ES benchmarks

[JT47319]

95% of traders (or so they say) washout.

Obviously 95% of traders could not achieve NOT losing a single point. An amazingly simple task in concept, but difficult in the extreme by practice. Like I said, if you can accomplish this one simple goal, THEN you can start setting profit objectives. Otherwise you're fooling yourself.

Try NOT to lose money in other words and survive for six months. If you can survive for six months, you have an even chance of being successful.

Day trading is a Darwinian struggle in the extreme. It is survival of the fittest given form and substance.

 

[dottom]

If you can make 2-pts avg per day per contract <b>consistently</b> week-to-week or even month-to-month you'll be rich. The smaller your equity volatility the more you can risk per trade.

Risk-adjusted return is everything b/c with with a more consistent system you can risk more per trade.

All I'm saying is don't discount the 2-pts avg/contract/day. Focus on improving consistency and robustness of your methodology. Then while that's cranking away making you $ week-after-week you can then focus on other methods. If your method works for the next 2 years you can easily grow $5k account to $1M, never risking more than 2% per trade. Depending on drawdown charateristics of your methodology, you might need more than $5k starting, but $1M in two years is not out of reach at all.

I've said many times that a small edge is all you need, but remember consistency and robustness is critical! Seems like you're doing well so far. Good luck.

 

[Trader Pete]

don't forget that it all depends on whether or not you hold overnight. many systems and/or traders make a lot of their profits by holding positions overnight or even up to a few days. keep it in mind.

 

[traderkay]

no matter what I do nothing seems to work on ES

 

[Jayford]

Quote from dottom:

If you can make 2-pts avg per day per contract <b>consistently</b> week-to-week or even month-to-month you'll be rich. The smaller your equity volatility the more you can risk per trade.

Bingo. This is everything. Its amazing how many people don't realize this. You just keep upping the contracts. If you start losing, you just get small in a hurry. Netting 2 pts per day, after commish, is $100 per day per contract. You are already at six figures per year with only four contracts. Keep the losses to a very small % per trade (2% is standard; I never go past 3%).

That said, I won't ever be in the big leagues as I have a psych block when I get over 5 cts, even though it may be a constant % of total. I've been doing this a long time and realize my comfort zone. Still, it takes only a few points per day, average, and six figures is very realistic at this size. You have to be net profitable in the first place though, which is the tough part.

Jay

 

[vanilla2]

Everybody,

Thanks so much for sharing. I think all of your ideas are right on the mark.

I see your points about how a 1 point average per day, or even week is an awesome profit. That is heartening information. For some reason, while trading, I picture old men smoking cigars and raking in 10 points every single day fading my trades, but the more I read your posts and think about it, this would be an obscene profit.

Today was my third day. Friday, I made +1.25 on one trade and took the day off to reflect. Yesterday I netted +2.25 on four positions. Today I netted -1 on 10 positions (most of these were attempting to make back the day's sizable early losses - and the commissions piled up high).

I think I'm still in the early stages of feeling out entry and exit tactics, and testing out how nimble you can be with ES using IB. IB's hotkeys are an excellent tool, and I am somewhat conflicted about my trading timeframe as I experiment with this wonderful instrument.

One question, it seems as though there may be safer profit in fading extreme price movements on volume spikes. While channel breakouts only seem to pan out some of the times I think they should before hitting my stop, it feels almost like a given that getting in at the top of a breakout move just after a long bar is guaranteed to fall out underneath you almost every time. Anyone scalp these consistently and care to comment?

From reading your suggestions, I'm inspired to focus on consistency above all, and will try to be much more discerning.

Thanks

 

[spreadem]

Today I netted -1 on 10 positions (most of these were attempting to make back the day's sizable early losses - and the commissions piled up high).

Half the battle is to not have any (or as few as possible) sizeable losses. Large losses are what kill traders.

Keep the lossed less than 1%. In fact it is a good exercise (if you're serious about being consistent) to take an average of your losses and see what percentage of your account equity they represent.

If your average loss is $100 and the size of your account is $10,000 ... you're in the ballpark!

 

[ElectricSavant]

I enjoy a beer and a good cigar .....while playing poker

Michael B.

 

[candletrader]

Quote from spreadem:

Half the battle is to not have any (or as few as possible) sizeable losses. Large losses are what kill traders.

Keep the lossed less than 1%. In fact it is a good exercise (if you're serious about being consistent) to take an average of your losses and see what percentage of your account equity they represent.

If your average loss is $100 and the size of your account is $10,000 ... you're in the ballpark!

Agreed... even a trade risk of 1% can produce a highly volatile equity curve with some major drawdowns... for those who don't believe me, and who haven't been trading with a 1% risk for a significant length of time, I suggest one thing... run an automated or manual backtest of your system/s over the last year using a 1% per trade risk... you will quickly realize how easy it is to generate major drawdowns even on a good methodology... and for a negative expectancy approach and/or a newbie, a 1% trade risk is often the highway to an account blow up...

If you prefer a less volatile journey, scale back to 0.25% per trade risk...

 

[candletrader]

Quote from dottom:

If you can make 2-pts avg per day per contract <b>consistently</b> week-to-week or even month-to-month you'll be rich. The smaller your equity volatility the more you can risk per trade.

Risk-adjusted return is everything b/c with with a more consistent system you can risk more per trade.

All I'm saying is don't discount the 2-pts avg/contract/day. Focus on improving consistency and robustness of your methodology. Then while that's cranking away making you $ week-after-week you can then focus on other methods. If your method works for the next 2 years you can easily grow $5k account to $1M, never risking more than 2% per trade. Depending on drawdown charateristics of your methodology, you might need more than $5k starting, but $1M in two years is not out of reach at all.

I've said many times that a small edge is all you need, but remember consistency and robustness is critical! Seems like you're doing well so far. Good luck.

2pts per day as a long run average gain per contract is about as good as it gets... personally I dont know anyone with such an average but, in my view, it is near enough to reality to be feasible... most of the best and most consistent ES traders I know are doing around 1pt a day... you can get rich on 1pt a day too, if you do size e.g. a 50 contract trader doing 1pt a day as a long-run average can live VERY nicely...

Of course, if the bubble environment ever returns, everything changes and it would be possible to average much, much more than 1pt a day, thereby getting the same profits (with much less size) as a 50 contract trader currently averaging a point a day... I am talking about current market conditions...