Hooti, You're making a cardinal mistake in day trading futures. You're trading the wrong instrument. The ES is a lousy contract to trade for pikers. Dump it now. Do what any good NoD-er (aka Donna) would do then... Focus on trading the CL futures (Crude). If you can't consistently sim-trade that with 1 contract for $300+ avg per day over a 3-month period, I'd say that you shouldn't be trading with real money in the first place.
ES moves nice but if you are slow to get in line. you could find yourself behind thousand of other orders waiting to get filled. On other hand in CL you could find yourself way in the front or way in the back as soon as you click on your entry, try 6E instead.
OK! I've seen this argument before... where to start, ES, CL, 6E, NQ I sure don't know the ans to that. I know with ES you need the ~$5600 in your acct for a contract. Do you need more or less to trade the others? Ammo - this is not an advanced class. We are supposed to learn the basics, about 8 - 10 set-ups... so and and so forth. The key tho is you get 3 trading days live one on one with the teacher. I think a lot of what I'm doing is just trying to get enough experience so that when I go for the 3 days, I'll be able to grasp more of what she is trying to tell me! And I'm going to go pretty soon... the class doesn't end till mid Jan. But if I take to long after that I'll be making and learning mistakes that I will have to unlearn. AS to chart reading. A phrase I hear alot is 'trading the hard right edge'. Chart reading obviously means a lot more than that, but somewhere in those discussions I come back to Al brooks way of things. I like all the TL, EMA's, etc. etc., And elliot waves and fibs are a big part of what we are learning. But after looking at all that on a chart, when it comes time to place an order, That Al Brooks stuff seems more to the point. How much of that is what you mean by chart reading? Or something all together different? SteveH and Nkhoi. Somewhere in here I will try them out. May end up there, CL, 6E. I do want to have a sense of the ES tho, and so many examples in class were of it... here I am. I like trading those up/down twins... training wheels for sure. I'm not loosing money, and R:R and trade management and discipline and recordkeeping. It's all fitting together. And where it is lacking is showing up too. As busy as things are with the holidays, don't expect me to change to fast! But I really really appreciate hearing the thoughts... and I'll start adding those experieces too. Thanks.
What you trade and what time frame you trade isn't as important as learning how to trade. The hard right edge is simply the place where you enter a trade. We can all look to the left and see how obvious something is, but can we look at price right this moment in time, recognize what it means for price to be at that level, understand what price would have to do to provide a clue as to what it might do next, and understand why? It's like being a detective and a psychoanalyst all at once, and if you're day trading a 5-min chart, you have far less time to think about it than if you're swing trading off a daily chart. I try to avoid thinking and just put my order in place ahead of time so price movement gets me into a trade. At the moment the market opened today what do you know for sure about the ES? 1. Price broke out to a new high of 1244.25 in overnight trading. 2. Price hardly budged before hitting another new high of 1244.50. 3. Price pulled back to the 20-bar EMA (a day trader's benchmark for mobile support/resistance in a trend). 4. This pullback in the uptrend held and price attempted to move up and test the new high. 5. Price failed to test the new high and stabilized in a narrow range around a flat 20-bar EMA. Analyze the thoughts of market participants actively holding positions at the moment the market opens: If you're long, you'll hold your position until you feel it's worth adding to it or taking some profits off the table. What would convince you to take some profits? A price break below 1242.50? Below 1241.00? Below 1238.25? What would convince you to add to your long position or initiate a new long position? A price break above 1243.75? Above 1244.50? If you're short, you'll likely consider covering for a loss if price runs too far against you. What would convince you to cover for a loss? A break above 1243.75 or above 1244.50? If you want to sell short what would convince you that price is going lower? Probably the same thing that would convince a trader with a long position to take some profits, such as a break below 1242.50 or below 1241.00 or below 1238.25. Instead of choosing a direction at the hard right edge, you decide to let price movement tell you what's likely to happen next, because price is in a narrow range around a flat 20-bar EMA. A price break either way should give you a couple points of move to play with. You bracket orders outside the range and wait to see what the majority of market participants ends up doing. The market opens and your sell stop @ 1242.25 is triggered. Your buy stop @ 1244.00 that was not triggered becomes your protective stop. If price finds support at 1241.00 (next support in line), moves back up through the 20-bar EMA, and breaks through the upper end of the range, you'll be safely taken out of the trade for a small loss. If price continues to fall, you can choose a hard profit target or trail a stop as each support level in line gets broken until a perceived "bargain" level is reached, buyers step back in, and short sellers (such as you) decide to take profits. I, personally, would target 4 points or more.
