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Trade Management

STAR TREK CAPTAIN JEAN-LUC PICARDCaptian Jean-Luc Picard is a character from the series Star Trek. He is many Star Trek fans favorite Captain because of his combination of class, wisdom and wit. This particular statement was spoken to the Android Data who was failing in his attempts to be more human. Tim has found this encapsulated his early trading experiences to a tee. Early in Tim's attempts to be a profitable trader he traded index futures. He had his strategy and was paper trading. He would get four or five winning trades in a row. He felt he knew what he was doing and felt he was ready to try real money. So the next trade setup he took on his real money account and lost, so he returned to paper trading. This cycle repeated itself several times. Losers are part of the statistical game in trading. If he stuck to the real money account those paper winning trades would have been real money winners. These winners would have easily offset the losers. The whole time he felt he was making mistakes. If he did it right it should have been a winner. Understand this, you can get all the rules right and still lose a trade. That's ok, that's life. That's trading. Trading is never a sure thing, it's always about statistic and probability. Just because you had a loser doesn't mean tht you did something wrong. Just because you had a winner doesn't mean you did everything right either. The important thing is to follow your strategy rules, your trade management rules, your risk management rules. If you followed all your rules then you did it right, winner or loser. Trading Maxim's help control your emotional impulses and keep you on the straight and narrow path. A maxim is a general truth fundamental principle, a rule of conduct or a proverbial saying. The purpose of Tim's Maxim's is to motivate you to discipline and trading as well as other areas of your life. We suggest that you start your own list of Maxim's. Things you can say to yourself while you are trading or doing life to make sure you always do the right thing. Feel free to borrow from Tim's list.
COINBASE:BTCUSDEducation
by Tradingstrategyguides
Algorithm Builder - INDICES - SPX500 - Review Oct 18th, 2019Hello traders I. Daily tutorial publishing challenge officially begins Starting today, I'll be publishing every night what were the setups given by the Algorithm Builder Indices . ---------------------------------------------------------------------------------------------------- You'll find more information about that script in this script signature. ---------------------------------------------------------------------------------------------------- II. Wisdom of the day Last Friday was the Triple witching hour day. That is the day where the US contracts come to expiration on the US market - this event happens once a month. Hopefully, only once a month, because this day is often particularly hard for traders to trade. Those days are the expiration of three kinds of securities: 1. Stock market index futures; 2. Stock market index options; 3. Stock options. The simultaneous expirations generally increases the trading volume of options, futures and the underlying stocks, and occasionally increases volatility of prices of related securities. III. Why a 1-minute chart? The indicator won't give more than 3/5 trades per day even. This is not a scalping trading method, it's intraday and based on smoothed indicators for entering in a strong trend only. Those are the most secure trades possible because: - the Algo Builder waits for a strong confirmation and will avoid the fakeouts - the 1 minute allows to enter very early. This point is crucial. We made it so that to enter early but with a minimum of security. IV. SPX500 - Signals of the day 2.1 Morning trade 1. 8:45 am We had a difficult move to take because in front of multi-timeframes resistances. and US stocks opening 45 min later. What I usually do, is to wait for a pullback near the EMA 20 which has a few huge benefits: - generally gets me a better entry price (lower for a long, higher for a short) - reduce the distance between my entry price and stop-loss - hence reducing the risk of the trade The Algorithm Builder - INDICES calculates the stop-loss internally, based on the price where the signal appears 2. 10:12 am and 11:45 am The IDEAL scenario for the Algorithm Builder. Leading trend is red, short signal, no supports near, a great setup with a decent risk-to-reward ratio. When we're in the same direction as the leading trend and the next algorithmic SMAs are a bit far, those are the moments where I know that my reward is far greater than my risk. Would I overleverage or increase my position size drastically anyway knowing this is the Triple witching hour day? Maybe not :) The three morning trades gave about 270 pips 2.2 Afternoon trades 1. 1:05 pm We now see a BUY against the leading trend in red. Which means, the trend is not too strong to go crazy yet. The method tells to wait for a pullback near the EMA 20 to enter with more security 2. 3 pm In the same direction as the leading trend but in front of MTF resistances. Even waiting for a pullback allowed to grab the last 30 pips of the day To quote Ice Cube - it was a good day :) All the best, Dave
