euphaedra wrote: ↑Mon Jun 26, 2023 5:20 am
I came across this when viewing one of the videos on Youtube from Penguin Trades who also learned from Mack but did not find consistent success until he based his entries on larger context and at least 1:1 risk reward.
Any thoughts?
I am not affiliated with TPT, im just a student of TPT and Mack, I am also not yet profitable, so take this with a grain of salt.
I dont know this penguin guy and dont know if hes making money or not, but what I can say is that in that youtube video some of his trendlines are incorrect, and having correct trendlines is more important than any actual entry. Correct trendlines tell you when to expect reversals, when to know when a move is almost done, where the next target might be. Its critical these be correct in order to read the chart correctly.
I actually go for 1:1 on all my trades but I do not re-think the wheel about it. I try to read the chart as close to Mack as possible, and take the exact same trades that Mack marks.
The thing is, Mack is teaching people how to read the chart. That is the strategy, chart reading. Before you take any trade you have to KNOW where prices are going first, and then look for an entry to get onboard. You have to read the overall chart itself first before entering. The "bigger picture" or "larger context" is already being taught by mack, and it took me a while to actually realize this.
IF a trader picks mack marked trades with relatively good frequency, they almost always work for 1:1 and just a little bit of trade filtering makes this possible without changing the strategy at all. Just because Mack marks 10 trades a day, does not mean those are all good trades live. The objective is to read the chart and wait until you KNOW where prices are going and look for an entry to ride with it, and if that does not materialize, stay out. I dont know about anyone else, but if I do anything but KNOW where prices are going when I take a trade, its almost always a loser I dont even get lucky.
Mack goes for 4 ticks and a runner because hes a great chart reader with a level head. He does it the way he does because (as he says himself) he hates losers. Hates seeing prices back up after going a little bit in his direction. His scalp target of 4 ticks is
extremely unforgiving. However, he does this for his reasons and in my opinion it comes down to psychology and repetition.
Mack always says something along the lines of "if you have enough room to get out" so he knows hes only going for 4 ticks and needs 6 ticks of overall movement. Knowing this, hes going to mark more trades because his initial profit target has enough room. If youre going for 1:1, its the same thing, just need to make sure you have enough room. But to be honest you really dont even need to consider this all that much because they almost always work for much more. Just have to trust the system and follow the rules.
Eric talks in the Lectures about how often a trader picks Mack marked trades and has a metric for it. It wasnt until recently that I realized how important this is. Its how we can measure our chart reading skills and quantify it. You can trade macks strategy any way you want, swing, scalp, swing & scalp, scalp & trail, whatever, but its not until a persons chart reading skill is good enough that they are picking Mack marked trades with a relatively high frequency that they can think to adjust or modify profit targets to suit that accuracy. The chart reading skill is good and the reasons for taking the trades you did are sound, and you do this with decent accuracy. Once that skill is achieved, more doors unlock.
Ive been guilty of this but when you start to venture out into other peoples youtube strategies, you no longer have the ability to compare your entries to a skilled chart reader and quantify your accuracy and ability and no longer have the benefit of over a decade of chart reviews. They just dont apply.
Lastly is psychology. The more you try to get out of your trades, the less accurate you will be. This is ok as long as you have an edge. Sometimes it is extremely hard to watch a trade go a point or 2 in your favor only to back up and take you out. People see this and think "it would have worked for a point" and adjust their whole strategy around their LOSERS instead of adjusting their strategy around their WINNERS.
Just some thoughts to consider. Eric and Mack do great work trying to make this all as digestible as possible but ultimately its up to the trader to listen and learn. The strategy is chart reading and the bigger picture first and foremost, and discipline and patience following it up.