Easyrider & Huios, The best setups are the easy ones like breakouts from support/resistance, double bottoms/tops, triangles, conjestion, equal ranges and retracements to a level. It all comes back to keeping it simple. These setups are in the emini everyday, its just a matter of watching and then acting on the stronger ones where more than one setup comes together. As I have said before the entry is the easy bit, its the exit that is the hard part. And Huios, I personally believe if you want to make good money from decent runs you have to get away from a 1min chart. The 5min chart shows the setups better and cuts out alot of whipsaws. Another thing Huios, you will probably become very good at this if you keep up the practise of tight stops. Don't listen to anyone trying to tell you to give the market room to move. Thats a good way to lose your bank. Keep the stops tight. If you take a trade you must think it will work straight away otherwise you would not take it, you'd wait till later. Therefore if your stop gets hit you should not have taken the trade in the first place. Always take small losses, you can get back in later. You can't get back in with no bank. I use no more than a 1pt stop loss (4ticks). Good trading
Always take small losses, you can get back in later. You can't get back in with no bank. I use no more than a 1pt stop loss (4ticks). I think it's a matter of preference, 1 point in ES seems too small for me but If it works for somebody that's OK. It's inevitable,though, smaller losses will get you stopped out more often. More important IMO is not to switch strategies (rules) every couple of trades.
I'm also an advocate of tight stops. The best trades are the ones that show a profit right away. Here's a thought i picked up at the website of Linda Raschke. She proposes to use a trialing stop of half your profit. I apply this when I'm up 4-10 points on the NQ, above 10 points I tighten my stop to 2,5 points, as consistent moves bigger than 15 points are pretty rare these days
Yesterday, I was re-reading vultures post (for the nth time) that he posted in another thread, and that I posted here. I knew there was something that was in there for me, but I could not find it. Then, all of a sudden it hit me like a 2x4 between the eyes.... I'll post later tonight, got to get ready for our meeting at 1:00. Been real busy since Fri afternoon. This is where I took my wife for our date. Very cool. Our worship pastor (rythym guitar player for Bonnie Raitt for 10 years, a Muscle Shoals, Alabama boy) was playing along with some of his "blues" friends. http://www.sixstringcafe.com/ Thank you all who posted within the last 24 hours. Most of it is confirmation my revelation yesterday. Be back in a few hours... <--- H
OK, here we go. My big realization was I was combining two different mindsets into one plan, and not even knowing that I was doing it. I wanted the large gains (5-10 pts) of a swing trade, with the risk of a scalper (less than a point). It just doesnât fit together. This whole thing about exits now seems to make sense. I was not getting my exits because I would flip flop between scalp and swing⦠while in the trade⦠being double minded. Iâd enter a trade and the market would go in my direction, and I would want the big move (swing), as soon as it started to give back a little, I would jump out (scalp). Iâd enter the market and it would go against me, Iâd let it go (swing) and then it would get too painful (scalp) and Iâd jump out, usually pretty close to the high/low tick. Then the market would come roaring back in my original direction. Ohhhh, if I would have just held on a little longer⦠which reinforced the double mindedness of my trading. One of my premises was that scalping and intraday swing trading was the same thing, you just held the swing longer. That is not true. The "pain threshold" of a swinger was something I did not fully understand. I had an idea, coming from a position (multi day) trading background, but not when it came to intraday trading. Why can't you have a 10 point run, and only risk .5 point???? You can, but it is a rare occurance.
This is exactly what I was doing, flipping back and forth between the two. OK, this brings up some questions. Iâm not sure what you mean by conventional techniques? I realize that the ES is a contrarian market, by this I mean that moves are fades with regularity. I learned this the hard way the first two weeks of trading it. What I was doing in the commodities, was not working, and had to adapt. Vulture, would you please shed some light on this? What exactly do you mean? I agree. Now that I know the difference, it makes complete sense. Exactly!!!!! So, in conclusion⦠I was trading with the understanding that I could use a scalp mentality (when it came to stops) with a swing trade, and a swing mentality (when it came to gains) with a scalp trade, and vice versa. The kicker was I did not even know I was mixing aspects of scalp trading with aspects of swing trading into one big morass. And you just canât do that. Separate the two.
yes, good analysis...I think this happens to alot of people trading the mini's...Like I mentioned in that post, it happened to me somewhat frequently, especially as I began to trade both accounts with two separate time frames... Like I also said before, the biggest risk in trading the indicies, IMO, is being stuck between time frames...Once you get into that gray area, you are filled with hesitation, apprehension and overall fear because you are not quite sure what the heck you are doing with the trade...It is much easier to just adapt one time frame and stick with it and make sure you know which one it is... And you are right that once in awhile you get the trade that immediately goes your way for a good chunk, like 4-5 handles without ever going against you...but truth is, to even find entries like that you are pretty much fading some short term momentum or fading one time frame against another, because you are catching the peaks and valleys...and to get into those types of trades you really have to be aggressive... The good thing about trading on a slightly larger time frame is that you are able to kind of filter the noise a bit and detach yourself from it...You can even be pro-active with it...I will often scale into trades and add to the first entry even when it is running against me, because I am trying to enter inside a specific zone of support/resistance...When you are glued to the scalper time frame, you are basically putting enormous pressure on each and every entry because you are trying to predict within 2-3 ticks each peak and valley...With the number of buy/sell programs running the markets nowadays, the "blips" on the micro time frame are becoming more volatile, and imo a bit less predictable... Just my opinion...Others will disagree...There are plenty of "pure" scalpers out there doing well, but the discipline is very different
Sorry, I missed the question in your post with my previous response...When I say "conventional techniques" I am basically just speaking about the "consensus"...By consensus, I would say that the majority will use breakout systems intra-day or some very popular moving average and time frame to trigger trades... I say this because it all "looks good" and seems logical...The problem is that many times you are entering the market as it is running away from you, you are exiting or stopping out as it is running against you...The negative slippage, especially on the shortest time frames, combined with commissions and emotional factors all add up...And, even more importantly, is it tradeable...I mean anyone can run a system test and come up with some decent numbers, but most of these "systems" are simply untradeable...They seem to smooth out all of those price shocks, employment reports, stop runs, etc, etc...Then they also leave alot on the table as well...Actually, this is more of a rant than sound analysis so I will shut up now...But I have been around these chat rooms, spent time in some of the "pay per" trading rooms in my earlier days, so I have a good feel for what the conventional techniques are... This is probably still a bit vague, so maybe I should just call "conventional" everything that is written in books about what "should" work, but once you are in real time, it all comes up pitifully short...And many of the techniques or trade management concepts that "should not" work often do work...