Challenge of Weekly Profit trading Futures

[p0box4]

Thanks El OchoCinco



Yes, I am central. its 2pm now.



Yes




Yes, I agree with you. The double bottom was a bit risky, knowing they have traders that trade the double bottom. My thought process was sell in hopes of more down movement. But I understand now.



Yes, I agree with you and it makes sense now. It would have been best to wait for price to go below low of day bar at 8:42 am CST.



Regarding trading at bell, the bar at 8:33am dropped alot, would it had made sense to fade that sell off? Or wait for a retrace, and enter once previous low is broken at 8:42am.

Thank you

View attachment 190756

If you are hoping for a profit, close the trade.
You only should enter a trade for a reason and so you don't need hope since statistically you know that on the long term you will make a profit.

The last screenshot, such moves are risky to trade since they could just as easy reverse from that first huge candle, open and close are very unpredictable.

Only way to make sure is to get statistics so you can evaluate if you have an edge or not, write a clear trading plan, then backtest, if the results are positive then forewars test for multiple months and only start live trading once the statistics show an edge.

The beauty about backtesting is that you can write a general trading plan and then test a bunch of different entry and exit methods, target calculations etc and test them all at once. No need to watch the market all day when you are trading demo and not have an edge yet.

At least that is how i did it.

Unles of course you are a 100% discretionary trader, however most discretionary traders also have things that triggers them to open a trade. For example candle stick formations, patterns, ... you can also backtest these.

In one hour you can backtest hundreds of bars (even manually) while real time only gives you X amount of bars (depending on the timeframe).
So if you want to trade candles like you showed, go back in time, look for simelar events/formations/bars/candles and try to find your edge.

Unless you are trading from the DOM, then ignore all of the above

 

[El OchoCinco]

I did not get to trade today as I was out but looking back hindsight at todays action I can explain some price action trades I look for. I will refer to the numbered points below. NQ chart form today. I also review charts to see what I missed or what I should have seen.

EDIT: Below is a 2 minute chart

1. Market sold off sharply after 2 sideways bars. I don't try and catch that knife with a random long entry and yo never know when it will end so entering a short anywhere is just a guess. Sit on your hands and wait. All large moves have a retrace or reversal. You don't know which will come but 100% guaranteed it will be one of them. The large move on 4 candles formed a doji candle and 3 sideways bars. 4 bar was a hammer.

What does that mean? For 20 minutes bears tried to resume the trend and got held up by the bulls. To me that is telling and you could have entered a long at 7597 above the small green hammer risking 9 points for a sharp reversal. large amounts of times a sharp sell off from the open is reversed (especially on no news). If you took the profut at the 20 EMA that was good for 13 points. If you held because there was no serious reversal bar until somewhere around 7622-7626 you had a nice runner. You could have moved your stop twice up the move to lock in a profit in case it weakened.

2. Assuming you missed that move or took profits, point 2 is where the market had a retrace/pullback of the large move higher and found support along the 20 EMA. 5 sideways bars showing for 25 minutes the market was holding and bears could not reverse the spike back higher. could have entered a long anywhere in this cluster with a stop below those long tail lows and rode it up until the red bar just after the horizontal blue line. That was about a 15-18 point move.

3. This is where the retrace from the previous high pushed back up but failed to take out the previous high. This shows weakness. The long red bar after the 3 on the chart with the vol spike is an early warning sign. Then the market retraced on the 20 EMA and this could have also been a short entry with a stop above those tail spike highs. How far you ride that down depends on moving your stop or scaling out.

4. If you missed this down move point 4 shows a retrace entry. Market retraced to first touch of 20 EMA and boucned off. Short entry with stop above that swing high bar and you would have rode that down to retest of opening low which it came close to.

rest of the day was a slow meandering rise with not much signals I could see any entries in.

Studying price charts this way is how you study price action and then prepare yourself to see these things in real time. On my chart I do add trendlines and some more MAs for visual aides (this is a clean chart for you to see easier).

I think you cannot trade off of random S/R levels you draw because you may be the only one seeing them. But longer trendlines, double tops and bottoms, retrace levels are part of price action we all see and make better trade entries.

 

[El OchoCinco]

I did not put the things I have on my chart I use to keep it neat and I usually use 5 min but since SML had 2 min I used that for illustrative purposes.

