Good Morning volpri, Very well said, I agree with you 1000%. It is better to trade manually with the eyes as you have been saying. Systematic algo system trading does not work.
Systematic if automated has its pros and cons as I see it. But I am not fluent in such things because I don't know how to program. But it seems to me and this is my opinion only: Systematic trading: It can work for a while then it stops working when conditions change. Looks like it would take require constant coding to optimize it. The challenge would be keeping it working vs the challenge of trading itself. If automated it does remove the emotions from trading so that could be considered a plus by some traders. For me that that would be no fun as it removes the fun of trading. We are humans who are hard wired with emotions. They are part of life and out human existence. Challenges (especially for our brain) I think are good for us especially as we get older. It helps us enjoy life. We feel alive. We are actively involved. Trading is more than just making money. There are plenty of very rich people in the world who are miserable and unhappy and worried. The flip side is while money cannot bring happiness it has been known to create a smile or two! Jesus said it best: "A man's life does not consist in the things in which he possesses." In the life and in living materialism fades to nothing when trying to extract true happiness from it. Especially in death which we all face one day. I have walked for days in the jungles for Honduras, slept in many a mud hut eating beans and rice and tortillas, swinging in hammocks talking and thoroughly enjoying my time with Hondurans. In spite of their poverty, they seem as happy as the many Americans I know even the quite wealthy ones. This is changing somewhat with the younger Honduran generation because of a change in worldview with its constant barrage (TV cell phones) on and focus on materialism as the road to happiness instead of finding fulfillment and happiness, at least to some degree, in their toil and work. Warren Buffet once said: “Money in terms of making trips or owning more houses or having a boat or something — it has no utility to me whatsoever,” said Buffett, who Forbes estimates is worth over $145 billion. “Money has no utility to me. Time has utility to me.”
Hello Volpri, Yes, what you said is correct. Algo trading systems and programming trading systems is complete waste of time and effort. Stay away from this style of trading. And you need nearly +$300,000 to do it properly and it may still fail. It is not worth the effort or time programming algos, too much work and more distraction from clicking the charts in real time trying to get rich and make trades. No one person can program ES or NQ trading today and make money., because in 3 months ES and NQ market condition will change, and you will not know it changed until the algo is in major drawdown. Been there and done that, waste of precious time. I blew $25,000 last year with that algo trading systems swing trading crap. Waste of money, could have been used to for scalping manually and make good money. Much easier to stare at chart and click, although stressful at times, it is far more worth it. Algo swing trading systems only worked in 2020 and 2022. Any algo swing trading systems trading since 2023, is completely loss and in major drawdown. The best trading algo system for an individual trader to build is a hyper scalping algo trading system that scalps all day. But that is very hard, I failed it building one. Very hard to build.
Here are some trades for 12-5-2024 using a technique I call whittling down. It is based on the concept of market probes on every bar or group of bars. Basically, it involves whittling down a paper loss (it is not a real loss until one takes that loss) to get back in profit. It depends on market probes and the putting of probability back in scalpers favor of salvaging a scalp that has losses accrued to it. Originally, I was going long betting to make a profit on a MM up from a BO of a bear channel. Instead, it started going against my long position. So midstream I swapped to a whittling technique betting that the market would probe back up enough to get me in profit again and maybe BE on my original entry, make a little, or lose a little on that original entry. When I use the whittling down technique: I can use the technique by adding same size each time or by doubling up the present size each time. It can be done too by tripling up. It puts probability in favor but carries more risk hence I have to settle for small profits. It is nigh impossible when scalping to have high probability, great reward with little risk. It is a tradeoff on these calculations. So, on a scalp if I increase my probability I generally should not go for great reward. Again, as a scalper "grab" what the market gives me. I can always enter again. The market eventually made the MM as it probed up strongly. Should I have held for that? NO NO NO not as a scalper that must maintain a high win rate. An intraday pure swing trader could hold as he is going for a swing. What I am doing here or trying to do originally, is scalping a second leg of an intraday swing trade. I used the first leg to prove a successful BO occurred. Then I make my first scalping entry. Enjoy the video if you can. It is for entertainment and information on a technique I use in scalping. I am not telling you to trade this way. You may not get the same results. You can lose all your money and more. I did double down on each succeeding entry, but it doesn't have to be that way. I could use the same size on each entry each time. I would just end up with a smaller profit, but I would be assuming less risk. I think again this video simply underscores the concept I mentioned in another post just above that the market is DYNAMIC. See I was going for a MM scalp. Whe dynamically that didn't work I had to change midstream my tactics and employ the "whittling down" technique to not only get back my loss but also make a gain. The market is dynamic. Can change on a dime. We never know how far it will go until it makes it makes its move and we can never know "how" it makes that move (momentum...slow and grinding..etc) until it begins to make the move. If what I have postulated (my premise for entering the trade in the first place) does come to fruition, then I am out with a profit. If it don't come to fruition, then I either accept the loss or I dip into my tool box of techniques and see if there is one I can apply. I admit I often break the traditional established rules of trading. But I use certain techniques to do that. It is not just a shot in the dark. THE MARKET IS DYNAMIC. THE ONLY WAY A SCALPER CAN GO WITH THE FLOW AND HAVE A HIGH WIN RATE IS TO HAVE A MYRIAD OF TOOLS TO EMPLOY AS PRICE IS PRINTING.
