Damir's Trading Journal

ElectricSavant · Sep 12, 2003

Rumor has it oldtrader was spotted at Starbucks the other day with a triple cappucino in his left hand and a double jave in the right.....

Michael B.

Damn kids....I talk to them with tears in my eyes....and they just don't listen.

xje · Sep 13, 2003

Interesting article indeed. Thanks Mark.

Two questions are in order:

1. For those of you who prefer trading YM over ES, is it really because YM is less volitile than ES intraday and YM always follows ES in trend (as the article suggested)? If not, what's your main reason?

2. Does a risk reward ratio with higher risk than reward (e.g. 1.5:1) really make sense? Is it more effective than otherwise (e.g, 1:1.5)?

Thanks for any response.

xje

Kap · Sep 13, 2003

Quote from xje:

Interesting article indeed. Thanks Mark.

Two questions are in order:

1. For those of you who prefer trading YM over ES, is it really because YM is less volitile than ES intraday and YM always follows ES in trend (as the article suggested)? If not, what's your main reason?

2. Does a risk reward ratio with higher risk than reward (e.g. 1.5:1) really make sense? Is it more effective than otherwise (e.g, 1:1.5)?

Thanks for any response.

xje

I trade both ES and YM, whichever is more volatile at the extremes, I just try not to follow the ES tick for tick because the "noise" can drive you bonkers.

As for the Gap trade, this is certainly not a new idea, we rarely move in a straight line, 70% of up to 1.2% gap moves are retraced (feel free to provide data otherwise, mine is rusty).. on the basis of this a 1:2 ratio willl still sit in your favour, I like to use 1:1.3, you can bet there is stops placed at 2*gap, indeed, I like to short/long +/-2*gap, this can be a nice early gift, but when your wrong your very wrong as the early gap traders scramble for cover. so try not to spill your morning beer/coffee. :eek:

OnTheEdge · Sep 13, 2003

I haven't been able to pull up the TWS for 8-1/2 hours. Is there something wrong at my end, or is that the way it is for everyone? Thanks.

xje · Sep 13, 2003

The same for me. I often have trouble to open TWS in Saturdays - I guess they might be using weekends to do maintenance.

Quote from OnTheEdge:

I haven't been able to pull up the TWS for 8-1/2 hours. Is there something wrong at my end, or is that the way it is for everyone? Thanks.

xje · Sep 13, 2003

Quote from Kap:

I like to use 1:1.3, you can bet there is stops placed at 2*gap, indeed, I like to short/long +/-2*gap, this can be a nice early gift, but when your wrong your very wrong as the early gap traders scramble for cover. so try not to spill your morning beer/coffee. :eek:

Thanks for the response, Kap. Just to clarify: do you mean 1(risk):1.3(reward) or 1(reward):1.3(risk)? Sorry I have trouble to remember which way is the convention.

Also, trading gap or not, is it generally a better strategy to have risk >= reward?

Thanks,

xje

taodr · Sep 13, 2003

Quote from OnTheEdge:

I haven't been able to pull up the TWS for 8-1/2 hours. Is there something wrong at my end, or is that the way it is for everyone? Thanks.

I believe TWS login unavailable on saturdays due to maintenance.

Kap · Sep 13, 2003

Quote from xje:

Thanks for the response, Kap. Just to clarify: do you mean 1(risk):1.3(reward) or 1(reward):1.3(risk)? Sorry I have trouble to remember which way is the convention.

Also, trading gap or not, is it generally a better strategy to have risk >= reward?

Thanks,

xje

generally 2 to 1.5:1. but the above 1:1.3, reward:risk, with the apparent 70% probability in your favour. For a 40+ point Gap... not a 5 point Gap lol

ElectricSavant · Sep 13, 2003

There are a few trader that state:

To trade the ES you must have a 1:3 risk:reward expectation. They swear by this as anything less will lead to long term destruction. By long term destruction I mean the decay of your profit will not be evident in your day to day trading.

Michael B.

Kap · Sep 13, 2003

Quote from ElectricSavant:

There are a few trader that state:

To trade the ES you must have a 1:3 risk:reward expectation. They swear by this as anything less will lead to long term destruction. By long term destruction I mean the decay of your profit will not be evident in your day to day trading.

Michael B.

- this is not a scalp... so The Dow Opens GAP down 80..I go Long ...ur suggesting I have a stop at 80 points south and a target limit Sell @ 240 points north!..... :eek: ... I think your missing the point. The 70% of 1.2% gaps retrace allowing the ratio to tighten..Of course I would not suggest you do any of the above.