Did some weekend backtests: Took the 1st minute opening range of the ES. Using neutral entry (first hit) fading vs breakout of that range with 1:1 RR, yields 50% success rate for both. At the very basic level, there is a 50/50 chance that a price will close either way on the next bar. My current strategy is anticipating the breakout off the opening range (at some point). But the problem is when you get into consecutive losses, you're pretty much will revert back to 50/50 chance. You can do things like smaller/bigger targets, scalin in , martingale, to skew the EV. There are so many papers that support brownian motion for these financial markets. In fact just made these using random() function in excel. I'm pretty sure i can fool somebody into creating a technical analysis on these charts. So where am i going with this. Basically I think trading is mostly bullshit lol. If I'm going to play the random game, I might as well play the mean reversion with scalin in. If anything that these charts show, is that there will be some kind of retracement. No lines jsut go straight up/down, MOST of the time. But you will have days like this (MES 12/22/22) But if you use b/e stops and scale in, and manage your risk with smaller position (to give room) you can "potentially" avoid gettting fucked in the ass.. What do you think guys?
Making money with trading doesn't necessarily means that you need to be able to forecast the market. I'd be able to make money from your 3 random graphs.
Good Evening hilmy83, Full Disclaimer Before Reading: I am still unprofitable consistent day trader. I have no proof of nothing. Please take what I say as worth a penny with a hole in it or a prostitute robbing you of your money. My response to you: Everything you said is 1000% right. If you are trading manually, you are trading gambler. And this is ok. Just try to guess right majority of the time and have fun! It is ok to gamble, cause you do not know what works consistently. So just live with and be happy as guessing manual discretionary trader. However, if someone put a gun to my head and said "Your black ass better make $100 today in the ES market, or I am blowing your head off, and you have 1 hour, get started NOW", I will do the following to save my life. Enter a trade Use a big stop Small Profit Target Scale In to avoid a loss, and make $100. Live another day. Love your thread.
I'm pretty sure most people can get at least profitable setup or two in there. My point is, we're operating in a random environment in short term in the day trading world. You could also do what @2rosy proposed and find pairs trading opportunity, which is more in line with mean reversion.
I had such thought as well, that, what if , bellow monthly/weekly, it's all but random. Funny, it would be, - ,,Hey look, a bull flag'' Then add to equation future growth and cash flow calculated in, and, - ,,Ok boyz, set the chart to random for the next 5 quarters & then we raise it to $45. - Gap ? -No, over 2 weeks. - Ah, ok''
Hello hilmy83, Yes, correct. You are getting wiser because now you know what you are really doing. You simply try your best day to day and take your best guess as the manual discretionary trader. And love being a guesser and gambler. Once you have million dollars from trading, then you not guesser and gambler no more, you are professional day trader master. If you can recover from drawdown, you are now the master. It is not about wins and losses, it only about recovering intraday drawdown. Nothing else matters.
Lol that's pretty much the conclusion I came up with. Just trade random entry with mean reversion and just pretty much use size and breakeven stop to "manage" risk.
Hello hilmy83, Yes sir. Manual Day trading every day is gambling and guessing. This is our life as the discretionary trader. You have to accept it so you live in peace and happy. What other choice do you have besides guess? You can not manual back test, take too long and you waste time. So you must guess and use the stop loss and hope you be millionaire at the end of the year. Your only other option is program algos and back test. So just guess and gamble and have fun. No-one knows or can prove the answer for manual trading. You must master the ES alone, by yourself. Do whatever you want to do, just be a millionaire in on year trading the ES. This our job, we have no other option. We are held accountable to make 1 million dollars trading the ES in one year. So just enjoy the game. After you make million dollars, you are now the master.