It's simple. ES trades in 1/4 point ticks. He's taking half a point in edge loss as a price taker. A one point target, absent commissions. It's in no way sustainable. If he were profitable he'd find a product with less edge loss. It's likely that he chose ES because he's undercapitalized. We'll never see an actual blotter. Peter, just show your end of day run and save yourself the trouble of posting each trade.
its good to hear that it is good strategy and yes probabilities of trades going in favor far outnumber the ones that go against. i am really interested in your journal and look forward to your calls and also learn things to better improve my trades, don't listen to naysayers.
it is possible that it is not sustainable in long run for i am newbie when it comes to this trading methodology but since PeterH seems to have a good run using this, i am sure it is vetted and all. Also a point in ES means $50 and end of the day this strategy which seems a lot like mine produces a lot of signals and does not care for if the market is trending or ranging or bulls/bears are in power. After taking out commissions you still are in a lot of green. Beispiel if you take 20 trades in total , and 15 of them are winners with just a point on 1 contract , it is quite a handsome profit for amount of time involved. and if you increased the trades to 2 points with and average of 3 contracts per lot with scale down involved. it is a winning strategy.
He starts out in a two tick hole. Needs a 67% hit rate to break even. You can wax philosophical about it and talk about how it works in this market or that (market). That doesn't change the maths. Think about it in terms of an ATM digital option. Would you buy an ATM digital if the payout was 67/100? No, you would not.
i really do not understand your analogy, i blame on my poor comprehension about options and less than average mathematical aptitude. but if i look at the quote of 67/100 compared to 50/100, since i am more of a probabilities guy i would take the 67/100 and play on that probability all day long as chances of winning on that probability is more likely with maximum trades. I am speaking from a probability point of view and the short scalp with 4 ticks win/loss is not exactly 50/50 as you seem to think, it is more like 75/25 or even 80/20 win/loss ratio.
If you're going to scalp for 4 ticks ($50), it makes much more sense to trade NQ. The 2 tick hole that Destriero is talking about is much more manageable at $5 per tick in NQ. But if you get good, its not scalable so why bother ? Also, I find $50 a trade just pure madness unless you have an incredible amount of knowledge of how price works. Its still not worth it IMO. If ES or NQ are trending well, on average 1 or 2 days per week, learn to capitalize on those good days, and stay out of the market the other 3 or 4. Hell, find equities that are trending the other 3 or 4 days and ride them up. But to tick f*ck all day long is just nonsense. Nobody makes money doing this.