ES Journal - 2025/2026

Discussion in 'Journals' started by Buy1Sell2, Dec 10, 2024.

  1. NoahA

    NoahA

    Its actually interesting how he is saying he will no longer update. Given that YM just essentially triple topped, and ES having broken though a triple top just one week ago, it makes absolutely sense for a pullback here, and hence why he will stop posting.

    In the past few years, there are really only a handful of weeks where buying a dip wouldn't work, if you expected to exit for a BE or profit within days. Obviously, if you were prepared to hold for weeks, and scale into the trade, you were essentially printing money during this entire time.

    I outline here the areas that perhaps would make you second guess your "buy the dip" strategy, but perhaps for half of them, there was reason enough to stay away, or at least wait (like liberation day dumping).

    ES-202509-CME [CV]  Daily #26 2025-07-09  20_28_56.801.png

    So now is perhaps that time as well to take a breather. After the new ATH on all the major indexes, perhaps its best to wait for a decent pullback.

    @theapprentice has gone through a drawdown in the past, and he did also say that all the profits still vastly outnumber taking a large loss once. But this of course really only works if you aren't leveraged too much, or at least don't suffer from decay by trading a 3x ETF for example, if you plan to hold and scale-in for the long run.

    The worst DD on this chart is the 20% dump on liberation day. Roughly 1,300 points. If trading MES, that is $6,500. With overnight margins of lets say $3000, you could hold this with a $10k account. Of course you would also want to be averaging into the trade, so you want to be able to buy and hold multiple contracts, but I imagine a $50k account would be sufficient to put this strategy into motion. Even the dump from Feb 19 to March 12 low had a 50% rally back up before it dumped again, so you could have maybe gotten out BE before it rolled over again.

    But at the same time, when you hear news like liberation day and see what is happeing, then perhaps you just get out. So maybe the strategy is, unless there is very bad news, just keep buying dips. If bad news hits, exit position, wait for capitulation, and start buying dips again.

    Is it really just this simple @theapprentice ??
     
  2. As long as he's making money, that's all that matters. :)
     
    NoahA likes this.
  3. mervyn

    mervyn

    no, a 50k account is not enough these days.
     
  4. NoahA

    NoahA

    Ok... lets just say you only plan to ever trade 2 contracts. So first entry, and then 1 scale in.

    Even if we go down to the Covid lows of 2200, that is 6300-2200=4,100 points away, or $5 per point so $20,500, plus your $3,000 overnight margin at IB means you will need $25k to hold this contract down to 2200.

    Then if you scale in somewhere, lets say 4850 which is the 20% drop because of the tariff fiasco, that means if you go long again at 4850 and hold down to 2200, that is another 4850-2200=2650 points, or $13,250 loss, plus $3000 margin. So you're down $41k, but if you had 50k in your account, you still haven't blown up.

    Of course you can also consider the low of 2022 which is at 3500, so a good 3rd option to scale in, but this means with a $50k account you don't have enough.

    Now I'm not suggesting anyone do this, and you can easily structure this better with some like SPY, but I'm just showing how the math works.

    Taking a loss on something like an index that is designed to go up over time is sometimes not the best strategy. Of course you need a huge account, and leverage kills, but there is probably only a 1% chance that you will blow $50k if you just buy and hold, but probably much higher than 90% chance that you will blow $50k if you day trade, always in and out, and going long and short.

    Of course, going long at all time highs is also not the best strategy, so a bit of timing is crucial to increase your chances of success.
     
  5. mervyn

    mervyn

    i know how the math works, traded over 670m es and nq notionals combined in 2021, some money but not as much as you’d plan. now even you have guts, you won’t be able to sustain any intraday swings under taco. more than 50% of trading days is now a clown show day.
     
  6. NoahA

    NoahA

    Actually, that is exactly why I think holding and scaling-in is necessary. Since the swings are untradeable, as some suggest, or rather, that you don't know when Trump will say what and either crash or juice the market, it is kind of more important I think to take a systematic approach.

    The is obviously what @theapprentice is showing. We have seen that Trump's team won't let the market fall too far, so you have the Trump put, rather than the Fed put. And I have also learned that if the markets stay down too low for too long, this affects tax receipts for the USG. So markets need to stay up so that revenue comes in, or else deficits get even worse.

    So if you combine the idea that the markets have to go up, but the path to get there is now highly erratic, then the only thing that makes sense is a strategy that incorporates only going long, holding through losing periods, and scaling into trades.

    I'm actually doing something similar but with IBIT. My rationale is that even if bitcoin enters a bear market, it will always recover. The past has shown that over 4 years, it will be up. So IBIT allows you to hold with no leverage, and very little risk of it never coming back. It spends a lot of time in ranges, so it make sense to sell sometimes and reload lower. The only problem is of course on explosive moves and you're not loaded up, and price never comes back to you. So the jury is still out if buy and hold is better, or trading around your position is better, but I have many much more progress doing things this way than trying to enter at ideal places with stops and targets and also trying to get the direction right by going long and short.
     
  7. mervyn

    mervyn

    then there is no point of trading es, 4200-6300 only nets you 105k on 1 contract, 60k of which is for the 20% drawdown in April, good luck with that, many stocks can give you the number without that much a drawdown.