I'm glad this ones over. I am wondering if most ES traders go for the swing, or scalp for .50s. Was the last two days of DTing the ES more difficult or a typical day? I lost $500 the last two days due to my own stupidity trying to go for the swing - at the wrong times of course. I watched plenty of .50 or 1.00 profits stop me out at even or for a loss. It seemed at the time that nearly every bar on the 2 minute retraced the better part of the previous bar nearly all day. Anyone else like this type of grind?
Regardless of what you are trading, you should have a ruleset to deal with all contingencies and all market environments... the ruleset must be second nature, so that your brain doesn't have to actually think during the trading day... in respect of yesterday's action, the price action was clearly not amenable for trend trading until the last hour... your rulset should have told you to err on the side of caution for the first few hours of yesterday, and either stay out or play for 0.5s and 1s using approaches not reliant on a trend... now I am not advocating a purely mechanistic approach based purely on a rigid ruleset... indeed, I am a discretionary trader... but what I am advocating is an extensive ruleset which you have on paper (mine runs for about 20 pages, and is the result of several years of observing stock prices)... the ruleset should be a series of what-ifs and should become second nature... when you add a ruleset to your discretion, you become what I would classify as a discretionary automaton... taking the best of the discretionary and mechanistic worlds and fusing them in accordance with your unique personality and way of perceiving the market's structure... yesterday provided plenty of opportunities for breakout players, faders, trend traders, scalpers and swingers... effective risk management and an understanding of the price dynamics would have enabled you to capitalise upon your preferences, while limiting the downside... .... in answer to your question "Was the last two days of DTing the ES more difficult or a typical day?", yesterday was closer to typical than we have had for a while... the abnormal price action of the last couple of weeks was an aberration in intraday volatility... in a perverse kind of way, yesterday was a welcome restitution back to normality, and reminded us all again that trading is not an automatic license to print money (unlike the preceding somewhat effortless and highly profitable weeks).... yesterday was very tradeable, assuming you latched onto the price dynamics which were amenable for your strategy or strategies...
Why was Friday any different than any other day? Every day in es there's a major bear a major bull a trading range and just about anything else you can think of in between. I trade for a full point. Sometimes you have to get it a tick at a time. I don't like to let any profit run against me. I make money due to accidental good luck. (That's when it moves in your favor faster and farther than you imiagined.) Every now and then you even latch onto an overnighter.
I agree with you that from a very short term point of view this week in the ES was not much different than the preceding months. Since I am rather new to trading and therefore did not know that, I stayed out of the ES most of the time and traded securities options instead (you can't lose there at a time like now). But in hindsight the ES would have been just as profitable with my system that aims for single points as ever.
The problem with small profits like only 1 pt or less in es is your stops are way out of whack. 2 pt stops and 1 pt profits will come back to haunt you. But still, I will take a small profit if I think that is all I'm going to get, and try try again.
With a 20 page ruleset can one person be all those traders? How often do the price dynamics change your mind as to which strategy should be ideal? Is it a tick by tick decision. or for example, do you see theres no follow through in momentum today so i'm going to fade breakouts.
Big picture decision... a lot of time is spent simply watching to understand how the market is unraveling... once I have come to a decision on the current price dynamics, I will stick to one strategy until it starts to falter... one strategy at a time, since alternating between strategies on a trade to trade basis is a recipe for confusion and account depletion... somewhat paradoxically, I have concluded that it is useful to have many strategies, but dangerous to trade them at the same time... once my discretion has concluded upon what the price dynamics are, I try and stick to one strategy... it will only change if there is a perceived structural shift in the market dynamics...
that the late intraday moves in the SP and Dow futures post 2 pm , 230 pm 3 pm EST have been up Wed , Thurs , Friday ? Or is it a sign of the fund redemptions slowing down for now?
Everyone has their "indicators" as to when to trade and when not to trade. If someone felt that Fridays' price action was not tradeable for them, then for whatever their reason, they just should not trade. I have very strict rules about when not to trade. Some are just a matter of time periods (for example, I will generally not trade between 11:30 and 1:30) and I have cetain specific things I look at (volume, divergent markets, some of my secret stuff, etc.) For a good part of the day Friday, I just watched. For a good part of the day Friday I got away from my screens completely...as I often do anyway in the middle of the day. I ended up having an exceptionally good day (for me....over 60k), but it was virtually all in the last hour (as it so often is). So once again, it comes down to discipline. I feel strongly, as I am sure most of us do, that you need to be patient and let the market come to you. Let the stars line up so to speak. ONe of the worst things a trader can do, IMO, is to trade when they are not comfortable with the market action. This is right up there with letting a winner turn into a loser. Maybe my next thread should be about HOW NOT TO TRADE Or BIGGEST MISTAKES IN TRADING. If anyone has any specific topic they think would make a good thread, let's hear it. I am getting close to retiring from trading (working), so I might as well pass on what I know. (my 3 kids are about on their own. Oldest graduating college, second in her sophomore year and it's all paid for, and my youngest is in the Navy Nuclear Training Center. My house is paid for (almost), and my wife, who is an attorney has gotten tired of working and is ready to hit the beach too. I don't want to retire when I am too old to enjoy it. I am in my early 50's and it is my time. I will never write a book (I have, but not on trading), and I will never do seminars. I have no desire to be under that kind of scrutiny nor do I want the attention. Nor do I need the money. But I have always taken pride in helping other traders. Sure, if every trader traded my way, it would no longer work. But there are too many players, and the playing field is far too large to ever have this kind of effect. Good luck to all, RS7
I hope you read what I said about looking for "tells" in the thread "TA and common sense". Look for repetive action/patterns/occurances of any kind. See the end of the last post in that thread where I talked about "tells". As for what it is a "sign of", the reason doesn't matter. That what you see is happening is what matters. This is exactly what I was referring to. Oh, and like the cops always say on TV and in the movies, "I don't believe in coincidence." Best, RS7