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>Speaking as an observer since I position trade, the big risk I see with day
>trading is the number of decisions one must make. Even if someone is right
3
>out of 4 times, 25 out of 100 decisions they make are going to be bad. 25
>bad decisions could eat up a lot of capital without very strict money
>management.
>
>Dan
If your stop is 2, 3 or 4 ticks away from your entry and you are aiming at
say 9, 12, 15 or 20 ticks the r/r/r allows you to get it wrong sufficient
times to get it right, if you see what I mean? Mostly, when day trading
with this sort of stop positioning, you in fact take yourself out at
breakeven or even with a tick or two profit, for a trade that has not gone
your way. Entries and exits, stops and profit stops are all crucial and you
need to be quick, decisive and have a really decent front office acting for
you. Fortunately, the bonds generally move with what I call a 'measured
tread' - at least for the times that I want to be in the market - so that
you can usually go in and out with limit orders at your price.
You have to appreciate that the psychology, if not methodology, of day
trading is very different to position trading. A trade that goes against
you need not - at least with the bonds, so far as I am concerned - use up
all your ticks of the stop and very often you come out quits at least. I
appreciate this is unlikely to happen with a position trade over a much
longer time scale. Hope all this helps others, if not your goodself.
Bill Eykyn
www.t-bondtrader.com
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