 

[SimpleMeLike]

If you are hoping for a profit, close the trade.
You only should enter a trade for a reason and so you don't need hope since statistically you know that on the long term you will make a profit.

The last screenshot, such moves are risky to trade since they could just as easy reverse from that first huge candle, open and close are very unpredictable.

Only way to make sure is to get statistics so you can evaluate if you have an edge or not, write a clear trading plan, then backtest, if the results are positive then forewars test for multiple months and only start live trading once the statistics show an edge.

The beauty about backtesting is that you can write a general trading plan and then test a bunch of different entry and exit methods, target calculations etc and test them all at once. No need to watch the market all day when you are trading demo and not have an edge yet.

At least that is how i did it.

Unles of course you are a 100% discretionary trader, however most discretionary traders also have things that triggers them to open a trade. For example candle stick formations, patterns, ... you can also backtest these.

In one hour you can backtest hundreds of bars (even manually) while real time only gives you X amount of bars (depending on the timeframe).
So if you want to trade candles like you showed, go back in time, look for simelar events/formations/bars/candles and try to find your edge.

Unless you are trading from the DOM, then ignore all of the above

RDK91,

Thank you for the comments.

You gave good advice. Do you manual back test or program the strategy then back test? I do have programming experience.

If you manual back test, how many trades you recommend manually backtesting for a statistical edge.

 

[Trade4gainz]

Trade Update:

My new strategy working so far, but would like to test it more and more before i start posting winning results. so far today was green.

Hope all of you have a great week.

 

[samuel11]

What does that mean? For 20 minutes bears tried to resume the trend and got held up by the bulls.

This is how I think about it too. I'm always imagining a battle between bulls and bears and looking for clues about who is in control at the moment.

 

[p0box4]

RDK91,

Thank you for the comments.

You gave good advice. Do you manual back test or program the strategy then back test? I do have programming experience.

If you manual back test, how many trades you recommend manually backtesting for a statistical edge.

I have almost no programming experience and did most of the backtesting manually.

My semi automated system is 100% mechanical and could be fully automated, however i am fine with it as it is, for now.

Since it is based on indicators it was fairly easy to backtest manually and i have backtested over 1 year on multiple timeframes and then also did some random backtest for 2 months on 10 different dates going back up to 6 years.

A lot of work, boring work, however much more efficiënt then looking at real time charts all day.
I did all this in about 2 weeks, backtesting everyday for 1-2 hours. If i would have done it with real time data it would have taken me close to 2 years to get the same data and i would probably have given up by then.

I think that is a mistake a lot of beginning and losing traders make, they don't put in the effort to find out if the system had a statistically edge, they test it for a few weeks and then give up while the system might just be in a losing streak, however most of the time traders think they found to holy grail until a few weeks later when everything comes crashing down.

It is impossible to deside if a system is profitable or not in just a few weeks or months.

I was messing around a while ago with my chart and some indicators and my attention was caught by something, something minor, in the beginnen my system was just about break even.
I could have trown it away and started over, however i started thinking about what my system does (could be anything from scalping to swing trading to ...), and i knew i had to find a way to improve my edge just a little bit and then i would have something, all that developed in what i am doing today. The basics are still exactly the same and it took many many months and a lots of hours of hard work to create what i have today. Most people don't have the patience for that and keep switching systems they find online or buy instead of working something out that works for them.
They want instant results, all the time.

So do a lot of backtesting, stick to a system that you feel comfortabele with even if it might not be profitable from the beginning. A small change in entry or exit rules can have a big impact on the results and by doing so you will find out soon enough if the system has potential or not.

Knowledge gives power and knowing how a system performed in the past gives an indication on how the system might perform in the future. A break even system is just 1 small adjustment away from being profitable.

 

[Trade4gainz]

I have almost no programming experience and did most of the backtesting manually.

My semi automated system is 100% mechanical and could be fully automated, however i am fine with it as it is, for now.

Since it is based on indicators it was fairly easy to backtest manually and i have backtested over 1 year on multiple timeframes and then also did some random backtest for 2 months on 10 different dates going back up to 6 years.

