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Plan: Keep a tight stop, move stop to breakeven when there is a 12 tick profit, hold winners until the end of day
MCL
Long 12:30pm to 12:38pm ET
Enter @80.50
Exit @80.49
Result -$1
MES
Long 3:26pm to 3:59pm ET
Enter @4454.50
Exit @4454.50
Result $0
Daily result with fees -$6.72
My MES trade I had terrible discipline. I didn't set a stop and didn't even have a mental stop in mind. Let the market go 25 ticks against my position. Luckily the market came back to my breakeven.
Trades tonight
MCL
Short 7:42pm to 7:57pm
Enter @81.00
Exit @81.04
Result -$4
MCL
Short 8:24pm to 8:55pm
Entry @81.03
Exit @81.02
Result +$1
MCL
Short 10:16pm to 3:21am
Entry @80.97
Exit @80.95
Result +$2
My goal in trading: Don't lose money. How do I do this? Its a trade by trade procedure. I attempt to use a tight stop. Having a tight stop leads to many consecutive losses which is difficult to handle psychologically. Using and executing a tight preplanned stop order is not always achieved because I am human and do not like losing money which leads to holding onto losses. Like today, I entered long in the MES and had no stop planned. My typical stop in this market is about 4-10 ticks. This trade went against me 25 ticks before recovering to break even where I closed the trade.
Until recently I was trading for pure enjoyment. This goal precipitated a completely different trading plan. I held losses all day and never closed them out. This was fun because I could root for a trade like a sports team and gambling. I now realize this results in poor financial performance and I can not longer afford to trade this way. I am sure every once in a while I will revert to this style of trading for an emotional release but am going to try to work hard to stick to my goals.
Trading to avoid losing money takes hard work, dedication to a plan, and consistency. I am going to take my goal to not lose money seriously and will look for fun elsewhere, not in trading.
Thinking about how my results will realistically look if I have tight stops of 3-6 ticks, move stops to breakeven, and hold winner: There will likely be 15-25 losses, 5-10 break evens, 1 winning trade.
1. Set a hard stop of 3-7 ticks
2. If stop is not triggered and position moves into profit by 10 ticks, move stop to breakeven
3. If breakeven stop is not triggered close position at end of day
I will try my hardest to adhere to my simple 3 step trading plan
Do you have a specific reason for entering a trade?
I don't need to know what it is just that you have something that has to happen to get you to open a trade.
Preferably you have 3 or 4 different reasons that have to occur to get you to place a trade.
I have a check list that has several criteria that have to be met before I trade.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
I like trading when the markets are quiet. This means overnight and around noon. For the oil market, I avoid 8am to 11am and 2pm to 3pm because the market is volatile during these hours.
I use the limit orders in the order book to determine entries. I look for larger order blocks and place my limit orders where they are. For instance in crude, if there is a price level 3 ticks higher than the last price with 100 contracts(some high number) I may front run the larger order with a tight stop.
However, I have been back testing my trading plan during periods of time when there is a 10-20 tick move. My limit is 20 ticks because larger moves means there is volatility and my stops will get destroyed. I look to fade a 10-20 tick move. I have found this allows my trade to move into a profit a higher percentage of time thus allowing me to move my stop to break even and holding a winner after that. I'm still back testing crude.
I try to stay on top of news in the oil market and generally try to trade the direction of the news and momentum as well.
Revised Plan: Exit using a 1-7 tick mental stop, hold a winner until end of day (using a hard stop takes too much time to implement and I miss the move)
M6E
Short 10:14am to 10:17am
Enter 1.0937
Exit 1.0940
Result -$3.75
MES
Long 11:21am to 11:22am
Entry 4459
Exit 4458
Result-$5
MCL
Short 11:27am to 11:28am
Entry 81.02
Exit 81.05
Result -$3
MCL
Short 11:32am to 11:35am
Entry 80.90
Exit 80.95
Result -$5
MES
Long 11:41am to 11:42am
Enter 4456
Exit 4455.25
Result -$3.75
MES
Short 12:01pm to 12:03pm
Entry 4450.25
Exit 4451.25
Result -$5
MES
Long 12:14pm to 12:15pm
Entry 4443.50
Exit 4443
Result -$2.50
MES
Long 12:16pm to 12:17pm
Entry 4443.50
Exit 4443
Result -$2.50
MCL
Long 12:23pm to 12:24pm
Enter 80.43
Exit 80.41
Result -$2
MES
Long 12:28pm to 12:29pm
Entry 4441.75
Exit 4441.75
Result -$1.25
MCL
Long 12:34pm to 12:35pm
Enter 80.44
Exit 80.41
Result -$3
MES
Long 4:26pm
Enter 4418.25
Exit 4418.25
Result 0
M6E
Short 4:36pm
Entry 1.0893
Exit 1.0893
Result 0
After a lot of back and forth I decided to use mental stops going forward.
Setting a hard stop takes 20-30 seconds and the trade opportunity has long disappeared by then. Furthermore, once price hits a hard stop there is at least one tick or more of slippage. With a mental stop I can exit when there is liquidity at the level I want to get out at. The hard part of a mental stop is being disciplined and fast enough to press the market order button when I see my price I need.
I know there are probably some people who think hard stops are superior for various reasons, so let me know your thoughts and I will gladly take your opinion into consideration.
You're going to attract what you're trying to avoid so when you say don't lose money that's what likely is going to happen. Try not to think of a pink elephant and you'll think of a pink elephant.
You might phrase your goal in a more constructive way like "My goal in trading is to make a (bumper) profit". For that you will need to manage your risk but that is not the main goal of your trading, that's making a profit.
Of course will only phrasing your goal different not make you profitable. Your consistency is pretty impressive. Maybe just try to do the opposite of what you're doing now? No pun intended.
For example your first MES trade at 11:21 hour was after a triple top (in an area of former supply at 04:32 hour) right in the middle of a range what looked like distribution. So the odds price was going to go up was very low (being in a downtrend on the higher time-frame as well, 60m & 120m). Above the triple top resistance was a good stop location and target low of day. All of that is not visible zoomed in on a DOM. Maybe it helps. Good luck.
Thanks @Mies. I will think about what you told me and try to incorporate the improvement into my plan going forward. I totally agree with you in that my thoughts become my reality. I set out today with the goal of having many tiny losses and that exactly what I got. I suppose I need to visualize the profit side as well.
