$2,000 to $200,000 in 2020 at 2.00% per day.

[sstheo]

Had a couple good MES shorts. Almost back to B/E (breakeven) on the MES.

Trade #1 was the early morning failure posted previously
Trade #2 came after a big drop, so I knew there were some sellers up in the 3376 area.
Trade #3 was risky, but both MA's were red when I took it.

 

[sstheo]

Here is my "Internals" setup.

On Multicharts: (top row) NYSE Tick, NQ 5 min candle, NQ 5 point HA candle with multi-timeframe fib indicator, (bottom row) Nastic, Adv/Dec, and Up/Dn Vol.

On Investor.com: 4 of the 5 FAANG stocks with 1 min setting and 50 sma. VIX and US dollar both on 1 minute HA candles with 50 and 200 smas.

 

[sstheo]

With your initial risk capital of $2,000 for 4 micro contracts ($500/contract),and your your $20 (40 Tick) initial stop loss per contract on MNQ,MYM,and M2K,don't you think you're risking at least 4% per trade (if not even per contract)? But if your initial stop loss is 10 ticks ($5) per contract then you're risking less than 4% for those 4 contracts.Please confirm if you're not risking more per trade than you think.

Great question. Let me reevaluate this right now.

With $500 allocated per contract, then a $20 stop per micro is indeed 4% risk per position per allocated capital. But on the whole balance, each position has a loss potential of 1% of the account. I am now in the $3000 range and am trading up to 6 micros at a time. If I have all of them in play at once, and get adverse movement and they all get stopped out, then I have a loss of 6 x $20 or $120. $120/$3000 = 4% still.

I have recently stated that 4% draw down will be my max loss for the day.

I have a win rate of about 80%, so 4 out of 5 of my trades are positive.

So if I am careful, I should not get 6 losses in a row, and should be able to keep things moving in the positive direction each day and stay away from the 4% daily max draw down.

What does "careful" mean to me? (1) Not putting all 6 positions on one instrument in one trade, but distributing them over at least two instruments. (2) Doing my best to follow all my other rules (3) Carefully try to gauge the fear and greed in the market with each potential trade (4) Think about you guys and my fear if I really screw this up, LOL.

 

[sstheo]

3 good MNQ trades this morning: The third one missed the stop by one tick.

Trade rationale:
Stalling in the overall market.
250 SMA rolling over.

 

[sstheo]

Adv/Dec and Up/Dn vol

Both have the green above the red = bullish still this morning, however the blue line is the plot of the relative NET difference (not related to the chart axis) and on both it is going down. This is very useful information. It gets me thinking "reversal coming soon." However, until the green and red are closer together, I need to be very cautious.

 

[sstheo]

The NQ is on fire to the upside today.

I used to love to try to pick tops and fade moves to the upside by shorting the very top. But I have finally gotten a bit smarter. Because the "top" is often NOT the top, and I get creamed.

If I think the market is overbought, that is fine. But I now have to wait until I have evidence of sellers, evidence of weakness.

How do I determine this? By the "Break of 2" rule. (It works for both tops and bottoms.) For the NQ here, I look at the two most recent dips that were bought. These Support levels BOTH need to be breached before I will consider a short.

This, along with the 50 sma has done more than anything to help me stay on the right side of the market.

 

[sstheo]

"Break of 2" update. As the NQ went up even higher, I raised the two support levels. Now you can see that it has come back down through #1. And #2 is currently holding up. Once ("if") #2 breaks, then I will be looking for a bounce to get short. I try not to chase trades.

But the market internals and the FAANGs are still mostly bullish, so I will be very careful with shorts. The internals are so important.

 

[Phil-n-Texas]

61.8 fib extension on daily recent swing (NQ) is ~ 9664ish. wouldn't be surprised if there's a push to that level as it blasted through 38.2 and hugging upper boundary of ascending channel.

 

[sstheo]

61.8 fib extension on daily recent swing (NQ) is ~ 9664ish. wouldn't be surprised if there's a push to that level as it blasted through 38.2 and hugging upper boundary of ascending channel.

If there are gunning for 9664, then now is a great time to do it for sure - press that advantage! But because we are at the top of the channel, a pause would certainly be justified to build a new base. Personally, I think they want 10,000 NQ and won't stop until they get there by May.

But since I just really suck at the long side, I hope we at least get some two-way action soon. The last three years have not been good for my generally optimistic outlook on life... The irony is not lost on me. An optimist should be a bull, right????

 

[Overnight]

... The last three years have not been good for my generally optimistic outlook on life... The irony is not lost on me. An optimist should be a bull, right????

Never be a bull when I am long at ATH. You must always fade me. At least this time I am long on the YM, so the pain will be more manageable.