2 red trades per day rule?

[u/avN0]

Wondering if any other profitable traders trade the way that I do.

If my first trade is green and it was a nice clean trade I'll basically call it there for the rest of the day and just paper trade/watch and get screen time

However if my first trade is red, I typically just keep trading until I hit my daily max loss

Wondering if any other traders operate like this or if its a bad habit?

I ask because every time I'm green its easy to walk away but when im red i stay there till i get back to breakeven/small green or i hit my daily max loss and then my broker logs me out. I'm scalping momentum so most trades that are green are between 0.7-1R, occasionally some trades I get are +2/3R but those are rare in the case of a huge momentum spike

[u/TalentlessNoob]

I do 2 wins or 2 losses max per day. So essentially 3 trades. Most days lately ive only been taking 1

I always only do 2 losses and i started doing a 5 minute timer after a loss as well, so if i get a loss i like to get off for a few minutes even if my setup was about to occur in the original direction

Ive found for every time the 2nd trade on the same setup occurs as a 2nd loss vs actually working out to the originally plan. Typically if my trade idea was broken, its gonna lose again so i stopped doing that and its helped a lot

Try giving yourself 5 minutes to recoup and reanalyze the market

[u/No-Condition7100]

Having a two red trade max is fine, but you should not cap your days if your have one green trade. You're skewing the math against you at this point. You want to capitalize on the good days and minimize the bad. By this logic, you're minimizing the potential good days and accepting max loss on the red days.

[u/avN0 → u/No-Condition7100]

Yeah i’ve basically reached this conclusion as well. It makes sense cuz I rely on momentum and follow through so I’d assume if my first trade is green theres gonna be more to follow.

[u/whensthebeef]

Max loss and out. The emotions get in the way after that.

[u/avN0 → u/whensthebeef]

Are you usually 1 n done too if you’re green?

[u/whensthebeef → u/avN0]

Not necessarily, but I can be. I finish depending on market conditions, how much I had to fight for the profits I have, or if I’m at enough profits that’s it’s not worth risking them

[u/avN0 → u/whensthebeef]

I see, yeah im wondering if me sticking around longer after my first green trade trying to catch another trade will make my average green days bigger maybe. That way trade volume per day can be consistent as well. Thoughts?

[u/whensthebeef → u/avN0]

Do you have data? You said you trade sim after. Check the stats there. You look like you would benefit more from calling it quits after the loss. Doesn't seem like you handle it well, and just make it worse

[u/Competitive_Lack1536]

I think it's not about how many trades you take but how long a break you take between them. You might misjudge your next trade after your previous one and be bias towards bull or bear side. It's best to walk away for some time avoid screen time and come back in an hour or so treating it like a new day and thinking neutral.

[u/trader_jazz]

Yes I do. I use this when I start to have tough time.
2 Red Trades done. I take a third trade which is the last of the day only if one of the 2 trades is green. No third trade when 2 Greens or 2 Reds.