I'll throw in my 2 cents....you seem like a good guy and seem to be taking the correct path. Learn the markets on your own. Absolutely do not sign up for any BS vendors selling the greatest trading system of all time. If it was that good they would be trading it and raking in the bucks, not hawking it to others. Read Market Wizards I, Market Wizards II, and Covel's book Trend Following. Basically they are interviews with the best out there. While there are a gazillion how to make money in trading books, trading is a complete mind game. The guys in these books do a great job explaining not only how they made it, but talk about all the msitakes they made and the mental roller coasters traders go through. What other job can one week you be on top of the world, and the next be completely wrong and have your confidence tested big time. Whatever strategy you have, make sure you have a game plan. Surf's little proclomation about having a plan will never work could not be further from the truth. Like DB mentioned, look at his journal. It's a disaster because he has no idea when to take profits or when to take a loss. Basically trading a la deer in the headlights. The markets don't give you the luxury of deciding afer the fact what to do. Come up with an out (stop loss) and where you want to take profits on EVERY trade. Take the emotions out of it. Make it so there is very little thinking to do after you put the trade on. The downside of profit targets is you will miss moves that go through your level and could have made more. But if you have a good risk reward (Somewhere around 3:1 is very good) and a decent win loss ratio you will be very succesfull. The downside of using a stop loss is.......there is none. Without a solid exit plan on losers you will eventually get wiped out. 99.9% of guys who don't make it is probably because they don't know how to take a loser. Surf's other little proclomation about having to take huge risk to make huge rewards is horrendously wrong. Again....see his journal for the evidence. While it is repeated 10000000 times in the trading world......Cut your losses and let your winners run is the name of the game. Is there a time to take more risk and go for more reward? Sure...when volatility kicks in and heads north. But you have to know when to do that. You can't say I am going for 1000 dow points when the Vix is at 50, then do the same trade going for 1000 points when The Vix is at 14. Is assinine. You will never take winners. At the end of the day like others said, sit in front of the screen. Learn on the simulator. Take your lumps and go through the mental rollercoaster of trading. Stay on the sim for as long as you need to come up with a good strategy/game plan. But when you do go live trade very small. Trading live is a LOT different then trading on the sim. Ramp up your size as your account grows, but do it in a smart way. Don't go from a 3 lot ES guy to a 20 lot guy. Take your time. Good luck with everything.
10/9/14 Prep I"ll replay today after work. Don't tell me what happened. Current trend on weekly still down. The 50% retrace of the 8/8 demand seems to have held. However, we have yet to make a higher high here. Yesterday after breaking out of the hinge to the downside, it exploded to up. In other words, If I were able to play yesterday's action, my day would have been wonderful, with great entries. The daily is still in a downtrend. However, there is a new bar for today sitting outside of this down channel. Either traders are seeking new value, or price will revert back into this channel. Today will tell us more about their story. Yesterday's high of 4041.75 and Low of 3930.75. A very large range which must have been great for some people, bad for others. What exactly would I be doing at 930? According to AMT, even though price broke the channel, it's probability is on reversing down to at least 3978, the current mean of the down channel. However, be careful, price BLEW through the entire channel in a day. Traders could be seeking a new value. If the current trend of the market goes sideways, we are looking at a range of 3930, and 4040 with a 3985 to 90 midpoint. Trading range all night and premarket. Between 4044 and 4027. MP at 36. Traders settles into agreement and have found their true value area temporarily. I would also like to note how after the hinge broke yesterday, to the downside, it found buyers, who then pushed price back INTO the pre market range. It stall there in that range for a little. ALmost like that range was still of some value to some traders. But many moved on after that hinge broke. I'll replay after work without cheating. BAR by BAR. and no hourly. Just what I posted here is what I'll use... Happy trading today people. As I wrote this premarket broke. At 740. COuld be reverting.
