Like many of you, I'm a scalper. My system risks .25 ES points and hopes to capture .50. I used to have a 55% win rate but now thats down to about 40%. I use a 30second bar chart with a 7tic chart for confirmation. I trade both breakouts and penetrations of the 1min. moving average. But wow I'm getting chopped up! I've thought about going out to 1min. or even a 3min. chart but i don't want to increase my risk from more than a quarter point ES. From what I gather some of you are position trading off of the 3min. Thats way to much risk for me! How do you shortframe trader handle the chop? BTW Jack/Bubba were really helping me find the way, but now he's gone and i'm like totally lost.
I've traded the ES only for a few weeks, but from my short experience I can't imagine trading with a 1-tick stop. That's normal slippage/wiggle in the ES and would be very difficult for me. I normally use a 6-8 tick stop loss and shoot to make 1-2 ES pts per trade. This has been working out better for me. -FastTrader
This isn't probably what you were looking to hear but regardless of what timeframe chart you have on your screen, as soon as you enter your position your risk is the same as someone looking at hour bars, daily bars or weekly bars. In other words, looking at shorter term bars doesn't actually reduce your risk at all, it may reduce your perceived risk but that's about it. If your system isn't working, maybe the problem is with the underlying assumptions of the system, rather than just with your timeframe, though it could be either one. Unless you have superior advantages with low cost of doing business, fast speed and information it may be hard for a private trader to make out with anything less than a .5 average trade. At least that's been my experience.
A 1pt stop is OK for ES scalping during low to medium volatility phases... forget about your 0.25pt stop... by the time you raise you finger above the mouse button to enter your trade you will be stopped out before you have even entered!
TriPack, You are very right in the above statement. However, once you entered the market, you do not remain passive. It seems to me that you excluded this possibility of interaction through decision once you entered. In most cases a strategy using very short timeframes will interact much differently from a strategy using long timeframes. This can make quite some difference. Will this lead to getting rich quicker or getting broke faster? It is up to the trader. So risk will definitely have to be estimated in function of this. Be good, nononsense