FX:SPX500Education
by Daveatt
Algorithm Builder - INDICES - DOW JONES - Review Oct 18th, 2019Hello traders I. Daily tutorial publishing challenge officially begins Starting today, I'll be publishing every night what were the setups given by the Algorithm Builder Indices . ---------------------------------------------------------------------------------------------------- You'll find more information about that script in this script signature. ---------------------------------------------------------------------------------------------------- II. Wisdom of the day Last Friday was the Triple witching hour day. That is the day where the US contracts come to expiration on the US market - this event happens once a month. Hopefully, only once a month, because this day is often particularly hard for traders to trade. Those days are the expiration of three kinds of securities: 1. Stock market index futures; 2. Stock market index options; 3. Stock options. The simultaneous expirations generally increases the trading volume of options, futures and the underlying stocks, and occasionally increases volatility of prices of related securities. III. Signals of the day 2.1 Morning trade We had a difficult move to take because in front of multi-timeframes resistances. What I usually do, is to wait for a pullback near the EMA 20 which has a few huge benefits: - generally gets me a better entry price (lower for a long, higher for a short) - reduce the distance between my entry price and stop-loss - hence reducing the risk of the trade The Algorithm Builder - INDICES calculates the stop-loss internally, based on the price where the signal appears 2.2 Afternoon trades 1. 8:45 am The first SHORT was given against the leading trend. Around 2:45 pm the background is green, meaning the leading trend is still bullish but as we got a short trade, we had to take it. Plus we were just below a ton of supports which tells us that a pullback near the EMA 20 is really required. Before getting invalidated by the brown vertical bar, we had an 84 pips opportunity . It's usually a good practice to set the stop-loss to breakeven or exit completely a position before the opening at 9:30 am. We often see violent and unpredictable wicks a few minutes before and after the US stocks open. 2. 4:05 pm (UTC+2) The IDEAL scenario for the Algorithm Builder. Leading trend is red, short signal, no supports near, a great setup with a decent risk-to-reward ratio. When we're in the same direction as the leading trend and the next algorithmic SMAs are a bit far, those are the moments where I know that my reward is far greater than my risk. Would I overleverage or increase my position size drastically anyway knowing this is the Triple witching hour day? Maybe not :) Maybe I should have (kidding) :( ... it was a 162 pips move :) All the best, Dave
FX:US30Education
by Daveatt
How to connect your indicator with the Trade ManagerHi everyone On Today's tutorial, I wanted to highlight how you can upgrade your own indicator to work with the Trade Manager Let's take the dummy example of the double MM cross Step 1 - Update your indicator Somewhere in the code you'll have a LONG and a SHORT condition. If not, please go back to study trading for noobs (I'm kidding !!!) So it should look to something similar macrossover = crossover(MA1, MA2) macrossunder = crossunder(MA1, MA2) What you will need to add at the very end of your script is a Signal plot that will be captured by the Trade Manager. This will give us : // Signal plot to be used as external // if crossover, sends 1, otherwise sends -1 Signal = macrossover ? 1 : macrossunder ? -1 : na plot(Signal, title="Signal") The Trade Manager engines expects to receive 1 for a bullishg signal and -1 for bearish . Step 2 - Add the Trade Manager to your chart and select the right Data Source I feel the questions coming so I prefer to anticipate :) When you add the Trade Manager to your chart, nothing will be displayed. THIS IS NORMAL because you'll have to select the Data Source to be "Signal" Remember our Signal variable from the Two MM Cross from before, now we'll capture it and.....drumb rolll...... that's from that moment that your life became even more AWESOME The Engine will capture the last signal from the MM cross or any indicator actually and will update the Stop Loss, Take Profit levels based on the parameters you set on the Trade Manager I worked the whole weekend on it because I wanted to challenge myself and give you something that I will certainly use in my own trading Please send me some feedback or questions if any Enjoy Dave
BITSTAMP:BTCUSDEducation
by Daveatt
19