So on my setup for say ES and CL futures, I use 2 charts for each. A 15 min chart and a 3 min chart. On the 15 min chart, I am looking at the overall trend. If you have multiple solid green 15 min bars that confirms the trend is going up and I would be looking to enter a trade on the 3 min chart. So while the 3 min candle could be red on the far right side of the screen, we would be looking to buy stength in this instance. Once in a trade, I do setup targets and stops more based on resisance and support on the 15 min chart not based on the 3 min chart. So at this point, I do something else and stop watching the charts. However, as time passes, I will look back and see what is going on. So lets say I am in trades at the same time on ES and CL, I notice that one of them is going against me and say if I am long, price action on the 3 min is showing continual weakness, I might just kill the CL trade, and leave the ES trade alone. While not always possible, if you kill a bad trade early and hit the target on a good trade, you still overall have profit not break even.
I am going to take a break from producing videos for a few days or a few weeks. I have other things to do, and I need a break also. Hopefully and can start back up within days or weeks. In this video I want to show how I trade wedge tops and bottoms on a 30 sec chart of MNQ on 12-6-2024. I do not draw the wedges on the chart, but I do point them out verbally. When a pattern is not so discernable on a certain size TF often one can dial to a smaller TF and see the pattern I am wishing to trade and see it more distinctly. In this case the wedge top/wedge bottom patterns are more discernable on a 30 sec chart as opposed to 1m, 2m, and 5m chart. In this video as I am trading wedge tops and bottoms, I use the "whittling down" technique to recover any paper losses as the market goes against my first or second entries. I swap over to another technique midstream if the first entry and a subsequent averaging down entry does not render me a quick profit. In this video on the "whittling down" technique I am doubling up on each subsequent entry once I start the technique. I sometimes whittle down the paper loss (it is a paper loss until I actually exit) using the same size on each additional add on. Sometimes I may even triple up on additional adds. This method works for me quite well because of the market probing on each bar and each group of bars. And because I "grab" my profits and refrain from being greedy. These trades took place between 9:24 and 10:08 so in around 44 min I pulled 155.25 points out of MNQ. Not too bad of an hourly wage. Enjoy the video, laugh and have fun! Hopefully, will be back at it soon. In the meantime, you may wish to watch again this series of videos and get even more entertainment and laughs! Disclaimer: All of these videos on this YouTube channel including this video are for entertainment and information purpose only that show how I like to scalp. I am not advising anyone to use these techniques. You may not get the same results as shown in all these videos and you can even lose all your money plus more.
Thank you so much Volpri for all the hard work , effort and time you spend in the videos creation. They are very helpful. A break is well deserved for you. Great trading on the 30 seconds chart. I never thought to peak at seconds chart. Which TF chart do you normally trade the most? I like only the 2 minute chart for trading price action discretionary.
Your averaging down approach reminds me of Martingale? Someone else on ET journal used similar averaging down technique.
Some traders would say "just take the loss early." We have all done that I am quite sure. And soon after exiting the market immediately swings back in our direction but only goes enough to reach around BE of our original entry. Now IF we had doubled-up on the losing position betting on a probe back to BE or close to it we can often find our doubled-up entry renders us a profit and our original entry is BE, a small loss, or even a profit. That is just averaging down, turning a losing trade into a profitable trade and putting probability in my favor that that is what will happen. I realize traders "see" this as completely backwards and wrong. But I consider this: PA is simply any price movement. So anytime I can shorten the "distance" price has to move to render me a profit then I have just increased my probability that my PT will be hit BEFORE my SL is hit. Granted the larger context needs to support averaging down. IMO traders who have tried it lose because they try it in the wrong context and do it at the wrong time, so they write it off as a stupid thing to do. It IMO it is a case of knowing how much and when to bet and when to fold. Most of the time IF I increase my probability, I take on bigger risks and smaller reward. It is nigh impossible to consistently take trades that render small risks, high probability, big reward. To think and believe that sort of trade exists consistently is a "pipe dream" IMO. So, for me it is imperative, especially on a double up position I simply "grab" very quickly what the market gives me. I cannot afford to be greedy in such scenarios. I am aware that many traders likely look at my scalps and small profits and ask: why didn't he hold for more profit? My answer is I increase probability I likely have to accept smaller reward. I know that it runs against the rule many follow of: "cut your losses and let your profits run." That idea may be ok if I am swing trading but for scalping, I find it is better to add to my losses and cut my rewards. I AM NOT TELLING ANYONE TO DO THIS. IT TOOK ME A LONG TIME TO LEARN HOW AND WHEN TO DO THIS. AND EVEN LONGER TO LEARN WHAT TO DO WHEN DOING THAT DOESN'T WORK. SO, I AM SAYING DO NOT DO WHAT I DO! This is a journal, and I am just showing what I do. I am not telling or advising anyone else to do it, but I do it and I do it in the videos links. Anyone can see if they want to spend the time to watch the videos. Whether it is done on a SIM or real account the concept it can still be seen. On a SIM account just adds 2 ticks to the needed price movement to realistically make an entry and an exit. Because price most of the time, if using limit orders, price has to go through one's price (whether entry or exit) by 1 tick to actually get executed. Not always but much of the time. Long term investors will often add to a losing position and that is considered by many as a viable strategy. Averaging their cost down by adding therefore betting it will go in the correct direction sooner or later to render them a profit. This is often based on fundamental analysis. I see that I can apply the same basic concept to technical analysis and day-trading because of the probing all day long as bulls and bears both are active in a sessions price movement. Bulls want a BO. Bears want a BO. The market wants to move to wherever the most transactions take place. This has always been so and will always be so. By removing the name, price, time (date) axis on a chart it becomes quite clear that this probing happened in 1940 and happens today in 2024. PA is essentially a "map" of human behavior that is not going to change anytime soon IMO.