aphex, you are very eager and that's fine. trust me, it will pass it's really tough and so many things you will try will fail. maybe it's not so much what works, but what does not work. and that you learn only by trying, many, many, many times. this is a very interesting thread too. don't underestimate capitalization though.
One final word, here's a test. If you sometimes have problems honoring your stops, forget it. You will never make it as a scalper. If you are guilty of taking small profits, you might just be a scalper and don't know it. Maybe those small profits are what you are comfortable with and all you need to do is tighten up your stops and you will start making money again. And if you always honor your stops and you never take a profit until your target is hit, then you need to be posting and I need to be shutting up and reading.
I missed this one ! Great post Dottom. I agree so much, you are 100% right. There is a new forum on ET now on strategy dev. We'll see what happens (expect the same pattern though, but I hope not, since it is a dedicated forum). I don't do arbitrage and I do work on day/swing trading systems that actually work. Sharing results and ideas is always the problem because as you know, it's so much hard work (so why give it away) and often, work is tagged with confidentiality agreements. But there are general things we can discuss (we as you pointed out, we usually start on those) and some details too. What people should expect is to hear about the discipline of the work, and understand the process. But usually they are more interested in getting a working system for free (until they are self convinced it does not exist). an example of something I learned from experience and I confirmed reading you and a few selected others : system scalping is not the way to go. Maybe it is actually impossible (maybe not, someone please tell me wrong). Anyway, so difficult it's more efficient to focus on other methods. I know emini trading is profitable, as soon as you forget about the obvious stops and switch to a longer time frame (than 1 or 2 points). That's my experience at least. However, most members and readers here are not capitalized enough to do it that way. I am in the camp of "keep it simple". that's the new battlefield on ET : those who think trading can't be easy and those who think it does not have to be complicated. Again, when I was a junior it was first the easy thinking (playing lottery or dice, shame on me) then the super complicated thinking (consider all possible patterns and thousands of rules, work on being a zen monk to deal with them) and all this failed. Then I finally went back to 'seek the simplicity' but not in a random way. The market is not random, it's chaotic. you can trade it when you focus on probabilities near you ( 'near' can be a few minutes or a few weeks or a few months -I don't do longer, but I expect it continues). there is a basic model at work in double auction markets. and it's simple. then you build on that. funny enough, just like relativity theory and quantum physics (trend theory and scalp theory) there is a missing link, it's not unified (for my group and I at least). It seems to hold true with other experienced traders here. the missing link makes it very difficult to system scalp (besides arb maybe) these markets. On the floor they used to have this missing link, by being there (I theorize). anyway, I know several succesful traders and groups on these markets trading bigger swings than the scalp we read about in this thread. None, including myself, succeeded in making it work scalping (one exception, low volume emini periods are very easy to scalp, even automatically. but these periods are rare in the year and you can't move size anyway. it's fun though). tntneo
Believe me, you don't want to be targeting .50 point because you'll never be able to distinguish between a truly good entry point and plain noise. Unless you're trading commission free, you will be eaten alive by your broker before the market even has a chance at an appetizer. Stay with one contract, and aim for points per trade, not the number of profitable trades. If you really hate leaving money on the table, use tight trailing stops, but the important thing is to be as selective as you can on entries -- for example, even if you're only looking for 2 or 3 point avg profit, wait until it looks like you can get a good chance of catching 6+ points before you pull the trigger. Don't forsake the large gains for the small gains just because as you're starting out, it's difficult to see the difference between the two opportunities when the time comes -- learning to see the difference is what the game is all about, IMO.