Dang it, Nodoji ! I usually print out a chart of the trading day, and it took me 15 - 20 min maybe to look for a few patterns, track the up/down work, and run thru the bar by bar 'what would you do'. NOW I look at a chart with several columns under it... several I didn't have before... Entry signal Price in (long/short) Stop loss Tgt # of bars to... tgt, stop & reverse signal, stop loss How Lg a stop would have worked? How far can trade go to safely moe stop to BE? Warning signal to exit trade early AND I'm going thru all my class Set-ups and the ones I look at from Al B. entering all of them I can find thru all of that... and looking for the ones that go for the 3 points and more. 2 pt stop, all that. I'm having to print out extra copies of the chart, to many lines and drawings for one. I'm not half done yet and it's over an hour later, and Here you have ANOTHER analysis of the day for me.... It's Christmas for pete's sake! Oh. Yes! Thanks to you (all of you) it is! I wish you the best of the season too...
Tedious work, but well worth it I sent you a PM by the way. It isn't mean, promise. It IS Christmas season after all
Thank you so much, NoDoji, for all of your wonderfully informative posts. This one is definitely another keeper!
Hooti, The best scalping you can do is where you find moves which can give you net 1.8:1+ RR ratios where there is no discernible pullback on the way to your target. This is why I say that the ES and 6E aren't that good. On average, you have 2 to 2.25 moves on the ES and you, realistically, need a 1.25 to 1.50 pt stop loss. You'll find similar results on the 6E for the most common of moves with a typical 7-8 pip stop loss). This is what separates the CL and TF from the above. It has nothing to do with time frames. It has to do with the length of an expected average move vs. what you have to risk to catch that move. It's this factor which facilitates being able to have lower winning pcts in order to win in the long-term. The fewer times you have to endure pullbacks once entering a trade, the greater your odds are of your target being hit. [This isn't a debate. It's a truth in trading] The CL moves so well that you can have 7-10 tick stops with 15-21 tick targets. You don't have to wait long at all to know whether you're right or wrong. This cuts down on your emotional wear. Being wrong fast helps you better to concentrate on the act of making good trades rather than sit there and be some kind of cheerleader, expending emotional energy in the process. Switch to the CL and sim trade it for 3 months. You'll learn faster doing that than playing around with choppier instruments like the ES and 6E. If the 6E were so great, you'd be able to frequently get 20 pips while risking 7-8. You can't do that on a regular basis there. On the CL, you can.
Thanks SteveH, and I'll look at CL. The first time I saw the 1.8:1 was on Geez's thread. So that has been in my thoughts. I appreciate Geez most at the moment, because of his walking away from his computer and cking it every 5 or 10 min. ...actually I sit in frount of mine OK for the first half hour or so, but then for whatever reason... maybe the emotional part, my focus noticably begins to fail. But I do real good after that by switching to walking away and cking in every bar or two. Not cheerleading is a great thing! Said another way, peace is not boring?
Working with that detailed post of NoDoji's I'd heard that material before, but it was much clearer this time. Thx. With my one contract I entered an at market open buy stop at 1247.75 and a sell stop at 1246. Sell stop triggered and then stopped out at the buy stop. But... it seemed to me initially that the market could trend up, so I reversed and entered a buy at 1247.5 with a protective stop at 1245. It's up and protective stop has been brought up to 1247. Tgt is still somewhere up there... such a slow day 2 pts is probably good? I'm thinking that there are econmic reports around noon my time, they don't look very significant, but I will consider taking profits then, or bringing my stop up to lock in some profit.