What happened? (ES trade)

Discussion in 'Trading' started by musclemoney, Jul 3, 2008.

  1. I'm a complete rookie at day trading, and am a RIA, so that sounds odd, I'm sure. But, my discipline and money management is based on a system, and I do not deviate. For example, if one the "four shock absorbers on the car" isn't working correctly, I scale back equity positions, or can be all cash by Investment Policy Statement.
    I'm a performance-based RIA, and only work with retirement assets. i.e., those who have a time horizon of 3-5 years or longer, as well as the Clients who are seeking growth, as well as monthly income. YTD, I am up 90bps. Down from being up over 6% two months ago. Of course, the markets are down approx 15% YTD, so current Clients are happy with my "performance." However, it's the prospective Clients I have been talking to who have almost driven me nuts.:( :D

    They're "running for the hills" (all cash, and have been that way since the start of 08.) I'm hearing from REFERRALS (not cold calls. That was when I was new, and was even un-popular back then. Hell, I don't like geting up at dinner for a call of some kind of political survey, etc., so I don't market myself that way):
    * "Stocks!!!!:eek: NO Fu**ing way. (click) Tell my friend _____ that he's nuts to be in stocks."
    * "Investment Advisor?? You been watching the news? This market is going to go straight down."

    I could go on, but won't. Needless to say, confidence is WORSE than I observed during 2000-2002.:confused: I've mentioned here before that I would like to transition my Clients to someone on the investment committee in about three years, and trade in my own account, as the "scene" has changed from the recovery in 2003 up to now, and it's not a pretty one. None the less, we'll get through these times. I don't particularly care for the way retail brokers, insurance agents, etc., have become blood thirsty with an "it's all about me attitude." The regulators have... Well, they're who they are. And, the prospective clients are so mixed up by the 24hr news, brokers who could give two shits about them, that they're doing some really scary stuff with their money.

    For the past two years, I have been reading the board, and trying to drill down into what I "may" be good at as far as day trading, and swing trading goes. I'm more into options, and futures for my own account, even though equities, bonds, cash, and alternatives are part of the system I use for managing retirement assets. Therefore, I am a 100% green horn at day trading imo! My system, and a daytrader's system are probably "ocean's apart," so I'm asking for advice from those of you who do this for a living. Yes, a RIA asking for advice. One thing's for sure. When it comes to making money, I can put pride on the shelf to learn from those who have been there before, and are currently doing the job well.

    So here's what your rookie did:

    I opened a paper trading account after focusing on ES posts/threads here. I've been going through the journals, posts, and threads for some time.

    I set up the chart tabs at 1min, 5min, 10min, and 60minutes. I'll monitor volume, and RSI in each tab. In addition, I have added Bollinger bands simple method, period 20
    SMA 5, and 20 on all tabs

    It's strange, but I have been placing one-two trades per day, and am looking for a trend (or breakout) to either go long or short. I'm entering at 100 contracts with a .50 stop, and getting out rather quickly. Here's an example:
    At 13:31 I entered a buy limit at 1263.75 for 100 ES contracts. I got two fills, then two seconds later I got the rest filled.
    At 13:32 (and 43 seconds. LOL!) I entered a limit to sell at 1264.75, and it got filled. I made $5,000 What???:eek: :)

    I know I put my pride on the line to learn something here, so tell me what you guys think. All I did was watch the ES tick up past the 5minute, almost crossing the 20, and entered the limit order. Bollinger bands were gapped apart a good bit. $5,000 in less than two minutes??:confused: What! In after hours trading last night, I wound up with $1,250 on 100 contracts by going short, then buying .25 cheaper.

    I've been talking with retail brokers/advisors who have been "in the business" for 15-25 years, and only one knew what the ES was, and that was very limited as the conversation switched to inflation quickly. (some/many brokers do this when they don't know an answer instead of saying "I don't know. I'll find out for you.")

    I'll accept all the responses you guys want to give to this, and appreciate your time. This is the point where I "empty my cup" so I can learn. Thanks guys!:)
  2. Learn Auction Market Theory and how cumulative and intrabar delta work and you will have an edge for life imo. :)

    Trading price action confirmed by volume is the most powerful set-up which can then be used in almost all markets.
  3. Ok, I appreciate the advice! I'll do some research this weekend, but would love to find a book on Auction Market Theory you would recommend. (It seems like everyone has a book out these days, and finding the right one is tough...) Thanks again!:)
  4. spidey


    I've been breaking even on the ES for some time now. I make some, lose it, lose more then make it all back :D

    I'm getting kind of sick of it. The thing has a mind of it's own. And at times moves so fast, because it's being basically run by CPU's.
  5. You do realize the gravity of what your doing, even in a paper trading account right? At 100 contracts, that 1250 per tick, up or down. Assuming your scalping, if the es goes against you for even a single point that is a loss of 5000. Given the slippage and uneven order fills in real trading, you would need a ridiculously large bankroll to safeguard yourself against sudden es spikes or drops, since an es move of 20 points will wipe out an account of 100k when your broker forcibly closes your positions.
  6. Well, I'm standing here "hat in hand," when it comes to trading futures and options. So I appreciate advice from those who have maintained a very positive P/L day/swing trading.

    What I did was set the stop at .50 and go long on increased volume, a wider gap in bollinger bands, and a move above the 5 towards the 20.

    I went short when the market started to break down on increased volume, and went short after the 5 was broken enough to be what I saw as heading down to the 20. Of course, I kept a buy in place at +.50 (a potential 20% loss?) if the market moved against me.

    I know I probably broke some rules by going a little over 10% of trading $$ available in the account. With a little over 100m in the account, I should probably only be trading a max of 2.5% of account value. I probably had rookie luck with this?:confused: I have no clue. Just going on technical indicators.

    I'll certainly be asking some dumb questions in this thread, as stated before. Hope you guys can bare with me.

    I'm glad to trade long term asset allocation ideas, (mainly tactical) monte carlo simulation (95% accurate compared to straight line appreciation) financial planning outcomes (i.e., "Can I live to 95 on this ___ amonut of income without running out?") and alternatives that have been scaled down to a handfull of good choices for portfolio modeling that is geared towards a 3-5+ year time horizon. I read a post by a vet trader here who recommended traders have a Roth, invest in some no load funds, etf's, etc., for the long term, and leave the emotion out of it. I believe he have good advice. 60% of my (Our. Sorry, my Wife would beat me! LOL!), retirement assets are managed by managers other than me...

    Again, I hope I don't ask too many dumb questions on this topic.:( :D
  7. lindq


    Really, you must be kidding. You're new at this and trading 100 contracts? If this isn't in jest, you must have a death wish.

    I find trading the ER2 to be a lot more rewarding than the ES. But you won't be able to easily scalp 100 cars.
  8. You are not really making any sense. If you want help then be more clear as to what your objectives are. How much money will you be trading with, will it be full time, do you want to scalp, daytrade, or swing trade? What is your % return goal?
  9. I thought that may have been the case.

    I'm trading with 120m.

    Wanting to trade full time

    Scalping futures

    10% monthly return

  10. I thought I was too agressive with it. I'll need to scale back the size.

    I'm not new to trading. But very new to scalping, and day trading.
    #10     Jul 3, 2008