Allen, I find the trade rationale that you give underneath your trades to be very instructive. From what I can gather, your strategy has a time framework somewhere between scalping and day holds. Given that your entries can, in equal measure, provide both scalp profits and intraday swing profits, I conclude the primary thrust of your approach lies within your method of running profits. Have you encountered any particular market conditions which are amenable to your strategy? Moreover, what sort of market conditions would you suggest are not appropriate for your approach? I note that you raise stops to breakeven at 80% of profit target. Have you analysed the efficacy of this relative to scaling out at x% of desired profit target? In effect, rather than creating a risk-free position on the entire holding once an acceptable level of profit has been achieved (your strategy), how about locking in a scalp profit on partials at a given profit level, and running the remainder on a risk-free basis (having risen the stop to breakeven or better)? My comments are not suggestions or criticisms, merely the random thoughts of a trader wishing to gain insights from other experienced traders, such as yourself, who I respect. Thank you for any insights, Candle
Hi Allen, nice to see you posting again here and hope all is going well for you over there in reality land.. I have gravitated into trading the eminis lately and was wondering what your reasons are for preferring the nq eminis over the es? I have read elsewhere that some find the nq's a bit more spiky and even more neurotic than the es (if that is at all possible!) what do you think about that? I was doing fine on the es for a while but now am finding myself getting chopped to pieces with alarming regularity.. still trying to figure the best stop versus target strategy for them and so am finding this interesting... scalping is still a problem for me, amongst other things due to being a long way away at the end of a wobbly isdn line and having a constant nagging feeling that I am usually looking at historical charts compared to the rest of you! I had a pretty useless day yesterday until the late afternoon pullback in which I managed to snag my first 10 pt move, usually bailing out way too soon of the best moves.. I probably need to adopt your approach more I am thinking and try for better positional trading and go for the wider stops to allow for the larger gains... I might have a closer look at the nq today.. keep up the posting! Neil (niall)
Allen - I'm at your party. You don't see me because my head's in the refrigerator looking for Bud Light Excellent info - thanks for taking the time to post.
How are you using the pivots with regard to the 5-min chart? i.e. are these traditional pivots (yesterday's H/L/C) based on the 5-min chart?
All markets are appropriate as I adjust my stops and targets based on a sample size of trades. This does allow me to adjust to all market conditions, I review my approach every 30 days maximum or as needed to allow for changing market dynamics. I usually will review my trades when i hit a rough patch as that is a time when the market is usually changing. As far as scaling out of positions, while I find value in this approach, all my testing of this has not shown any significant increase in gains overall. Basically for me it is better to have a full position go to my target than partial positions go beyond it. I also rarely scale out of positions into stops. 90% of my trades have full positions at both stop and targets when hit. Just my style. AllenZ
This market gets stranger and stranger is all I can say. Some things are going on that I have not witnessed in a long time if ever and it makes me quite skittish and a little bit timid. When I see a day where i seem to have it all together I go for the gold, on other days I just try to keep in green or at least breakeven. Trades Trade 1 - 10:08 Long 855.50 Exit 862.50 +7 Trade 2 - 11:13 Short 850 Exit 845 +5 Trade 3 - 13:08 Long 844 Exit 840 -4 Trade 4 - 14:07 Short 844 Exit 844 flat Day Net +8 Month Net +27 Trade 1 - long over the 30minute high. exit taken into moving average resistance. My target for this trade was 865 -867 but with ma's present at the time I took the money on the quick move. Smart play, exited within a point from the high. Trade 2 - after the market reversed off the highs and broke my support level I looked for best entry that would allow me to use 856 as a stop ( 30min high ). entry taken at 850, target was 840 but i exited on a 5min pivot move following the break of the 30min low, usually means a short term change in direction or stalling of trend. Trade 3 - I saw a few signs of the lows being put in and basically took a shot ( rare for me ) as basically a pattern failure play. Once the lows broken we should not have bounced as we did so I took that as a sign that the short term lows were in. This was a tough trade lasted for almost an hour, watched it move to 838 ( my stop was 837 ) and then up to 848.50 ( target was 852 ). Decided to raise the stop and got stopped for a loss. Trade 4 - after the last trade stopped for a loss I decided to flip and go short ( also rare ). This trade was a mistake, took me ten minutes to figure that out and exited flat as soon as I realized that is was a poor trade. I wanted to go short at 855 late in the day on the ramp into the 30min20ma but decided against it as I have been avoiding the last hour like the plague. Would have been a killer. Late day entries are either big gains or big losses for me so I have been playing it safe of late. AllenZ
Hi Allen! Nice journal. I think it would be usefull to regard commission costs too. They are an important part of the after all profits. Even with using the low IB commissions of 0.25 points NQ per RT and your really nice winning series of +27 NQ points in 11 trades (11*0.25=2.75) they take away around 10% of the net gain. In the macro view they are defintaly an important part IMHO. go on posting and good trading!
Hey Niel good to hear from you. first of all I feel that the Es and NQ are completely different vehicles and need to be traded with different approaches. The ES strikes me as more of a faders market where the best trades come from fading weak breakout/breakdowns. This is not my best area of trading. I find the NQ's provide the moves from break points better as long as you are willing to ride out the noise. Lately to be honest I am attempting to develop a trading system for the ES based on certain chart patterns but seriously they are quite difficult recently and I find it tough to get much. Both markets have been seriously choppy of late and lacking of a lasting intraday trend. While nicely profitable of late I still find myself mumbling " this market is impossible " at least once a day. Todd H. ( of RealMoney.com fame ) recently had a great line. I cant remember it exactly but along the lines of profits will be easier to come by and for now be happy to get what you can. Anyway thanks for reading my journal feel free to post comments and questions. AllenZ
For my use, a pivot refers to a short term change of direction following a multi-bar move in one direction. For example, if you get a 5 bar move down with a series of lower highs and lower lows when a prior bar high is finally broken, price pivots or changes direction. Sometimes, this is followed by a strong move and sometimes not, the key is to find when it is likely to produce a reversal or when it is likely to move just enough to allow an entry in the direction of the prior trend. I use these pivots on every time frame in conjunction with various chart formations to produce trade signals. I also use the traditional pivot calculations but they are different from these types of pivots. Really wish I had a better word. These pivot moves were originally shown to me by another trader and then reinforced by yet a different trader. All this to say that no mater how much you think you know, you should always leave yourself open to learn and absorb new ideas. AllenZ