I understand moving from ledge to ledge but am curious then how you handle pullbacks in this transistion from ledge to ledge or do you simply treat the pullback as another, shorter, ledge? Would also like to know what timeframe you trade off of.
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1-2 ES points a day
- Thread starter esnewbie
- Start date
Fearless,
I find your comments enlightening. Can you explain how to "see" the ledge? Can I see this via range bars or am I not getting your point?
I find your comments enlightening. Can you explain how to "see" the ledge? Can I see this via range bars or am I not getting your point?
Quote from fearless9:
I really do not know how to explain trading the ES because it is relatively straight forward.
The price moves from ledge to ledge where a 3+ tic battle takes place.
Clearly some ledges are more important than others and this is easily seen.
If you enter on the correct tic, you have a cushion of 1 or 2 or more tics depending on how the battle is going.
You are not going to succeed in every battle so you need several trades per day in order to accumulate your net daily tic target.
Bear in mind that every tic lost must be made up in the same session. You do not allow yourself the luxury of saying 'never mind, tomorrow is another day'
Each day is complete.
Therefore, if in doubt, exit for BE or a tic or two either way. There are plenty more ledges in a session and if you win 75%+ of your battles, you will make your daily net tic target.
If you reduce the day to this process of lurching from ledge to ledge then all trades are the same. There is no need for hyper analysis and/or name labeling.
It all starts with a pledge to yourself
'no losing days'
If you cannot accept this statement then you are stuffed and thereby consign yourself to following the path of win / loss, drawdowns etc etc that the collective geniuses of Trading prescribe.
Always keep in mind that your Broker is your friend. You have mutual respect and trust.
Quote from gnome:
Face Value matters because it's the value of what's being traded.
Absolutely correct. Using leverage increases the potential return. But for the purpose of deciding what is reasonable (and I think that was the point of this thread), using the total contract value is quite helpful.
In other words, trading $75,000 worth of stock (the approximate value of an ES contract) and earning let's say 15% or $11K, might be considered reasonable by many people.
Now, if you're trading with $500 margin, it doesn't change what's reasonable...but it sure as hell changes the return, the risk, and the probability of total loss.
OldTrader
Quote from woundedknee:
I understand moving from ledge to ledge but am curious then how you handle pullbacks in this transistion from ledge to ledge or do you simply treat the pullback as another, shorter, ledge? Would also like to know what timeframe you trade off of.
Hello WK,
My comments are simply that ... just comments.
If they awaken in you a desire or reinforcement for a particular direction then terrific, I wish you the very best of good luck and good fortune.
The details however I leave to you, since we are all so different and the common goal of wishing to trade consistently and profitably is not sufficient to bind us within it's details.
Quote from esnewbie:
Fearless,
I find your comments enlightening. Can you explain how to "see" the ledge? Can I see this via range bars or am I not getting your point?
Firstly, I cannot comment on range bars, having never used them.
A ledge in my book is where the price falters despite the efforts of the longs and shorts.
It is beyond a single bar 'turning point' ( reversal) and it is for you to decide how many times that you want to see the price touch the line and falter before declaring it a ledge..
If you are running MA's, channels, Indicators etc then turn everything off and just watch the price bars.
Good luck
Good luck
Quote from OldTrader:
Absolutely correct. Using leverage increases the potential return. But for the purpose of deciding what is reasonable (and I think that was the point of this thread), using the total contract value is quite helpful.
In other words, trading $75,000 worth of stock (the approximate value of an ES contract) and earning let's say 15% or $11K, might be considered reasonable by many people.
Now, if you're trading with $500 margin, it doesn't change what's reasonable...but it sure as hell changes the return, the risk, and the probability of total loss.
OldTrader
Excellent points OT.
One wonders, if the matter of producing a net positive stream of daily tics is addressed first and successfully; then money management becomes superfluous, since the Trader has just converted the unkown into the known; and maximum leverage becomes their new new best best friend.
It might occur to a Trader in this position to bring his/her margins down well under $500 since the margin no longer reflects the risk to the Trader's account.
As always, the Trader is liable for all losses incurred.
Quote from OldTrader:
Absolutely correct. Using leverage increases the potential return. But for the purpose of deciding what is reasonable (and I think that was the point of this thread), using the total contract value is quite helpful.
In other words, trading $75,000 worth of stock (the approximate value of an ES contract) and earning let's say 15% or $11K, might be considered reasonable by many people.
Now, if you're trading with $500 margin, it doesn't change what's reasonable...but it sure as hell changes the return, the risk, and the probability of total loss.
OldTrader
You pose an interesting theoretical argument. If it is not that difficult to do 15% on a non-leveraged account, why couldn't one expect to be able to leverage up the results? We know the best futures traders in the business can't do it, at least not consistently. Is it simply a question of high leverage forcing them to use sub-optimal strategies to avoid ruinous drawdowns?
Quote from AAAintheBeltway:
"... Is it simply a question of high leverage forcing them to use sub-optimal strategies to avoid ruinous drawdowns?
That's part of it. A "string of losers" is an eventuality. If you're non-leveraged, or small leveraged, you can hopefully weather the storm. If you're heavily leveraged, the odds of wiping out go way up.
Also, the psychological stress of "leveraged losers" can be too big a burden to bear. You can't afford to blow your psychological capital any more than you can afford to blow your financial capital.
Traders really should not use leverage until they've made "enough" profit non-leveraged and are confident in their style/discipline. Even then, leverage introduces extra demons.
Quote from fearless9:
Firstly, I cannot comment on range bars, having never used them.
A ledge in my book is where the price falters despite the efforts of the longs and shorts.
It is beyond a single bar 'turning point' ( reversal) and it is for you to decide how many times that you want to see the price touch the line and falter before declaring it a ledge..
If you are running MA's, channels, Indicators etc then turn everything off and just watch the price bars.
Good luck
Good luck
Got it... it seems the best traders use price only w/o any indicators.
Thanks again!
Quote from fearless9:
If you are running MA's, channels, Indicators etc then turn everything off and just watch the price bars.
Good luck
Good luck
May I ask you to post a chart of one of your setups?
Just out of curiosity. I too trade off of price bars alone and there are not many traders who do that.
Thanks.