Making a living on ES/NQ 5m reversals/flags.

Discussion in 'Index Futures' started by tradersaavy, May 11, 2003.

  1. Partly right, partly wrong, partly fuzzy - and totally presumptuous.

    Hardly anything is impossible in trading, though some things are pretty darn improbable.

    In my opinion, you are very probably not going to trade successfully looking exclusively for those patterns - that is, defining them solely by price pattern and without exploiting other indications and tactics available to daytraders. I also happen to find 5-minutes overly wide for daytrading the ES, and I'm not much on reversals per se - but that's just me.

    In theory, a disciplined daytrader could trade very profitably, exclusively off such set-ups, but the vast majority of day-traders are simply incapable - emotionally and possibly even physically - of staying flat for hours on end, ignoring marginal and worse set-ups, while staring at their screens with the buy/sell buttons staring back at them, and seemingly everyone else in the world bragging about their kachingos. The impatience or even the desperation to overcome past failures, to disprove negative suggestions from seemingly more experienced and successful traders, or to show off in front of other traders in real or virtual trading environments may also entice them, over and over, into taking bad trades.

    "Making it" is subjective. I know individuals who do pretty well, by my standards but perhaps not by the standards of certain "big" "master" traders, trading 1 or 2 e-mini contracts. If you can trade consistently with 1 contract, then you can stay above the poverty line solely by trading - and will already place yourself in a distinct minority of traders (broadly defined). You may then be able to increase size.

    My own experience - of losing badly, even disastrously, for a long time before I reached the point that I could trade with any consistency - would lead me to discourage anyone from taking up the occupation in the first place, but, once someone has made the decision, I would remain very hesitant about offering blanket judgments about the potential of any particular strategy (even the ones that I would never consider trading on my own). Everyone I know who's trading with any success is doing something - from scalping for ticks to utilizing Gann numbers and Fib structures to intraday position trading by classic patterns to trading mainly by "feel" without hard stops, in equiites, futures, and/or options - that some seemingly very smart, very experienced, very knowledgeable person has categorically declared to be IMPOSSIBLE and FINANCIALLY SUICIDAL.
     
    #11     May 11, 2003
  2. Don't forget those that never had $25,000 in the first place. Generally the 20-somethings that are being "forced" to the minis because they aren't allowed learn on stocks because of the SEC rule.
     
    #12     May 11, 2003
  3. great posts guys. tascian, what do you use primarily to trade?
     
    #13     May 11, 2003
  4. Well written , Kmar.....
     
    #14     May 11, 2003
  5. Stocks move differently than the minis. if you trade minis like stocks you'll be in for a surprise. As for the rest of your post I guess you just alienated a big portion of your (prospective) clients.

    Kymar Eye: I don't think it was presumptuous it has been my experience, I am sub-25K account and daytraded minis for a full year and lost 20% of my account after commissions. With a small account unless you have nerve of steels to handle the chop it's a waste of time to trade in and out 4-5 times a day.
     
    #15     May 11, 2003
  6. Tacsian

    Tacsian

    TraderKay,

    primarily I daytrade the NQ and ES and use S/R areas..both pivots and some points I calculate myself based on Fib/Murrey/Gann numbers. I consider the opening range another "pivot point" and watch how price reacts the rest of the day when in the area of the opening.
    On the chart I posted on this thread the green lines across the chart were my F/M/G points, where I expected pauses to add on to the trend, or reversals etc.
    I use volume to confirm or to keep me out and do watch for a few patterns on the 5 min that I have used with a positive probability.
    I have the 5 min 20ema on the my chart, both because i use the slope of this for some smoothed generalization of the 5 min trend and because I know many others out there will use the area for a decision point.
    I also keep an oscillator on the bottom of my screen..Macd, Stoch, RSI...makes no matter which...they all can reveal the same thing. I do not "sell when overbought" and so on. If anything I'd prefer to sell when its oversold...best moves in a given day often occur while the indicator is staying firmly in oversomething territory.
    Dunno if that is at all helpful, but that's my basic configuration.
     
    #16     May 11, 2003
  7. I play double top and double bottom's with volume divergences on the SP market. I have to wait until the market isn't trending for this to work. I had two trades on Friday...both made a few points. I've been trading this pattern for two years and it seems to be very reliable (as long as I avoid trending days).
     
    #17     May 11, 2003
  8. nitro

    nitro

    "There is more to heaven and earth than is dreamt by your philosophy."

    nitro
     
    #18     May 11, 2003
  9. dottom

    dottom

    You can most definitely daytrade ES/NQ successfully with less than $25k. It will take you awhile to build up enough size to live off the trading profits, but you can definitely trade successfully with an ever growing account size with as little as $5-10k depending on risk characteristics of your method.

    I think a lot of the "advice" is geared towards newbies who everyone expects to lose a good portion of their initial capital. If you lose $10k of that $25k before "getting it" ok you still have $15k vs. if you start with less, you are wiped out.

    This "newbie period" notwithstanding, I'm referring specifically to risk characteristics of any method. It's all simple math, assuming some level of robustness/stability in your method. On a one contract basis there are definitely many methods with risk-of-ruin (including risk-of-pscyhological-ruin) less than <1% for much less than $25k starting capital.
     
    #19     May 11, 2003

  10. amen brother nitro.

    best,

    surfer:)
     
    #20     May 11, 2003