Better to be Wide or Deep?

T

trader99

If you've traded long enough then you'll eventually find some good repeating technical patterns that seems to be somewhat consistent. Then the trick becomes recognize that pattern in REAL-TIME and eliminating the false positives.

I've been practicing on simulator a few patterns that seem to be consistent.

Anyhow, long story short do you find it's better to be wide or deep? Let me explain. Is it better to to look for as many different instruments that match your particular successful pattern? I.e. using technical pattern scanners. Scan thousands of stock symbols and you get a bunch of them. Of course, there will be some false positive. Eliminate them if you can.

Or do you focus on one instrument like the NQ,ES, YM etc and just wait for your setup and pattern to come.

I realize the richness(in terms of complexity) of intraday trading is amazingly deep! In a week you probably seen hundreds of patterns that would take a long-term trade years to get to. If you practice on an accelerated pace spanning months of data across different market environment you get a lot of exposure!

I've been focusing narrowly on index futures because I like the way futures trade.

But if I were to be honest and data driven, index futures have not been net profitable to me. Yes, I had great and amazing days. But net net it has been negative P&L experience.

Ironically though I don't trade stocks much but when I do it's because it meets a certain particular high probability pattern. And I would buy or short and hold.

So, do you guys think in your experience is is better to scan for your high probability patterns across wider universe or do you focus on mastering the minutiae of one instrument to be more profitable.

Or perhaps the success in stocks is being more selective and holding longer whereas index futures is mostly daytrading which needs a lot of moving in and out and fast reactions.

Just trying to decouple these influences.
 
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trader99 said:
the trick becomes recognize that pattern in REAL-TIME and eliminating the false positives

long story short do you find it's better to be wide or deep

do you guys think in your experience is is better to scan for your high probability patterns across wider universe
or do you focus on mastering the minutiae of one instrument to be more profitable
More...

No one has ever been successful spreading themselves out too thin, or wide. -- Be DEEP o_O
Have specialization, be truly a Master of something -- a Killer in it.

Recognizing the true pattern, or I personally like to refer to it as the Inflection Point, from false breakouts is the Million dollar skill.
Be a macro, big game, hunter...not a scalper picking up dimes and quarters in front of the proverbial market steam roller.
Have the vision to hunt for the big prize. Don't get tempted by bribes and petty stuff Miss Market may throw and toss your way ...along the road to the Open Sesame Cave of riches.
 
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I think there are (at least) two distinct questions in here, aren't there?

There's the issue of whether to be wide or deep in your selection of instruments to trade, and the matter of whether to be wide or deep in the selection in the types of trade you select.

I'm not convinced there's necessarily an "objective right answer" to either: both are going to vary according to people's objectives, aims and availability (hours), as well as according to their backgrounds and development of their trading skill-sets.

Still, in principle, I think "deep" is likely to be the right answer for most aspiring traders, most of the time, regarding the types of trading they aim for and the types of trade entries they seek to identify.

I suspect that regarding instruments to trade, it's less significant to be deep rather than wide, because there are more similarities and fewer dissimilarities, overall, between instruments (and even between instrument-types, given adequate liquidity) than there are between trade-types.

70% of my own trading is on one instrument (NQ), and the selection of the three others I routinely trade (CL, E6 and B6) was determined largely by my own background as a trader rather than (for example) by looking at dozens of different instruments and deliberately selecting them for any particular attributes (though these two possible methods of instrument-selection do actually overlap to some extent). You could call that "wide", in a sense ... or at least not "very narrow".

The types of trade I take are the same, for each instrument, and they're the type of trade that suits me and which in recent years I've studied and researched and practiced almost to the exclusion of everything else. You could certainly call that "deep".

I could switch to ES and A6 (for example) and trade profitably, most days, far more easily than I could switch to slower trading or trading with a different "style".

(I think Lawrence is right, in principle, to caution against picking up nickels and dimes in front of steamrollers ... but these things are all relative, and some people - including Tomorton, perhaps! - might even consider my own trading to be doing that. I'm a "semi-scalper", arguably ... by some people's standards, anyway ... though in my opinion the gap between scalping and what some people call semi-scalping is actually a much wider one than the gap between semi-scalping and much slower-moving, longer-term trading.)
 
trader99 said:
If you've traded long enough then you'll eventually find some good repeating technical patterns that seems to be somewhat consistent. Then the trick becomes recognize that pattern in REAL-TIME and eliminating the false positives.
More...
Nope, going in the wrong direction.

Lucky for you. Post: 4632779
 
Xela said:
Still, in principle, I think "deep" is likely to be the right answer for most aspiring traders, most of the time, regarding the types of trading they aim for and the types of trade entries they seek to identify.
More...

I would rather agree with Xela too.

Wider has some additional needs, like for example "are you fully automated?" If not wider means a lot of things to follow as discretionary trader. Watch 4 or more 24" screen at the same time, follow each open position, watch stops for each position, act quickly if needed... A lot of job.
 
I'd answer Wide Or Deep, except I know that in 6 months or a year, we'll be looking at a different market that will favor the opposite of whatever I record as working best for me now.

Keep all your irons hot. Give 'em all a try, regularly.
If something doesn't work? Quit it. Go to the ones that do.
But don't *dump* the old method -- put it back in the fire, and keep it freshened.
I am using stuff now that I haven't touched in 5-6 years.
I have all my old notes, and I'm updating those as I go.
And I am NOT dumping all of the ultra-low-vol stuff that I'd learned over the last 2-3 years -- Oh no!
 
Hi All,

Thank you for all of your thoughtful comments and opinions! Much appreciated. I realized I phrase the question wrong. Or not as clearly.

What I really really wanted to ask was this. Suppose you've mastered a couple of trading patterns. For example, you are good at identifying breakouts either up or down. Like you are more right than wrong in identifying breakouts. I'm just using breakouts as an example of a pattern. Doesn't necessarily need to be that pattern.

So is it better to scan over a large universe of available instrument to look for YOUR trading pattern and catch them using some kind of technical scanners. Or is it better to trade just one instrument waiting for your technical pattern.

Because what I noticed sometimes is that the index might not be moving at all on a slow day, but there's always something moving in the market every single day!

Why not get into those that satisfy your conditions?

I think it makes sense. To make it even more extreme. Let's say you are really good with just one pattern that seems to be high probability. You've tested and trade sim it. But today in your chosen instrument that high probability pattern is not there. But you know for sure that there's somewhere in the market there are instruments that follow your particular high prob pattern. Why not seek them out? Or you think it's better to not trade that day since the pattern is not there.

The risk I see is even though it might follow your pattern there are micromarket issues. Like for example the bid-ask is too wide. So you gotta learn how to enter that vs futures where for the most part the bid-ask is narrow.

I definitely will continue to trade index futures and practice that on sim to help me hone my pattern recognition skills.
 
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