I don't want to distract from the OP's journal but there's a great misunderstanding about scalping. This trading style shown in this journal is not scalping...it is just day trading. 1) Scalpers have special commission rates or have seats on the exchange and their commission costs is a critical aspect of their trading. Ninjatrader brokerage does not offer special commission rates that scalpers need. Commission rates is a big concern for scalpers because their "cost of trading" is calculated far beyond the special commission rates they're getting. 2) Scalpers do not use 5min, 3min, 2min or 1min charts (day traders use these time frames). In contrast, scalpers are on tick charts or time frames less than 1min. Arguably, scalpers are keying off of DOM, time & sales, bid/ask information but the few successful scalpers I know...one is a heavy DOM trader and the others are using tick charts. Note: When the phrase scalping first showed up in the markets ...traders were heavy DOM users and/or tick chart users. Many years later, I didn't start seeing the word scalping misused in context with minute charts until after the pattern day trader rule of 2001 and then heavily misused after the financial fiasco of 2008. Today, the word scalping is actually associated with a new term amongst professional traders...high frequency trading (HFT). In contrast, us retail traders tend to not associate scalping with HFT. 3) Scalpers tend to trade +50 or more trades per day in current low volatility market conditions. Yet, in normal to increasing volatility market conditions...its normal to see a true scalper do +100 or more trades per day. 4) Scalpers do not take stop hits of more than 1 point while trading Emini NQ futures nor do they hold trades for more than 1 - 2 minutes. Their stop/loss placement is usually auto placed instantly upon entry into Emini futures and I've never heard of a scalper of the Emini NQ futures use an auto stop > 1 point. Yet, its normal to see day traders (not scalpers) use stops > 1 point regardless if its automated upon entry or placed manually after entry. Yeah, once in awhile a scalper may have caught a big trade with sudden volatility and then decide to change the goal of the trade from scalping for a few ticks to day trading for a few points. However, such doesn't happen often for a true scalper because the tick issue (profit/loss) is a big issue in their trading...they are just trained to move in an out of increasing volatility movements that last more than a few minutes. 5) Scalpers are well capitalized and they are not trading 1 - 2 Emini NQ contracts. They are trading considerable size and/or they're trading highly volatile trading instruments or they only trade when their trading instruments has volatility. 6) Scalpers today are far/few between in contrast to the 90's when it was popularized for stocks and futures traders. The cost involved to do proper scalping is over the heads of most retail traders (that's us) and today's low volatility in the Emini NQ futures is not suitable for scalping "except" for a few days here and there when there's good volatility. My point is that you're a day trader (nothing wrong with that). If you want to be a scalper or you thought you were scalping...you're already at a great disadvantage based upon your trading plan and habits that can not be overcome if you're trying to be a true scalper. P.S. I'm a day trader. P.S.S. If you're still designing a trading plan or you frequently make changes to your trading plan...you should not be trading with real money. In fact, your trading plan should be tested in simulation only prior to any real money trading. Simply, if you make changes in your trading plan...stop trading with real money and go back to the simulator until you have enough evidence its suitable for real money trading.
Correct above, also a day trader, just H4 traders like to label us as Scalpers cause we are evil and all lose they don't seem to understand the difference of someone shooting for 2pips or like us 100pip moves when available.
A point about keeping losers small “Every battle is won, before it is even fought” – Sun Tzu ====================== One can’t arbitrarily set out to keep losers small – meaning; One can’t enter.., pick a stop placement they "deem" small – then expect any modicum of success Each trade fails (breaks down) where it fails – which is precisely the point at which the stop should (must) be placed Anything less – is the death from a thousand cuts (price repeatedly taking one out – via its normal gyration(s) – while remaining well within the current context – which continues validating the impending move) Wordy way of saying.., price moves back and forth – to shake traders out – before it continues on And anything more – is needlessly pissing money away (being wrong is simply a part of trading..., staying wrong is fatal) ============================ “Every battle is won, before it is even fought” – Sun Tzu Proper entries; Naturally provide small losses..., when (are close to where) the trade breaks down Provide the maximum potential for a profitable move ================= Get some rest..., and clear your head - it is imperative we maintain balance Success Sir RN
A little criticism from me won't cause him a fraction of the pain that his current trading path will cause if he doesn't turn around quickly. Good ideas without a plan + previous negative outcomes influencing subsequent trades = consistent loss of capital. If he can give us the specific rules from his plan governing his entry prices and trade management yesterday, I'll shut up.
I posted several lines describing all the info that goes into whether a single candle will be a qualified signal bar or not. It's all that other info that makes or breaks the R:R of a trade taken off a single signal bar. I have setup where a single tick of difference on the entry (based on a single bar) would've been the difference between a losing trade and winning trade 3x the stop loss two times last week. For other traders this might be meaningless, but if you treat it like a business, all the research that went into the business plan has relevance. If I start second-guessing my plan, it goes to hell quickly. http://www.cornixtrading.com/2012/07/rats-vs-yale-students-randomness-psychology/
Not everyone is as anal as you, i sure dont try to read anything into a single candle, i look for buyer / seller points live ie not 20mins ago even, or short term momentum. We all see it differently so judging by your method is kinda pointless IMHO. Personally wouldn't trade NQ ever, far too weak, DAX or YM for me.
Anal retentiveness to an Nth degree.., is a characteristic all successful trades share Some come by it naturally…, remainder are forced into adopting it Trading / mkt is quirky that way RN
@NoDoji I've been meaning to ask you, how many samples do you usually test and more important, how large of a period of time do you cover with your tests? Reason I'm asking is because I'm also a price action trader and am involved in a major price action testing project of my own right now. I wanted to compare notes on how many trades you look at, and how you catalog and organize things. Any insight you can give us on how you go about testing would be very much appreciated, it's something that isn't talked about enough in the discretionary world unfortunately.
This year I did an analysis (@Turveyd: notice the word "anal" in there ) of two new trading ideas. First I did a manual analysis to evaluate the price action around 100 appearances of the setups. This gave me ideas for various methods of entry and trade management rules. Then I tested each of these methods over a three month period of time, which provided well over 100 appearances of the setups. Both setups are now a part of my trading plan. Interestingly, they came out of filters for avoiding trades where most of the criteria were met, but one thing was different, resulting in a low win rate. I noticed that the price moves off these voided setups were often very strong in the opposite direction of the initial signal. By testing just how "often" and just how "strong", I ended up with two stellar setups.