Scalping the S&P E-mini Futures-ES

Well there seems to be an interest now to discuss day-trading the ES futures contract. I have been daytrading the S&P E-mini now for the past few weeks and started this forum so that those of us in the other threads that expressed the same interests can all chat here and discuss live trades.

I would love to be able to post my real time trades but my trades can be from 1 minute to 15 minutes and in most cases it will not be easy to place my trade and look away to write here so many posts might slightly delayed. The purpose is not to just post trades but discuss approaches and tools used to trade the E-mini.

So I will start off with my general approach:

First I trade the E-mini at thinkorswim.com but will be opening an account with TradeStation because I want better access to live streaming charting and $1.00 cheaper commissions ($2.50 at TS v. $3.50 at ToS). I still trade options at ToS.

Second I use live 1-minute, 5-minute and 15-minute charts of the S&P and now ES and trendlines of support and resistance for trading along with the corresponding TICK indicator with the same time frames. Both are in candlestick form.

I am using TeleChart to track the S&P and TICK but will soon be using TradeStation because the software is better and will be free given the volume of contracts I trade. So I will save the $99 a month for TC and have $1.00 less commissions PLUS better live charting software.

I started with 1 contracts at a time until I felt more comfortable and now do 5 contracts at a time. I will be moving to 10 contracts at a time soon. 5 contracts is a margin amount of about $19,000 and 1 point = $50 and 5 contracts/1 point = $250.

My goal for now is to scalp about 1 point a day and continue to do this consistently. No big home run trades, just my same old motto of Nickles and Dimes a Thousand Times. If I only make $1,000 in an approximate 20 day trading month, then it is still a monthly return of about 5% on the same $19,000 risk margin. This is scalable with 1 contract or 100, as long as commissions are not a problem.

I do not use pre-set stop loss limits, I base my stop loss on the trendline breakouts and TICKs and get out as soon as the move is opposite to what I expected. This always happens within a minute or two of the trade so I can get out pretty quickly. In some cases I reverse the trade completely. For example, if I am long 5 and the upward breakout quickly reverses and TICK dives, I immediately sell 10 contracts to now be short 5 and ride it lower.

Well we are now off and all are welcome who want to discuss daytrading the ES!

Phil

 

Here is an article that might be helpful for those interested in using the TICK indicator:

http://www.smartmoney.com/options/index.cfm?story=sfo-music

Phil

 

I am attaching a chart of the S&P using 5-minute intervals. As you can see from the chart we have a nice triangle/wedge forming and a breakout to either side would indicate a great entry. Watch the TICK for an extreme reading near a trendline to forecast a breakout and then ride the direction.

Phil

 

Here is the chart. If you check now you will see we bounced off the top trendline of the triangle/wedge. This could be a developing bottom or point of consolidation. The breakout could be strong and profitable. The upper bounds appear to be around 1193 and lower bounds appear to be around 1188 currently. Waiting to trade the breakout myself.

Phil

 

Phil, where's the attachment???

 

Above

 

optioncoach,

Wow, I read that article like 9 months ago,

As good as the tick is, are you trading with another edge or is it just the tick and some money management?

 

Here is an updated chart as of 10:46 AM. There was a smaller triangle which the SPX broke out of yesterdat when it ran down to 1186 and there is also the larger triangle shown. Notice how the SP bounced back off the upper descending line just a few minutes ago and is now somewhere in the middle of the triangle. I am hoping this is a bottoming traingle/wedge and not a mid-point of a move lower lol.

Phil

 

thanks for opening this journal!

especially after we got "kicked" off or RC's

haven't looked at the tick stuff, but thanks in advance for posting it.

went short at 11:00 with a 2.5 pt stop
looking to exit at 1190... who knows though this action seems to have flattened out here.

 

Ok just scalped 3/4 of a point with the index bouncing off the bottom ascending triangle line.

Here is what I did. Aftr bouncing off the bottom line I went long 5 contracts at 1193.25. The TICK then went down sharply and the future dropped a bit so I went long another 5 at 1192.25 for an average price of 1192.75. The index hit the bottom trendline again and if it broke through on large TICK I was out as a stop loss. However, the TICK began trending higher so I held on. The futures moved higher as the support held and I closed all 10 at 1193.50 for 3/4 of a point or $375 less commissions in 11 minutes.

Below is the chart labelled with my two entry points. The chart is of the S&P so it will not move like the futures exactly. You will notice that the index jumped back to the line on a large down TICK swing but the market reversed as the TICK surged higher again. You could have went long again here on the reversal.

Phil