A lot of work, boring work, however much more efficiënt then looking at real time charts all day.
I did all this in about 2 weeks, backtesting everyday for 1-2 hours. If i would have done it with real time data it would have taken me close to 2 years to get the same data and i would probably have given up by then.

I think that is a mistake a lot of beginning and losing traders make, they don't put in the effort to find out if the system had a statistically edge, they test it for a few weeks and then give up while the system might just be in a losing streak, however most of the time traders think they found to holy grail until a few weeks later when everything comes crashing down.

It is impossible to deside if a system is profitable or not in just a few weeks or months.

I was messing around a while ago with my chart and some indicators and my attention was caught by something, something minor, in the beginnen my system was just about break even.
I could have trown it away and started over, however i started thinking about what my system does (could be anything from scalping to swing trading to ...), and i knew i had to find a way to improve my edge just a little bit and then i would have something, all that developed in what i am doing today. The basics are still exactly the same and it took many many months and a lots of hours of hard work to create what i have today. Most people don't have the patience for that and keep switching systems they find online or buy instead of working something out that works for them.
They want instant results, all the time.

So do a lot of backtesting, stick to a system that you feel comfortabele with even if it might not be profitable from the beginning. A small change in entry or exit rules can have a big impact on the results and by doing so you will find out soon enough if the system has potential or not.

Knowledge gives power and knowing how a system performed in the past gives an indication on how the system might perform in the future. A break even system is just 1 small adjustment away from being profitable.

where can i find longer period of data for NQ for backetesting my strategy?

 

[p0box4]

where can i find longer period of data for NQ for backetesting my strategy?

I did almost all of backtesting in Rithmic Trader Pro.
Might not be the most efficiënt or best way, i am not saying my way is the only way to go.
Just sharing my experience .

 

[SimpleMeLike]

I did not get to trade today as I was out but looking back hindsight at todays action I can explain some price action trades I look for. I will refer to the numbered points below. NQ chart form today. I also review charts to see what I missed or what I should have seen.

EDIT: Below is a 2 minute chart

View attachment 190760

1. Market sold off sharply after 2 sideways bars. I don't try and catch that knife with a random long entry and yo never know when it will end so entering a short anywhere is just a guess. Sit on your hands and wait. All large moves have a retrace or reversal. You don't know which will come but 100% guaranteed it will be one of them. The large move on 4 candles formed a doji candle and 3 sideways bars. 4 bar was a hammer.

What does that mean? For 20 minutes bears tried to resume the trend and got held up by the bulls. To me that is telling and you could have entered a long at 7597 above the small green hammer risking 9 points for a sharp reversal. large amounts of times a sharp sell off from the open is reversed (especially on no news). If you took the profut at the 20 EMA that was good for 13 points. If you held because there was no serious reversal bar until somewhere around 7622-7626 you had a nice runner. You could have moved your stop twice up the move to lock in a profit in case it weakened.

2. Assuming you missed that move or took profits, point 2 is where the market had a retrace/pullback of the large move higher and found support along the 20 EMA. 5 sideways bars showing for 25 minutes the market was holding and bears could not reverse the spike back higher. could have entered a long anywhere in this cluster with a stop below those long tail lows and rode it up until the red bar just after the horizontal blue line. That was about a 15-18 point move.

3. This is where the retrace from the previous high pushed back up but failed to take out the previous high. This shows weakness. The long red bar after the 3 on the chart with the vol spike is an early warning sign. Then the market retraced on the 20 EMA and this could have also been a short entry with a stop above those tail spike highs. How far you ride that down depends on moving your stop or scaling out.

4. If you missed this down move point 4 shows a retrace entry. Market retraced to first touch of 20 EMA and boucned off. Short entry with stop above that swing high bar and you would have rode that down to retest of opening low which it came close to.

rest of the day was a slow meandering rise with not much signals I could see any entries in.

Studying price charts this way is how you study price action and then prepare yourself to see these things in real time. On my chart I do add trendlines and some more MAs for visual aides (this is a clean chart for you to see easier).

I think you cannot trade off of random S/R levels you draw because you may be the only one seeing them. But longer trendlines, double tops and bottoms, retrace levels are part of price action we all see and make better trade entries.

El OchoCinco,

Thank you for sharing and taking time out to put together for me to study and review. I will respond shortly once I read your comments.