What are some basic strategies ?

ironchef · Nov 9, 2024

HawaiianIceberg said:
aloha flash!
Is there a certain time window you use to define the pre market range?
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I want to compliment you for your eagerness to learn, persistence and willingness to have an open mind.

May be you already belong to the 1%, if not, I am rooting for you to join the other side, hopefully soon.

Take care.

HawaiianIceberg · Nov 11, 2024

ironchef said:
I want to compliment you for your eagerness to learn, persistence and willingness to have an open mind.

May be you already belong to the 1%, if not, I am rooting for you to join the other side, hopefully soon.

Take care.
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Continuous learning is the cornerstone of sustained success. You can always do better

2rosy · Nov 11, 2024

HawaiianIceberg said:
Continuous learning is the cornerstone of sustained success. You can always do better
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I'm learning Spanish with an app. Yo Ocho el burrito. Basically fluent

ironchef · Nov 12, 2024

HawaiianIceberg said:
Continuous learning is the cornerstone of sustained success. You can always do better
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This is not advice but sharing my philosophy as an amateur retail.

1. If I do what everyone does, I should expect to get what everyone gets, one of the 99% trader. I stay away from those beaten paths.

2. Everything is governed by some underlying fundamental principles. Understanding those fundamentals is a first step in building a system. I ask what drives option price and what drives PA?

3. Recognize my own personality and develop a system that I can live with. If I am not happy trading a system, it is of no use to me.

Best wishes.

ironchef · Nov 12, 2024

HawaiianIceberg said:
Continuous learning is the cornerstone of sustained success. You can always do better
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I repost @volpri's post on scalping for you. You should read it carefully and if you understand what he said, you will do OK.

volpri said:
I don't pay attention to R:R. It is a metric that IMO in no way defines the predictability of price movement. It is used to try and ensure that one's strategy is back tested to a mathematical degree that yields a profit with X amount of risk.

For a scalper, most of the time R:R per se is going to be upside down. Because a scalper is capitalizing on the constant probing of the market and there are simply too many variables that can enter the picture. Volatility being one of many.

I don't believe in back testing either. It is an endless, vicious cycle. I do believe in forward testing. By that I mean if I have technique that I think it will work I need to test that is the market live going forward. For me the market is rarely mathematical. That is why I don't use fibs...there is two exceptions and one is that there is a tendency for PBs, if they are going to stop and the previous trend resume, that they can often stop at 50%, otherwise, if they go much further say 70% then the market has likely abandoned the previous trend and is now going the other way. The other is MMs (measured moves). The tendency of the markets to move in measured moves when the unexpected happens. But I suspect that both are more of a function of human behavior.

That said I do put in an initial SL But it is more to protect myself from catastrophic moves or to protect myself from a max loss I would want to endure in any one particular trade. But I don't associate it, or tie it to some profit target decided beforehand. For myself it is important "what" price does in terms of its reach, but it is also equally important "how" price is made.

I see price movement as fluid and uncertain. I cannot possibly contain it within the parameters of some known mathematical equation. Or dictate to it that it must "fit" and move within my mathematical creations of R:R. I simply see no way to tell it to move according to my ratio of R:R. At least I am not smart enough to be able to do so. That is why I have no set agenda in terms of PA movement. That is why as a scalper I am constantly preaching "grab what the market gives me". I cannot know for sure it will give me more. I had rather "grab" what it gives me and if it continues, I can re-enter again.

An old adage: "a bird in the hand is work 2 in the bush." Meaning it's better to be content with what you have than to risk losing everything by seeking more.

This is especially true in scalping. Too many times have I had 3,4,or 5 points locked in but did not grab them to only seconds later see them evaporate into thin air and find myself in a losing position. A successful scalper cannot get greedy. He must maintain a high win rate. I use FOT (frequency of trading) to counter exiting early and grabbing profits. Regardless of what the market does afterwards. Should it continue, I can get back in. Should it reverse I have a profit locked in. A successful scalper should not "cry" over spilt milk..what could have been..but he should focus on what did happen and grab it.

That said do I ever exit too early? Of course I do. But I don't worry about it or agonize over it. I grabbed something the market gave me and if it wants to give me more, I can jump right back in again if I have a mind too or I can wait for another setup. FOT.

To try and devise a R:R to give me a ....mathematical likely construct ....well that is beyond my paygrade. There are simply to many unknowns. I cannot know when a CEO decides to sell 5 million dollars of a stock to buy his wife a new house. I cannot know when an institution or institutions decides to load up on x amount of ES contracts. Or dump x amount. I can only observe and see what happened and respond to that with techniques that capitalize on the results of such action taken by the institution(s) as the chart prints out the results.

I don't think PA can be coded effectively for very long. For instance, PB's come in all sorts of forms and in many ways. I cannot know beforehand just how a PB will behave. But by observing the PA action (where prices reaches and how it reaches it) I can postulate a likely scenario forthcoming. For example, 3 consecutive bear bars all closing on their lows with little overlap and starting at the top of a broad TR, but not yet reaching the middle of the TR, I can postulate that price will likely go down some more, at least enough for a scalp. And therefore, I can act on what I see happening.

So, I don't use R:R when constructing a trade. I use more PA live and its resulting patterns to determine initial entry and exits. However, when a trade is over with I sometimes analyze a R:R. This I call "actual" risk I suffered to obtain the profit I obtained. Often times it renders a very good R:R in traditional understanding of R:R. But usually my initial catastrophic R:R is upside down in terms of what I think I can grab out of the ES.

I know I beat around the mulberry bush to explain my thinking about R:R and SLs and PTs. I do use an initial SL and initial PT but if you watch any of my videos I move them around quite often depending on "what" and "how" price action does what it does. ON days where there is just normal PA volatility (just eyeballing it...is it jumping...is it slow and grinding..etc) I will start with an initial SL of 16 ticks in the ES and 12 ticks PT in the ES or MES, and 40 ticks SL in the NQ/MNQ and 30 ticks profit. BUT I will increase or decrease either initial SL and PT and subsequent SL and PT in the SAME trade as it is happening depending on what and how the market is doing whatever it does. They are only there to keep me from losing any more than I initially want to lose or possibly make. But since I utilize averaging down (adding to a losing position) and averaging up (adding to a winning position) then both SL and PT are fluid and I move them around depending on what price does and MY REACTION to price.

I simply do not worry about maintaining a certain R:R calculation. But I do not want to be on the wrong side of the market and will rather quickly jettison a position double up and reverse directions. Especially if I have averaged down losing position that appears like I am on the wrong side and misjudged PA.

I thought it good to explain my reasoning on the use of SLs, PTs, R;R calculations and not just tell you 16 ticks, 12 ticks and so forth.
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HawaiianIceberg · Nov 13, 2024

ironchef said:
I repost @volpri's post on scalping for you. You should read it carefully and if you understand what he said, you will do OK.
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Aloha ironchef,
Thank you for the share. I'm one of @volpri 's biggest fans. I don't scalp like him but he made a dramatic impact on my trading and I'll forever be grateful for what he's done here.

ironchef · Nov 13, 2024

HawaiianIceberg said:
Aloha ironchef,
Thank you for the share. I'm one of @volpri 's biggest fans. I don't scalp like him but he made a dramatic impact on my trading and I'll forever be grateful for what he's done here.
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Same here. I believe that post finally pushed me over to the other side.

Of course only time will tell.

flash crash · Nov 21, 2024

HawaiianIceberg said:
aloha flash!
Is there a certain time window you use to define the pre market range?
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Just saw this now as I'm taking a break from ET while I focus on keeping my focus on my own trading.

I take into account the whole night from Globex open forward.