Mnevis wrote:Hi Tah,
I need your help. I have been following you for many years now (I have attached my first post in 2014) and I still lose money. What do you think I should do?
Thanks for helping us.
Mnevis
Dear Mnevis….and
ALL PVSRA Musketeers,
The MMs move price to cause market participants to lose money! They need folks to come in on the wrong side so the MMs have liquidity to fill SM orders on the right side. They also need folks on the right side to become scared of loss and give up and get out! So, always keep in mind....
#1, we DO NOT KNOW how the MMs will move price next, no matter what we think, no matter what we believe.....
NEVER! And, always keep in mind....
#2, trade very, very light relative to account size.....
ALWAYS!!!!!!!
Okay, then we might ask ourselves "If we don't know how the MMs will move price next, then what good is charting?" In my opinion, charting is good for two things: (1) to see historical S&R where price will probably eventually land if it is moving in that direction after a send-off of very high activity, and (2) to show a "setup" we can eventually embed into our brain and trade, instead of just taking wild "shots" at a moving target! So,....
#3, restrict trading to valid setups.
And, we might ask ourselves "What is the best way to respond when a valid setup is entered and then the MMs turn PA around and start taking it in the wrong direction?" In my opinion, the best way to respond is: (1) EXPECT IT! That way you won't be surprised, shocked and worried when it happens, (2) and since you are trading very light relative to account size, you have plenty of liquidity to keep your account from ever approaching getting blown....and (3) to even add to trade if MMs eventually reverse PA back to your trade direction....or (4) close trade with the increased loss and go back to monitoring for valid setups. Of course, you can take another approach....and (5) just always close trade if MMs take PA to wrong side of Solid trend and look closely to see if a setup in this "wrong" direction is formed, or is being formed, and consider making a new trade in this opposite direction.
Obviously, risk tolerance is a background issue in all of this. How far in the "wrong" direction are you willing to let the MMs run the price while hoping for them to stop it and start it moving back in the direction of your trade? Trading very light relative to account size removes a lot of that pressure while you are trying to decide. If you are indeed trading very light relative to account size, but still against allowing a 50-100 pips move against you while waiting for price to turn back, and so you can add again to your trade, then take the "scalper" viewpoint by closing trades when PA begins closing on wrong side of trend and look for new trade in this opposite direction. Only YOU can decide what YOUR risk tolerance is!
If you are having difficulty, try applying all of this (in the manner of what your risk tolerance is) with more frequent practice. Try trading the M5 chart time frame using 34/89 ema instead of 50/200. Start anytime after the "FO" for your first of the day trade. Trade duration will be shorter and for lower pips,
TVT 20 (MOL) FIFO...but in this case, more often less than more and definitely fast in, fast out! The M5 TF/34-89 ema is appropriate for this. An example pic. is attached.
The only thing
FOR CERTAIN in trading is that by trading very, very light relative to account size, no matter what the MMs do, you will be more relaxed as you choose how to respond to the market.
Tah