Afternoon ES session

[Swan Noir]

While market mechanics -- spread, commision etc -- were very different at the time requiring much larger gross profit targets, I did my first scalps in the late '60's and by the mid 1970's owned, with my partner, three seperate small (very small) investment firms; one in NYC, one in London and one in a lesser known but quite significant, at the time, financial center Lugano, Switzerland. I owned, with my partner the control block of a small publicly traded oil company and, on my own, the control block in another public company.

My point is I've been conversant with many financial techniques including scalping for over 40 years. In that period I've never before met an upstairs trader -- I repeat an upstairs trade not a floor operator -- that used a tick as his profit target. I have also never seen math remotely similar (as I said even very rough back of the envelope math) to that in the post I reponded to.

I'm not saying a plan that shhots for a single tick can't turn a profit nor did I say that earlier. What I am saying is that I have had more than a pasing familiarity with these matters and I have never run into another upstairs -- and I do stress upstairs -- trader who even attempted it.

Good luck in your scalping and all other endeavors.

Quote from tiddlywinks:

Swan:

I won't attempt to explain to you how scalping can be a verifiable, profitable technique.
For most it is as weisman called it, tick f*ck. IMO, that discrediting description comes from not having an understanding of how the trades are constructed and managed.

For a smattering of insight, I've attached a rather old article. It's at least 7 years old and I have no idea if the setups still work as described. It remains in my eLibrary however, and nowadays is widely available with a simple search. The point is, scalping requires a different type of setup and management construction. Most can not or will not think of a valid setup in terms of time, let alone spend personal time analyzing for worthwhile outcomes.

 

[Swan Noir]

I neglected to thank you for helping educate me by including the attached article. I've not yet read it but you can rest assured I will and, at that point, either thank you again for providing an on point examination of scalping for a single tick from upstairs or try to gently add to your education about apples to apples = good form and apples to oranges being somewhat foolish.

Of course I anticipate that I will learn something here -- let's say at least a smattering about the trade you two seem to be so conversant with and proponents of.

Many, many thanks.

 

[Swan Noir]

tiddlywinks ... I have now read the article you attached to your post. Confusing a one tick scalp attempt that will always prove to be a loser over time with what is the standard (for ES) four tick (one point) scalp changes the entire equation.

I'll wish you both luck for you are certainly going to need it.

 

[tiddlywinks]

Quote from Swan Noir:

I neglected to thank you for helping educate me by including the attached article. I've not yet read it but you can rest assured I will and, at that point, either thank you again for providing an on point examination of scalping for a single tick from upstairs or try to gently add to your education about apples to apples = good form and apples to oranges being somewhat foolish.

Of course I anticipate that I will learn something here -- let's say at least a smattering about the trade you two seem to be so conversant with and proponents of.

Many, many thanks.

Swan: I'm not interested in your fruit trees, your upstairs persuasion, or a string of poly-ponies in Switzerland. If the article works for you so be it. It the article sucks according to you so be it. Either way, I don't care about your silly little attitudes towards trading or MY trading abilities.

Trade On!

 

[Swan Noir]

lol ...

Quote from tiddlywinks:

Swan: I'm not interested in your fruit trees, your upstairs persuasion, or a string of poly-ponies in Switzerland. If the article works for you so be it. It the article sucks according to you so be it. Either way, I don't care about your silly little attitudes towards trading or MY trading abilities.

Trade On!

 

[Handle123]

Quote from wiesman02:

Just curious how you all trade the afernoon ES session? I find the moves provide bad R:R and the predictability goes down the toilet close to around 3:30 b/c of all the re-balancing. Hell even at 3:00 it gets tough.

Just curious how some of you all that kill the morning session handle the afternoon session. I'm almost at the point where I'm going to stop trading afternoon ES session all together and start learning another instrument to trade in its place come afternoon time. I do very well from 930-1200ish. After that seems to be a shit show. I'm finding that only a few times per week is the afternoon ES session even worth trading.

Any thoughts ?

I recently pretty much stopped day trading, after doing it 26 years, mainly in big S&P/ES, let others trade it for me. I have set goals of 2-4pts for first 40 minutes of day sessions, not worth the risk of doing pre-market(all trades are averaged down up to 13 levels) except for when reports comes out, like to trade around those looking for failures. If we get the 2-4pts, contract size reduced 80% for afternoon session starting at 12:15MDT for next two hours. Afternoon session still has same risk, but targets are reduced on most trades with exception of reading DOME's volume last 45 minutes of day session. Afternoon session carries less trading signals as the market trades differently than morning session most of the time with more consistent patterns that occur at certain times or High/Low of the day trades. Last 45 minutes carries more counter-trend trades but again based on time periods for me, ie at 1:30 is on 2nd higher low pivot, good odds for me that market will be making two mini pushes up for me to get 4-8 ticks. I am not heavy into Elliot wave, but I keep an eye of where the wave 3 is which is the one that has biggest swing. Knowing that most software programs will generate some of them to produce signals on close based on ATR especially on Friday for weekly systems means there will be a hard push to the top/bottom of the hour when stock market closes. Then right after a hard push counter-trend in last 15 minutes of day session. Thirty minutes before close of the fourteen commodities we day trade, same approaches are used.

