STOP THE PRESSES.......STOP THE PRESSES.....BREAKING NEWS........BREAKING NEWS! GROB has made a post that everyone can read AND understand. ET History has been made today. It now begs the question....is grob turning over a new leaf? Is this a new pardigm in teaching...one where grob actually tries to communicate in a way that facilitates learning? Stay tuned folks! More to come.......
I agree with everything you said except when you say that these trades come along two to three trades a year that give you a "big" edge: I think they come once a month. In fact, when the trade that comes along where the market is giving up so much edge that it happens only 2 or 3 times a year, you are very likely in the hole. Since these huge edge trades rarely happen overnight when you are not trading and you wake up and it christmass because the market is giving so much edge, and you were lucky to not take all the edges in between because you were sleeping. If this happened intraday, you are probably stuck with a loser, since you very likely got in when the edge was just 2 Std Dev event, and it is now 3 or 6 (or gawd forbid higher than that, especially on a gap, although gaps are extremely rare in SIFs intraday). Unless you can predict days like that, you are often on the wrong side of them. However, the rest of your post is spot on. nitro
Nitro, I was thinking the exact-same thing to myself. Roughly 2 -3 times per month we get one of those big-trend sessions. The morning starts on a gap & go or gap & fail. Price action hangs sideways all day long, then goes vertical from 2:00pm est into the close. If we spot these events and pile on the contracts into afternoon surge, it is possible to trade 3x or 4x normal contract size BUT keep max risk to capital at 1x normal percent. The tradeoff is risking unrealized gains on first contracts itm while wagering added positions will lever into a big win. I myself don't try that often, but when an afternoon surge move appears imminent, it's prime opportunity to earn a week's / month's wages in a single session without taking on too much risk.
Your observation skills are keen. Gap and fail happens more often on the small gaps than the big gaps. I normally get crushed on those big gap days, but unless the market does what it did in May of this year where it went on to lose 8% more after giving up huge edges, I end up either breaking even on the trades, or making a little money. In May '06 I dropped $12k in a week trading SIFs. It happens... nitro
Grob, I tend to sweep out monthly gains above $20k in my futures account. With that I readily trade 10 - 20 ER contracts and 20 - 30 ES contracts, keeping max loss per entire open trade at -$1,000 to start. I keep max risk at 5% of current account balance, scaling up trade size thru the month as balance permits. That is done by entering one symbol or the other as signals generate, then moving stops (when possible) on the first trade to lessen risk as the second position is open. Once capital rises to $30k, $40k or wherever, trade size increases accordingly. If the account would slip to what I feel is low, funds are easily added. Right now my working capital available in personal emini account going into Tuesday is $20.8K. I expect to make $20k to $50k this month in that account, if normal to large range days present such opportunity, we'll see. An average of $2,000 daily on 20-lot ER / ES is normal, blended average over the course of an entire month. The way I trade by scaling into two different symbols = trailed stops allows for much greater leverage with nominal risk to realized capital than straight entry/exit on a single symbol. When volume & volatility return to normal, I'll trade bigger size in the ES and therefore leave more working capital in the account. Until then, I put excess capital to "work" buying raw land - timber properties in my area.
Nitro, in May I had three of my best emini sessions ever. Two were $20k days, using 10-lots size. Eminis and stocks do trade differently, of course. The setups I relish most are either gap & go moves that run parabolic up or down past 2:00pm EST, or gap & fail moves that make the same big afternoon moves. We should see two - three of those sessions this month, quite possibly this week. Futures rollover week tends to have at least one outsize session, and the past three sessions of 5pt to 7pt total ES range have markets coiled & prime for a directional burst.
I suspect that we are making markets for each other, and when the big ones comes you make much of your money from me Interesting rollover point: I have never done that test. nitro
For whatever reason, emini rollover week tends to have at least one outsized directional day. That coupled with last week's total range constipation has us primed for a big move. I believe the S&P has held a 16pt total range for past three trading weeks... something's about to give, big-time.
most ET traders are very smart and average time to profitability is quick, maybe 3-6 months before their profitable - i'm a slow learner - so far i've spent over 350K in 4 years (trading and living expenses) and i still have a long way to go - my biggest mistake was thinking i would be ringing the register in 2-3 years...
Most ET'rs are where you are at. Wanting to make money, but not doing so. Trading is a tough business, it doesn't suffer fools! And at the same time, it is also very easy. You have spent 350 k in four years...and you are not profitable yet? That is insane, it's not the correct way to approach trading. The correct way, pick a market, then research, develop a strategy/edge, and then watch it in real time going forward for a period of time. Then you begin to execute the strategy with the smallest size possible, only when you are making money should you increase the size and risk. No trader should ever spend more than 25k on their learning curve. Ever! I wish you luck...but it appears to me that you are just gambling. Please, stop what you're doing and reevalute things.