Definitely making nice swings big daily. Risk/reward wise, one point change in ER2 is equalivent to 20 points change in YM, these days, this ER2 makes 15-20 points swings daily, this is equal to 300 to 400 points change on YM. Lot of opportunities to make or lose $$. Besides, save commissions to trade ER2 instead of YM, NQ or ES.
Talking about risk/reward and scalping, I had a nightmare last Monday on a software failure. I'm not sure how many of you use TradeMaven to trade. Trademaven went down last Monday morning right after I bought 20 contracts (try to scale out 0.50). I also had 10 more limit buy orders in the scale-in process. TradeMaven went down for several hours. I had the stop loss through a strategy, I thought the positions would be stopped out when the big drop came around 678-679. Unforuntately, the strategy didn't work when the Trademaven severs went down. But the limit buy orders were executed, I ended up with 30 contracts. By the time I downloaded and used a backup software (TransAct) to look at my positions, ER2 dropped a hard 3-4 points, I was down over $10000 and none of the contracts were stopped out. Later after I called TradeMaven, I leant what happened. What happened was, one week ago, a Trademaven guy helped me setup an all around strategy to work for both CME and CBOT. I didn't realize the STOP # orders he helped me setup didn't send the stop orders to the exchange UNTIL it hits the STOP price. If TradeMaven is down, or the software is down, or the Internet connection to TradeMaven is lost, the stop orders wouldn't send to the exchange forever. After I did more reading, I found STOP# orders are synthetic stops. I fight all day Monday with a new trading software but still lost $8K for that day. A very hard lesson learnt. Trademaven released a new version (v3.19) Monday night and fixed its server connection problem. You got to know your trading software inside out. This mistake was 100% my fault, not the software to blame, I should have asked what the STOP # means. This is another reason I didn't post much for the week, still mad at my dumbest mistake So for other TradeMaven users, please make sure not to use STOP # or STOP LIMIT # on your orders to trade ER2.
I was comparing it to ym myself: $10 a point is double ym tick value so certainly you have higher negative expectations right from the start, but don't necessary have to risk more: mental stops don't need to be bigger than 7-10 points and at least it's not stuck. these past few days er2 made quite impressive breakouts during the session and offered many opportunities were r/r was excellent. Also if you are daring you can use then book and trade every candle, picking up 3-10 points here and there; of course taking some losses along the way.
You simply observe the price-range for every 3-5 min candle formation: it usually has a movement of 3-10 ticks or more; follow the action on L1 and place orders aggressively on the book to capture the range between the lower and upper shadows.
I started to play inverted Fisher RSI transformation indcator last week, this TA indicator worked very well so far, if the index is extremely bearish or downtrend, RSI stays at the bottom (hooking), if the index is extremely bullish or uptrend, RSI stays at the top (hooking). Compare it with regular RSI below. This is 233 tick chart for Friday ER2:
When regular RSI crossed Fisher RSI, this can act as the buy/sell entry points, when ER2 is in downtrend, regular RSI stays above Fisher RSI, a good and safe short entry is when the regular RSI crosses and drops below Fisher RSI. Again, using Friday's ER2 chart, regualar RSI is the green line in this chart:
Opposite is true to go long. If regular RSI goes across the Fisher RSI and stays below Fisher RSI, that's a buy and hold, sells when the regular RSI touches the Fisher RSI again:
Another observation on trading ER2 (or any indexes or stocks in general), you never miss a train if it wants to leave long and far away. You always have a second chance to get in - either long or short. ER2 always performs 1-2-3 check on almost every major trend, up or down. If it is on the uptrend, it will goes up (step 1) first, then goes down to test the previous low (step 2), if previous low holds, the train will starts to leave. On the TA indicator such as RSI has a higher low is the key on the step 2 pullback. Friday's major moves: After the open: