Beware Of Paper Trading

Paper trading isn't worth the paper it's done on, simply because there is no money involved. You are a lot different when your chips are on the table. With nothing at stake, you can sit back and look at a quote machine with equanimity. When there is no money involved, you can sit back with a pad and pencil and follow technical indicators. You can even take time away from the market and go to the kitchen for a sandwich. Try selling a hundred S&Ps and see if you are interested in eating.

George Angell, West Of Wall Street

Do you think that a 8 tick move is sufficient to move your Stop Loss to B/E?

I tend to wait a bit longer before moving the SL. A higher low is the best indication to move your SL to B/E or just below the new low.

I have no clue on how the TA was looking when you took the trade but after the price dropped to 1262.25 and turned back up, I whould have moved my SL to 1261.75 or 1262.00 (a new low was set).

Well here we might need to consider the psychological damage caused by not moving the stop to b/e in the event that you get stopped out at a loss.

Look at these 2 trades:
1. Say you place a trade and it immediately moves to profit and hangs around 4 to 10 ticks of profit for the next 45 minutes. The market then trades down and stops you out at an 8 tick loss.
2. Same trade but it immediately moves into a loss and hangs around a loss of a few ticks for 45 minutes and then stops you out for an 8 tick loss.

Which trade puts you in a worse mood and therefore jeopardises the next trade that you are going to make? Remember that both trades ended up with the same monetary loss but I believe that they have a very different psychological effect on you.

None of the above.

If the price does not move for 45 minutes you should have sold allready and moved on.

Another rule you find in many books: get out of a trade that is not moving.

Well that depends on your Time Horizon to Target. If the strategy that you are trading requires this amount time and longer to complete then you have to stick with it otherwise you aren't following your rules.

Here is a simulated trading contest that might focus the mind. Although there is no money at risk (except the entry fee which in this case is waived) there is money to be made. So once you have made money on the first trade in the contest then there is incentive and motive to stay ahead in the game.

Trading Contest

So this is a halfway house between simulated trading and real trading. You only lose your entry fee but you stand to gain considerably more. In Vegas you can play poker like this as well. A $35 entry fee will pit you against 59 other players and the last 6 standing walk away with about two thirds of the pot.

I have read the THT thread but I'm not convinced.

Markets move to erratic to get this THT in a formula. I prefere to stay in a trade as long as the TA gives me a good signal. As soon as the market starts to turn I get out. Could be after 1, 3 or 6 points. Or even after a 1 point loss.

I have made it a rule (for now) to only trade one market at a time. So when I have to wait 2.5hrs to reach a specific target I can't trade something else. That's one of the reasons why I would prefere to eliminate a trade that is not going anywhere and put my $$$ into something else that is.

This is my opinion (as a newbie), maybe I need more experience to grasph the THT.

Well the trick (IMO) is to isolate the time it takes to reach your target in each of your strategies and create a distribution curve (like a bell curve) of "time to target."

That way, after you've entered a trade you have an expected, a shortest, and a longest time frame to watch. This will give you more control over "when" to say "this trade ain't working" - and as you say, move on to the next one.

rverheyen: Are you still around? How has your trading been with the Time Horizon Target methods?