1-2 ES points a day

[GTS]

Quote from Steve Tvardek:

Sure he made 2 pts today, but he'll have to keep up that consistency with an almost unattainable rate of success. Remember, one day does not a trader make....

Another interesting aspect about this trade: he could have gone the other way and still won (gone short @ 1516, target of 1514, stop at 1522).

That's the nature of a small profit target/large stop trade - it has an inherently higher win ratio (even with random entries) however as you said, you need to be right at least 9/10 times to squeek out a profit.

Quote from esnewbie:
Steve,
For the last two months, this strategy has netted average of 20+ points per month.

Can you post the win/loss aggregate numbers?

 

[Steve Tvardek]

2 months is a start but we have also seen an incredible run in the S&P lately, lets see how your strategy handles sideways and down mkts as well. Keep in mind, I'm not trying to say you will fail, however the math speaks for itself. You WILL need to have a very very good win % to sustain this over the long run. Trust me, you arent the first person that looked to make just 1 measly point a day. This stuff has been looked at forward, backwards and inside out.

Quote from esnewbie:

Steve,

For the last two months, this strategy has netted average of 20+ points per month.

 

[increasenow]

TO ESNEWBIE...how are you able to monitor this as you are at work...I thought the bracket trading was because you have to work...just wondering...thanks..

 

[esnewbie]

Quote from Steve Tvardek:

2 months is a start but we have also seen an incredible run in the S&P lately, lets see how your strategy handles sideways and down mkts as well. Keep in mind, I'm not trying to say you will fail, however the math speaks for itself. You WILL need to have a very very good win % to sustain this over the long run. Trust me, you arent the first person that looked to make just 1 measly point a day. This stuff has been looked at forward, backwards and inside out.

Steve,

I totally agree that we've had an incredible run and the hit rate has to be high. At least for the last two months I've only had 3 losers per month. Also as I mentioned before,once the trade has gone through the stop I have a MIT order in the opposite direction to reduce the loss in half. This has allowed me to reduce each loser to -3 points where the reverse order's limit lies. I am looking forward to seeing how it trades during summer low volume. Will keep all posted.

edit: BTW, while the goal is to enter everyday that doesnt always happen. If the setup is not there, I will not get in. In Apr there were 3-4 such days.

 

[Steve Tvardek]

I dont understand, just because you get stopped out and reverse, doesnt NECESSARILY mean you will be right on the other side either. I am assuming that on the trades you lost 6pts on, you reversed and then bid/offer out 3 pts lower/higher correct?

What happens when you lose 6 pts, reverse and then mkt stalls and then heads back in the direction you were in, in the first place? Now, you lost 6 pts and then maybe another 4 or 6 or whatever. How will you account for these types of scenarios? They will happen, at some point.

Quote from esnewbie:

Steve,

I totally agree that we've had an incredible run and the hit rate has to be high. At least for the last two months I've only had 3 losers per month. Also as I mentioned before,once the trade has gone through the stop I have a MIT order in the opposite direction to reduce the loss in half. This has allowed me to reduce each loser to -3 points where the reverse order's limit lies. I am looking forward to seeing how it trades during summer low volume. Will keep all posted.

 

[fubar]

Ahhh the 1 - 2 point grail.. on to Avalon

 

[esnewbie]

Quote from Steve Tvardek:

I dont understand, just because you get stopped out and reverse, doesnt NECESSARILY mean you will be right on the other side either. I am assuming that on the trades you lost 6pts on, you reversed and then bid/offer out 3 pts lower/higher correct?

What happens when you lose 6 pts, reverse and then mkt stalls and then heads back in the direction you were in, in the first place? Now, you lost 6 pts and then maybe another 4 or 6 or whatever. How will you account for these types of scenarios? They will happen, at some point.

Steve,

You are correct. Once it goes through the stop the MIT order is in opposite direction. This order has a limit of 3 points and stoploss of 1-2 points depending on volatility.

 

[Steve Tvardek]

The reason I am grilling you on this stuff is b/c its super important to understand that there are a ton of variables to account for each and every day and, when the mkt cycle changes, then a whole new slew of variables come into play, and this is where most people end up giving away all their profits and then some. Just make sure you are prepared for a cycle change when it comes.

Quote from esnewbie:

Steve,

You are correct. Once it goes through the stop the MIT order is in opposite direction. This order has a limit of 3 points and stoploss of 1-2 points depending on volatility.

 

[GTS]

Quote from esnewbie:

Steve,

You are correct. Once it goes through the stop the MIT order is in opposite direction. This order has a limit of 3 points and stoploss of 1-2 points depending on volatility.

Well if the reversal trade has a better track record (and a better risk/reward ratio) then the primary trade then perhaps you should be trading that trade exclusively (forget the primary trade) as MajorUrsa previously suggested.

 

[esnewbie]

Quote from Steve Tvardek:

The reason I am grilling you on this stuff is b/c its super important to understand that there are a ton of variables to account for each and every day and, when the mkt cycle changes, then a whole new slew of variables come into play, and this is where most people end up giving away all their profits and then some. Just make sure you are prepared for a cycle change when it comes.

Steve,

I am very thankful you took enough of an interest to post your thoughts. I have lurked on ET for several years so I know your skill level. I think it will be a good tell how it performs during the summer since volatility/volume will shrink. My goal of 1-2 points is a function of the ATR just like the stoploss. So at some point in the summer I'm sure I will be shooting for just 1 point with tighter stops.