Tuesday's trade sequence reminded me of this article from last year – Sometimes It Takes Multiple Attempts.
Where the market reminds us that it doesn't give a damn about our expectations for a quick move from entry to the target.
And that sometimes, it would rather play a bit first and see if it can stop us out.
I just love these narrow range holiday sessions. They provide a good "line in the sand" from which we can determine bigger-picture sentiment – bullish above and bearish below.
So yes, despite the low volume I do consider them relevant enough to mark on my charts as S/R.
And so, prior to the session open, I sent out the following social media post. Please note that this is a repeat of a 2019 post so the price action is different to today's action. But it's the concept that is relevant.
So here's the plan today:
Sounds easy, right?
Let's drop now to the 1 minute Trading Timeframe:
A few thoughts post-session:
(a) It's unrealistic to expect that every trade will go immediately to your target. Sometimes a trade idea will require multiple attempts.
(b) Two failures – stop and reassess. Reconsider the original trade premise, but also be sure to consider the idea that you are completely wrong. And also that maybe you have no idea of what is happening and need to stand aside.
(c) Three failures – time out. Wait for a change of structure and only then look for the next trade idea.
(d) And maybe… consider the idea that a key goal in your trading should be to not only know how to find quality trade ideas, but also to get good at surviving those times when the trade idea doesn't quite match what the market is actually offering.
Because sometimes… it takes multiple attempts!
if you are trading how you consider Brokerage cost ?
say in indian market brokerage is approximatelt 4 points of Nifty if you take so many attemps before actually getting right trade say 5 attemps either stop and reverse trade then ,brokerage charges it self is 5 x4 =20 points.
so what time frame shaold be chosen to avoid oversensitivity of market ?
Please note that I will rarely extrend this process beyond three trades. If two fail, I’ll consider the need to pause and reassess. If three fail it’s a compulsory stop to reassess. And usually at that point I’ll just box off the area causing problems and wait for price to move clear. Then trade the new structure.
At some point you do need to recognise that you’re out of sync with the market. And cut your losses.
Please note also that these failed trade ideas will not always be a full loss. I always aim to scratch a trade early if I perceive the edge as having gone (or as being at risk). Sometimes this can be around breakeven. Sometimes for a small profit. You may find some of these offset the brokerage costs.
But not always. So let’s assume they rarely do.
In many of the liquid US futures markets you will find round-turn commissions to be in the vicnity of just one tick or less. So very little profit is needed to overcome them.
One possible solution then is to shift from your current markets to a more favourable market. Or to a more favourable broker, if that is the issue.
If that is not possible, then you’re right that the simplest option is an increase in timeframe. This needs to be done to the point at which a typical expected (average) win will more than offset the brokerage costs from three scratched trades (or five if you prefer). I don’t know the Indian markets well enough to know what timeframe this is. You’ll need to assess this through trial and error.
If that is not something you wish to do, then re-entry may not be an option. You need to find a way to find edge from single-entry attempts only.
Lance, you are right, always need to book partial profits from the reentries to be safe, there is risk but there is profit too. Thanks.