Wednesday, January 04, 2006
1/4/06 Ryan Jones Lesson 3 step # 7
I know, your thinking that I skipped a step or two? No I didn't. I was referring to the lessons which are the 1 hour lessons he gives. I am really on step 7 which is part of lesson 3. Let's see if I can remember all the steps.
1. Admit that there needs to be change.
2. Commit to making a change.
3. To Achieve change you must be held accountable to someone.
4. List items that need to be changed. What I listed were mostly symptoms of my greater problem of not trend trading.
5. List how you would like to be remembered at your funeral. Gives you a list to strive to achieve after changes are made. Also made me realize that my biggest problem was not trend trading and then not cutting down size when I have a loss.
6. List things that need to be changed in order or importance or priority. Trend trading.
7. List steps to making changes. A short road map if you will
On to Seven then. I'm going to talk about trend trading and then revenge mode trading.
Trend trading. On of my biggest issues with this is that I feel that the train has already left the station and that it is too late to get on board. So instead of waiting patiently for an entry I will often just fight the trend and try to fade it. Of course that doesn't work. I don't always have to be right because when it comes to trading I'm usually not! I have noticed that on the days that I will make myself just jump in the trend are just as a huge breakout has occurred... right at the worse time. Then the market will pull back and I will usually be stopped out. Sometimes when I get smart, even after a bad entry, I will wait and will add more contracts on a pullback. On those days I can generally do alright... even with crappy entry I will make money... because I am trading with the trend, not against it. On day when that breakout spike is a reversal then I am just sunk... big time. So, it's either crappy entry or I will fight it instead. OK, how to solve. Here is my solution.
1. If there is a trend evident (HH and HL or opposite), then wait for a pull back or at least a flat spot before the next impulse wave. Fooser is very good about this. Follow him on entries. Use 50% retrace as rough rule or S/R lines for entry points. May be more or less but it will protect us even if it is a reversal.
2. When entering a trend, start with 1 or 2 contracts. I can always add more later. There will be a later. Let it prove itself first.
3. Don't ever try to fight it. Use the 10 period EMA on all charts as fooser does to ID the trend in the first place. Don't trade against it on the longer charts. 60min, 30min, 15min. Trade the majority. The only exception to this might be a Gap trade.
4. Use Trin, put call for direction and tick for entry. This has worked very well for me in the past couple months.
5. If no trend evident and indicators are in conflict then just use the Daily and 60 min S/R lines for entry and exit. Must wait for extremes. Tick is one to use on these days.
6. (This has been added to this original post later. After reviewing disc 4 I've come to realize that I left things out of these steps. I need to have a set of checks and balances to make sure I do indeed follow the steps. Step 6. Check and review progress daily! This will also apply to the last step of Revenge trading listed below.)
Revenge trading steps below:
1. After first loss then stop trading to see what has changed in the market. Something has changed or I would have made money.
2. If I'm not sure what has changed with the market then don't trade! Simple. If no setup then don't force it.
3. After first loss cut down size. As MC says... it's never too late to get smaller! If trading 6 then progression should look like this. 6:4:3:2:1. Every 2 trades will cut size in 1/2 or more.
4. Never add size until after a win!!!!!!
5. Never add size. If I'm in a trade currently that is losing even if I haven't taken the loss yet, don't try to average down, unless I have a REALLY GOOD REASON!!!!! There aren't many.
I would like to condense these down so they are subject to change.
Trader X
1. Admit that there needs to be change.
2. Commit to making a change.
3. To Achieve change you must be held accountable to someone.
4. List items that need to be changed. What I listed were mostly symptoms of my greater problem of not trend trading.
5. List how you would like to be remembered at your funeral. Gives you a list to strive to achieve after changes are made. Also made me realize that my biggest problem was not trend trading and then not cutting down size when I have a loss.
6. List things that need to be changed in order or importance or priority. Trend trading.
7. List steps to making changes. A short road map if you will
On to Seven then. I'm going to talk about trend trading and then revenge mode trading.
Trend trading. On of my biggest issues with this is that I feel that the train has already left the station and that it is too late to get on board. So instead of waiting patiently for an entry I will often just fight the trend and try to fade it. Of course that doesn't work. I don't always have to be right because when it comes to trading I'm usually not! I have noticed that on the days that I will make myself just jump in the trend are just as a huge breakout has occurred... right at the worse time. Then the market will pull back and I will usually be stopped out. Sometimes when I get smart, even after a bad entry, I will wait and will add more contracts on a pullback. On those days I can generally do alright... even with crappy entry I will make money... because I am trading with the trend, not against it. On day when that breakout spike is a reversal then I am just sunk... big time. So, it's either crappy entry or I will fight it instead. OK, how to solve. Here is my solution.
1. If there is a trend evident (HH and HL or opposite), then wait for a pull back or at least a flat spot before the next impulse wave. Fooser is very good about this. Follow him on entries. Use 50% retrace as rough rule or S/R lines for entry points. May be more or less but it will protect us even if it is a reversal.
2. When entering a trend, start with 1 or 2 contracts. I can always add more later. There will be a later. Let it prove itself first.
3. Don't ever try to fight it. Use the 10 period EMA on all charts as fooser does to ID the trend in the first place. Don't trade against it on the longer charts. 60min, 30min, 15min. Trade the majority. The only exception to this might be a Gap trade.
4. Use Trin, put call for direction and tick for entry. This has worked very well for me in the past couple months.
5. If no trend evident and indicators are in conflict then just use the Daily and 60 min S/R lines for entry and exit. Must wait for extremes. Tick is one to use on these days.
6. (This has been added to this original post later. After reviewing disc 4 I've come to realize that I left things out of these steps. I need to have a set of checks and balances to make sure I do indeed follow the steps. Step 6. Check and review progress daily! This will also apply to the last step of Revenge trading listed below.)
Revenge trading steps below:
1. After first loss then stop trading to see what has changed in the market. Something has changed or I would have made money.
2. If I'm not sure what has changed with the market then don't trade! Simple. If no setup then don't force it.
3. After first loss cut down size. As MC says... it's never too late to get smaller! If trading 6 then progression should look like this. 6:4:3:2:1. Every 2 trades will cut size in 1/2 or more.
4. Never add size until after a win!!!!!!
5. Never add size. If I'm in a trade currently that is losing even if I haven't taken the loss yet, don't try to average down, unless I have a REALLY GOOD REASON!!!!! There aren't many.
I would like to condense these down so they are subject to change.
Trader X
