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When I leave the ophthalmologist, it’s almost always a rude awakening and a sign that I’m getting older. The doctor has asked “better or worst” after several clicks of the lenses, and I finally say “better”. I am now faced with the fear that I will walk out looking like “Froggy” from the Little Rascals with my new glasses.
Deep inside, in a place where we holds secrets that we share with no one, we would have been much happier or felt much younger with our older and yet outdated prescription. We know that in order to see, we must go with the truth and get the lenses changed. The truth hurts, but we must move on.
Shortly after I made a 180-degree turn in my trading in ’95, I had a relapse. My next demon was changing timeframes. Plotting EST from a 5-min, and just as I was going to get stopped out, I took a look at the 15-min, the 30-min, back ten-days, and maybe even the daily. I would stop when the picture looked better. Many traders do that when they are in a trade that’s gone bad, and they don’t want to take the loss. You know you’ve taken the daytrade too far when you get the annual report in the mail.
Conversely, there are many traders that have tried to move up to the larger timeframes, in search of less stress and to stop the account from bleeding with losses spent on commissions. Instead of watching a 1-min, they move to 5 or 15 min timeframe. What happens more often than not is, they get very fidgety and trigger-happy, like a 5-year old boy who can’t sit still for 5 mins. They have been conditioned on the 1-min charts for so long, that they lose their patience and if they could, they’d drop some “speed” in Father Time’s coffee. That’s impossible, so they start dropping down timeframes.
If you are in either situation, you are on a path to stress, anxiety and or self-financial destruction. No different than putting on a pair of reading glasses if you don’t need them or not wearing your glasses for nearsightedness and then driving cross country at night.
Here’s how you can begin fighting this demon. First, ask yourself…”What is my primary timeframe?”
- Investing with weekly charts?
- Swinging with dailys and or 60’s?
- Daytrading with 15-min, 5-min?
- Or drinking Red Bull and or Dunkin Donuts coffee and then trading the 1-min?
Whatever the answer is, make sure you’re honest and give it a REAL try. Let’s take daytrading with 15-min charts as an example.
- Start with the daily and know the significant pattern, trend, prices, MA(s), support, resistance, etc.
- Drop down to the 60-min and repeat
- Drop down to the 15-min and repeat
- THEN STOP!!!
- Predetermine, EST, RR, open it, manage, and close it
- Done
Last week I put up a swing play on QCOM. http://www.elitetrader.com/vb/showt...=5&pagenumber=3 Yes, folks I called this play as it was in progress. It was a “Scaling Swing” as I call it. When I scanned QCOM, the very first thing I did was look at the daily, because the smaller timeframe showed a more bullish tone. Going back to daily, I saw a completely different picture. I set my EST and had the discipline to stick it on this swing. After I was out, I proceeded to day trade the stock for the crumbs (very nice profits) after putting the bread on my kitchen table, very much like a cat bouncing a mouse around after he’s killed it, as if it will wake up so he can kill it again. I was criticized by a couple of folks on how I handled this trade; some felt I was “leaving too much money on the table and throwing up my own roadblocks”. This is not a jab at those premature and uninformed comments, and nice ET’rs but rather an example of a “lesson” I learned long ago: “Be conservative and selective in your risk, and if you are stopped you’ve only exhausted a small portion of your strength and resources and you can trade another day”. A friend of mine turned me on to the movie “Rounders”. Here’s that movie’s defining movie moment for me: Matt Damon is playing cards with “The Russian” (John Malcovich) and he wins (the last game). Go rent the movie and you’ll see exactly what I mean, besides, I don’t remember the character’s names.
I see trading in a couple of ways, “Poker playing (like the movie Rounders), and WAR!!! I scan and then predetermine my timeframe, entry, stop, target, and risk: reward ratio, and I deploy with conviction and discipline. They’re not taking these stocks private anytime soon, and if they do you’ll have plenty of notice. You CAN ALWAYS TRADE THEM AGAIN!!!
