I am really starting to feel sorry for some of the traders on this group. It seems to me that direction changes seems to also coincide with this hope and pray attitude that because YOU have made a bet the market will go in your favor. Most of you will know I am not that good at the bear, and for the last 2 years I have been working on getting it right, well I am getting better and here are my words of wisdom.
First decide what kind of trader you are: if you follow 'A" then you are longer term trader that is prepared to hold a position until it tuns based on information about the market, Seasonal trading, the wave thing or any other long term strategy. If you are this kind of trader you are going to be looking for the turn and plan to be the first to have an accumulation of contracts in whatever direction, Good strategy but you need a big bank to play this game, but returns are usually stellar when the market turns and heads in the direction you want. this is more of a bull thing. And you will inevitably end up holding long contracts on the way down waiting for that turn and adding more and more, when the turn comes you will be in the pound seats as your contracts will unwind into profits as the market goes up.
Second kind of trader is going with the flow. Look at the overall direction and base every bet on that until further notice.
I used to be the the first kind of trader, now I follow the trend and make much more. I watch with horror that the people stuck in the bull way of thinking over commit to every little bounce the market makes and then follow that with a huge number of posts about how hard the squeeze is on the nether regions. it seems that every one wants to follow a very fine list of things that will indicate if we are going up or down. Take the last couple of days, history bit all of you in the arss because you all saw the rand going south and jumped in, because usually when the rand goes south we go up. so this time we did not go down because of anything we did but because of the Dollar strength, and that scenario makes us drop and not go up.
So i have tried this before and no one listened, lest offer advise again and see if it help someone.
So the way i do it is this, i try and make 2 entries into the market every day with 1 contract each. so firstly whatever you did yesterday is yesterdays problem what you need to look at is do we keep yesterdays problems today.
So my decision to stay in the direction or bail out only depends on one indicator the MACD.
i start in the 10 min, I add to the direction (in this case down) if we are pointing down.
If we are bellow the zero line on the 30 min i keep what I had yesterday for another day.
So when i need to get out i look at the following.
on the 10 if the MACD has crossed convincingly in the opposite direction, no additional entries into the market.
On the 30 i start to look for a turn, I don't take any action until this also crosses the lines and starts in the same direction as the 10.
next day if the 10 is still pointed opposite to direction, and the 30 is as well, I dump the nearest 4 contracts that are in profit, and anything not in profit.
My attention then goes to the 1 hour and 4 hour to see if a turn is warranted and to decide if i need to get out of all contracts.
If i see the 10 min bounce off the 0 line and head back down in this case I STFR and it all starts again.
this way you end up putting money in the bank about every 4 days (usually) and the oldest contracts grow to huge numbers if you manage to keep them, this gives you a nice profit when the market finally turns.
I no longer care if the market is bull or bear, I don't get squeezed, I don't have losses above about 10 percent of all the trades. when I know the market is turning based on the 1 day MACD I scalp for a few days but always do the same things every morning and end up with the first long trade by default if the MACD rules are followed. Simple.
Dont care about the S&P, DOW, Dollar, Politics, Crashes, Booms, Bears, Bulls, Comments, Waves, the SUN, The MOON, Cycles or any other information. I just read all that crap to pass the time and don't use a single thing to determine my trades. This is my KISS method at the simplest I can make it. It has taken 2 years to do this and I got the IDEA from reading in groups like this.
This takes all the pain out. Try it on paper first, then start making money.
G
Good simple system G-Man
If one hits the sweet spot of a turn (Beorn's recent long is a good example) then A's longer term strategy is good.
If I've missed the turn and don't have a clear picture and end up trading the middle bits ... I also scale down to very short term trades ... tight stops ... set profit targets and take something off the table at those points.
I have bigger positions for longer term trades as I'm more confident with them ... and small positions for the short term nibbles.
You can also have a core holding and scale in and out. I've done that twice today. Putting something in the pocket is satisfies my trading psychology needs.