You get to experience 5 type of tradesEvery time it is different, but in general I would say there are 5 type of trades: 1- Just nosedives and never goes into your favor. Straight down (up). The ones to avoid, which you want to get out of as quickly as possible. Will destroy your account really fast if you do not cut it. Not much you can do about this type. Obviously you get stopped and that's it. I see people hold on and even congratulate themselves for it "expert educators" telling people to "let their losers recover", and brokers say that most clients do this. It is so stupid I won't talk about it. You get stopped, end of story. Here are examples: 2- Baghodler favorite. Check Tesla and Robinhood bagholders for an example of this one. Slowly goes against you, and more, and more. Baggies absolutely love to hold onto those ones. "Oh well it is going to bounce eventually". Literally going against the trend. It is so stupid to anyone that understands a tiny bit... Trends are awesome. Spot a nice diagonal trend, enter, trail your stop, stay in. move with the market. Markets do not trend that often but when they do it is easy money. Holding against that is emm well like stabbing a wound to make it go away. Might be a good idea to cut your losses early. If it just slowly keeps going against you... An example where it was slowly going up & I gave up but came back with a short idea later. Should have given up faster tbh: And then there was a new opportunity: 3- The one that does not go anywhere. Just consolidates, or goes slightly in your favor/against you and then the other way. Paul Tudor Jones has a rule "If it takes too long I get out". Might want to follow that one. I guess you can take almost any Bitcoin trade as an example. Gosh this stupid thing is boring. I cannot think of any trade that was not Bitcoin that was a number 3. It usually goes up or down. 4- The one that goes midly in your favor. They can either slowly go up (/down) or go back agaisnt you then double bottom and rip up. Depends on the strategy, and you will be able to tell how to deal with those with experience normally. It is complicated every case is different. No simple rule here. Can trail stop, move SL to breakeven and maybe re-enter later, or just stay in and wait and see (but if it takes too long thought...). Plenty of possibilities to do this. This one is an example, not great: This is a stinky one that goes way down, then up then down again. 5- The ripper. Goes strongly in your favor and keeps going. Never comes back into your risk area. These are the kind of ones that make accounts grow and the one we are looking for. The other 4 types are irrelevant. They are just failed attempts to get these big winners. This amazes me, but according to brokers, this is the one that traders get out of quickly -.- And the disgusting ones (number 2) are the ones that people hold onto because "it is not falling too fast it will come back eventually". Cannot help but want to "secure" your profit? Then simply move your stop loss to breakeven. If you have a really big winner, it should not go back against you the vast majority of the time. Here is an example: Here is another example: And 1.5 month later it is still going down, stronger than ever (I should have stayed it, but at the same time beloved intelligent regulators won't let me):
TVC:USOILEducation
by MrRenev
1
Update to "Go long BTCUSD"-Trade Management Risk:Reward is 14:1 This chart will give you a better view to the ongoing trade "Go Long BTCUSD", with all indicators in visible (Pivots, Opening Range) to see the trade progression, trailing stop losses and profit targets. What you are seeing here is trade management. By managing the trade properly we are able quickly eliminate the risk of the trade being a losing trade, by bringing our stop loss to close to break even very soon after our entry. From there we simply trail stops to key support levels as well as taking partial profits at key resistance levels. This allows for the trade to be a comfortable experience by enjoying the booking of gains and the continual reduction in risk of losing profits.
BITSTAMP:BTCUSDEducation
by chris333
3
Trading Record - Risk Units Exercise This is an observation with educational purposes, for myself and for the people who might find it useful. First of all, the results that are shown here are made from the last 13 trades that were published and TRIGGERED, here in the website. Each one of those trades are measure in terms of risk to reward, in other words terms of risk units. Remember when you are going to place a trade you must have clear what % of your account you are going to risk, after you have that number, depending on the place from your entry to your of stop loss level you define your position size in order to match your risk amount Below you can find in detail each one of the trades, is important that you see the description of each idea in order to see how was the trade management in each case Trade 1 Trade 2 Trade 3 Trade 4 Trade 5 Trade 6 Trade 7 Trade 8 Trade 9 Trade 10 Trade 11 Trade 12 Trade 13
Education
by JaimePantoja
1