I've mentionned it in other threads, and I'll say it again on this thread to newbies... and to myself very often... It's not how much you could make a day before you stop trading, but rather how much $ or pt you lose a day before you turn off the computer. Money management! will allow you to stay in the game long enough to learn. Remember, the loss is the ONLY thing you could control when you enter a trade. For the profit, the market will give you what it wants. You can't tell it to give you 10 pt so you could go home. Cheers!!
I have mentioned this before, but I have seen so many newbie traders make very naive statements such as "I only want to get 5 pts per day trading this" or some other arbitrary number, not based on any market reality, but on some monetary figure they seem to like the sound of...The reality is the distribution of gains and losses is not so easy to predict, even if you are 100% discretionary... Take, for instance, this past Friday...For some they might have caught one small move off the open and made their 5 pts and quit for the day...Others may have traded all day and lost their 5 pts for the day...There is a serious randomness to returns over the short term...And another thing that you have to watch for is the tendency to say, "once I am up 2-3 points I will quit for the day", which is equivalent to saying once I capture a minimal amount of noise I will quit and then start again with that exact amount of risk tomorrow... Many of these questions arise because people have not considered the alternatives...What happens when you are battling back from being down 10, when all you wanted to make was 5..What happens when you are up 3, want to make 5 and then lose the 3 and go back to 0...These are just a few of the myriad possible occurrences during any given trading day, which goes to prove that it is very random...The best thing to do is to simply max out the days when you are winning, so that when you are in flow with the market one day, you do not quit, but you push it and try to hit a much higher threshold...That way, when you have the losing trades they will not knock you right back to 0... If you do a good enough job, eventually you will average your intended goal, but you cannot predict the outcome of the event and cannot "micro manage" too finely or you will find yourself developing a certain anxiety over each and every trade...This will certainly destroy any "flow" you want to create in pursuing your goals...
Interesting comments. I have to say the trading of the eminis is much more difficult than trading stocks. It's the ultimate daytrading challenge especially for the small traders. And the market changes in subtle ways for ex. I had identified some very reliable intraday chart patterns last year, they still take place several times a week but the velocity of the moves has changed, the moves now look tentative while they used to be strong with many expansion bars.
Yes, the index futures markets change their "character" all the time...The beauty of trading these indicies is picking up on all of the subtleties of the price action...Currently, I am sort of reading the price action, from a purely observational perspective, as a market that is just very new sensitive with a total lack of commitment on both sides of the trade...This past week was a prime example...The previous three weeks definitely had a short bias and rewarded that trade with significant follow thru...But the past week you could see that many of the down/up spikes seemed to be caused more by a cancellation of bids(offers) as opposed to one side trying to establish price or commitment at one level...Those are the little subtleties that system trading does not pick up on...But it helps when you can just get a feel for what type of trading any given environment will reward... You also point on something very interesting regarding the velocity and follow thru...There has been more follow thru in recent weeks, but I do distinctly remember January as being a market that would spike into a price level and then die...From that point the market would linger in a 4-8 tick range until another sharp spike would run it into another price level...I just see that as a non-committed market...
The biggest change I've noticed in NQ is how 'thick' it has become. Size on the bid and ask has increased noticeably over the past few months as the total daily number of contracts has increased. The patterns on the 1 min charts look more and more like ES has been for a longer time -- and both are beginning to look like T-Bond futures charts. By that I mean that there's now more and more time spent at horizontal price 'levels', with more of a stair step pattern to the swings. I guess these are just verifications of the tremendous liquidity and increasing maturity of these markets.
Yes, I had not really put that much thought into it, but you are exactly right...The volume on both contracts continues to pick up and has basically transformed the market into some form of the t-bond markets, where you get alot of bidding and offering at each price level...I was just looking at the volume for the ES on Friday and it was the lowest(210k) since March 28th(190k)...But even on Friday, the low volume basically just "collared" the market between 2 very tight S/R levels...
I think most of the action these days is from "pros" churning each other. As they grab their profit quicker and quicker the oscillations diminish to the point of flatlining. Until the public gets back in again, its going to be tough to make a buck. You have to wait for those days with some kind of catalyst, imo.
I think the challenge in trading the mini's and index futures and bond futures etc, is that they are probably the closest thing to an effecient market that there is. There are so many varied interests of people, some hedging, some speculating, and those two can offset each other. The result is that most of the time, IMHO, the market is effecient and does not offer opportunity. That said, you can be very profitable trading them, but I think you have to spend most of your time out of the market in your timeframe to do it. There are patterns and tendancies you can take advantage of, but they dont last long and you cant wait to be sure or its too late. I know that for me, trading them really magifies any weaknesses ive had as a trader, and I cant be as sloppy as I can be with equities. Brandon