Trade Management using Tight Stops

Posted by: @in

My main frustration is if you understand what Al says shouldn't everyone get he same results? Give or take. At least in retrospect?

Like a guideline a baseline? It's the old, "it's not if I'm profitable or not but whether or not I followed the rules."

I'm not sure how to ask? How do I know how Al would have traded that day so I know how he did and most importantly where did he exit his trades?

I was trying (unsuccessful) to make a point about people trying to trade like Al WHEN EVEN AL DOESN'T HAVE A WAY TO TRADE. He has a way of organizing the market in his head.

Dear Sand,

 

How Al or others are trading is not important. You're on a different level of experience, you have different account size, you live in a different time zone, you're prepared to risk more/less, you have different spread/commission, or have small kids having to take care of while trading... just to name some.

Exactly! That's my point too.

Answer to your first question is clearly: No. There is no fixed set of rules. Al is always saying there are many different trading styles to enter or exit on every given tick. He's explaining what those styles might be. Not what he is personally doing. He mentioned several times, that he likes high probability trades, so I conclude he's often going for some kind of scalping. However, during live trading, he's analysis is more conservative, probably because there are many beginners who are absolutely not advised to scalp and that might cause discrepancy between he's saying and what is he actually doing on every given day.

Again totally agree. So if he doesn't trade the way he says, what is he teaching? How are we supposed to trade? (Rhetorical question)

He's is also legally bounded and may not give specifics of his trades.

No that's patently false. This is the ONE that really bothers me. NO he's NOT. That is a COMPLETE LIE! Right from Al's mouth. Maybe he actually believes that. I dunno. I doubt it. I'll leave it at that.

Further, it would be impossible to present all entry/exit points for every tick and every trading style during the live trading session, the amount of information would be overwhelming.

Not if your only calling out your trades. Especially after the fact. Why not after the fact?

Regarding "the rules", Al is very explicit on this. I'm paraphrasing him here: "There is no such thing as a set of rules you have to follow... because if there was such thing everyone would have followed it and there would be no one left to take the other side of a trade. There would be no market anymore". This is a fundamental true, worth remembering.

Again... EXACTLY!!! I agree %1000!!!

Regarding premature exits. Once I go for a swing, or scalp it doesn't mean I'm married to my position. Situation on the markets can change from one tick to another, but I do have a plan in advance and I stick to it.

??? Well that's a contradiction. I'm never married to my position but I have a plan and stick to it?

But again I agree with the first part. The great Mike Reed used to say every trade starts as a scalp.

What was your plan on the last trade of that day?

Not sure what your referring to? Gladly give you my thoughts if I could see.

Judging your chart I'd say you're in over-trading mode, but if it makes you happy and profitable it's okay.

Yeup it does make me happy and profitable. I like to think of my trading now as defensive. (Years in the making and still and always working on it) I'll try to catch moves but will get out many times if I have to.

The last thing is psychology. Once you understand your emotional state, your PL will drastically improve.

I think that's reversed. Your psychology will change once you require the requisite skill to match the task.

With kind regards,

Yes. With kind regards.

(P.S. I really like the discussions in here. We all can discuss and learn and grow.)

Posted by: @in

Dear Sand,

 

As far as I'm informed, following the EU regulation, telling people when to buy/sell is a "financial advisory", especially if you own specific security yourself, one must have a license from the national regulatory body for giving such advice. Also, when someone gives advice during live trading session and it turns to be a loss, the reaction of the audience is disappointment, which is not good for the learning curve. Third reason would be simultaneous talking, thinking from all possible trading styles and managing one or more positions - very hard imho.

Yeup. I believe your right on all accounts.

Could he not detail why he did what he did at least 24 hrs later. I get why he doesn't do it live and he doesn't have to do anything. He already does more than anyone in the tradesphere and I've said that before but this just makes no sense that someone could get in trouble for explaining a closed trade they made in the past? Especially the distant past.

I don't know if you followed most recent webinars, but Al is sometimes saying (afterwards) that he has had a specific position and also where he has entered and exited.

Oh. That's exactly it. I know when I was in his room he let people ask questions at the end of the day. He would say I entered here or here and exited somewhere in here, usually. I think that's his way of getting around any idea that he was suggesting trades, which is a No-No, but he could still be as helpful as possible.

Again. Could he not disclose/discuss his trades after the fact?

I'm not asking him to. I'm asking if he legally can?

On the second question, having a trading plan for me also includes a clearly defined (my) rules for premature exiting. So, as long as preconditions are satisfied I'm sitting tight. But, if e.g. a strong reversal bar appears around specific significant level, I might consider early exit, but not before that, and not on weak counter-trend signal, or dojis. Sometimes I also want to see a second entry for always in counter trend before I exit, especially during the strong trend.

