Greetings, While I think the 200 contract system is may be a bit extreme,trying to capture a portion of the daily range is a fairly safe play. I don't think the "pros" know when anyone is in a trade,alot of them give away their customers money just like a "rube".Im not sure why daytrading has earned such a bad rap.The dirty secret is alot of traders made a fortune while the market crashed after 2000.Only 1 sided bulls got hammered,who was selling to them?JMHO. cordially Tom
Methinks he's been sitting on his butt so long now that he's gonna have the world's worst case of "Outhouse Polio". Saxon, just throw a couple grand in an account, get a platform that uses bracketing and put on a few trades. That will tell you all you need to know about your idea, good or bad. Oh, and don't forget to ask yourself that question we discussed earlier. Don-
illiquid When I first read this, I thought you were doing a play by play of some of my old trades!!!!!! saxon22 Yes money can be made scalping the ES for 1/4 point. But from my experience, not in the way it appears to me you are considering to attempt. First let me give a little background. I have been a full time trader for many years. I started trading stocks in 1979. By 1981 I was doing fairly well, by my standards at that time. Best single day profit was a little over $16,000.00 In 1982 I became a series 7 stockbroker with Paine Webber. By 1985 I had started an independent NASD broker dealer. My firm traded managed accounts of which I was director of trading. During this time I also owned controlling interest in a registered investment advisory firm. I traded equities for clients and options and equities for myself and my family. I now only trade for myself and my family. I trade equities, options, and ES futures. My daughter is with Goldman in NY (age 30) and my son is a market maker at the CME (age 27). I have seen him do over 25,000 contracts on a single trade. Those guys have balls the size of coconuts. I daytrade the ES whenever I am not traveling. I mention all this as an indication of the battle scars and tuition I have paid. I just about went under in the crash of 87. At that time I thought I was a lot smarter than it turns out I am. You have been given some very very good advise by John 47, illiquid, and Trader28. From my experience, I will make some suggestions of things you might want to consider with your trading method. I have found that for most individuals successful trading is very individualized and not cookie cutter. Many people will tell you you can not make money with a reward to risk ratio of less than 3 to 1 and definitely not less than 1 to 1. When trading for larger moves, I tend to agree. But when scalping the ES I definitely disagree. The only way I have been able to make it work is just the opposite, with a reward to risk ratio of 1 to 4. That is with a 1/4 profit target with a 1 point stop. I can nearly hear the laughter now, but I can tell you that is the only way I have been able to personally make it work. With the 1/4 target and 1/4 to 1/2 stop the win rate is too close to 50/50 (just because of the normal shoving back and forth) and with the slippage and commissions I can't make it work. With the 1 point stop and very very selective entries I have been able to hit a win rate of over 85% for a 1/4 target. One really important thing is to use a trading platform that automatically enters you stop order when you enter your original order. Also I use a stop market order NOT a stop limit order. Yes this usually means a fill 1 1/4 below entry. But with this type of trading if it gets that close to your zone you had better be out and ask questions latter. Also, I would suggest you not try to trade one contract lots except maybe to get used to entering and exiting orders the first few trades. What works for me is to trade in multiples of 3. I take off 1/3 at the first 1/4 profit target I take off another 1/3 at 1/2 profit target and then work the last 1/3 for a larger profit but move my stop to trigger market at breakeven. I also think to be successful you must get use to joining the the q with your exit orders before you even get filled on your original position. If you do not do this you will not get picked of on your exits because of you position in the q. Also, just as some of the others mentioned with all the scarecrows and positioning taking place in the book it is very difficult to trade this way while watching the professionals dance around in the book. I have found it much easier for me to just watch a filtered time and sales and the charts. I have some more suggestions but just ran across this thread while I was waiting to go to a doctors appointment. I will try to post some more suggestions later. saxon22 What are the trading books you have read and what are the ones you are planning to read? Good Luck Nutsneal
As always your post is both eloquent and intelligent. You must be a charming chap, I have no doubt about that. Btw, next time, could you use standard english? I am not privy to pseudo- english you seemed to picked up in the outback.
Charts are secondary w/ scalping like this, the book and time and sales are by far the most important. Other than that some guys will probably say tick charts, but the usual is probably 3, 5, 15 minute