Basic First Trades

[Kai]

Can. Of. Worms.

Given the context (i.e. First trades) I have to disagree. There is nothing better than 1 entry, 1 exit. Keep it as rigid & basic as possible. So much easier to spot the errors that way - with the plan, & our own demons (assuming a new trader has a plan!!)

A trader could make £10k a yr with a 1 entry, 1 exit strategy - yet there's a 90% failure rate. Personally, I believe it's caused by people believing they'll have the gift for discretionary trading, right off the bat.

I hear what you're saying but being a discretionary trader isn't exactly mutually exclusive to being a rule-based trader, he can be extremely rigid regarding the setup by simplifying a single strategy and actively looking for it in the market whilst ignoring everything else, but still be flexible enough with the staking and managing of the position.

It's never too early to start creating good execution habits before bad ones set in, with a one-dimensional approach he has to constantly make absolute decisions where to enter and where to exit which can be very stressful, even if the trade is going well there's always that fear of the price quickly pulling back, so why not exit half of the stake at some point to secure a bit more breathing space both on the ladder and in his mind to feel more in control. We're all aware that good execution and proper risk/position management is an edge in itself even by trading completely at random by cutting bad trades and letting the good ones run, so why not start learning towards that.

[ShaunWhite]

I agree with keeping it simple but you can simplify to the point where you're impeding yourself.

[sniffer66]

Apologies to the OP for jumping in, but have been reading this thread with interest. I'v been scalping sucesfully for a little while now and was looking at the swing trading video yesterday . Is there a video or article anywhere that covers the multi staking method you have been discussing the last few posts ? Had a quick google this morning but cant see anything obvious

[Kai]

Apologies to the OP for jumping in, but have been reading this thread with interest. I'v been scalping sucesfully for a little while now and was looking at the swing trading video yesterday . Is there a video or article anywhere that covers the multi staking method you have been discussing the last few posts ? Had a quick google this morning but cant see anything obvious

Well it's nothing overly complex even though it may seem like it at first, it's all about getting familiar with how the ladder works so you can manage your positions better depending on how the trade is going and how confident you feel. The reason why traders use this approach is because nobody can really consistently get that perfect entry or exit so traders have to settle for optimal entries and exits, it's a small price to pay to get that comfort in your trading and to keep the variance in results lower.

It's best you look at the videos because it's harder to explain textually, but lets say a runner is currently trading in a narrow 4 tick price range and you flat out lay him at the very top tick of this range expecting him to drift but he doesn't drift right away and he instead keeps trading in this range. It may seem to you like the trade is doing badly since you're looking at -3 ticks already and thinking of getting out for a loss but nothing has really changed, it's just the current market noise. But if you averaged out your entry with a bit more patience by splitting the stake in half and laying at the two ticks at the bottom of this narrow 4 tick price range then you would feel a lot more comfortable and confident holding this position until you get that drift, and if it doesn't come you can take a scratch or a small acceptable loss, or even end up with a scalp for your troubles.

With more experience you will later realize how to scale out of a position and you'll realize when and where it makes more sense to average out your entry/exit, because not every tick is worth the same and not every price range behaves the same. For example it makes a bit more sense to average out your entry/exit on price ranges that are generally weaker and more volatile like the prices just below 2.0 or below 3.0 instead of dumping your entire position in one go since the tick increment % will be vastly different, but with more experience you'll get to grips with ladder mechanics and you'll be able to execute your setups much better, you'll even turn a profit from bad trades sometimes.



Just make sure you don't get into the habit of "doubling down" when a trade starts going against you because you can quickly rack up hefty losses if you're on the wrong side of momentum, so don't overdo it with averaging out your entries, compared to averaging out your exits where you can't do too much wrong.

