Trading to win using the Secret Code of the Illuminati

Emini Triage
Stop Losses

Stop Losses

Today’s trade was “not as exciting” as yesterday’s, but what did you expect?

It was a beautiful day for secret code traders, and quite profitable. That’s all we care about.

What style of trader are you? Scalp? Day trade? Swing trade? How large is your account? The rather large tag cloud for “stop losses” suggests that this is an important topic for me.

Let me try to share a few basic ideas. If you accept that the market can do anything, then you must also accept the opposing theory that you also can do anything.

The real question then becomes: “Will you?”

When the market is running against you, and 3 points is now 5 points, and you add a contract to average in, and then it lurches another 3 and a half points, can you handle the draw down?

Emotionally, are you comfortable  being underwater $500 plus? $1,000? $10,000.? Is your account large enough to hold positions overnight?

What if you averaged in 10 contracts, or more, because it usually works, and now it keeps running against you, do you have a plan to manage that? Are you emotionally and financially capable of taking your loss, and be willing to accept that as part of the game?

Some traders routinely scale in. As a retail trader, and especially as a newer trader, I am not a fan of it if that is your situation.

It seems easier to me to learn precision entries like the Emini wizard system offers.

There is no shame in being wrong, the shame is continuing to be wrong when the original premise is broken. Why not just take the stop out, or reverse?

Write down rules you can live with, regarding the type of trade you want, the amount of risk you are willing to take, and your profit targets. This plan should also include per trade, daily, and weekly limits.

Hit the search button and and you should find some more ideas.

Make sure you read nucleus accumbens.

BTW, don’t forget you lose “opportunity cost” when you are trapped, even if it comes back to break even for you.

The shorts who have been giddy all year and are complacent will always get slaughtered.

Bear market rallies can be vicious.

We had a 40% pb today of yesterday’s move, then the bounce finished the day near the highs of the week.

Don’t let one or two bad trades ruin your account.

Managing positions and accepting stop losses is part of the game.

Have a great weekend.

Emini Triage

Emini Triage

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