Good description. Looking like it is about to happen on Euro currency futures...a sharp move higher in the manner you describe.
Well it certainly took its time to do it, but I'd class the first few seconds of the 18.14 minute today in Euro currency futures as being the type of condition garachen was referring to. I'd be particularly interested in the microstructure for the trades enclosed by the yellow box. Would be interesting to review depth of market information during this period, perhaps at 100ms intervals. Not entirely sure who is participating in that area and why, but have some theories. I'm just a manual trader who doesn't have access to anything high end or fancy beyond the basic time and sales record, so this graphical representation is the total of what I can see. Perhaps garachen might comment if he still reads ET? I know where in the market these types of moves are likely to occur, but I'm not typically involved in the ones which happen out of hours. Perhaps something which one could code an algo for in TT ADL or similar...I'd do 95% of the work in deciding when to switch the algo on, what instruments its to monitor, and on what side it is looking to trade, if it could handle establishing the position just ahead of the move (or the initial sweep to start the move) and, crucially, liquidating it at better prices where manual trading would be slower than optimum.
============ Great points,Trader Ga; Even.....'' watch a contract''=;;if its your [capital]money. I see your points ; about the only thing i would add , even Rich Dennis who [proved] he taught traders like turtles admitted it was not easy, at all.Actualy it was so hard his partner Mr Eckhardt said trading could not be taught,;;almost right but not quite right,LOL But if its [average traders] money, why leverage ignorance, which is the starting place for everybody.???????????????????????????Most would be better off with 100 shares or 1 share of stock until profitable. Sure elite trader is full of millionaires[sarcasm] You could say ,,well rich dennis started them with contract;; NOT really, Rich [according to Jack Schwager,+ Mr Eckhardt] started them with proven[turtle] training and a HUGE pool of applicants,, most of whom,never got any training. or capital. Thanks. Good points + wisdom is profitable to direct. You also seem to be an ususual trader/investor ; i discern truth in your post,LOL
Great thread by someone who clearly knows his onions. The gold futures contract today was a very good example. Curious if anyone followed the suggestion to trade just using the depth of market, no charts, focusing on learning to intuit when there is buying / selling pressure?
Trading is unique in that there is no one set way to consistently make money trading markets in terms of style and technique. I know a PhD who kills it and I know a guy who dropped out of high school who kills it. I agree 150% with your sizing and risk approach. Personally, I keep a trading journal, and I reward a series of profitable trades with a modest bump in size. Conversely, two losing trades in a row takes me back to my previous ( pre-bump ) position sizing. These are very small bumps fractionally in relation to my typical position sizing. I do this in order to encourage consistency and "grinding out" income in my own trading. But I don't want my bumps to generate anxiety or create hesitancy in terms of pulling the trigger. And with leverage being what it is in futures, as you so smartly mentioned you can quite easily go from making $100 per day to making $10,000 per day quicker than most may think. From what I have seen over the years, traders get into trouble when they self-sabotage perfectly good trading systems or market trading styles. They take quick profits but are scared of losses so they hang on to shitty positions hoping they come around. They get conditioned to adding to losers because it might work several times. And then one time it does not and you get taken out by management or your clearing firm. Traders also get bored and make impulsive, stupid positions. Traders think too much. Traders think they are smarter than the market. Traders refuse to believe that the last price print is the collective knowledge of the entire marketplace in terms of what that product is worth. The market is what the market is. Another bad habit I have seen over the years would be traders forcing trades in order to make money. Nothing good ever happens when you force a trade.
Garachen is probably my favorite poster of the last few years, but seriously who believes this? Put me in front of whatever contract for one year and I guarantee i won't make 5k$ per day. DOM traders specialized in one contract exist but it takes much more than one year to get there IMO.
Even in these markets I beg to differ. One year is more than sufficient. You just have to make sure you are looking at something where you have a reasonable chance of success. 1) primary contract 2) mix of manual and automated 3) you can get close to the lowest fees There are plenty of mid-frequency trading strategies that have not been picked over yet.
Do you know the story of Squeaky, the Chicago mouse? Squeaky was floating on his back along the Chicago river one day. Approaching the Michigan Avenue lift bridge, he called out "raise the bridge, I have an erection!"