Not sure if there's a specific tutorial for it but you can probably see this in most videos on the Bet Angel Youtube channel, the very first one on the prerace playlist is already a good example of this approach.

https://www.youtube.com/watch?v=BtFQ_jo ... dex=2&t=0s

[sniffer66]

Apologies to the OP for jumping in, but have been reading this thread with interest. I'v been scalping sucesfully for a little while now and was looking at the swing trading video yesterday . Is there a video or article anywhere that covers the multi staking method you have been discussing the last few posts ? Had a quick google this morning but cant see anything obvious

Well it's nothing overly complex even though it may seem like it at first, it's all about getting familiar with how the ladder works so you can manage your positions better depending on how the trade is going and how confident you feel. The reason why traders use this approach is because nobody can really consistently get that perfect entry or exit so traders have to settle for optimal entries and exits, it's a small price to pay to get that comfort in your trading and to keep the variance in results lower.

It's best you look at the videos because it's harder to explain textually, but lets say a runner is currently trading in a narrow 4 tick price range and you flat out lay him at the very top tick of this range expecting him to drift but he doesn't drift right away and he instead keeps trading in this range. It may seem to you like the trade is doing badly since you're looking at -3 ticks already and thinking of getting out for a loss but nothing has really changed, it's just the current market noise. But if you averaged out your entry with a bit more patience by splitting the stake in half and laying at the two ticks at the bottom of this narrow 4 tick price range then you would feel a lot more comfortable and confident holding this position until you get that drift, and if it doesn't come you can take a scratch or a small acceptable loss, or even end up with a scalp for your troubles.

With more experience you will later realize how to scale out of a position and you'll realize when and where it makes more sense to average out your entry/exit, because not every tick is worth the same and not every price range behaves the same. For example it makes a bit more sense to average out your entry/exit on price ranges that are generally weaker and more volatile like the prices just below 2.0 or below 3.0 instead of dumping your entire position in one go since the tick increment % will be vastly different, but with more experience you'll get to grips with ladder mechanics and you'll be able to execute your setups much better, you'll even turn a profit from bad trades sometimes.



Just make sure you don't get into the habit of "doubling down" when a trade starts going against you because you can quickly rack up hefty losses if you're on the wrong side of momentum, so don't overdo it with averaging out your entries, compared to averaging out your exits where you can't do too much wrong.

Not sure if there's a specific tutorial for it but you can probably see this in most videos on the Bet Angel Youtube channel, the very first one on the prerace playlist is already a good example of this approach.

https://www.youtube.com/watch?v=BtFQ_jo ... dex=2&t=0s

Thats great - thanks for the detailed response Kai. I've actually looked at spreading the exits as a percentage of the entry before and dragging them if the price doesnt move as far as hoped. Not looked at spreading the entry though. Will take a look at the vid
Cheers again

[ruthlessimon]

with a one-dimensional approach he has to constantly make absolute decisions where to enter and where to exit which can be very stressful, even if the trade is going well there's always that fear of the price quickly pulling back, so why not exit half of the stake at some point to secure a bit more breathing space both on the ladder and in his mind to feel more in control. We're all aware that good execution and proper risk/position management is an edge in itself even by trading completely at random by cutting bad trades and letting the good ones run, so why not start learning towards that.

Or is that instilling negative expectancy habits early on?

To me, discretion is an extremely advanced skill – I’ve been trading quite a while, & tbh still struggle to justify why I’m a manual trader!

I’m always deeply uncomfortable with emotional (fear based) exits; & honestly believe that the idea “any win is a good win” is dangerous. If I win 10ticks; but should’ve won 30ticks – that’s a 20tick loss. To many of those markets, & we could be -EV

I have to say, that’s the first time I’ve seen absolute decisions be called stressful. In some ways yes; but imho, no. We’re only gonna need to focus hard for a couple of seconds, checking all the criteria are aligned, place a stop. Done. Then we’re free to watch it play out, make a cuppa, have a quick dank meme browse or whatever – what could be better when learning!! The stressful bit is having the guts to watch it play out, & not negatively effect it

[Kai]

I’m always deeply uncomfortable with emotional (fear based) exits; & honestly believe that the idea “any win is a good win” is dangerous.

That's actually exactly why I suggested to split the stakes, to help avoid fear based exits and other emotions and only focus on the execution and getting used to all the noise and the general ebb and flow of the market.