Again. Ok wow. Nice. That totally makes sense. I think Al generally trades like that too.

I was asking about your trading plan, in regard to the the second last trade, on the high of the day, you mentioned on the image below (you've posted it about a week ago).

Oh for sure. My focus that day was to only buy and just keep buying until you are sure you shouldn't.

If I recall correctly I didn't put a single sell order in after 8am (PST) and for the remainder of the day.

Those trends can go farther than you think possible and that's one way I keep myself on the right side.

Truthfully I think I would have started selling closes up there by now lessening profits that day but I stuck to my plan that day.

I try to take profits before I have signals to do so in the opposite direction as well and will re-enter if shakiness subsides.

Given that day again I don't know how I'd trade it. Every day is different. Every snowflake from a distance looks like a snowflake, yet each is completely different.

With kind regards,

Same!

Good trading to you! And all!

Posted by: @brad-wolff48gmail-com

...

This is why if he is careful about saying what he did and cautious about not giving real-time trading advice, he can get around the rule and not be considered to be providing investment advice.

This is my point. Al doesnt have to do anything he doesnt want to and I dont blame him but this just leads me to believe I was correct as you chose your words wisely too.

Yes, Al is careful to NOT GIVE LIVE ADVICE as this would require licensing.

He is NOT able to advise. I get that but you said your self "real-time trading advice".

But you aslo did mention because he has a trading course.

Question: So he cannot disclose closed trades in the past that have no way of being construed as buy/sell advice?

Lastly, regarding Al showing a Trading Style:

It almost certainly does show his trading style, but it takes a long time to begin to see it. I will sum it up like this; First, Al started trading Always-In and exiting when the Always-in traders went. After doing that for some time, he realized he could take profits quicker and maximize more profit (aka if long exit on strong closes or buy climax bars.). After that, Al started scalping more, perhaps counter-trend. When you watch his course and see him point out what traders are doing, it is the same thing he would do in those situations, so buying the close of breakout bars, stop entries of Major trend reversals, fading the first reversal of a Breakout expecting it to fail, all of these Al regularly takes.

OMG that's it! That's the confusion! His materials and trading style are different over time. You are so right!

...As are mine. That was my path too without realizing it. Kinda mind blown right now. Although I had to learn on my own after the basics.

That was a real eye opening paragraph Brad.

To those of you looking for a simple solution regarding trading, you are not going to find it. Trading can become more and more simple, but it takes a long time, and it is a lot of screen time and time watching Al's video course. Al once said on a podcast the best quality a trader starting can have is persistence for the simple fact that it is very challenging, and if you do not have persistence, you will most likely quit due to the frustration. If you are frustrated with Al or trading (I have been many times), I suggest reviewing one of his trading course videos and asking yourself what I am missing.

For me this is where we diverge. I always end up loosing more trying to interpret what Al would do. (But I'm no Ludopuig)

I am at the stage where I don't have to add money anymore to my account because I've eliminated the worst traits of my trading but I have a way to go and much easier to rely on myself then wonder what Al would do.

Been through the regular course many times and the forex one right through as well. No more good will come of it.

I like to chat as I trade. Have to find a different venue lol.

Hope this helps.

It did thank you!

Brad

Everybody will differ. Richard helped Al create a smaller version of the brooksradingcourse that is helpful.  Since Al and Richard made the course I do not think they will get upset if I post the link below. I link the course because its a much shorter course that helps get to the overall key points. 

I do not think the below link is a replacement of the full brooks trading course but it can definitely help. SandPaddict the link below may help if you have not checked it out. Its 6 hours of a few ways to trade a Major Trend reversal, Pull backs, Trading Ranges and Breakouts. 

Overall, One key point that Al often says it to keep things simple. If you are making money than nobody can tell you if you are doing anything wrong. I have watched Al for so long in the Trading Room that it is kinda second nature to think in my head "what would Al do here". Everybody is different though. 

Hope this helps as well. 

Yes, that was also a big realization for me. Al trades differently in his trading room because he mastered PA. He prefers high probability setups, so he is a natural scalper. If the context is good you often hear him say that he just took half position off as a scalp and he tries to swing the other half, but often he closes that other half too when the market doesn't follow quickly...

I like that style and if I could trade with a two part position I would. I have tested many times in the past. Not there yet. Maybe never. All-in all-out for me.

I'd recommend to watch the course twice and then DO NOT TRADE, but watch the trading room recordings, like the 6 month bundle of material (the 2015 are good and cost like $115). After some time, it really becomes natural, because you understand Al's mindset and style.