Research from the larger timeframe down to your main timeframe, plot your points, and deploy with conviction and discipline.
Deep inside, in a place where we holds secrets that we share with no one, we would have been much happier or felt much younger with our older and yet outdated prescription. We know that in order to see, we must go with the truth and get the lenses changed. The truth hurts, but we must move on.
Shortly after I made a 180-degree turn in my trading in ’95, I had a relapse. My next demon was changing timeframes. Plotting EST from a 5-min, and just as I was going to get stopped out, I took a look at the 15-min, the 30-min, back ten-days, and maybe even the daily. I would stop when the picture looked better. Many traders do that when they are in a trade that’s gone bad, and they don’t want to take the loss. You know you’ve taken the daytrade too far when you get the annual report in the mail.
Conversely, there are many traders that have tried to move up to the larger timeframes, in search of less stress and to stop the account from bleeding with losses spent on commissions. Instead of watching a 1-min, they move to 5 or 15 min timeframe. What happens more often than not is, they get very fidgety and trigger-happy, like a 5-year old boy who can’t sit still for 5 mins. They have been conditioned on the 1-min charts for so long, that they lose their patience and if they could, they’d drop some “speed” in Father Time’s coffee. That’s impossible, so they start dropping down timeframes.
If you are in either situation, you are on a path to stress, anxiety and or self-financial destruction. No different than putting on a pair of reading glasses if you don’t need them or not wearing your glasses for nearsightedness and then driving cross country at night.
Here’s how you can begin fighting this demon. First, ask yourself…”What is my primary timeframe?”
- Investing with weekly charts?
- Swinging with dailys and or 60’s?
- Daytrading with 15-min, 5-min?
- Or drinking Red Bull and or Dunkin Donuts coffee and then trading the 1-min?
Whatever the answer is, make sure you’re honest and give it a REAL try. Let’s take daytrading with 15-min charts as an example.
- Start with the daily and know the significant pattern, trend, prices, MA(s), support, resistance, etc.
- Drop down to the 60-min and repeat
- Drop down to the 15-min and repeat
- THEN STOP!!!
- Predetermine, EST, RR, open it, manage, and close it
- Done
Last week I put up a swing play on QCOM. http://www.elitetrader.com/vb/showt...=5&pagenumber=3 Yes, folks I called this play as it was in progress. It was a “Scaling Swing” as I call it. When I scanned QCOM, the very first thing I did was look at the daily, because the smaller timeframe showed a more bullish tone. Going back to daily, I saw a completely different picture. I set my EST and had the discipline to stick it on this swing. After I was out, I proceeded to day trade the stock for the crumbs (very nice profits) after putting the bread on my kitchen table, very much like a cat bouncing a mouse around after he’s killed it, as if it will wake up so he can kill it again. I was criticized by a couple of folks on how I handled this trade; some felt I was “leaving too much money on the table and throwing up my own roadblocks”. This is not a jab at those premature and uninformed comments, and nice ET’rs but rather an example of a “lesson” I learned long ago: “Be conservative and selective in your risk, and if you are stopped you’ve only exhausted a small portion of your strength and resources and you can trade another day”. A friend of mine turned me on to the movie “Rounders”. Here’s that movie’s defining movie moment for me: Matt Damon is playing cards with “The Russian” (John Malcovich) and he wins (the last game). Go rent the movie and you’ll see exactly what I mean, besides, I don’t remember the character’s names.
I see trading in a couple of ways, “Poker playing (like the movie Rounders), and WAR!!! I scan and then predetermine my timeframe, entry, stop, target, and risk: reward ratio, and I deploy with conviction and discipline. They’re not taking these stocks private anytime soon, and if they do you’ll have plenty of notice. You CAN ALWAYS TRADE THEM AGAIN!!!
Research from the larger timeframe down to your main timeframe, plot your points, and deploy with conviction and discipline.
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