I have to say, that’s the first time I’ve seen absolute decisions be called stressful. In some ways yes; but imho, no.

This is all in the context of a newbie trader that is not yet familiar with swing trading or the emotions that come with it. Just looking to spare him some of the emotional roller coaster that he'll be going through when being forced to make absolute decisions without knowing what to do most of the time. Not much point in trying to conquer your fears or mastering your emotions when you're using small stakes, he will still need to go through that emotional phase once he starts scaling up but at least he'll be able to fall back on his execution to get through it.

[ruthlessimon]

when being forced to make absolute decisions without knowing what to do most of the time.

Should such a trader even be attempting to trade live?

If I was gonna start all over again; my immediate focus would be "what data do I need collect?" "how should that data be collected?" "What am I roughly looking for?" - now that's either gonna require a mentor, or Peter's course. Also the benefit, is that such a trader wouldn't need to quit their job etc. Then we've got a sandbox, where we can simulate thousands of ideas/strategies, out of hrs. The dilemma comes when something appears to work.

I made the mistake of believing I'd be one of the 5%, who wouldn't need to do that work - arrive in the 1st week, gung-ho, discretionary, no data, & crack it - the next Heathcote. That cost me 1yr - hence I'm always gonna be an advocate of a strong edge first (strong = could be automated), before even starting to trade live. Then we can start playing with execution etc, the stuff that will become necessary as we rise through the ranks, & stakes

[Kai]

when being forced to make absolute decisions without knowing what to do most of the time.

Should such a trader even be attempting to trade live?

Absolutely, how else is he going to learn? Wasn't it Peter that more than once suggested that a newbie should start trading completely at random by managing his positions as best as he could, experiencing all kinds of situations and getting a feel for the markets almost by trial and error etc.

Can. Of. Worms.

Given the context (i.e. First trades) I have to disagree. There is nothing better than 1 entry, 1 exit. Keep it as rigid & basic as possible. So much easier to spot the errors that way - with the plan, & our own demons (assuming a new trader has a plan!!)

To go back to the thing you said earlier, I think we are more or less on the same page I do agree that he should keep things as rigid and basic as possible to start with, but only regarding the setup that he is looking for in a market, that's why I linked the first video about steamers. Regarding the execution I feel it's beneficial to adopt a different approach and experiment a bit to see what type of style he actually prefers.

[ruthlessimon]

Absolutely, how else is he going to learn? Wasn't it Peter that more than once suggested that a newbie should start trading completely at random by managing his positions as best as he could, experiencing all kinds of situations and getting a feel for the markets almost by trial and error etc.

Yeah, I guess that's true - but random with a purpose on nags (consistent randomness). "I'm looking for a breakout", "how many ways can I define a breakout", "I'm looking for a reversal", "I'm looking for a pullback", "I'm looking for a back" (I like that one ). Maybe I'm a tight bastard, but I prefer doing those types of tests on a spreadsheet. Doing that live, & I reckon I'd get savaged by the market

To go back to the thing you said earlier, I think we are more or less on the same page

I've enjoyed it; Problem is, I come from a household where talking trading (especially sport) is verboten (just don't get it) - so I've gotta get bits off my chest at times, if I see a nice looking thread

[fullchat]

Wow you guys are are shining a light on all sorts of strategies some I can see others will come later I hope, I realised that I was maybe not quite scalping initially, more starting a trade and then closing it but too frightened to see how far I could go and when I did let it ride it seemed to late sometimes to make a profit as the trade had gone through my fingers. Now I'm doing 2-3 ticks and closing and then repeating things while the market allows me to. I have also viewed loads of Peters videos too which help so much.

Thanks guys

[Kai]

I've enjoyed it; Problem is, I come from a household where talking trading (especially sport) is verboten (just don't get it) - so I've gotta get bits off my chest at times, if I see a nice looking thread

I feel you, talking sports trading is definitely not haram on this forum. Unless your name is Mel The Scientology Trader