I watched the regular course straight through twice, watched the forex right through as well all video by video. Read almost every blog for years. Watched all bonus videos numerous times. Was in the room for a few months. Have a bunch of those recordings you are talking about and have reviewed them many times. Ect... ect...

His trading style is different because what he teaches in his course is not a trading style but the understanding of how the market works. Each trader must adapt the material to their own trading style.

You would think that's the case but I get "set straight" the minute I say I bought on a limit order after a big up bar at resistance. Or whatever the case may be. Or more typically it is in the form of what you wrote below.

A good start is to follow always-in by taking obvious setups like, buy/sell the close, H1 (in strong BO) or H2 in tight channels and limit order entries below/above bad opposite signal bars (like buying below a doji in a bull BO phase after follow-through). Forget about scaling in and counter trend trading with limit orders, that is for the advanced trader, very hard to do. If you prefer swing setups, a good start are wedges, especially in a MTR context.

Sorry but this is typical and exactly what I'm talking about.

That whole paragraph is great sounding but not very useful advice. Maybe even dangerous.

...."A good start is to follow always-in by taking obvious setups (not sure what those are) ...like, buy/sell the close, H1 (in strong BO) or H2 in tight channels and limit order entries below/above bad opposite signal bars (like buying below a doji in a bull BO phase after follow-through). (Those are all just entries and don't guarantee anything.) Forget about scaling in and counter trend trading with limit orders, that is for the advanced trader, very hard to do. (It's also the only way to make money in certain matrkets.) If you prefer swing setups, a good start are wedges, especially in a MTR context. (I like to fade MTR's as much as buy/sell the breakouts).

I'm definitely realizing trying to trade like Al or ANYBODY is a fools errand for me.

The more comfortable I am in my trading style the more I realize how different it is from Als.

It's coming to grips with the fact that's just fine and that's the hard part right now.

Thank you for your kind advice though!

Posted by: @yuri

...."A good start is to follow always-in by taking obvious setups(not sure what those are) ...like, buy/sell the close, H1 (in strong BO) or H2 in tight channels and limit order entries below/above bad opposite signal bars (like buying below a doji in a bull BO phase after follow-through). (Those are all just entries and don't guarantee anything.)

obvious mean when the probability is at least 60%, like when the always-in direction just switched. Entries matter because if you follow the high probability direction you can enter with swing stops and a good probability of making a profit. I just ask, like Al does, with each new bar printed are there more likely sellers or buyers above/below and is the always-in direction clear? 

I see... "obvious" theres a clear setup.

I keep it simple: if we are always in short, for example after a BO + FT, and a L2 forms near the EMA, and the reversal is not enough for a MTR then I just enter with swing stops to target a new low or if price makes an H2 near bottom I get out. Entries matter in this case, for example if the reversal is strong, and no L2 forms, I would never enter because it could become a sell climax and then you risk getting trapped. L2 is really just a sign of bad FT for the bulls in a bear trend.

Got it. You make excellent points on the entries. I don't discount taking a great entry. But again a great entry is just the beginning as you are locked into that price after you enter. Everything AFTER that is tied to that particular price.

Going forward yes PA matters but really the only thing that matters is where your little dot exits in relation your little entry dot.

Entry and exit are one dimension in a four dimensional reality. Time being the fourth.

1) Dot... 2) Line... 3) 3D... 4) 3D + time.

Your entry is just a dot. Your exit is just a dot. Your entry would not move to your exit without a line and without time.

This sounds ridiculous and trivial but it's NOT.

Risk and time are interlinked as well.

If your trade takes risk in a certain amount of time VS a stoploss you can get out with a win and risked alot for the relatively small win but not realized a loss.

Is that better. Is that worse?

Is actual risk the same as vrtual risk?

Looking at the charts at the end of the day I see what everyone else does. It all seems obvious that if you waited for the double bottom, second entry, MTR, and a buy above a bull bar, possibly wait for a follow through bar and get on and ride till the top where you'd get out at that last red box ignoring all the rest you'd be set for life.

Of course it's NOT that easy otherwise everyone would be trading them and making money.

What you don't see is how many of those turned into continuation patterns causing you to loose on more than the %40 you'd have to hold perfectly.

Don't get me wrong. I prefer to have a lower win rate (unlike Al) and a larger win/loss ratio. I try to stay above a %50 win rate but I'm more concerned about W/L ratio and keeping that higher than W/Rate

I agree with your assessment though. Makes total sense to find a low R/R situation to base your trade off of even if it just gives you structure.