I have been lurking over a year and never posted until now. There is something in his post that hit me. I have been daytrading equities for about ten years and believe it to be one of the hardest mentally taxing jobs in the world. I lost so much money the first few years I look back and tell myself I could've bought a decent sized office building and lived off the rents. I became profitable on a consistent basis only when I understood my limits. I daytrade only several ETFs every day long and short and ignore everything else. I know these ETFs like the back of my hand and believe I know how they react under daily market conditions. I realized I couldn't trade the momentum stocks as they moved too quick for me. I trade the same things over and over again. Boring, yet profitable. You may have a gambling problem if you are about to blow through a third account. You need to face reality and go get a good day job. It won't matter how well capitalized you are if you have a gambling addiction since you will lose it again and again. Go get some help and don't feel ashamed by admitting you have a problem.
All that will do is mean he loses $20-30k instead of $7500. At this stage, he has to learn how the market works. He can do that just as well with $1000 positions as with $30k ones. Whilst he has a negative expectation, the smaller his account the better it will be for him.
Why don't you trade with ES options intraday ?? Buying 1 atm option gives you equivilent exposure to one half of ES contract. And buying them otm (even intraday, yes) gives you even less deltas. [with less position risk as well] Not to mention that failed trades can be turned to positions if you have a propensity for swing trading. Spreads aren't perfect, but they make up for your leverage issues, and allow you to set wider stops and capture larger moves (which it sounds like you need). 3 ES contracts on 15k of acct is a good way to be scared money. Too big for even a good system, since drawdowns are inevitable. Scalping with tight stops is a recipe to give money to the market. Hell scalping with wide stops may be the same. Just think about it. At least with options you are lowering your exposure and limiting your losses based on position size. With varying deltas, you can fine tune position size to any acct size (and I mean any). Alternatively try the NQ... its might be a little more forgiving to you.
My experience with daytrading is this: In an inefficient market with decent orderflow (for example, the early electronic futures before black boxes came in; or the SOES system before Island etc came to the fore; or internet stocks during the bubble) it can be very lucrative and low-risk indeed. You can actually take 10k and run it up to 1 million or more in a few years. The other 98% of the time, i.e. pretty efficient markets, it is an extremely marginal approach. You have to be top tier and work your nuts off to grind out a profit. Even then, it is only really worthwhile to trade during periods of high volatility. This is because high vol causes order-execution inefficiencies and high volume & swings. Most daytrading is about front-running large orders (which generate intraday trends), spreading between related stocks/markets, gunning stops, and fading capitulation or naive opening orders by other market traders. All these strategies work 10 times better in times of high volatility than during more normal periods. Therefore in a fairly efficient market, I would only advocate daytrading during periods of high volatility like we are experiencing now. The other 85% of the time it's better to work on other strategies IMO. If you look at people who succeded daytrading, almost every single one of them did so during a period of "free money" i.e. where there was an identifiable market inefficiency that they exploited. I have yet to read about a daytrader who cranks out returns year in, year out, in a pretty efficient market. I am sure one or two exist but it's not exactly something you are likely to be able to emulate.
Follow the trend, if there is one. If not, just roll and roll 4 week t/bills, and wait until a CLEAR trend develops. Big/picture analysis and moving averages should give you an very accurate idea of trends. For example right now there is NO clear trend. A bullish trend migh be about to develop, but wait until it is confirmed.
<i>"I am focusing my time and $$$ on learning as much as I can about the way I think about trading and studying trading psychology. This is a mind game, trading that is. It is designed by the pros to slowly bleed the sheep dry."</i> There many stages between newbie and consistently profitable trader. Layers built upon layers. Once we have a positive performing approach, the next step is to learn how it behaves in all market conditions. Rising markets, falling markets and sideways markets are three completely different circumstances. If you doubt that, ask yourself if the tape seems any different from Friday morning 'til now versus prior couple of weeks. Adjusting to those subtle but profound differences is the next step for many (if not most) traders. Same method, same signals, different market behavior. That's the part which seems purely mental. Seeing any given approach work differently on any given day, without realizing the difference of each day. Some sessions throw off money in mind-blowing fashion. Some are miserly as can be. Most fall somewhere in the middle. <i>Daytrading doesn't work</i> is an incomplete sentence. "I've reached the conclusion that <i>daytrading doesn't work</i> to my expectations of personal performance in exchange for personal time and efforts expended" is a complete sentence. Day trading works. That part is indisputable. It might make you feel better to think it doesn't work for anyone, therefore you are not a failure. I'm simply saying it does work, problem is your timetable of expectations falls short of your own personal learning curve. Simple as that.
ES Hammer when you trade in the middle, instead of being patient. this principle is one of the key principles in trading. The high R:R opps are at the extremes of the ATR, whether it be daily weekly monthly yearly. The longer the timeframe the better the R:R. the daily high or low is a inefficiency, if you understand this statement, your ahead of the crowd. so if you carry this principle even further, daily, weekly, monthly, yearly highs and lows are inefficiency zones. whats characteristic of these zones, the market moves away from these zones rapidly whether it be above or below the zone. 1376-80 is a inefficiency zone. Another name for inefficiency zones, support and resistance. efficiency = (open interest/number of participants) [(current price - average price of leveraged positions)]absolute value if the open interest is high, and the price differential is positive(profit), prices will rarely move to that level, it means the few have cornered the many.
Hypothetical Market A open interest = 5000 long account a 1250 account b 1250 short account c 1250 accound d 1250 Price C - Price P = (100 - 90) Hypothetical Market B open interest = 5000 long account a 100 acount b 1150 short account c 100 account d1-dn 5(230) = 1150 Price C - ((d1-dn(5)x Price P))/230) Hypothetical Market B, account b is holding a concentrated position, fear and greed are used to create inefficiency, that account holder b uses to his advantage cornering the market. Hypothetical Market A, is aren't the norm. The MM's try to create situations of Market B using fear and greed. The small participants 5 loters are overleveraged usually and are forced to close as price is driven further away from their level. The COT reports try to give indication of it, but the public versions aren't detailed enough to take advantage of. How is account b able to realize a profit when he has to exit out of a concentrated position, by distribution using greed to entice the 5 loters. Otherwise if he tries to exit the market, major slippage occurs.