Day Trading don't work

it depends, it depends, it depends.

it really does.

i have found that the key to my success was AVOIDING THE BLOW UP (TM) which was entirely the result of psychology, NOT methodology.

you need two things to be a successful trader.

1) a methodology with an edge.
2) RISK MANAGEMENT.

neither in and of itself will result in success.

but those two are ALL you need.

i trade YM (intraday) for income, and I invest to build wealth

when it comes to the former, i VERY rarely add to a winning trade. i will add to a trade in my predetermined entry zone (iow, it's not adding to a loser, but it is adding within the zone that i consider entry-worthy. if it breaches that, i am ALL out)

you need to find the RIGHT market for you. for scalping and intraday, for ME, it's YM

it may not be for you. note that ES is essentially the same as YM, just inferior spread.

if you are a trend-follower type of guy, you are probably better off in a trendier market like corn or soy.

personally, most of my trades are means reversion, thus i do best in morning YM setups. afternoon tends to be trendier and less means reversion, so i have to consciously tell myself to not take certain trades in the afternoon and take others.

write a business plan, make trading rules (and follow them), consider a mentor, and track your trades RELIGIOUSLY and ANALLY.
 
Hi LonelyTrader,

One of the biggest mistake you can make in the beginning is trade with real $ without perfecting your method on simulator. Yes, similator is play money and psycologically trading real $ is different. But if you can not make $ on simulator, no way you will make $ on real account. Some of the simulators these days are as good as real thing as far as execution goes.

The steps to dau trading success are as follows:

1) Find method(s) that suit you psycologically.
2) Sim it until you can consistantly make profits, then sim some more.
3) Start trading real account with smallest possible increment (1 contract)
4) Once your account grows to a comfortable level, add another contract.
5) Repeat Step 4 until you reach max # of contracts that the market can handle without much slipage.

If you pass step 2, but fail at step 3, analyze exactly where the brake down is, and go back to step 2.

Regards,
redduke
 
Quote from whitster:

you need to find the RIGHT market for you. for scalping and intraday, for ME, it's YM

write a business plan, make trading rules (and follow them), consider a mentor, and track your trades RELIGIOUSLY and ANALLY.
More...

Can I ask what kind of targets do you use when scalping and stops! on the YM?

Iv'e done this write the plan and follow it, as for a Mentor I don't think pepole have the time, but it would be nice if a Mentor/Pro could show me one or two simple methods to keep me out of trouble.

Quote from RedDuke:

Hi LonelyTrader,

One of the biggest mistake you can make in the beginning is trade with real $ without perfecting your method on simulator. Regards,
redduke
More...

I traded on a simulator for around 3 years and made money, then went to trading with real money, but it don't seem, to work as good as a Sim account. I been at this for a little over 5 years, I'm finding it tough.
 
Quote from Lonely trader:
I traded on a simulator for around 3 years and made money, then went to trading with real money, but it don't seem, to work as good as a Sim account. I been at this for a little over 5 years, I'm finding it tough.
More...

What exactly is the difference that you saw?

Since you trade liquid futures such as ES and ER, starting trading with 1 contract would give you exactly the same execution as the real thing. I have done it myself, and saw no difference in execution.

The difference that I found was purely psychological, it was much easier to pull the trigger on sim after 2 or 3 losses in the row, not so easy on real account. But I overcame this issue with practice and reading Douglas “Tading in the Zone” cleared few things up as well.

So the question is what are you doing differently on real account vs sim?
 
Quote from RedDuke:

What exactly is the difference that you saw?

Since you trade liquid futures such as ES and ER, starting trading with 1 contract would give you exactly the same execution as the real thing. I have done it myself, and saw no difference in execution.

The difference that I found was purely psychological, it was much easier to pull the trigger on sim after 2 or 3 losses in the row, not so easy on real account. But I overcame this issue with practice and reading Douglas “Tading in the Zone” cleared few things up as well.

So the question is what are you doing differently on real account vs sim?
More...

Mostly went by my rules on a sim account, maybe placed the odd trade I would not have done on a real account, but most do this on a sim, Example, someone phones you, you would talk to them on a Sim account and let the trade run in the background, but in a real trade you would not answer the phone.

I have made money on my real account the first part of the year but give it all back, my point is, with day trading, you win some and give more back over the long term....I be going in again today:eek: , I will post my trades later in the day. I got till the end of this year to decide if trading is for me, after 5 years of reading studying & seminars.

Regards

Bill
 
Quote from Lonely trader:

...Would anyone be interested in showing me for 1 day in ET chat room how they trade ES I don't want to know your method just see how it can be done

Thanks
Bill
More...

Hi Bill,

Why just one day only when you can watch every trading day and why limit yourself to ET chat that's not (accordinly to many that used it) suitable for a learning environment about trading Emini ES. :confused:

Simply, there are other free chat sources much more serious, better moderated than ET chat involving Emini ES.

Quote from Lonely trader:

...I would like to ask traders who do this for a living, do you work on ratios for you profits and loss, such as 3 to 1 or 2 to 1 or even 1 to 1 ratio?....Maybe you scale in to trades? maybe you scale out of trades? I like to know the mind set of a Pro. do you use targets and so on. is it better to have tight stops even though you get stopped out a lot, or is it better to have a larger stop to give the market some room?

Thanks again fo your posts I welcome helpful post and criticism posts, I have broad shoulders so I can take it.

Regards
Bill
More...

