In regards to your entry technique of using 2 contracts, what would you do if you were only able to trade 1 contract?
That's a good question, but one I'm not sure I can answer, as I haven't put much thought into it. My thought process is that many times you can get 6 ticks if you get a good entry, even if you get the direction wrong in the end. The idea is, get the 6 ticks and go to BE quickly to reduce risk. Sometimes you get stopped out at BE after the 6 ticks, and the market moves on in your direction anyway, so it can cost you as well. I'd rather get the 6 ticks, and reduce the risk. Also, if I hit it right, and it takes off, then I still get a piece of the big move. The best trades usually take off right out of the gate, but not always. You have to weigh the options and go with less risk, or more risk and more losers, with more big runs I guess. Another option with two contracts is to still take the 6 tick profit, but not move immeidately to BE. If your wrong, you don't make any money, but the 6 ticks offset some of the loss, or at least allow you to have a BE trade if it turns against you. Back to your question though. If I was trading only 1 contract, I guess you could still move to BE after 6 ticks, and then hope you don't get stopped out before the market continues on in your direction. You might go with 8 ticks and then to BE to give yourself more room. You might also just go long with the one contract and tough it out until you get a new S/R level, then move the stop to 2 ticks outside the new S/R level. I'm sure there are many on here that are only using one contract, so they might be able to chime in with some suggestions. I've always used 2 cars, and when I can do this consistently for a while, I'll go to four or six or eight cars, and take 1/2 off at 6 ticks and go to BE and allow the other half to run. When you can make 6 ticks on 2 or 3 cars, that's 3 or 4 points per trade, even if you get the direction wrong in the end. Of course if you get a full stop though, it's a bigger hit to your account. I've also used 4 ticks as my first target as well, but You need to keep your stop equal to your first target for money management reasons, so if you go with 4 ticks, you also have to use a 4 tick stop and I found I was getting stopped out too often, or else I couldn't get a good enough entry to keep myself outside the S/r area. Not sure if this helps, but that's the best I can do with my limited experience of using 1 contract.
wish every day had a nice trend like today! oh well, probably back to chop in the near future and will give back everything I made today! Here's my chart for today....comment if you see anything I missed.
Mccullek... I use 2 contracts when trading ES, NQ and YM... I use a similar process for target and stop... for example.. for ES, I use 2 contracts, stoploss is 2 full points (8 ticks), first target is 2 full points (8 ticks) and after first target is hit, I use a trailing stop of 4 full points (16 ticks) until I get ahead about $400 total then use a trailing stop of 2 fullpoints until it stops out. Of course, I often adjust the stoploss and trailing stop once I'm in the trade. I use different values for NQ and YM and as you can see, I'm not a scalper. And as you said, this can be scaled up easily. I'm comfortable with my stops/targets/exits... but still working to refine my entries. Of course this process only works when I have decent trends like today... Cheers Toucan
Toucan, What is your stop, target, and exit when you trade the NQ? I only follow this market and I appreciate any suggestions. Thanks. Floyd
Floyd... for NQ, I use stoploss of 4 full points, first target of 4 full points and trailing stop of 8 full points.. Toucan
Don't even joke about that. Think of it as if you were a professional executive level officer of a major corporation entrusted with a large amount of money. Your chart is excellent by the way.
I personally would analyze my method, and see what the perfect ratio of a given number of ticks in my favor is compared to a best case scenario and a worst case scenario. The above is confusing so allow me to use an example from my bond trading journal. After a few years of experience I decided to data mine my own trading. I discovered that my entries were almost always good for 4 - 6 ticks in the ZB. The percentage was unbelieveable. My stumbling block was holding on for much more. Once I made that discovery my trading took off. To apply this to a one lot trader, I would find out how many ticks you are usually good for, and make that your target. Once you build up your account, you can then exit the first at your "good for" number and let the other ride.
More of the same today. No real break out yet, just a steady grind down around the LOD. I did get short on the pull back around 9:44 AM, and it was the best pull back of the day with the exception of the opening drop. I covered when it turned, but haven't found another decent entry point, so only one small trade today for a small profit. I'm looking for one of those great trading days where I can get long/short and stay that way for a while! A small profit is better than a loss any day though.
1 trade this AM -4.25 pts. Shorted magic tick below bar closing below major support level 2375. Got stopped out. Mkt finally pushed down over lunchtime