Today I counter trend again. Most of them. I bought Crude Light when the Dow gap down over 200pts. I bought my last CL at $67.19. Sold it at $68.40. There's just little happy story. Most of the time I struggle and painfully fighting the wave.
I want to stop but I kept doing it. Now I enter my mind and find out the logic behind it.
1. I hate to become a herd. It's happened back to August 2007 when the market was on peak, I remembered buying China ETF at the peak. It kept haunting me how am I so stupid. So the mentality brought until now. I don't want to become sheep buying on top or selling at bottom.
2. Peace of mind. In CL case, I kept hunting the low/top of the day. When I got it, I will relax a bit. I hate enter at the middle because I am afraid the odd that price may fetch again. In reality, trending market don't even look back. There's just pull back and it's usually shallow especially in strong market.
3. Fading the moves mean quick and fast profit. Trending market usually going slower and retrace faster. That's make sense because everybody will react slower when entering the market but act faster when it comes to profit taking. WHen it's time to profit taking, the mind visualized how much profit based on they saw on screen. But suddenly the price retrace fast and the profit suddenly decreasing. Afraid to lose profit, we act faster to secure the profit. Thousands of people do the same thing and the price go much faster.
4. No regret. Counter trend setup usually aim for a less profit. Because every counter traders know they're against the tide. So, after profit taking the price usually goes back to the trend-stream. So it's higher odd to profiting at the peak/bottom. Give a relieve feeling that we do the right things. If I did the with trend entry, most of the time the price will go further after profit taking, sometimes very far. I felt stupid enough profiting too early.
5. Tight Stop Loss. Only stupid people enter the counter trend setup with wide stop. It's high odd probability the stop will take out. Of course the tight stop will have higher odd being taken out but at least the loss's smaller. After being taken out, I'll look another setup to counter again, sometimes after the price go further with the trend. Sooner or later, the price have to stopped and it's time to enter the counter movement.
6. Most of the time, market is on Ranging Mode. I think about 70%-80%. Fading the Range Market is all bread and butter.
7. Lastly, I think I am a daily wage trader. Stop trading after getting decent profit.
I would like to break this mentality. But I don't know how. I want to surf with trend, not swim against it. I want to learn how to enter a little late with the trend rather than a little too early against the trend.
If someone out there know how to solve my problem. Please share me some advice or anything. I will greatly appreciate it. Oh, and my previous post about counter trend, it work. 7-10 ticks less then 5min.
Here's the result from against the trend. Not purely apply the method. If so, the result will much better.
I'm certainly not a person to give advice to others because I have many issues in my trading work but I can share few thoughts from my experience. Few years ago I never traded in direction of the trend or break out. I would just sit and wait for exhaustion and than enter to collect few pips when it's coming back. I just couldn't pull the trigger in direction of a trend. Now I rarely trade that way but sometimes I do and it's ok. I really wanted to change things and can't remember how the process went but it's basically when I accepted that I will trade in the direction of the trend in same short sequences as I was trading so far against the trend. I always thought that when I start trading in direction of the trend I will be able to pick up all those waves and ride my position. Well, I can't. That was my secret, to accept smaller scalp profits that I'm used to going against trend on high probability moments now doing it in direction of market movement. So now I look for breakouts, stop runs, taking off highs or lows all in the direction of trend but just for few ticks. I'm grateful for this change because this now feels better and market helps more.
ReplyDeleteHi FX,
ReplyDeleteThanks for sharing. You are a scalper, instead of against the market, you scalp with trend setup. Nice advice. How many pips you take for scalping? For me it's 5-8 ticks.
Thanks
I don't know how many pips will I take prior to my entry. Once I'm in I can see nature of the move if there is any. I tend to ride first surge in my direction and get out when it stops. It'a usually 4-15 ticks.
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