Austin, In your July 13th video, you said you would not trade ER2 anymore. That you would only trade ES. Does this mean your 2k method is not worth a nickle when it comes to trading ER2? The reason you said you were quitting ER2 was the "spikiness" or some such phrase. You didn't say it had anything to do with liquidity...
Great Morning! Version, I briefly paused from trading the ER2 due solely to liquidity on each tick. Two different months this year I made +500% returns, most other months +50% to +200% returns primarily in ER trading less than 20 contracts. Once I tried pushing 20 contracts, had a number of partial fills on the winners BUT always full fills on the losers coming back against me. I'd make +4pts on three contract and then -1.5pts on twenty contracts, which clearly doesn't work. Since then I've toyed with scale-in entries on the ER. If my selected ideal long would be 615.20 for example, I'll start buying at 615.40 and then .30 and then .20 In order to offset that designed slippage, I widened my initial stop to -1.5pts or sometimes -2.0pts from blended entry. This approach allows me to fill total desired size (within reason) AND sometimes catch a partial position winner that formerly missed filling by a tick or two. This new tweak allows me to fill +/- 40 ER contracts in that range. Right now the ER is still thin at the actual size cleared per tick, but volume and open interest keeps rising dramatically. Seems like the YM is stalled or shrinking growth while the ER is gaining popularity. ** ER itself is very noisy - spiky at times. One look at the 2min or 3min chart from Friday's open is an example. The ER whipped thru a 4pt range in wild fashion, hitting profit targets or whacking out stops both ways in the blink of an eye while ES sat perfectly still in the process. Thursday afternoon I was short 10-lot from 718.00 with said position up +2.3pts in favor. I trailed to +1pt from entry, got stopped out as ER came thru that mark and all the way back to 718.10 or -0.1pt from original entry. Would have taken me out had I trailed to par, too. Immediately after clearing all those stops, ER dropped below 712 at the lows. Meanwhile, ES short trade worked perfectly fine for +3pts with no volatile stop-gun moves wiping the deck. I hunt the wider intraday swings in ER, and it is by far the most lucrative to trade IF handled correctly. In my opinion, that volatility also makes it the toughest.
Austin, Thanks for the answer. I agree with the fact that YM is getting smaller while ER2 is getting bigger. This must be making the CBOT wonder what the heck is going on...
Belief. Disbelief. Frustration. Fear. Anger. Those are all emotions each of us experiences on our path from fledgling to experienced trader. There are so many lessons to be learned along the way, the list is endless. A great number of aspiring traders hit a wall that seems insurmountable. They make it to a state of give/take or consistently breakeven. After awhile, the frustration emotions lead them to believe that no one really makes money in the markets. There's even a rather lengthy thread on that very topic in this forum that exemplifies this emotional process. One (of many) reason some members here flame everything in sight is due solely to that type of frustration. They honestly feel & possibly fear that successful trading is all just one big lie, perpetuated by the varied sinister vendors. Most of those traders struggling to reach their definition of success are indeed nearer the goal than they think. Here are the three pillars of success I lean on to make a lot of money in the emini markets: #1: Dependable method approach. Gotta have the tools to execute trades with at least 45% win rate while achieving at least +2/-1pt profit ratio scale. #2: At least 90% of my trades are with the trend. I'm buying pull backs on the way up, selling lifts to resistance on the way down. I no longer try to fight a market... I work real hard trying to flow with it instead. My biggest problem is no longer repeated losses, it is now trying to catch surging price action running away from me. Which challenge would you prefer? Fighting a tape for small potential gains / repeated big losses, or trying to catch rides on the directional train running away? I hunt for the bigger price moves, expecting to catch them while knowing they exist every week inside directional swings, just as they always have. I can easily endure trades of -1.5pt ER, 0pt ER and -1,0 ER before hitting +4pt ER and +3pt ER in a normal range day whereas too many traders would be -1pt, 0pt, -1pt, +1.5pt and +1.5pt respectively, same exact trades. #3: Years of building = testing mechanical systems taught me all about Optimal F and the varying account management tactics. I use a modified version of Optimal, which basically adds contract size on the way up and scales back on the way down. That coupled with methodical tactics or trade execution is what allows ANYONE (not just me) to make +100% monthly gains or more on a consistent basis, depending on liquidity of market and leverage involved. Done wrong, this same approach will drill an account straight to zero $$ in a hurry. One tweak I use would be the tactic of doubling - tripling contract size when conditions are ripe for a big swing move. There are numerous days where I'll enter full positions, trail stop to entry (par) on that lot while entering a second block, then repeat the process a third time with one-block normal risk to initial capital (and full risk of all unrealized gains) but three-block leverage if the market continues direction. When all charts indicate a big move is probable and price action starts cascading lower or plowing higher, I step on the trend and quite often pad my account 25% to 50% in a single day just like that. The key to scaling in is <b>doing so in favor of price action, not against it!