Hi ElPrado. Thanks alot for your contribution. I've read a couple of those books that you posted. I"ll also add Trading in the Zone soon. However, mark douglas is quoted everywhere in trading, maybe I've already read the book. My game plan is currently being written. It's amazing how one page can turn into 3 when you specifically write about your plan and what I watch for and have tested. I plan to upload it here too, along with stats from my excel file. I didn't understand a lot of what surf was writing as well. First of all, it just seemed uncomfortable. Risk a lot to make a lot. I understand risk. Generally, have to risk your mortgage and marlboros won't get you anywhere. I"ve got a stop every time! One mistake a made once is moving that stop. That's not part of the plan. Won't do that again... I'm simply starting with one contract. Maybe 2. My plan evolves around one. I've learned it's important to SIM pretending you are trading more than 1 so that you learn scaling in, or out, rules. For now, because I would like to go live, I will probably be all in all out in the beginning. Possible scaling in on winners. Once again, thanks for contributing.
Short for 5 points already. before work. Range broke and heading south already. Too bad I'll miss it!
9oct2014 REPLAY Today was great. I didn't cheat and replayed bar by bar using the prep I posted here. Who am I cheating anyway? You? :eek: The prep is really helping me prepare for the day. I'd say it creates a bias, but it's actually creating a simple probabilities mind set for myself. After booking 45.25 points by 1330, I decided that's some good profit for the day and called it. It ranged for the rest of the day anyways. Attached is the 1 minute with my trades. Remember in prep I said price "probably" will revert around 3978. It sure did. Auction Market Theory. I'm really learning how simply managing a trade correctly can effect ones win rate/hit rate. It's simply amazing. Why stay in if you're losing? Trade #1: Not triggered. Broke out of range beneath 4027. Looking for short. Price ranged a bit more. Trade #2: -2 points. Lower Low. Should have exited break even. But I tried to give price room. Traders still haven't decided to DIVE. Trade #3: -2 points. Started getting upset here. Then I remembered. My stops are an expense. One that I'm fine with. Waited for traders to break this range and show what they had in mind. Trade #4: 3.75 point. I began considering the AMT wasn't right this time. Especially after price couldn't go lower than 4004 at about 1040. Long. Didn't feel comfortable holding for any retrace over 50% with the previous 2 trades. It's amazing how each trade influences the next, even if you're flat! Trade #5: B/E. Didn't want to wait the retrace again. Also. DT. Then a hammer top or dragonfly or whatever you call it. All I know is price was immediately rejected at 1123 at about 4033. Trade #6: 28.5 points. WOW. Perfect opportunity for those trading multiple contracts as well. Trendline break. Maybe AMT back in. It was. Exit at line break. If trading more contracts, exit portion. Price NEVER even retraced close to 50% which suggests more selling to take place. Supply was in. Not enough demand at these prices. Trade #7: -2 points: This would not have occurred if trading multiple contracts. One or 12, or 79 contracts would have already been in, not having to worry about an entrance. I'm trying to consider how I would trade 2. It needs to be in my plan because I'd like to up my lot size...slowly. Trade #8: 7.75 points: Traders still selling. No one to absorb so they needed to lower their prices. Caught pullback after range broke. Trade #9: Not triggered. Assumed continuation. If contract was still in etc...would have been ok. Trade #10: Not triggered. We are at the mean. 3978. Though maybe a little bounce back. Trade #11: 1.75 points. Range broke. Sell. Covered quickly. If I let price retrace would have been stopped. Trade #12: 9.25 points. After a DB at about 3060, price went up. Long on first Pullback. Traders might not have to lower their prices much more, because people are buying at these prices for whatever reason. Price stopped tanking, that says something. I'm highly curious about the massive selloff at 1615 and 1639. That was nifty.
Couple thoughts: I notice new opportunities if learning to scratch a trade quickly. Trade management can really effect one's P/L. One thing I'd like to know is if people find trading more than one contract better? Meaning, you don't have to continually enter and exit? Just wondering.
