contract to see how long it would last. Found a good setup, etc. Got in, gradually moving my stop behind the high of the previous bar, then a couple of dojis happen that kicked me out. See the pic for the details. Question being, is it normal and to be accepted or is there a way around it?

When trading 5 minute candlesticks try only moving your stop above a down bar if the location of the close is in the bottom 20% of the range of the bar...vise versa for green candles. Even still, these types of stops happen all the time...price goes against you, stops you out and then keeps going in the direction of the trade...very common.

If look at your chart if you would have followed the above rule for moving your stop you stop location would have still been over your entry bar when that bar with the long top wick occurred and then after it closed down you would have moved your stop above that and you would still be short on the final candle of the chart you posted. That method of moving stops worked real well for me when I traded 5 minute bars. Now I only use range bars.

JohnS 

Have you heard of Adam H. Grimes' free course? I did the original course and felt it was a good "no BS" tutorial on learning the market, learning how to statistically evaluate your edge using a spreadsheet & manually back testing, which @Babool is referring to.

Babool 

...

Mr. Babool, Are you referring to this course?

JohnS 

It appears to be updated. The beginner free course sounds like what I did. Regarding contract: sorry that is all I remember about continuous contracts when I used nt7. I’m afraid I can’t help.

Judging by its contents, the course seems to be for complete beginners. Can you please go over its contents and point which section(s) you meant. I've attached its table of contents in a .pdf. I assume you were talking about the last section "PRACTICAL TRADING PSYCHOLOGY".

Calming 

Mr. Babool, Are you referring to this course?

No that was not me...never seen that course before.

Massive l 

4 wins, 1 loss (very small sample size) 80% win 20% loss Now add up your total $ winning trades and your total $ in losing trades Then find the average of winning $ and losing $. (winning $ / 4) / (losing $ / 1) that's your Risk/Reward. take your R/R and multiple is by your winning % (.80). Take that # and subtract your losing % from it (.20). that's your expectancy.

Copied it down in my notebook. Wondering, once these numbers are calculated, what is one to do with them? Where do you plug them in?

They do bring up one important aspect - winning trades. How can one increase his number of winning trades? I assume by studying PA. What else is important?

Calming 

Copied it down in my notebook. Wondering, once these numbers are calculated, what is one to do with them? Where do you plug them in? They do bring up one important aspect - winning trades. How can one increase his number of winning trades? I assume by studying PA. What else is important?

You don't do anything. It gives you an idea of what to expect.

You should also know your maximum and average risk exposure. How much heat do you take before price moves in your favor? This then gives you an idea of where your stop should be placed. I take my average risk exposure and double it. That's my stop. Your stop should not be more than your maximum risk. I can always get back in if the signal stays and price moves back into my favor.

Increasing winning trades is not necessarily the goal. Increasing my expectancy is. You can't do anything other than to refine your skills as a trader over several categories. These categories include strategy development (reason for opening/closing trades), risk management (knowing your stats/rules), psychological management (following your strategy/managing risk). I want to win so I prefer strats that are at least 50/50. It's hard work and takes a 1000s of hours. I don't know if the 10000 hour rule applies to trading. It takes more than that because you have to prove yourself every year. Being successful with a positive p/l over a few years doesn't mean shit. You have to keep producing and it's 100% up to you and only you. Don't get too excited over early successes. Remain neutral and keep driving. It doesn't stop.

Babool 

What you need to do is come up with single trade, one that you can write down and repeat when you see it occur on a chart. Go back and study 90 days worth of charts and circle every time that trade occurs, note the ones that make it to target, get stopped out, etc. Keep a spreadsheet. Figure out the trades win loss ratio and make notes. Learn about support/resistance and use those areas as filters to keep you out of trades. This will be a good start on your way to learning what you need to know.

Now that we've mapped the territory - 90 days of data - the next question is how to go about scouting it. If one is looking to make 6-8 points, one should look for legs 10-14 points long because there will be at least two points at each end left out for determination. So one will need a setup that can result in these many points. Which setup to choose?

I am going off Brooks' list of setups:

1. Reversal bar
2. Good signal bar pattern
3. EMA pullback in a trend, especially if two legged
4. Breakout Pullback
5. Breakout Test
6. High/ Low 2 or 4 (there must have been a prior trendline break if fading a strong trend)
7. Failure of anything: Prior High or Low, flag breakout, reversal from an overshoot of a trendline or a trend channel line, 5 tick failure

A couple of questions. Is any important setup missing from this list? If not, how should one proceed with choosing that one single trade or setup?

Babool 

That's more than a hole...its a deal breaker if you want to be profitable. 6-8 point targets may or may not be reasonable and will depend on if your entry has continuation. When I say continuation, I mean does it have room to your target before encountering support/resistance that would decrease the odds of the trade being successful. For example, would you take long entry 2 points before hitting yesterdays daily high for the first time this session expecting your trade to go the full 6-8 points to target ? More than likely it will reject when it tests yesterdays high for the first time and possibly retrace enough to stop you out.

So, levels of support and resistance are important as one calculates a possible move of PA. The problem then is that there are just so many of them. How can one determine which ones are more important than the others? Brooks suggests focusing on only the previous day's High and Low. What should one add to this list? If adding more items to the list of S&R, how to assign priority to each of them?