Roll Up, Roll Up, Every Trade is a Winner

Trading is a funny business. You can take two setups that look the same yet have two different results. By the time I have written my trading plan, I have a number of high probability setups that I trade with a high win rate. When they don't work, all that has happened is that one or more traders with larger size has taken an opposite position. That's all that has happened. Nothing has broken. The setup was never 100% nor could it be.

Once you have a high win rate setup, it's very important not to fiddle with it. You have done your job of designing it, now trade it. Losing trade? Big deal. As soon as you start second guessing or "fine tuning" a good setup, you are on a very slippery slope to losses.

And why try and avoid losing trades if you have kept to your trading plan? You know you can expect, say, a 68% win rate, average win more than 1.5 times average loss etc., etc. That's enough to get you into the big league of earners if you can stand increasing your size. That's what you should focus on. Once you have a solid trade plan and have achieved CP on small size, the next step is gradually adding size as your capital grows, not to try and achieve 100% winning trades which is impossible.

The chart below for the ES on Friday shows 2 trades. The first one is straightforward. The second one is a deliberate "late" entry. I almost entered 7 bars before but it looked like it would bounce. The bar where I entered was one bar late. I couldn't enter on the bar before because I had rejected the trade 7 bars before and the 2 entries were very similar. In this case the entry 1 bar later gave certainty at the price of the late entry.

Click to enlarge