10oct2014 WE are still in a downtrend from 9/19 breakout of uptrend which began 4/18. With the last 2 days volatility I'm not sure what to expect for today but I'll do my best to prepare for it. On the daily still in a DT. Low was made premarket to 3923. Even though we are in a downtrend, it seems that the daily is possibly hinging. Traders haven't decided which way to do. On 10/1 and 10/2, there wasn't enough demand so sellers dropped their prices. At 3927 demand came back in. THey began selling, or new traders began selling at 4040. We've hit 3927 twice since then, and we've hit 4040 twice since then. This could be a trading range that has gone sideways. If it is, we are at the lower extreme. Higher highs and lower lowers have not been made for a few days. I could count the past two days as higher highs and lower lows, but they are being rejected. If this is in fact a TR we have a midpoint/mean at 3984. 4 points above 3980 which coincides with past couple days value area. According to AMT, with a DTchannel and a TR, I"d expect price to "probably" revert to the TR mean at 3984, OR, the downtrend channel mean at about 3970. AFter the past two days it could be a tight rangy morning. But, premarket is quite active today. YH 4047.75 YL 3947 *this low was made after hours. Still not enough demand at this prices. However, NYC open could bring some demand at these very low prices. We'll see what happens. What exactly am I going to do at 930? (i'll replay late tonight or tomorrow morning) Given that premarket we are already pushed below yesterday's low, and that we are at the bottom of a trading range, and bottom of the down trend channel, I'd expect today to have some longs and price revert to those points mentioned earlier. There might even be opportunity now for a trade. There isn't a range that needs broken, so at 930 I would look for signs of demand at these prices. However if these signs aren't there and signs of more supply arrive, we could tank to 3820. This tank would probably take days. Attached hourly with possible range.
I didn't get to replay friday because of family stuff and work. IF this week's testing goes well like it has been, and my plan gets onto paper, I'll will probably try a live day next week. AHH 13oct2014 Market Prep We are in that downtrend. Traders sought new value at new lows on friday. For those that have been following, I mentioned earlier the demand on 8/8, and it seems we almost hit that point at 3825 in instead of 3821. That downtrend has been broken. We'll see where traders look for value today. We could have gone sideways. The action on the 10th took us out of two ranges on the daily. On the weekly we could be pulling back into a main uptrend channel which began in march/april 09. We are only 100 points away from that. If demand is found at the channel extreme, a new channel might exist on the weekly. What am I doing exactly at 930? Price is in a new place. It is also new for me. It looks that traders are seeking value at lower prices. Traders could like current prices, or want to buy them lower. Price will tell me at the open. Price broke out of a range overnight/sunday night, at 3840, and is not resting around 3854. Stuck between 848 and 860. If price behaves like the uptrend, we'll revert back to the downtrend channel mean. I think value has shifted down to the 09 trend channel around 3720-3740 range. WE'll see. if price continues to range, at open I'm playing a break of that range.
Hard day all around, so I only replayed the action until my final stop-out at about 1230. The rest of the day was fun to see unwind with the large drop. As my prep has been indicating, we did in fact meet a past price point at about 3818. Demand came in strong on 8/8 at this price. Price seems to have stalled around here, or a little under here. If I continue to be consistently profitable on replay and SIM, I will probably try a live day. I'm looking at Thursday of this week. Even if I only place one trade, I think it might be time to my plan into the marketplace. My plan HAS to get put on paper. I trade my system now from my head. 25% of it is on paper. Much of it can't be written yet because I don't trade 97 contracts at a time. Todays trades were really short. I couldn't tell if it was fear, or simply that my system had fast scratches today. All in all, my winners weren't as large as I would have liked. I'll agree, do not trade with a BIAS. There is always an amazing reason to sell...or buy. I entered today with a large down bias. Some of my nicest trades today were to the long side. I missed the big ending move because I stopped replaying. All in all, a profit of 580 per contract, or 29 points, 13 trades. Avg Win 86.11. (wish that were bigger) Avg Loss 48.75 P:L 1.77:1 and win rate of 70% !!! I was proud of that. Trade management helped me A LOT today. Green buy Red Sell NT - not triggered.