Where to target and what to do once there?I've been bad. I've been greedy with having "strong hands" when I had some 5 to 7R, really should have gotten out when it started retracing. How do I let it go from over 5R to -1? From March-April to September 2020 I got baited. There was oil, there were all the USD trends in summer, and they all went rather far. After this I wanted to keep running my winners, I was not sure exactly what I should do, I was busy with other things to look into it (finalize a strategy and add 2 new ones to my pool of 2 + 2 I don't use so really double my setups) I just went for hold but on top of that I forgot about my positions and let them run (reverse) forever without paying much attention.
I spent 2 years on just 1 strategy (+2 I do not use) from mid-late 2018 to mid-late 2020. Took me I'd say around 10,000 hours of backtesting, trial and error, and so on, to make it right. Added a new one in 6 months (all day every day), and then in early 2021 damn it's actually recent I casually added 2 in a few days no sweat. My first strategy has a fixed target, or had, actually I am not entirely sure what to do here. But more generally I spent 4 years not really know what to do once the price got to the target area, should I trail with a tight stop or wide or just get out? But now I know.
It is a long road. The basics however, they are instant. No work required, it only depends on the individual they either get it or they don't. It's like you start with an edge from day 1, at +1% and then you spend a whole lot of time to bring that to +20%. People at -100% the huge losers don't "just do the opposite" and end up at +100%. Don't think brokers checked? The big losers take 20 trades a day. They have 0 edge positive or negative. And winners mostly follow the trend, risk a little to make a lot, and hold. It's just that for optimal results they learn to not always hold. No, not "after having learned to hold", there is no unlearning. Those that don't hold from day 1, just bad, no hope. At least according to academics, regulators and brokers. People that don't hold winners from the start never make it. Simple stats.
Getting started with targets is really easy. Entry does not matter, target is easy, stop too. Everything doesn't matter or is easy with investing.
First, the observations (non exhaustive):
There are 2 approach:
1- The robot. Throw a ball, the dog sees it, gets excited, chases the ball. The market throws some bounces, the "day" or "swing" trader sees them, gets excited, and chases. No added value, no intelligence. The price bounces, but in a very wide area and the bounce amplitude is random. So they think they found a holy grail, because damn they're onto something clearly no one noticed the price bounced on supports, and they insist on awful "strategies", try to make it work with 3 to 1 risk to reward, very far away stop since it bounces randomly around support, and the target is terribad for obvious reasons. Wide stop tiny target.
2- Since the price will bounce from moderatly to a lot, use this area as a target, and when the price starts reversing we know it probably will retrace significantly so we jump off the ship. The second approach is also buying in a downtrend on these supports same as 1-, but after having sold. So the "edge" noobies think they see and absolutely want to "take advantage of" is exploited this way, it is literally the same buying at supp. But I don't know I guess everyone today is terrible at math and logic they can't even think of buying at support without it being a ridiculous countertrend 0.3 reward to risk gamble, doesn't even cross their mind. You actually get to buy at support.
What is funny is they see the price breakout, then go in a straight line to the next level, and they somehow get all excited "I'm going to buy". No one wants to sell? Brain not working properly. Makes no sense.
It is rly binary, you either get it or dont. It is a skill check (or is it attribute?) like in RPG games. Which is nice since you get to know very fast if you will make it or not, no need to waste 5 years. I saw (and regulators + brokers tell us) there are some degenerates that have been losing for 10 years and still continue. I saw someone on youtube that has a 20 years long "career" and all he has done is lose! For 20 years! He even describes his 20 years of failure in a video, his wife almost left him and he had many struggles. He sells robots now, trying to get some of what he lost back. He probably thinks he was "so unfortunate" it is ok to scam people. "The kid has heart", ye that's what you say about losers. Just means someone is dumb enough to insist when something is clearly not working for them.
There is not much more to it, the basics that is. Then from here getting good targets takes grinding, experience? Only way I know how to is with stats, even the "not stats people" look at the past and gain experience by "working out" like PTJ did to predict 1987 crash. He isn't a quant but still looked at the past. Even Warren Buffett learned from experience and made stats, I guess his targets are something like "how expensive" with variables "market emotions" and "interest rates" but he knows when expensive is too expensive based on statistics (that he read or experienced over the decades) not based on magical fairy dust.
What to do at target? Well this is a long story. So many possibilities and ifs and buts. I'm going to show 2 examples and call it a day.
There is a lot of stuff on the chart, it's not very clean, looks like a "technical analyst" or day trader chart, sorry. Obviously investing takes more than drawing 2 lines, there are going to be several conditions to enter, several conditions to where to enter, several things that go into the stop, the target, etc. A board hitting its head on a keyboard can't make money. The same way I doubt a robot mindlessly buying when a stock hits a P/E of 5 would make money, investors look at cash flow, management, past revenue, book value, competition, and many other things. Simple things, but several of them (not 1 million numbers either).
So once the trade is entered, and target is at 6R:
And yes it does not stop at every support, sometimes it fires past target:
And finally, of course:
Can be good places to add (after the bounce took place)!