Bill,

Do you have a trading plan that's written???

If so, you should know where your profit targets are at, where your initial stops are at, trailing stops are at, scaling in or not...

All prior to entry.

My point with the above is this.

I only read your posts in this thread and nobody else.

You seem to be all over the place and those are clues that your either not trading with a plan or your trading plan is very inadequate.

That leads me into my next questions.

* What type of trading methodology are you using on ES (ex. breakout, trend, range, volatility et cetera)???

* How did your method perform during the recent volatility increases (June - mid August) in comparison to prior to June???

Now, to answer your question...

Nobody should be giving you any advice unless they specifically tell you what type of trading method they are using.

Simply, don't make the classic newbie error via learing or adopting something from someone that's most likely is using a different trade method than you are.

For example, lets pretend your using a breakout strategy while taking advice from someone using a range strategy.

Thus, breakout traders manage their trades different than someone that prefers to trade range bound markets.

My point with all the above...know what your trading plan is and find like minded traders using the same thing or similar that are profitable.

Those are the traders you should be asking for advice.

Also, I'm not saying someone with a different strategy can't offer advice that has merits.

I'm saying that you've given yourself a deadline (December) and your still bleeding (consistent losses)...

It's time for you to spill the beans exactly what you are doing and get advice from those that are profitable via the same or similar like trade methodology.

It's your choice.

* You can continue with this type of vague like discussions about what your doing.

* You can explain in detail your method, go over each trading day in detail (entry, exit, interval, reason for the trade et cetera) to increase your odds of getting advice that's specific to your trading method.

Good luck and it sounds like its time for you to start a trade journal here at ET in the Journal section.

http://www.elitetrader.com/vb/forumdisplay.php?s=&forumid=29

Thus, don't start posting your trades in this thread...

Start fresh in the Journal section and make sure you state in a clear coherent message exactly what is your trade method (entry signal, exit signal, initial stop/loss protection method, trailing stop method, profit targets, contingency plans, chart interval used, reason for the trade et cetera).

If you don't have the above...you don't have a complete trading plan which implies your trading at a disadvantage because profitable traders tend to have a complete trading plan.

Mark
 
Quote from Lonely trader:

Mostly went by my rules on a sim account, maybe placed the odd trade I would not have done on a real account, but most do this on a sim, Example, someone phones you, you would talk to them on a Sim account and let the trade run in the background, but in a real trade you would not answer the phone.

I have made money on my real account the first part of the year but give it all back, my point is, with day trading, you win some and give more back over the long term....I be going in again today:eek: , I will post my trades later in the day. I got till the end of this year to decide if trading is for me, after 5 years of reading studying & seminars.

Regards

Bill
More...

You need to discipline yourself and act on sim and real the same, no exception, especially to such distractions as phone and others.
 
By far, the most important thing for daytraders or scalpers to understand is that they should consistently use "position scaling" to manage positions.

Whether right or wrong, many times just the fact that you are using intelligent scaling into and out of positions can often make you money or at least break you even.

Of course, in a persistent rally or selloff, there's not much you can do, but in "normal" futures markets, incremental scaling is the way to go.

Futures contracts commissions are "per contract", not "per transaction" so you can buy/sell 1 at a time, just as you can buy/sell 5 at a time; same commission for same total number of contracts.

So, let's say you're trading something like YM and you can spend only 5 contracts max position, taking a long stance (fictional prices).

1) Always buy (or sell) a single contract at a time.
2) Defend your position at a fixed offset from your last transaction, so if you bought 1000, be prepared to buy 995, 990, 985, and so on... up to your max.
3) For each contract you buy, immediately set a target to sell at a fixed target, such as 5 ticks. So the contract bot at 1000, seeks a 1005 target, the 995 contract seeks a 1000 target, and so on.
(These can be modified as the trade proceeds, if you have the right order entry client.)

Of course you can modulate these offsets according to the contract you're trading; it's not a hard and fast rule.

So, as you are scaling in, and staggering back in this example of a long position, you are simultaneously taking profits "inside" the major position, as some or all of your targets work out. After a while you eventually become flat.

But the important thing is that each "mini-trade" inside the major position puts money in your pocket which offsets any open losses the position may have.

So, trading is all about "volume weighted average buying price" being lower than "volume weighted average selling price".

"Staggering" entries and exits like this gives you a much better chance of obtaining a favorable overall entry price, and exit price until eventually you become flat.

It also allows you to "modulate" your level of risk as things either go your way, or start to go against you, incrementally. It's a continous process inside a maximum position size you feel able to maintain.

The example was for long trades, but same logic in reverse for short trades.

"Don't shoot all your bullets at the same target [price]".

One thing that's interesting about this approach is that you are adding to your position in "defense", rather than as the position works in your favor. Most traders think you should add as the position goes in your favor, but this strategy has you adding in defense of your position and removing contracts at profit (hopefully) as the position works out in your favor.

So it's different advice than is normally given.

The downside of this approach of "defensive scaling" is that you are putting more on the table, as the position is moving *against you*, so that you are obtaining a better average buying cost, but you are also upping the ante.

You have to have an analysis which tells you with some confidence that the trade is "worth defending"; otherwise, you would just be guessing.

But even if you must guess, using a scaling strategy will produce better outcomes than shooting all your bullets at one price.

That's some advice you should think about as a professional trader, in futures contract daytrading anyway.

FS
 
You must log in or register to reply here.
Back
Top