Can it be done?

Size at 1.3360 on Bid. Is it real?

 

Was it real?

 

No action for a couple of weeks, and will probably be the same through the holidays, as usually is the case for me.

I think this Journal has served its purpose, but I have received a number of PMs re helping others, which I would like to do, but I have never been an “educator” when it comes to trading. Again, as I am pressed for time, I am trying to collectively respond to the previous posts and the PMs. Perhaps the following will clarify some issues.

This was not meant to be an educational Journal; what I have learnt it’s been pretty much on my own.

Let’s go back to why I started this journal, and why I think it has served its purpose to some extent. It’s not that you cannot trade futures with a $2K account, but the fact is that the “account balance” simply has no correlation with your “consistently successful” trading. There are so many other methods/system/strategies ect. out there, and there so many people making insane profits just doing that by the virtue of having a large account. What I wanted to show is that you can test your abilities and skills as a trader – a consistently profitable trader – if you can do this. Sure there are other ways to do and prove this, but doing it this way adds a flavor of creating something inspirational for others.

Along the way, the discussion slowly has changed to how it can be done. As I have said before, I don’t believe in analyzing charts and to me, the past is the past, what I try to do is to “participate” in the action now. And that’s where the order flow and liquidity concepts come in together with “size”. In order to successfully and consistently trade this way, you have to be able to discern which side is in charge, and as a result, wants the liquidity. Let me ask you this: if there is a large buyer in the market wanting to grab everything in sight, would you be a seller? No, you’d want to tag along the ride on the long side with your 1 lot, but get off the ride very quickly with a couple of ticks to minimize risk. BUT, how do you if there’s a large buyer wanting to sweep every single one those contracts on the ask side (vice versa with a large seller)? That’s the key! I think some or a lot of you are just simply confused by looking at “size” on the bid or ask on a few levels deep. That’s one piece of the puzzle – a very important piece, but it does not convey anything on its own.

Let me throw in another piece of the puzzle out there: You have to be able to discern which way the market is coming off in order to be able to figure out which way it is going with the “size” being your GPS! E.g. don’t just look at the size on the ask side and think either 1) Large sellers, size is real, market is going down, or 2) Size is trying to spoof the market to sell because they want to be buyers without tipping their hand! There is no other outcome. Remember, the price is either going up or down. But, imagine, for example, if you paid attention to the fact that for example the market was approaching the HOD (or LOD) OR was coming off the HOD (or LOD) (because these are the easiest points to pick out in a day, but there are other pivots that you can pick out with experience). If you pay attention to this, then believe me when I tell you that “size” will have a meaning – whether real or spoof – whether algos/bots flashing – it will mean something!

How does scalping come into the picture? Well, that’s how I minimize my risk: by having a shorter time in the market with an open position! Many people think of minimizing risk by the size of the position or the cents/ticks stop loss, but think about the time factor. Sure I miss a lot of good waves to ride with large swings, but I’d rather take my few ticks consistently get flat as soon as I can.

Again, I think a lot of you have misconstrued the “size” factor and what it represents. I think you are looking for a cookie cutter type of indicator that perhaps “signals” a buy or sell if there is a large “size” showing up. “Size” is only one piece of the puzzle, perhaps, a bolt in an engine having many complex and moving parts. But it is an important piece of the puzzle. Remember, there are 1000s of different ways to trade, and charts are always popular; you don’t have to learn this if to become a profitable trader.

It really does not matter what you trade. The same principles apply, whether it’s CL, NG, the 6’s, ES, NQ, etc. If you stick with one, and you can do it with 1 lot, imagine this: by the time you are up to 3 lots, you’d be making a great living.

 

Oh and I thank you very much for it. Sometimes inspiration is all a person needs.

That's what I look for too!

Yes I agree with the above statement. It makes sense.

Now this statement doesn't make sense. It contradicts the previous statement. Or is there something I don't understand? Did you mean: “BUT, how do you if there�s a large seller wanting to sweep every single one those contracts on the bid side (vice versa with a large buyer)?”?

Where’s the rest of the engine then?

I wish you a good living then.

P.s. - Did you get my PM? (Just want to know if it worked or not.)

 

Back by popular demand in 2012! Just going back to the original intent of the Journal, even though it can be done! On the other hand, perhaps will start posting in the Trader P/L 2012 thread (although some big numbers are being posted there ). The trading may be sporadic and not everyday, so we start by counting the days that are actually traded. And, the 6's are my bread an butter!

Day 1 (beginning balance starting in Feb. - will post end balance at the end of month):

 

Day 2 (three turns on the TF as well):

 

Can you make a video?

 

Good to have you back Will be interesting to see how you go. I sent you a PM btw.

With the 6's, they obviously do their own thing? I would've thought they are just tracking spot and algos/computers are keeping it all in line so they wouldn't do their own thing? But obviously I guess they do? Like big bids for example, does it mean anything if spot is selling off?(because its just going to track that?)

Just something I've wondered about the 6s, obviously there is something there otherwise you wouldn't trade them but curious as to how much they do their own thing.

 

Spent a little time trading this morning and I had to "earn" every tick - literally! Even with the TF! But for sure it was earned.

Day 3:

In the 6's, of course there's a correlation with the spot, of course there's plenty of arbs and algos that wreak havoc in there from time to time, of course there is spoofing with large bids and asks, etc. But I don't look for them and they don't matter. Many traders do, understand them, and make a ton of profits trading them. Once I know the "intent" of the market, there is not a fast enough bot or a spoofing algo that can not allow me to get filled to the tick (with my one lot ) or get me stopped out. I scalp, get in, get out - but throw in the above recipe/knowledge/experience, and then you've minimized the risk for each scalp and tilt the odds in your favor.

 

All you needed was just to wait for today - the ECB Min Bid Rate and GB Rate Statement would make the 6E move around nicely! Not to mention the news out of Greece and some sort of agreement. Got greedy on some trades - because the damn thing would not stop! LOL! Tried to take some screen shots as well.

Day 4: