Day-Trading 2.0 for small traders

It seems to me your view of noise is really Maximum Adverse Excursion. I suggested in a previous thread that analyze your MAE. If the market consistently moves a large amount against your entry point, that is not noise, that is poor entry. One way to deal with that problem is to wait for a retracement after your entry signal before entering your trade.

>>My point is, the only way to actually make profit and not get stopped out when using a tight 2-3 tick stop, as recommended, is to pick the absolute bottom or top.<<

You don't need 100% accuracy to profit, you just need an edge. "Absolute tops and bottoms" occur at S/R levels most of the time. For a 2-3 tick stop to work, you need a very accurate trading method. A more realistic stop for scalping is 4-6 ticks.

Trading is not easy, scalping is not easy.

When you do a postmortem on your trades, what do you discover? Why are you not profitable? Are there too many losers? Are losses too large? Are there any noticeable patterns e.g., do your losers tend to occur at particular times of day or at the same place in the price wave structure.

After the analysis, what changes have you made to correct the problems?

Bill

 

Iron Fist,

Trading one contract on the ES is a very tough proposition. That said, it can be done.

Right off the bat you're handicapped because of position sizing. In other words you, can't use money management strategies based on adding/subtracting contracts. Notice I didn't say scaling. Semantics maybe, but not to me.

Your gonna have to decide: Tight stops or loose ones. Anything in between is no man's land and will bleed you dry. 1 to 2 to even 3 point stop will get you killed.

If you're gonna use tight stops (I use 3 ticks) you better be good (real good) OR have the fortitude to get in and out several times w/out breaking a sweat and still keep focused.

Now here's the kicker-- once in the money--> LET THE FUCKER RUN, AND RUN SOME MORE. You WILL need the cushion of large winners. I know, I know; you've got 5 points of profit and you wanna cash in. Don't. Everything in your body is telling you to close the trade. Don't. It's gonna wreak havoc with the brain but hold tight. It might not pay on this trade or the next, but it will pay you.

Know your levels in and out. Watch price behavior. Of course it goes up and down... HOW does it go up. HOW does it go down. Do you know why so many traders say "If I had only stayed with the trade" Do you know why they said that? Because most any Joe can look at a chart and see that price is trending up or down. But what they can't do is:
1. lose money
2. be wrong

So they close the trade at 3 points profit happy that they were right and made money... then kick themselves in the ass as the trade runs another 10 points. Then they do it over and over again.

Don't be that trader.

 

IronFist,

Don’t get me wrong but during the last few months I really have enjoyed the mental trading process you have passed, at least from what I can deduce from your post in this thread. IMHO, you seem to have improved a lot since your 50 EMA crossover idea but you need to move to the next level. You are overanalyzing and trying to rationalize every detail which usually works in other professional fields (I am an economist and I can tell you that was/is for me one of the most difficult parts in daytrading) but sadly will be your deadly mortifying crux in trading.

How many templates you have saved in the last months? Which study collection you haven’t try in the last month? How many combination of tick, volume, time charts have you used to “see” and “understand” the right trade for the same instrument?, How many ideas you have tried to implement to improve your PBP, volume, S/R, larger stops, smaller targets, etc ? etc, etc, etc. A good symptom that you are moving to the next level is when you try to post an example chart in a forum and you struggle to find where to click to add an indicator and modify its settings. Your trading setup should be simple, boring, mechanical but EXTREMELY DYNAMIC . In your case, Open sierrachart/file/open chartbook/ and it should be the same chart with the same studies (if any) you have traded the last months (even with the few no sense trend or S/R lines you drew 6 weeks ago and doesn’t make any sense anymore). You should master the valid trades in your PBP under the circumstance established in that particular chartbook and not look for explanation of every single trade using different tools because the only thing you will achieve is a broader and more confusing trading perspective in a theoretical level. Of course if you want to sell a trading book, system, service, tutoring plan or want to become a fortune teller you will impress many people with your unrealistic “vast trading knowledge”. It’s a waste of time and money to try to rationalize or tame the market, there is better value mastering and disciplining your setups for your PBP !!!.

You should not only chew the sometimes brilliant tips people have given you in this thread and the knowledge you have gained through your trading experience but should digest all the information and put in the right perspective. I offered you a live trading exercise and I am still waiting for you to choose the instrument and timeframe, let me know so we can work something out of that.

Make everything as simple as possible, but not simpler. Albert Einstein

jjrvat

 

Entries are absolutely crucial in 1 lot trading.

EDIT: The problem with one lot is you can't decrease you risk. You can't increase your profit. You can't trade around it. And you can't decrease you risk.

It's do or die every time.

 

jjrvat just made one of the best posts i've ever seen.

this thread is a secret treasure.

hope you guys find the gold.

it's like one of those hidden picture games, where's it's in plain sight, but it's blending in with other objects so you can't recognize it.

good luck

 

I second every word.

 

Thanks jjrvat for the guidance in this excellent thread. Looking forward to the live trading exercise. If I may suggest, how about ES with 10000V

 

+1

 

wheres waldo?

 

Everyone gone away for holidays????? I for one am really interested in seeing a live exercise on this. Iron Fist, pick your timeframe and contract as Im sure a lot of others would be interested in this as well