Inexperienced traders blow up taking 20-point stop-losses in ranging markets. Pros instead execute tight 3-5 point trades on the S&P and wait for 20-30 point moves on the NASDAQ. The difference is risk management and knowing which instrument fits the market condition.
Like imagine the traders at home, how many traders will not sit on their hands and take 20 stop loss in this range?
Now I'm going to agree and disagree with that. An experienced trader may strive in these conditions, right? And if an experienced trader may have taken 6 setups right now, but each trade might have been 3 points or 5 points.
Ah, like a relief.
Very small. And I think having that mentality in a balanced market is the right approach.
Instead of going for a 20-point move or a large move one time, if I need to take 3 ticks and have the risk of being squeezed 5 ticks on the NASDAQ, right? On the S&P, yes. On NASDAQ, I never do that. Yeah, only at least 20-30 points of movement.
Yeah, on S&P I go for at least 12 to 15 points, and usually it's about 3 points of risk. You have a minimum risk to reward that you accept? I won't take anything under 2:1, but majority of my trades are 4:1, 3.5:1. It really depends on my entry and my target.
