Is chart trading dead? (At least when it comes to ES)

Discussion in 'Index Futures' started by tortoise, Dec 26, 2017.

  1. tortoise

    tortoise

    I've had a lousy year trading ES. The lack-of-volatility, overlayed with six months of chemotherapy, just about prompted me to throw in the towel.

    First lesson: Don't trade while undergoing chemo.

    Second lesson: Well, that's the point of this post. Bear with me....

    I just finished watching one of John Grady's excellent webinar videos on order flow. He appears to be a proponent of trading without charts, using just order flow info (in this case as presented on the Jigsaw platform). He asserts that prop firms don't allow newbie traders to use charts at all. Moreover, in this algo-driven enviroment, where the bots are scalping for two-to-four ticks, he says it makes sense to do what the bots do. He advocates trading extremes of the buzz-n-fuzz range for ticks.

    Ok, a couple of questions:

    1) Why would I want to compete head on with bots at their own game? Doesn't any advantage of discretionary trading stem from the fact that skilled discretionary traders are able to transcend the noise and capitalize on imbalances that lead to price dislocation?

    2) Doesn't such an approach leave one vulnerable to account-decimating overtrading?

    3) Am I a Luddite, seeking to justify the old ways of doing things when those old ways just don't work anymore? Maybe "chemo brain" is not too blame for the cascade of poor entries and worse exists. Maybe charts really are yesterday's tech, and ES traders need to be order flow scalpers in order to survive.

    Thoughts, anyone?
     
    VPhantom and Gambit like this.
  2. Yes
     
  3. tortoise

    tortoise

    I had a feeling this thread would be a mistake.
     
  4. Sprout

    Sprout

    1) Bots are as smart as their programmers. Studying orderflow can be very illuminating. Noise in the financial markets is more a reflection of one’s level of discernment. This discernment comes from deconstructing market structure and P/V action into their respective basic grandularity.

    2) Yes. It frequently does. Applying multiple timeframes can help limit one’s over trading. It’s important to understand the factors and variables that change a retrace into a reversal from one’s initial position. The opposite is also true, the pace of compounding profits accelerates by frequently being on the ‘right side of the market’ and not exposing oneself to unnecessary drawdowns.
    The lure of easy money and get rich quick is very costly to the unprepared, the lazy, the greedy and the undercapitalized.

    3) Success and failure can be discovered in any method. It really comes down to the level of differentiation one has built in their mind and how one goes about increasing the emotion of confidence in the approach that most resonants within their personality.
     
  5. You can't scalp ticks if you don't get 'wash'.
    Put up a 1min candle graph of ATR with a 6min SMA.
    Put a horizontal line at 0.50: if the 1min ATR is not averaging above half-a-point for the past 6 minutes, DO NOT TRADE.
    For me, the sweet spot was ~0.75.
    Above 1.0, and you're now a B.S.D. (and, I wouldn't do it.)
    Also, see if you can put on a trades/minute statistic somewhere: if you open an order with 1000 contracts sitting at that strike, and the trades/minute are 1250, you've to sit there for 48 seconds with the market chewing through the book, til *your* order gets hit. Knowing where you are (which is to say, "how *deep* you are...") is a very handy skill....

    10 years ago, it was pretty easy to scalp ticks -- I called it, "milling money."
    As the ATR has come down, so has the advisability of trading for ticks. :wtf::confused::vomit::(
    I *don't* scalp now. (Though it continues to inform my thinking/trading very much.)
     
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  6. Not really, there is plenty of money chart trading this year, just that times vary as you need to adapt.

    The first half of 2014 when I started trading ES was brutal, paint drying volume in the extreme and requiring beyond patience during the World Cup etc.

    By the time the Greek debt crisis kicked in I was mentally attuned to a narrow range and happy with 1-4 points a day. Since then when it returned to relative normal, nearly every day has been great.

    Whether you start in a time of feast or famine might affect outlook.

    Trading when feeling low is a problem.

    I have been on heavy antibiotics for the past 10 days. My beard has grown at maybe half rate, a side effect is these tablets is they reduce testosterone by 50-80%. My trading is lousy as my mind is very flat.

    I know however that this will pass and I will have more pep in my step so I don't worry. Sometimes it is you and there is nothing to be done but get better.
     
    Last edited: Dec 26, 2017
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  7. The charts have given clear signals on ES not just this year but always. Every sell off found quick support at a previous area of resistance and continued up. Continuous buying opportunities, if you will.
     
    murray t turtle, Sprout and tortoise like this.
  8. i960

    i960

    I honestly think you should just change your timeframe. I don't know if you're trading intraday but if you are and you're also undergoing chemo I would stop trading on anything lower than the daily. IMO the other things going on outside of trading probably have a far stronger effect then the charts or price action themselves.
     
  9. tortoise

    tortoise

    Yes, I’ve stopped until i’m out-of-the-woods. Timeframe is intraday.
     
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  10. Nothing is dead; Things become a reborn variation of a variation.

    Trading is all about how you interpret the dynamic future. and how you apply it. Sounds simple enough,
    But most people are simply just spinning their wheels getting nowhere.
    99% of people here are full of stuff, and/or failures. -- as with any given sample anywhere.

    I assume we're all trying to predict/trade/manage the daily SPY/DOW/ES chart.
    The Big, and only, game in town...as far as I'm concerned. The so-called Holy Grail skill in trading.
    We're not investors (or swing traders)....we're impatient -- We want more revolutions, for that compoundability.

    I envision most traders blindly staring at square chart boxes...hoping and praying to glean some magical automatic formula.
    Try to look at the collective picture of things, and all its potentially triggering variables. Not just the surface level of things.

    If you can read Miss Bitchy Market's mood with patience and adaptability...you will become rich.
    Go fishing for the shark -- don't nibble and attract and bait and pull in a regular fish. Have greater, deeper horizons and understanding and wisdom of the market,
    Don't look to quickie fuck Miss Bitchy Market...slowly open up to her, be patient...observe her, talk and dance with her. When you ride and time that wave...that's where the magical love/profit zone will be.

    Be malleable Play-Doh and honey. not a solid brick or rock, or watery...water.
    Trading is an organic, real Pet to manage and oversee. not a Chia pet. -- good luck with reading square charts trying to establish an automatic gold mine, money printing system.
     
    Last edited: Dec 26, 2017
    #10     Dec 26, 2017
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