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Hi Don,
Actually I did not state that the entries determine the other factors and I
don't believe that is the case. I will use the same entries every day, but
how I manage those trades is dependent upon the other factors mentioned.
There is no such thing as getting in "early", just like there is no such
thing as slippage on a Market order. Nor does my fill have any bearing on
how I will manage a trade. In fact, I would prefer to not even know my fill
price as that can cause you to mis-manage a trade. I just want to know that
I am in since the fill price has no bearing on my objectives for that trade,
how the trade progresses, etc., etc.
The only thing I am concerned about is getting in "RIGHT", I.e. with the
current momentum or through the center of a range, and that does not mean
early by any means. And this applies to any timeframe that I trade from - I
use 5 minute charts and P&F charts to trade SP/ND/US/SF intraday, but I also
keep an eye on the longer term charts since the big money is making
decisions based upon those.
Unfortunately, many traders are obsessed by this desire to find the
"perfect" or "early" entries because they believe that this reduces the
risk/stop for that trade. The opposite is in fact true.
And I do not believe in scalping as that puts the math of trading decidedly
against you. Each trade has to be managed based upon the conditions and on
it's own merits...previous trades or whether you are up or down for that day
are completely irrelevant.
Yesterday was a perfect example of what I am talking about (and most days
this year) - why take 2 points or so out of those huge moves we had on both
the S&P and ND. You need to have a trading plan that allows you to
capitalize on that kind of volatility, and systems and indicators will not
do that for you. The best computer ever invented is the one between our own
ears, and you must be able to use that to trade successfully. I know most
folks believe that a 'system' will help their trading by removing the
emotions inherent in trading, but again the opposite is in fact true.
My apologies for getting a little off-topic.
Bob
www.rjhtrading.com
-----Original Message-----
From: Don Roos <roos@xxxxxxxxxxxxxxx>
To: Bob Heisler <bheisler@xxxxxxxxxx>
Cc: Alan Courchene <positionsize1@xxxxxxxxx>; List Omega
<omega-list@xxxxxxxxxx>
Date: Wednesday, February 16, 2000 12:25 AM
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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