At one of the lower ends of trading activity paradigms that I rotate thru is about a dozen or so actions in which the aggregate net for the day is relatively low but likely to be greater than the yield of scalping. At the other end of the spectrum are paradigms in which the activity is easily several hundred action ("trade") points. Someone mentioned today being a "stay out of the market" day since their knowledge and skill is dictating for them to stay out of the market. Somewhere in the middle, lies minimal activity coupled with maximum profit extrapolation. Looking closely at the zigs and zags within the day shows just how much is on the table. The length of the zigs is the total per contract of what's available. For me, "chop" is very ziggy and often results in a larger multiple of the days range then less ziggy days. Yesterday up until the afternoon had few zigs. For trenders, it was SOP, whereas the afternoon was SOP for choppers... Today already, I am at 117 actions totalling 8.5 points per contract. For me, it is very inefficient since there is a middle ground somewhere (ie. fewer decision points, better yield). What's more important than the number of trading points is knowing that a trading point has arrived and focusing on the appropriate market values at such points. Scalpers operate between such points. SO where is this optimum middle ground... Kindest Regards... M4K!
You are doing the absolute best transition. Lets say there is an asymptote to hit for the ratio profits compared to actions. In ET, a list of 50 or so people could be made to show how they are progressing to this optimum level for their various strategies. The three approaches going towards this asmptote that differs for various methods are: underdamped, critically damped and over damped. You are on the underdamped curve. The two advantages are: that you get to the asymptote the first time (the others just Get there in a number of TC's)almost as soon as possible. You do leave the optimum in your wake and that is okay. Secondly, you are better able to get a view of the whole turf involved. This means you can even make determinations about trading fractal advantages along the way. the personal compliment to this is how your nature and character enjoy the "action". In another thread I got a real wakeup call this AM. A person commented on his preference for trading by associating it with the severely over damped viewpoint. His expression was that when gliding he occassionally passes up a thermal. For a laugh, you can probably guess that I have never passed up a thermal. I miss them on occassion because of skill or whatever but I never do it by choice. So what are the things that come up on the underdamped pathway. Not being in the channel isn't one of them but within the channel you are dealing with stalls (on money made), hitches (scalp level profits) and dips ( nice quickies). Ultimately all of these contribute to skills and experience. But we are dealing with: "is this trip necessary" type stuff. Soooo.... the way to diferrentiate on these things is to lightly regard the market pace. the slower, the more hold time is involved so "reading" the fine verniers is not so hectic. What are they? Volume conformity and regularity must be processing or the pace is very low and risk high and noise is possibly disruptive. Cut the action level by sidelining in this very low volatility. So otherwise do all the fine monitoring and trade to scene because you will be making 2, 3, and 4 ticks per unit time of cycle. Note the cycling is very regular no compression (least likely) nor antennuation (more likely). most of this is latral trend chat anyway and the envelope is a medium measure of CCC (Congestion (slaloming), Convegence (momentum all but disappearing and volatility in the lower registers) and Centering(noise dominated bar movement as a regression to neutral (the only time it is statistically significant)). For paces above lateral tending, the stall, hitch and dip are at play on a volume mean average carrier which is much above the lateral trend volume mean average which continually drifts lower. By having a set of rays superimposed on each volume fractal you are using you get to see this automatically which keeps YOU calibrated. What is coming up for you as you cut actions back towards the asmptote is that you will have seemingly mental lapses. They are not lapses. Here's an example. As kids learn to read they sound out words step by step. after a while they just read and undrstand. By being under damped in your progress you are getting the "full treatment". Lots of sounding out. as you slow down on the actions and do more "holding", you get to "reading" the vernier and seeing more "sylables" in bigger more complex words. The whole words become reeadable all the way through the time it takes for the word to appear flawlessly as yet one more time. Seeing suffixes is sort of fun after a while. I am so glad you are way past "fear of learning". Actually I absolutely know that it never even came up for you.
