Trading Horse racing : Trading reversals and stop losses

The sport of kings.
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ShaunWhite
Posts: 5991
Joined: Sat Sep 03, 2016 3:42 am

Thu Jun 04, 2020 2:27 pm

Rob51852 wrote:
Thu Jun 04, 2020 11:18 am
Shaun, thanks. That makes a lot of sense and is different from the way I've been looking at it.
Thx. As I intimated I'm not sure where this idea of strictly opening and then closing a 'trade' comes from. If you watch Peter's live trading videos he's building and reducing his position according to his confidence. To try and put that into the context of your question, perhaps you could halve your holding when the price goes -ve 3 ticks and reduce it further if it continues to get worse. Similarly if your initial marker bet starts to look like a good decision you can always add to it. I'm quite happy to admit I'm no great manual trader but the I see a big disconnect between how traders actually operate and how it's perceived by people learning, nothing is a black and white in or out decision, it's about managing your position in line with your confidence.

I'll bow out of this one now because as I said I'm not really in a position to give manual trading advice but from watching Peter's videos and from my experience with fund managers/dealers, that's what I see happening and that's what principals my moderately successful automation uses.

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Kai
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Location: Croatia
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Thu Jun 04, 2020 4:15 pm

Rob51852 wrote:
Thu Jun 04, 2020 11:18 am
Kai, how many ticks below the bottom of the traded range would you say a breakout is confirmed?
You're maybe missing the point of what I was trying to say, if in your mind an important price point gets breached then you try to react accordingly, if it doesn't you hold your position and nerve if you're comfortable with your staking. If you base all of your decisions on how many ticks you temporarily lose or gain no matter what price range then I think the market will take you for a ride pretty often. Say that one of your positions sits on +2 ticks currently and then you see clear signs that it's a terrible position, why needlessly hold onto that bad position until it hits that -3 stop loss?

Maybe think about it this way, wouldn't ideally the market just love to go further than it should? So that most people hit their stop loss, before quickly turning back? How often do those most aggressive sudden moves snap right back? Just a few random questions you can try asking yourself.
ShaunWhite wrote:
Thu Jun 04, 2020 2:27 pm
To try and put that into the context of your question, perhaps you could halve your holding when the price goes -ve 3 ticks and reduce it further if it continues to get worse. Similarly if your initial marker bet starts to look like a good decision you can always add to it. I'm quite happy to admit I'm no great manual trader but the I see a big disconnect between how traders actually operate and how it's perceived by people learning, nothing is a black and white in or out decision, it's about managing your position in line with your confidence.

I'll bow out of this one now because as I said I'm not really in a position to give manual trading advice but from watching Peter's videos and from my experience with fund managers/dealers, that's what I see happening and that's what principals my moderately successful automation uses.
I think that's actually very good advice, it points you in the direction of how you can more safely manage your position, and with it manage your risk. That's exactly how I try to manage most positions overall, if it looks good then take some profit and/or add to it, if it doesn't look great then start reducing risk, and if it looks terrible just close asap so that I don't waste any time on a crap position, this frees up my time to look for something else, possibly even reverse the original one.

It's all about making judgement calls on what you think is going on, for fast markets you may need to make many micro-decisions. If you hesitate for whatever reason, it may already be too late, so I understand the need to set up some flat rigid rules. Applying flat rules to all markets and positions doesn't really lead anywhere, but trying something like Shaun suggested is not actually a bad idea in my opinion.

doovd
Posts: 45
Joined: Sun Jan 15, 2017 10:02 pm

Fri Jun 05, 2020 7:50 pm

Wow @ShaunWhite I posted something pretty much identical in message to your original post in this thread, but a couple of hours earlier than it...spooky!

viewtopic.php?p=222508#p222508

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ShaunWhite
Posts: 5991
Joined: Sat Sep 03, 2016 3:42 am

Fri Jun 05, 2020 10:14 pm

doovd wrote:
Fri Jun 05, 2020 7:50 pm
Wow @ShaunWhite I posted something pretty much identical in message to your original post in this thread, but a couple of hours earlier than it...spooky!

viewtopic.php?p=222508#p222508
:) I saw your post after I did mine and was going to commented on the similarities too.

Rob51852
Posts: 23
Joined: Mon May 30, 2016 7:28 am

Tue Jul 07, 2020 8:05 pm

Hi guys,

I just wanted to post back and say thanks again. I’ve got a new mindset now and it seems to be helping. I had my best month ever.

Cheers

jamesg46
Posts: 1146
Joined: Sat Jul 30, 2016 1:05 pm

Tue Jul 07, 2020 8:11 pm

Rob51852 wrote:
Tue Jul 07, 2020 8:05 pm
Hi guys,

I just wanted to post back and say thanks again. I’ve got a new mindset now and it seems to be helping. I had my best month ever.

Cheers
Nice to hear things are going good!

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