There are times no trend trading takes place when Megaphones appear. There are Crude Oil, Gold, Russell, Nasdaq and even the Dax that offer other plays during lunch. I do not recommend to anyone to ave down, most won't put in the years and money(tick data) of backtesting to do so correctly. All my methods trading Indexes are based on a controlled environment, so anytime volatility picks up, no signals are taken.

Why not just add size to morning session, and spend afternoon writing code for automation?

 

[tommcginnis]

Quote from Swan Noir:

Here is my problem with the math: It seems to allow for exactly zero losing trades and zero scratches and you don't talk about where you stop yourself out when they go south. I don't get it. Nothing about this coincides with anything that I see in the market everyday.

No losing trades? No scratches? No predefined stop? Just win, win, win, win, win 24 times in a row and then do it again the next day. I know you say 18 out of 20 winners but the math does not reflect that ... it calculates all winners. Yes 18 out of 20 winners is incredibly impressive but somewhere in the math you need to include not just that you lose on those two trades but how much you lose. How do you avoid scratches? Are there any scalpers who don't scratch out? Is it possible that the two non-winners includes scratches? It certainly does not seem so. I've never encountered a trader before whose plan assumes 90% winners or who traded for a single tick from upstairs or that did math -- even the roughest back of the envelope math -- in any manner similar to what you have here.

What am I missing?

Less than what you are missing is what you're getting, and from where are you getting it[?]...

The post to which you responded was a laud thrown to someone who'd posted an exceptional (as it turns out) run of 6-point days. There was no exposition on scalping, just a recognition of vastly reduced trading costs if you hold for points versus ticks. I could never do that -- and the OP opined that it was a hard/lucky run for him. No one talked about technique -- so it's not a question of what you're missing, but .... what are you adding[?].

And I don't have an answer for that one.

But I can certainly tell you this: I FEAR time. Remember that old Kansas song, "Ass In The Wind?" I'm sure it was written about trading. "Alls you know (is) your ass (is) in the winnnnnnd." I do NOT like to buy-n-hold fer nuthin'. And when I'm scalping (which, again, I'm leaning back into after ~ a year's scenic tour into other lands, I'm aiming to get back in), the thing I DO remember clearly -- ending the day mostly in cash every night was -- I SLEPT LIKE A BABY. Whew!

Which is all a comment on nothing, I guess. Digressions, digressions.

Where's that coffee?

 

[tommcginnis]

Quote from tommcginnis:

Less than what you are missing is what you're getting, and from where are you getting it[?]...

The post to which you responded was a laud thrown to someone who'd posted an exceptional (as it turns out) run of 6-point days. There was no exposition on scalping, just a recognition of vastly reduced trading costs if you hold for points versus ticks. I could never do that -- and the OP opined that it was a hard/lucky run for him. No one talked about technique -- so it's not a question of what you're missing, but .... what are you adding[?].

And I don't have an answer for that one.

But I can certainly tell you this: I FEAR time. Remember that old Kansas song, "Ass In The Wind?" I'm sure it was written about trading. "Alls you know (is) your ass (is) in the winnnnnnd." I do NOT like to buy-n-hold fer nuthin'. And when I'm scalping (which, again, I'm leaning back into after ~ a year's scenic tour into other lands, I'm aiming to get back in), the thing I DO remember clearly -- ending the day mostly in cash every night was -- I SLEPT LIKE A BABY. Whew!

Which is all a comment on nothing, I guess. Digressions, digressions.

Where's that coffee?

PS, I guess: yes, I've had weeks go by with all positive trades. So what? That's how I'm trading, and not magical at all. The price is, you pony up a boatload of commissions. (I paid -- and will expect to pay -- 5x the commissions for ES tick-scalping that I do with ES credit spreads, for roughly the same net income. That kind of leaves a bitter taste in your mouth...) BUT! The thing of it is, you seem way-focused on results -- I am not.

I am focused on performance: get the performance down pat, ramp it up to achieve the results you wish. But if you go for results first/foremost, you are putting the cart before the horse, and your trades/trading will go south, fast. "FWIW" and all that.

Which reminds me of the Navaho, whose master weavers would sneak a specific "mistake" into their visually, stunningly, perfect woven rugs, just so as not to make something "perfect" and offend the natural way of things. Traders who seek to keep any sort of trading record going, without first examining their performance instead, risk the same sort of hubris that the Navaho avoid. Perhaps a loss here and there might be a very good thing.

Coffee's done.