gone move right in. heres a nice oldfashioned tale from my childhood: âMost investors and traders approach markets in the same way as they would approach a lake containing a fabled treasure. They feel that all they had to do is set up appropriate pumping equipment and the treasure is theirs. What they do not realize is that â as in all good fairytales â the lake has magical properties, designed to protect the integrity of the treasure. Most people who touch the sparkling water are doomed to become a part of itâ¦â Tony Plummer âForecasting financial marketsâ
hardcash, What about the one called "Alice in Wonderland?" It amazes me how many people on this board profess that it can't be done, yet everyone obviously hangs around here for some reason. I'm beginning to suspect that a lot of people here aren't Elite Traders at all, and get very upset when either: a) Someone does very well trading. b) A Newbie comes along and talks about trading. c) Someone offers a suggestion and then gets reamed for it. Let's look at it this way: Anything you do in life requires some level of work, commitment, passion and determination from the individual to succeed. Whether it be trading or a janitor wanting to make cleaner of the month by making sure every toilet sparkles, the amount you get out of something is always proportional to the level of work you do to put into it. I am 25 years old and I am sure there are many older people on this board who are very opinionated and set in their ways. Some of them probably "rip it up" in the markets while other's barely have the ability to be onboard for the month, week, year (whatever). What really amazes me is how narrow-minded some people are about life and, to a lesser extent, trading itself. If you live your life with blinders on, let other people tell you something is impossible and then accept that at face value and never "try" to succeed, then you have just defeated yourself. I really love kids because they are so keen on observing the most obvious things in life and have yet to be indoctrinated with rules about what is possible and what is not. If 99% of people cannot become the CEO of a major corporation, there is still 1% that can and do. What is the difference between a CEO and a front-line worker? Well, that CEO, in most cases, was a front-line worker 35 years prior who busted his chops doing the best job he could while others did whatever they needed to just to collect a paycheck. Perhaps that person had a goal or vision, but he continued to work hard, learn the ropes and push forward year after year. Is he a better person or more intelligent than the next guy? Not necessarily, but he is highly motivated, probably unconventional in his approaches and will often go against the prevailing conventional wisdom. Take this discussion and apply it to trading and you have a lot of similar things going on -- and obviously, since I am only 25 years old, I don't know anything according to the narrow-minded older people who would rather show their tough skin and belittle someone else than actually stop and say, "hmm, I'm going to listen to this person, he might offer something interesting to think about." I knew this guy who was in his 40's who always talked about these great ideas -- they were really good ideas and he just sat around talking about them. One day, it occured to me that, although these ideas were great, he never acted on them. He just sat around coming up with really great ideas but never did any work to pursue them. I guess, quite frankly, he was just lazy. Yes, I did make an entrance onto this board with a very egotistical, smarta$$ post -- but I am 25 and that is a phase we go through. However, I *am* unconventional, very determined and I *will* succeed. It is absolutely amazing how one's mindset really shapes the perceptions and constructs of a person's observable reality. It's like a good-looking guy going to a bar and getting shot-down by a hot blonde. Then he gets shot-down by a brunette. Suddenly, he feels less confident about himself and his future approaches towards women are even more half-hearted and they see right through him -- they see the confidence level deep inside him and they, too, reject his approaches. So finally the guy thinks that he's just not the type of guy who can get a lot of women and constantly thinks that and, through his thoughts, makes is a self-fulfilling prophecy. On the other hand, I have a best friend named Aaron that got shot-down a lot, but also got more a$$ than a toilet-seat. I asked him, "When you go up to a hot blonde and she turns you away, how do you remain so confident afterwards?" He basically said, "No, she didn't reject me, I just found out she has bad tastes." -- And yes, he really did believe this in his reality. So what happened? He'd constantly hook-up easily with that attitude. So to all the naysayers in here who also like to come down hard on other's -- The only advice I can give any other newbies that come along is this: No matter how many people in this room tell you this and that can't be done, don't take it seriously at all. Believe in yourself and, if you feel you have an edge, pursue it with all your heart and soul and make it happen. Like the hot blonde example, "You didn't learn that it was impossible, you just found out that the trader who gave you advice just thinks it is." aphie
Aphie, You make some good points but also some not-so-good ones. The good-looking guy in a bar example doesn't work for the markets in that women look at a person's personality, attitude, & character in addition to just looks. Perseverance alone -- saying *I **will** succeed* -- has been done many times by many people who still went bust. The market doesn't care how determined you are or how long you are willing to persevere. You need to have an edge and the discipline to execute it within positively defined risk parameters. What many people are saying on this thread is that scalping eminis is very difficult, not impossible. Why not look at it in terms of probability and not absolutes? Let's say that (hypothetical numbers): 1. .01% of people are successful scalping e-minis for a living 2. 1% of people are successful day trading intraday swings for a living 3. 5% of people are successful swing-trading for a living In addition to the % success rate, there are also different risk profiles and capitalization needs of each one. My point is rather than take others experiences as a total condemnation of what you can or can't do, instead look at them as probabilities and pick the challenge that's right for you.
dottom, I agree with you. However, it has been said that the market is also like a mirror that reflects every personality trait of the trader, which would mean if we are hesitant, greedy, fearful -- all those things come back to us. Well, I will find out first hand shortly what psychology is all about when I have $5k on the line. Until then, I'm going to take a more quiet role in here. Here is a funny joke I came across about paper-trading vs. real-trading:
ha ha, very funny, thank and now back to paper vs real, they are not the same, you miss out the emotion part with paper trading, I know a few did well in paper trade but lousy in real trade, myself include.
Yes, I had to learn that paper is not real just today. Well, i knew it before, because I started trading real, went to paper after a few months, and came back now. The problem is that now I know better how to trade but my emotions sabotage my profitable paper strategy. Got to try something else to cancel out my emotions. And reading a book like "Trading in the zone" helps to understand my problem better, but it can't easily erase the emotional aspect by rational thinking. This is also true in life That shows me why people say trading is a journey which will bring you into contact with your weaknesses.