As promised, I wanted to revisit some of the Stochastic and Type I setups I listed on June 29th.
As it stands, only one of the three trades triggered us in. NVTL is only a couple of ticks from stopping us out. While many traders stress out over getting stopped, I view them as simply the cost of doing business. In the NVTL setup, we were looking at a 7-1 reward to risk setup. I'll take that kind of ratio any day of the week.
The other two candidates never provided us with a clean trigger mechanism to enter the market as they made new lows during the retracement. Step back, reevaluate the trade and keep them on the radar as they may still be good setups with a potentially better entry price.
Trade Smart
~Duane Gott
Well, I have painfuly to admit that Type 1 is very unreliable trade- looking at type 1 setups failing all the month. If the method is correct, it should not be failing massively
Posted by: Skirmantas | July 09, 2009 at 10:48 PM
I think part of being a good trader is you need to learn when to be in the market & when to stay out. The last 2 month's was a good time to stay out in my humble opinion.
Posted by: anthony | July 10, 2009 at 07:32 AM
Skirmantas, all trading setups fail at times. There will be times when the Type 1 fails one after the other. That is trading. The current market has presented us with a conditions that brought about many failures of the Type 1 the equity markets. However, all should have offered good risk to reward or should not have been taken. That's the discipline we try and instill during the mentoring sessions. Trading is not a single point in time it is a stream of events over time.
Good Trading
Craig
Posted by: Craig | July 10, 2009 at 07:34 AM