In that second spot I didn't mind whacking on a bigger risk than usual with the intention of letting it go overnight. Given that it had tested that area, I felt it unlikely it would go lower. If it did, I lost 20 points, no biggie.
My general rule is my low-risk setups, but I have nothing against, in certain spots, getting in with a wide stop if I think the context is good and there is big upside potential. I wouldn't recommend that for those who aren't familiar with the markets. Once it ran, I thought I'd take it. I was content. The plan would have been to leave it overnight and then see if it takes off Monday night.
With taking larger than usual risks I believe it all has to be relative. The reward needs to be large. And the risk can't be a large portion of your average weekly profit.
One thing I really wanted to do was to get in in the pre-market on Friday and just have a wide stop right to the bottom. It would have been enormous risk (130 points), so I couldn't justify doing it, but I was very confident that we had made a new low and to get in that close to the bottom would have been gold for a position trade. By the end of Friday I think price had moved up 150 points from that level, stop could have already been to BE and holding 150 points in the black with little chance of being stopped on a re-test to the low.
If my weekly average profit was 200 points, I may have done it. I believe that there are some spots where this is warranted and if it represents half a week's profits then it is worth the risk for such large upside potential.
Some may disagree with me, but I felt the night before was a big stopping bar on huge volume.
If I was only making 20 or 30 points a week then I wouldn't risk over a month's profit on such a move. But if it was half a week's profit then probably.
By the way....
Does anyone trade any commodities or currencies which would also suit my style of trading? I haven't looked into this yet.
I'd be interested to know what is out there and how many dollars per pip/tick?
I'm guessing oil is a popular one?
What are market open times and when are they most active.
I know it's a general question but I'm just curious!
...protect yourself from being wrong because you haven't got stops (think about that for a while its important)and take entries and exits when people are spewing orders because that is where the volume is...
TH, no one appears to have picked up on or questioned this one (underlined) yet.
Yeah, i do not understand this either, to protect oneself you use stops but you seem to be indicating protect yourself by NOT having stops(maybe i am just reading this wrong... should it read: protect yourself by using stops...)
When your trading size you trade very differently to us mortals.
Thanks Tech, yes i am aware there are guys big enough to trade without using stops (including TH) but i thought this advice and board in general is geared more towards small guys that do trade with stops in place. Besides i recall TH scatter charts and he seem to always get out in time ie use stops...
TH is talking about the big boys who move markets & can't/don't use stops... it's an invaluable illustration of how us lesser mortals need to be thinking when we enter, exit & place our stops......... If you are a 500 lot trader you don't just hit the buy button and smash out for 500 lots into the market then do the opposite to get out. If you move size you have to go for large moves simply because it takes time to get in and get out. Now given that - you have to do a few things. Use that size to maximum advantage, protect yourself from being wrong because you haven't got stops (think about that for a while its important)and take entries and exits when people are spewing orders because that is where the volume is. See the chart that I used the other day for what is happening.
Yeah, i do not understand this either, to protect oneself you use stops but you seem to be indicating protect yourself by NOT having stops(maybe i am just reading this wrong... should it read: protect yourself by using stops...)
how do we incorporate this advice for one or two contracts
The Vid is cryptic!
You obviously haven't seen breaking bad?!
Understand what the big guys are likely to be doing (How they will be trading) and trade accordingly with our 1 or more lots.
Often (and I was one of those) we get caught thinking small while the bigger picture is one with our direction.
The big volume and range needs an answer to the question---what is it doing---is it strength or weakness ----is it sustained selling or sustained buying---is it adjusting position size or more buying or exiting?
In Breaking Bad the gangsters thought the small piece seen being thrown was drug (ice) and similar in appearance, when in fact was explosive. So the point is: It's not what it seems or appears to be...
Thanks Tech, yes i am aware there are guys big enough to trade without using stops (including TH) but i thought this advice and board in general is geared more towards small guys that do trade with stops in place. Besides i recall TH scatter charts and he seem to always get out in time ie use stops...
Don't be upset TH, sometimes it takes time to digest what are you trying to communicate... Not everybody has your IQ.
So, what's in store today... are you feeling bullish?
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