TECHNIQUE: After three profitable trades, skipping the next setup.

Discussion in 'Risk Management' started by Iwilldoit, Feb 2, 2016.

  1. Visaria


    Your adverse drawdowns on some of the trades are huge compared to the amount of profit you eventually make. I'm curious to know at what point you would throw in the towel on a trade?
    #21     Feb 3, 2016
  2. cascade of non confirmations/expectations, internal positive/negative oscillation, very bad trades, repetitive negative confirmation in price action in all timeframes. The trade turns negative in one timeframe ie.. like 5 minute chart but fails to on the 4hr chart. The trade would still be kept. Basically if the trade leaves a sour taste, minimization of losses but not expecting to make anything of significance on it. The frequency of setups are higher as timeframes approach tick charts. When you get into longer timeframes, one may have to sit and wait for days for a setup.
    Last edited: Feb 3, 2016
    #22     Feb 3, 2016
  3. bleau


    #23     Feb 3, 2016
  4. #24     Mar 15, 2016
  5. Visaria


    i'm pretty sure they don't.
    #25     Mar 15, 2016
    komorebi likes this.
  6. I noticed that as well...a $34700 DD on a $110 eventual profit...At the same time I have seen traders that will put in large stops with small profit targets banking on the idea that they can capture the "noise"...The S&P has always attracted faders and mean reversion types (although it's been "trending" a great deal the past 6 months)
    #26     Mar 15, 2016
  7. Xela


    "It must be true: I read it at EliteTrader". :confused: :wtf: :rolleyes:
    #27     Mar 16, 2016
    K-Pia likes this.
  8. Zodiac4u


    That would be great advice for many. For the not so experienced, it would be a good time to examine your trades as to why they worked.
    #28     Aug 30, 2016
  9. %%
    Exactly right; an exception could be in like a bear market 3+ years old.You could trade smaller; or if your are real , real young you may want to increase size-LOL. T hat way you may possibley have time to recover from huge losses. NOT a prediction; wisdom is profitable to direct
    #29     Sep 6, 2016
  10. I think such a proposition is entirely arbitrary because I doubt any amount of valid testing would ever arrive at such a conclusion.

    If trade outcomes are entirely independent, as a previous poster suggested, then skipping a setup for its own sake makes no sense. And even if trade outcomes were not entirely independent (say, because you hit a patch of price action that was particularly friendly to your trading method), then would you want to skip a setup while you were especially in synch with the market?

    There may be reasons to skip setups, but the reason and manner in which you propose is not one of them.
    #30     Sep 7, 2016
    ogarbitrage likes this.