KISS Entry Exit Stop that is set upon entry Objective Discpline to follow your strategy Patience to let the trade play out Belief in yourself Belief in the positive expectancy of your edge Balls
oraclewizard77, Moderator, Here's some good rules. https://elitetrader.com/et/threads/modeling-the-masters-10-rules.340487/#post-5014462
...losses in a row https://elitetrader.com/et/threads/...lowing-your-system.340265/page-3#post-5016346
Hello bone, Can you please explain what you mean by position management? For example, if I enter the market long ES 1350.00 and stop at 1348.00, and profit target at 1354.00 and I am trading one contract. I just enter and sit and wait for my stop or profit target to get hit. How does position management play a roll in my example? Thanks,
Position management includes the stop-loss and profit targets as you described above. It should also include a sizing plan. From my years of client work, I have come to the firm conclusion that it's a mistake to assign some fixed amount of capital (you frequently hear one or two percent) to risk on each trade. There's no getting around each person's unique temperament and anxiety levels about risk - I suggest that the trader recognize them, own them, and move on from there. In other words - there's a fair number of people who don't want to risk $1000 on a trade even if they have $50K in their trading accounts. Confidence is very important - if $500 is a more palatable risk number for a person then by all means go with that. I'm also a big proponent of building account equity and not digging a hole for yourself. I work with my clients individually about their own sizing plans, and when to bump up and when to scale it back.
But what if the trader is trading only one contract at a time, and cannot reduce the size of the position? "After two losses in a row - cut your position sizing in half. When you can manage two winning days in a row - go back to your previous position size..."
One lots are the most difficult - I will readily admit that. You can’t scale down and a bump up doubles your risk. I do some hand holding on occasion.
Hello bone, Thank you so much for the response. Regarding sizing plan. I often read or hear, do not risk more than 2% per trade on trading capital. Are you stating , in your opinion, that there is nothing wrong with risking 5 to 10% if it fits the trader temperament.
Bone, How is one lot the most difficult? Just scale up to 2 lot once account balance double. For example what is wrong with the bottom approach for scale up. Balance equal $10000 -----> 1 contract Balance equal $20000 -----> 2 contract Balance equal $30000 -----> 3 contract