Most-Excellent... I'll be processing, sorting, and filing this post also. Much Appreciated and Kindest Regards... MAK! You had mention somewhere about a training tool. Was it just a mention of something that is required or is it something that is available?
I have tried to sit in the low volatility period and looking for a 1/2 cycle in my direction which works if volume is steady. I have learned(through losses and evaluation) to take an exit and sideline when your volume charaterestis you explained above appear. Today from 1:25 to 1:35 was a nice clue in terms of volume. Yesterday's volume on bar 11:40 and 11:45 was also a nice clue. Does it matter where in the cycle the low volume perists? So in essence, I have learned to sideline when volume is extrememly low because it makes making money difficult unless you happen to be on the right side when their is a BO. Thanks for the great post.
for myself finding a middle ground between scalping and intra day swing trading has been the key. I take 1 to 3 trades per day but rarely trade after 11:30 am EST. As for why futures are so hard? The feed back of every action is generally much faster than stocks. So either you adapt very quickly or you 'blow up' Also... I suspect there are a lot of profitible futures traders out here on ET. But we would never post a journal... if you make the money that a futures trader with a real edge can make... why bother? I don't have anything to prove, and vice versa, doubters don't have to believe. The key is finding your edge... and edge that gets you in a such a great price that stops are used for worst case scnarios. Exit with a tick, a point, 5 points... whatever... but if you your entry is good many things fall in place. Next just cause you "can make a fortune overnight" doesn't make it a good idea... control the greed (initally tough to do) Lastly remember... it comes down to price, how many are buying it and how many are rejecting it. With that foundation also know that one any given increment of time... an average of X amount of buy/sell transactions are made... AFTER that... you have a projection into the short term future happening. Example... say through the afternoon... volume is light... buy side 500 ticks... sell side... 500 ticks... At 13:47... the average has climbed but at this time... buy side goes to 3700... sell side t0 1000 with a positive candle. What does this imply to you is about to happen? Anyways... just some my 2 pennies worth...
Once you successfully trade futures using directional methods, You can successfully trade anything on the planet with volume and a price chart. There is no doubt, that all methologies relating to intraday can easily be applied to long term investing, I do it myself, Futures trading vamps up the learning process from 3-5 years to 3 months if you are studious everyday. It is by far more difficult in a sense then your normal long term investing, you really need to know WHY movements happen, WHEN movements happen, WHAT needs to happen before movements happen, what TRIGGERS the movements before it happens.,and most important what needs to HAPPEN after the movement But once you understand all this and do it successfully, its like an olympic contender coming back to play for the little leagues. You clean up everywhere if you need to. But with leverage so high in futures, theres no need to go anywhere else, this is the place to be.
I have a theory on why the futures game is so hard, and it's because it's so totally rigged beyond your belief. This game has been around for a very long time and it's basically regulated by the people who participate in it, ie. the Clearing Firms. A great amount of money can be made if they know how to do it and I believe they figured it out. It's even easier now with all the electronic trading than when it was only pit trading. Here's what they do: All retail traders must clear through the Clearing Firms before the trade gets exectued. This information regarding the position size, direction, account size, etc., is piped into a trading room run by the group of Clearing Firms who service the retail traders. They monitor this information very carefully with sophisticated software. They don't just guess what the "dumb money" is doing, they know exactly. They can send signals to their partners on the floors to move the prices the direction it needs to go in order to give these traders the most profit. It's like this, if you were sitting at a poker table in Vegas and you got dealt your initial hand. Everyones hand at the table is clearly viewable to the House. The house's hand is well hidden. You then call for 3 cards. The House controls what cards you get. You can't win in that situation and trading a mostly unregulated game like futures puts you in the same kind of disadvantage. Sure there are some lucky folks who make money for a while but it's very rare for someone to make it consistantly. That's why trading futures is so difficult and so few win, for a little while. _____________________________________________________ a fool and his money should have never gotten together in the first place
gnome, If you really are a wise man, I do not think you should use words like 'fools' etc. about tight scalpers, especially not when you have no experience in this yourself.