Surfing for Profitsstay however long it takes me—maybe it takes me a couple of
hours. I’ve traded—honestly—for 20 minutes, placed a trade and
then 20 minutes later I’ve closed it and it’s been up 30 pips. So
you have those days. I wish they were all like that. But then there
are days you try to trade for three or four hours, maybe, because
the market’s not as volatile but there’s still activity. It just takes
a little longer, It will take me several hours for those trades. But
it’s basically goal oriented. Say the market only moved 50 or 60
pips overnight or over a day, and to me that’s not enough volatility
to want to get in the market so I won’t trade. I’ll just watch the
market. There are those days, too.
Q: Do you set a particular point goal or a dollar amount goal that
you want to reach? Also, if you can talk a bit about the amount of
risk. You said there’s a certain amount of risk you’re willing to take
during the day, and it’s a dollar amount of risk. But is it also a point
amount of risk? Do you say to yourself, “If I’m 50 points out of the
money on this trade that’s my stop limit”?
A: I always have a hard stop because you never know what’s going
to happen. I try to keep it pretty tight. I don’t really like things to
get away by more than 40 pips or so. I think I’m a good trader. So if
something gets 15 to 20 pips away from me, I’ve got to just close it.
I know I’ll make it back on the next trade or the next several trades.
Q: A very interesting point you just made. You said, “I think
I’m a good trader and that’s why I keep my stops small.” You’re
assuming that if it has moved 20 points against you, then the trade
you initially analyzed is just wrong and you need to get out of it.
A: Right, exactly. I’ve analyzed my trading and the analysis shows
if I am down 15 pips or so, I’m saying, “Okay, I just made the
wrong decision here.” So that’s why once it goes to 20, I just click
and close it out or at least close half the position.