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"Poor entries will both reduce percent profitable trades and your average
trade."
good point. i would also say that max drawdown (minimum account size) also
increases because larger stops are required to avoid whipsaw. the ideal
entry point then is one that comes as close as possible the low of the move
(when long) since this is where the market found support. the closer my
entry gets to this point, the closer i get to the ideal trade with minimal
risk and maximum upside. it's what i've written some of my systems to do
because i know that probablities favor the market staying above that point
of support than at any other point higher. the farther i enter away from
this point, the farther from support my entry is, the more buying that has
already ocurred, and so the larger my stop and risk have to be if i place
stops that adjust to market conditions. i've read often that entry is the
least important param but i have doubts that this applies to all
environments esp. intraday. this assumes that i don't average down.
> -----Original Message-----
> From: Don Roos [mailto:roos@xxxxxxxxxxxxxxx]
> Sent: Tuesday, February 15, 2000 5:05 PM
> To: Bob Heisler
> Cc: Alan Courchene; List Omega
> Subject: Re: Which holds best promise?
>
>
> Bob and Alan:
>
> Good info. Thanks. As you have stated, Bob, the entries are the
> determining
> factor for the others in many ways.
>
> You guys know this, but it should also be noted that if your entry is not
> optimal, your liklihood of being able to stay in the trade is
> smaller, as is
> your ability to trade for a shorter period and still have a decent reward:
> risk. That is, poor entries require larger entry risks to
> prevent being whiped
> out of the trade, and poor entries require a longer holding
> period or better
> trending pattern to make the trade worthwhile. Poor entries will
> both reduce
> your percent profitable trades and your average trade. The stops
> required, are
> therefore directly related to how optimally you can achieve entry without
> lowering the percent of profitable trades. Also, many small
> accounts do not
> have the luxury to decide whether to run 2 or 15 cars. So #1
> (position) may not
> be applicable, #2 (trade management) is dependent upon your entry. #3
> (assessing of market environment) also is determined by wanting
> to get a good
> entry as well as some prediliction for the continuance of the
> direction entered,
> long enough to create a good reward to risk. (For example, one
> may decide not
> to trade during the midsession so as to avoid the light volume
> and the scalping
> games of the floor piranha).
>
> So, from my experience (scalping and short term daytrading),
> entries are #1.
> Your time frame for a trade may be a determining factor for the
> ordering of your
> priorities.
>
> Good idea for discussion, Valinda.
>
> Don
>
>
>
> Bob Heisler wrote:
>
> > I would prioritize them this way, and also add a couple of things.
> >
> > 1) Position size (no 1-lots)
> > 2) Trade Management (stop placement, exit strategies, add-ons, etc.)
> > 3) Sensitivity to the market environment (particularly for
> intraday trading)
> > 4) Reading the price action (Entries, but also determines all
> of the above)
> > 5) Trading without an OPINION or BIAS to market direction
> >
> > And I couldn't agree with Alan more that the entries are the
> least important
> > as they are meaningless without the first 4 items.
> >
> > Bob Heisler
> > www.rjhtrading.com
> >
> > -----Original Message-----
> > From: Alan Courchene <positionsize1@xxxxxxxxx>
> > To: List Omega <omega-list@xxxxxxxxxx>
> > Date: Tuesday, February 15, 2000 4:20 PM
> > Subject: Re: Which holds best promise?
> >
> > >I would prioritize them this way:
> > >
> > >1) Position adjustments (POSITION SIZE)
> > >2) Stop management (RISK MGMT)
> > >3) Pattern recognition (ENTRY)
> > >
> > >
> > >IMHO,
> > >One and two are key!
> > >Three is far less important.
> > >
> > >Alan C.
> > >
> > >
> > >
> > >--- TradeWynne@xxxxxxx wrote:
> > >> In a message dated 2/15/00 11:38:43 AM Pacific
> > >> Standard Time,
> > >> Valinda48524@xxxxxxx writes:
> > >>
> > >> > Which of the following trading approaches holds
> > >> the most potential?
> > >> >
> > >> > 1) Position adjustments
> > >> >
> > >> > 2) Pattern recognition
> > >> >
> > >> > 3) Stop management
> > >> >
> > >>
> > >> Valinda:
> > >>
> > >> Why are any of these mutually exclusive?
> > >> I would do my best with all three.
> > >>
> > >> Bill Wynne
> > >> SmartTrades.com
> > >>
> > >>
> > >
>
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