Aug 182011
 

We spent the morning exploring Mouggins, a charming “old village” atop a high hill.  I love exploring these small towns especially when they’re on a hilltop and have a nice view.  I need to take more photos.

We got home late and I missed the first 45 minutes of the session and hadn’t done my normal preparation defining my levels and trade zones, so I just did some sim trading based on reading the order flow.  And I did quite well.  I was amazed.    I had very tight stops and my worst MAE was just 1 pt, which I find very good on such a volatile day.

 

I finished Brandt’s book and I keep thinking about his 30% win rate.  My win rate is way too high.  That’s partly because I’m looking for very good setups and partly because I use wide stops.  I think I could do better if I took more trades, used tighter stops (and stopped out more often), and accepted a lower win rate.  I’ve been writing about this and working on this for a while but reading Brandt’s book helped sink it in.  My stop was 2 pts on my sim trades today and they worked.  But even if I stop out a few times, I can still come out ahead.  And if I can use a 2 pt stop then I can trade more contracts.  So this is my focus.

I thought about trying some of his chart pattern setups but after finishing his book, I think he convinced me not to go this route.  For one I’m already successful (mildly) with day trading.  His method has 90% wash trades and a few real big winners that make his year.  I’m not sure I can do that.  Seeing him be wrong several times in a row on the same idea would be frustrating.    I’m going to keep thinking about that, but in the mean time I’m looking to see what concepts from his book I can apply to my day trading.  The 3:1 R:R and 30% win rate is one of them.

Hope everyone did OK today.  After the big drop it was quite rotational, my favorite market.  Even playing only the short side would have yielded nice profits.

 

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