</b> This week has strong potential to offer one of those situations described above. If they start pushing price action up or down strong this afternoon, it could break thru a ton of stops and plow straight away. We'll see. ** Three pillars to success: #1: viable method or system #2: trade in harmony with swing = trend bias #3: correct account managememt Of the three, account management is toughest. For one-lot traders, it's very simple. Only trade when all chart conditions are ideal. That's it. Sit on your hands until the best signals come along, then take them. Execute that trade, then sit on hands until the next high-odds setup per your approach comes along. Once the account grows AND experience skills have grown, tweaking account managememt i.e. how contracts are managed is the rocket fuel which makes dramatic difference in equity curve growth over time. I spent $3,000 annual lease on software for one year that ran monte carlo projections and optimal projections up-down-sideways, which never resulted in one extra dime from mechanical system profits. But... those lessons on % probability of going broke AND the dramatic difference in dollar results based squarely on how many contracts are traded when optimum have been invaluable since. Education in life never costs... it pays huge dividends, often in a completely different realm than was first expected. That is true for everything we learn, it is all applicable across the entire aspect of living. Hope this helps, Austin
For those who asked, I no longer operate any type of trading room service. This week alone I'm doing a live trade workshop online for existing clients, it's a one-shot event that may never be repeated. It'll be fun but exhausting. I always enjoy all interaction with positive, open-minded traders seeking improvement. I am too... we all are thru the course of our careers. We could all learn a tremendous amount from successful traders like Trimble who lurk here but do not contribute for the exact reasons he stated... negatity b.s. that simply has no place in a serious trader's life. There is no time for that. Let's all treat each other like friends at a backyard party. Let's not pounce on the newbies. Let's not flame some of the more "eccentric personalities" here... they are harmless, and they are people too. Why not build a positive thread and create a safe place for traders like Trimble and possibly his friend referenced to contribute within if they see fit? Isn't that a better use of everyone's time within this forum here? I'm out until this evening. Lay low thru the morning until 9/11 observances are complete. Don't fight any deliberate trend moves, and expect strong potential for a big move past 2:00pm EST into the close. Best Trading Wishes! Austin
But those results are on only a measly return of 100% per month every month. Thats a bad month for most of the boys here according to their posts. Gee, I wish I could be as good, one day. Ah, per chance to dream, to hit the big time one day.
Wow, I'm gone for the weekend and ET hasn't been this lively since Rubberbird's famous challenge. Good luck with this, it will liven things up and give you a chance to silence, or give greater voice to the critics. As tempting as it is I won't trade in such a contest. My style is consistant base hits, and your challenge would have me trying for homers. I hope the challenge actually occurs, I love the carnival atmosphere , it's almost like a heavy weight boxing match. I read with amusement Caddyshack's counter-challenge and he may be on to a good alternative if your real money challenge doesn't get off the ground. I thought of something else, why not do a thread dedicated to your live trading seminar this week. Post your real time calls, trades and the results. The fact that you do a live seminar is proof enough that you have the balls and believe in your stuff. Still a trading contest would be better. Anyway, I'm glad to see your sticking up for yourself, especially like this. Kind of reminds me of the Kenny Rogers song where they thought Tommy was leaving, but instead he stopped and locked the door. Rennick
Bearbelly, It all depends on what you as a trader are more comfy with. There are good and bad to both products depending on what you as a trader are more accustomed to. I want to know wether I'm wrong or correct quickly and therefore I like ER2 and the moves it gives, but like Austin has mentioned you can only get so big in ER2 -vs-ES the thicker the mkt the less fakes and spikes one can expect because it is more efficient. So there are advantages to both but in ER2 you have to be on your game at all time b/c of the sweeps(spikes) that are at times real and fake, with time you learn to take advantage of these moves.