Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
I would advise setting a daily loss limit because if you follow it then you know you will never lose more then x% on any given day. This knowledge makes it more possible to trade aggressively. However, as to whether or not it actually helps you, is based on specific factors of your trades. For example, if you use a tight stop loss then having a run of serially correlated losses can be a significant risk.
There is a trade off between trade selectivity and trade frequency. The mathematics work such that if you trade more selectively then you need to risk more per trade which increases risk of greater drawdown. It also tends to mean that you trade during more exceptional periods which are by definition more risky. If you increase your trade frequency then you risk less per trade but take more mediocre trades-- so trading costs become more predominant.
I suspect you need to become more selective in your trading. One technique I used in the past that seemed to possibly help was to try to identify the best trade in every X period window. If you can capture the best trade ideas of the day then you will not need to take as many trades.
Can you help answer these questions from other members on NexusFi?
1) ditch all and any oscillators. They are useless. They are lagging indicators that reflect the past and are basically weighted averages that you outsource your decision making to. In a psychological sense this is their siren like attraction to traders because they handily avoid you having to take any real trading decisions.
2) If you're trading SandP futures you should be using volume as part of your guide. If there is a volume spurt then what does this mean?
3) You can still trade short term but look at 5min/15min/1 hour charts for S/R levels.
4) Learn market structure/price action. I can recommend a bloke on youtube called Mark Douglas who does a great job on explaining how matkets work. I think his videos are titled something like beat the banks or stop hunts/stop hunting. You will gain a greater understanding why markets chop and why they take off.
5) Look at posts made by Dionysius Toaston this site. He owns (I think) a DOM application but more importantly he explains market structure (where people are likely to buy and sell and why) very well.
If you trade many contracts with a tight stop then a news event that leads to a quick drop in liquidity (slippage) that can cause larger then anticipated losses or, for example, holding through a report release by accident or mistake. The other major risk is holding over closed periods (such as weekends) where the market could gap up or down significantly on events over the closed period such as a weekend. There are other sources of potential large losses or gains such as leaving open orders out by mistake, software bugs, or setting the wrong order type (stop failing to trigger, for example). Some periods such as trading overnight are more risky due to reduced liquidity and higher potential for gaming behavior.
Looking at your chart OP, I've been where you're at. Been there done that with the Woodies-CCI. I even got his paperback book with his setups at one point, sidewinders, etc. I would suggest trashing it completely. Woodies is a total fraud who somehow had a long time cult following. ( One of several painful, long ago experiences trying out indicators sharing this with you. )
It may be ok to have your wavetrend oscillator as your only oscillator, but mainly to be aware of divergences which can help guide but never used as an entry alone. The ACME volume levels are fine where it looks like at least some decent s/r or reaction levels.
As others have mentioned, if you're going by candlesticks, then it's good to learn some PA if you hadn't done so already. Brooks is a good start, but just for getting an idea of reading the PA, as I think he fails (maybe on purpose) to teach any viable entry methods. ( if he even trades for real, and now just floats on the trading vendor income stream like the rest of them). The classic 20 MA can help as initial background structure (along with your acme levels) when looking at the PA. Then you can come up with your entries on the bars. My 2c and gl.