I haven't been trading the emini long, 3-4 months, but my backtesting shows a 6.3 point per day average using my method over the last 12 months. But this month I'm only averaging 2.61 per day.
Another thought . . . Some daytraders I have watched are putting on two contracts with a 1.5 pt stop. If the price moves 1.5 points in their favor, they sell one contract and move the stop to breakeven. Then they let the second contract run and exit on a technical signal or a profit target. Doesn't this violate the "cut your losses short, let your profits run" maxim? Would they be better off not scaling out?
I think a good scalper could do a lot better, but he can't handle the size a longer term trader can all things being equal. Plus, you must devote your life to your screen, and who wants to do that if you don't have to. My goal is to trade 100 lots, 1-2 times per day, and eek out a small living for my family as I golf with my palm pilot.
If you use a $10,000 margin requirement per Emini S&P500 contract a return of 2 points a day is $25,000 per 1 lot. That does not seem too bad too me, and I would bet that there are less than 15 people on this board that put up that kind of yearly return and can show it for the last 5 years. Brandon
I think most technical indicators are lagging in nature, if you're staring at the es/nq all day you should be able to anticipate most short term indicators several bars beforehand (if the es has been steadily falling, suddenly spikes down, bounces, then floats slowly to its previous lows, you just know that MACD histogram is going to signal a "buy" divergence, etc). IMO, the best clues in the eminies (especially the NQ with only 100 tech components) are the stocks and sectors themselves -- use the SOX, BTK, BKX, find the leaders and laggers for the day and keep an eye on how they trade. It might seem counterintuitive to watch the components of the indices for which way the futures may trade, but sometimes you can clear out alot of noise if you can catch the "play" for the day. JMO, whatever works -- this does for me.
As long as I'm at it . . . Is part of the problem trading in the visual representation of charts? I mean, the price is going up or down, but is displayed on charts going sideways over time. Wouldn't a "thermometer-like" display be more representative? Kind of like what you would see if you looked at a chart from the side? OK, it's a strange idea, I know.
I agree. I am a bad scalper. I envy scalpers, it looks so exciting. But my job is to make money, not to have exciting trading. size rules and longer time frame (not that long) is just easier imho. tntneo
And is noise "fractal"? It doesn't seem to matter whether I look at a 55 tick, 3 min, 15 min or any other time frame. They all seem to contain the same noise level. Is there a TF "tuned" to the market that has the least amount of noise?