I was doing 6 contracts at a time at Schwab before I made the pretend jump to 100 contracts paper trading.
FJ, you've placed plenty of trades over the years. What would you say are your greatest strengths as a trader?
As a trader, I'm not sure because the leverage often makes my correct predictions about the economy meaningless. Therefore, I need a strategy that is more suited for short-term. I would say my greatest strength is something I haven't applied yet... And that is a strict adherence to mathematics and statistics when I find something that I know should work. This is assuming I do eventually find this.
Would you say that you were basing your trades on a fundamental view before? FJ, imho one of your strengths is you have no problem pulling the trigger on a trade. No?
If you read my timeline... Everything prior to August 2022 would be considered position trading or swing trading, so yes that is fundamental. From August-October 2022, I was trying to ride the market sentiment of ES, so still fundamental but not as long-term minded as before. Since October 2022, I've been more trying to scalp but still using near-term market sentiment as my guide to know which direction to bet. I have no problem pulling the trigger if I have good reason to believe I will make a profit.
Right now, I am fully of the belief that ES will go down to 3200 (possibly much lower) at some point this year. There is a turning point that will happen when we see bad economic data (higher unemployment, low business earnings) actually cause the market to go DOWN (which is the logical normal thing to happen), rather than the twisted/backwards situation we have now that bad economic data causes stocks to rise because then people think the Fed will stop raising rates. When that happens, there will not be much to cause stocks to rise until Fed actually starts lowering rates (not just stop from raising them further). They may not lower them until end of 2024 or into 2025. Even if I am correct on all these predictions, it does not help me trade because the leverage involved means only the immediate short-term is relevant. I can be correct over months, but if I'm wrong on the day, then I'm broke.
I thought you've learned macroeconomics!!! You know that historically, exchange markets are 6-month ahead of the economy? On a side note, I don't care where the SPX is going, as long as the volatility is present. And any day trader shouldn't care either. Forecasting the markets is just pure entertainment and chit chat (pairing with good company and drinks and cigars...).
I'll give you a quote from a famous person... "A general contractor with dependable, quality subcontractors in their pockets, is like a bird in the hand". Quoted from Cabin111 I would keep your day job and just trade directionally. You put in your stops and keep them there. Find a correct entry point and ride it. Look at your phone 3-4 times a day for quotes (while you are working). Unless you are a quality coder you should stick to the things that you know. In early 2000 I knew, I KNEW, the dot com bubble was coming. I bought a put for QQQ. My timing was off by six months...Option expired worthless. I KNEW the housing bubble was happening. But because of the bad taste in my mouth from the dot com mistake, I didn't write the puts I should have. Those WHO KNEW oil was going to drop when Trump shut down the country, got it right. But some people (even here on ET) did not expect USO to go negative!! Margin calls left and right. Consider directional trading with hard stops. Limit the amount and your exposure. Play with it and learn. If you are not an exceptional coder then avoid day trading at all cost... My 2 cents...
I've already realized that swing/position trading doesn't make sense for highly leveraged products such as futures. I could learn enough about coding so that it wouldn't be a barrier to entry. I would most likely hire someone to write a code I can edit. I've already spoken to a few of these. Rather than focus on the coding aspect, I think I should focus on the strategy building and backtesting aspect. The coding details will come later.
Ok, that's right. But I meant how the major news release will immediately affect the ES. It is completely backwards that a rise in unemployment on an NFP report will cause stocks to go up, which is the situation currently happening. This won't last forever and it's a significant event when it reverts back to normal.