I've been trying to day trade the ES with terrible results. I am using the hourly DMI and 15min stochastic to enter and exit trades and am finding myself frequently the victim of numerous head-fakes, causing me to overtrade. I"m thinking about switching to taking longer-term positions (i.e. 1-2 day holding period) and increasing my stop to 4 points, hoping I can avoid the whipsaws. Any traders here agree that moving to a longer time frame would be a good idea?
Here is an approach that I use that seems to work well. I wait till 9am CST (10 am EST) and then I look at the first half hour trading range. I place a stop/limit order a few points outside the top and bottom of this range (A buy and sell stop respectively) I then let the market decide where it wants to go, and it does this by hitting one of the stop orders and getting me into the market. I then place a trailing stop (7 points for the NQ, 3 - 5 for the ES) and I then go and do other things. I come back and check every 15 minutes, and once I have a firm profit, I move my stop up a bit to ensure I keep it. I let the market keep cooking though. Some days it just keeps on trucking and I do really well, some days it reverses and I get stopped out and I still do okay. Sometimes, it head fakes and stops me out at a loss early on, but not usually. This way I find myself trading less during the day, and more importantly, more profitably. I hope that helps
Try the NQ with 200 MA and BBands (avg @ 200 as well), using 1min bars. If you look at that setup, you'll see that it explains itself. This works coded as a systems but better as a discretoinary method.
I've been cosidering differernt money management techniques to ensure i keep my profits... what do you consider a "firm profit" which causes you to raise your stop?
I consider a firm profit to be a point or two, but I wait till the market is out a few more points than that to allow for some wiggle. I'm happy if I take home +3 for the day (NQ) and +1 for the ES. Ofcourse I want more, but I try not to put my stops too tight on a trade, for fear of getting stopped out on what could have been a great trade. Once the market moves far enough out, say +5 points on the NQ, I may tighten the trailing stop a bit, or I may place a hard stop, and let the trail where it is, especially if its a volatile day. I just hate to see a positive trade go negative because I didn't adjust the trail or set a hard stop.
Thanks to everybody for their input. DMI has been a very effective indicator for me in determining the overall trend. Perhaps I spend too much time agonizing over the entry and should just go with the trend as indicated by the DMI and then see what happens. I like the idea of entering a trade, immediately initiating a 4 point stop and trailing the stop if the market moves in my favor. We'll see how it goes.
Buckeye: if you are willing to use a 4 point stop i would advise that you wait until 11 or 12 am when the market has created a definitive trading range . Use your favorite indicator i.e.-DMI) set up a trade for a 3-5 point profit target. If possible look at your last two months charts and "backtest" the idea before using real $$$$. if you can get this trade to 60 % profitability you only need one trade per day., then add contracts to increase the profits.
First of all, you guys should come down to the futures forum, that's almost all we talk about is e mini. First danger sign: You start thinking there is something wrong with your stops. 2nd danger sign: You start tweaking the values on your indicators. 3rd danger sign: You start thinking that your mind is clearer now after taking all those losses than it was when you were flat and developing your plan.
I don't use them (but get their free daily email), check out www.trade-prospector.com for ideas on how to swing or intraday swing the emini using S/R. They are top-notch for this type of trading.
Buckeye, I can usually tell just by what someone writes whether they have what it takes to trade. There is a guy who writes books and gives lectures. He makes these wonderful analysis, but then sums it all up with the wrong conclusion. He admits he is a good technician but a poor trader. You sound like the kind of guy who has a good attitude. I went through a streak of 16 losers in a row. I thought, "Even a coin toss can't be this wrong!" I stopped trading and started looking at what I was doing and tried to do the exact opposite. It's amazing how weaknesses in our character will continually put us in the same bad trades over and over again. If you aren't making money with 2 pt stops, you won't start making it just by using 4 pt stops. The most important thing now is to protect your trading capital until you get some things sorted out. Indicators are advisors, but you are the boss. If you understand your advisors, you will understand why they are giving you particular advice. You sound like one of those guys who has what it takes.