Today is a classic lesson in simplicity using just support resistance levels in S&P. We started out around 945-946, there was an obvious downward trending bias from yesterday until the S&P hit a key support level at around 930, which it then bounced off and and continued to move upwards until hitting resistance from this morning's opening levels. Granted, not all days are so clear-cut as this, but it doesn't take a bunch of indicators and fancy mathematics to make consistent money -- you can make money off any index stock by learning everything you can about support and resistant levels. aphie
Allenz "Do you mean trading one contract per day? My capital allows me to trade maximum 2 ES contracts. But I trade only one each time. I am a very short term trader, usually only hold it for few minutes. On average, I made 3 to 6 (sometimes 8) trades a day. Is there any difference between day trade and position trade?" Look at your capital, you say it allows max of 2 cars on the ES so I assume your capital is near $7k. If so then look at your ave stop, taken by adding your total points of stops taken and dividing it by number of stops taken. Lets say you trade 1 car and your ave stop is only 1 point. That means you only risk .75% per trade. You have a low risk of ruin but I think you would be a little loopy to think you could make 2-3k ( not sure what your goal is ). Because you are simply not giving yourself a fair chance. Now let me add 1 caveat, if you are the RARE trader that is very good at letting winners run meaning you get an average gain of say 4 X your ave loss then perhaps you can excel at your monthly returns while keeping a low risk profile. Please dont underestimate the role risk plays in the money you intend to make trading. AllenZ
I don't understand why is it important whether somebody makes 2 ES points or 10 ES points a day. In a long run what matters is how much size you can handle. IMO there is a difference between making a living and getting rich.( Assuming you are not scalper). I am not denying though, that being able to make 10 ES points a day + being able to trade size is the best scenario.
Allenz Actually, my a/c has $12k. But I am very caution. I give each ES contract 120 points or 200 points for emini NQ. I think by doing so and never leave contract overnight, I can have little chance of getting margin call. Unless Bin Laden comes again My stop loss is 1 to 2 points. 4 X my ave loss means 4 to 8 points. I think it is quite hard to make 8 points per trade. Does it mean my plan is not good enough? I welcome any comment.
Ok, here we go again. I tend to agree that 10 times the risk per trade is doing pretty well, and of course if you get much beyond 2-3% at risk, your risk of ruin becomes a factor. But that is only half the equation. Your expectancy also comes into play. A trader with a highly profitable system risking 2% is not equivalent to someone with a break even or worse approach. In other words, the percent at risk is only one factor, albeit an important factor. That of course leads directly to the one concept that newbies don't seem to grasp. You can't control your risk by the size of the stop. Your approach or system and market volatility determine your risk. You can only control how much you lose on any one trade. If your stops are too tight however, causing you to lose repeatedly, your expectancy goes negative and your risk of ruin becomes a question of when not if. I'm pretty sure Allen will agree with this but I'm also sure there are plenty of people out there who think they are being very conservative because they are trading the ES with a 1 or 2 handle stop. I could be wrong, but I would guess their expectancy is either negative or so low they would better off with their money in the bank.
Yes. I know we need to have an edge to win in the market. But this is more about the trading systems, methods or other technical factors. What I am concerned is risk and reward factor and also the money magaement.