Wanna see a big reason why it's such a tough nut to crack: 2002 I placed my first futures trades in this year (as attested in my defunct journal), 2 or 3 mos. of trading. P/L) +1340.00.........commissions) -1843.20..........TOTAL) -503.20 ----------------------------------------------------------------------------------- 2003 Oct. P/L) -1276.13....commissions) -396.53...........TOTAL) -1672.66 Sept. P/L) +230.00...commissions) -67.20.............TOTAL) +162.80 Aug. P/L) +37.50.......commissions) -134.40...........TOTAL) -96.90 Jul. P/L) +807.50.......commissions) -189.60...........TOTAL) +617.90 P/L total: -201.13.....commissions total: +787.73....TOTAL) -988.86 Everyone knows commissions cut into profits. But sometimes you just gotta show it in writing for full effect. And 98.9% of these trades are with a single contract. Tried multi-contracting in October. Just another reason in the many of why this is such a tough game. EDIT: Don't forget to add your data/charting, cable-DSL, computer and any other misc. charges along the way. And not having any money coming in to support the learning curve 'cause of trading full-time (some cases).
Thanks for all the replies and votes! spyderman: There was a time over a year ago when I was reasonably profitable scalping SPY off of emini action. Obviously, at that time there was occasionally a sufficient lag between ES and SPY to exploit. I paid about 60% of my gross profits from this activity in commissions ($.01 per share). I tried several different approaches to trading ES, usually for a few days or weeks every half year since the beginning of my trading (or learning how to trade) carreer in mid 2001. Sometimes a system seemed to work, but after a couple of weeks a few losers brought me back into the red, and I quit. I traded NYSE stocks quite profitable for over a year until very recently, when I switched to futures because of relatively lower commissions and because the NYSE is probably dying anyway. I was never profitable trading NASDAQ stocks, I wonder if that has something to do with my inability to trade ES and NQ. As of now, I usually squeeze about $3000 per week out of ZN and ZB (1-lots) and lose $1000 per week in ES and NQ. It's almost like these eminis are gnawing at me and I won't rest until I can become profitable. But maybe I should. Nana Trader: No, I have never traded forex profitably. I occasionally (maybe once every other month) see a decent swing setup in one of the most liquid pairs, and I guess you could say I'm profitable, but due to lack of trades (so far I have done a total of 5 trades in my life) I can't even consider this activity profitable in any significant way. Also, I meant daytrading rather than picking a few good swings a year.
I've been trading ES for about a year. In the beginning I made decent money with 10 contracts targeting one point with 3 point stop loss since Dec2002 until July 2003 and have lost all money since than and now broke even with it. If I lost more money within the next few weeks I will call it a quit. I think it has become most difficult instrument to trade, only momentum indicators work best( atleast in my case). Intraday action sucks now, only one move in the morning session and than nothing until close. Chops and narrow range days are norm, next two days after a decent move are the most difficult days to trade.
If you're talking intraday trading, the biggest challenge is finding a consistent system, then being able to know when to override the system based on other "factors", much of which cannot be quantified or made discrete. For example, if I get a buy signal late in the day, but know that we've had last hour rallies 2 days in a row, then I might go the other way etc.
Lob, My opinion is that a trader has to make a decision,ether become an expert on his market and continually adapt his strategy to his chosen market. Or become an expert on his strategy, and continually scan many markets to find the one(s) that that fit his special strategy. Which ever way a trader chuzez,he needs to continually collect data, to watch for change in the current market/strategy. Adapt as necessary. sulong
My view is that one must find market "situations" where only 3-4 points (ES) need to be risked for a better than 50-50 probability of perhaps making 8-10 points. PLUS determining when there is a good shot at 30-50+ points from daily/weekly charts. That means, getting a handle on playing possible market turns... you know, "picking tops and bottoms" like conventional wisdom tells you not to do? Anything other (including scalping) is just fishin' in a dry hole.
The intraday volatility is getting lower, thus daytrading strong trend following system or setups will fail more than usual. Say, your setup or system has a bias of about 65% winning, it is likely that it will drop to about 40% lately. BUT, if you have seen how S&P behave before 1998, you should know that is normal. The ultra high volatility we've experienced in 1998 to 2001 is going away. Expect the market to return to the more normal level for the next few years. A common measure of volatility is the VXO (was VIX). It is trending downward strongly since late 2002. At lower volatility, you will need higher time frame setups as your risk control or directional bias. e.g. You see a divergence top forming in 45-min chart, you better not chase the break outs and switch to sell resistances. Be flexible is the best I can put it.
Illiquid, I would think that having to "override" a system you just labeled consistent is rather contradictory. Is this not at the root of the problem being discussed here? nononsense