ES Daytraders: How many indicators?

Futures are not my area of expertise trading wise but like everyone else I am glued to them all day. When I traded at Protrader we got JS Services price map, and a lot of guys swore by it after using it for a while.

They have been around for about 15 years and a lot of locals supposedly use their daily data for piviot's and S/R levels. You might try hooking up with that or take their trial at the website of the same name (jsservices)

It's a steep 350 bucks a month as an individual though. Besides that, I have to agree with everyone else. Keep the use of indicators to a bare minimum and focus on the price action.
 
Thanks for all the excellent responses, they're really helpful, and are confirming what I've been thinking all along - KISS, or maybe even KIRRSS - 'Keep It REALLY REALLY Simple.'

TNT - I am planning to build a non-discretionary volatility-based strategy that may/may not be automated, depending on how many trades it takes daily.

Av - Will check out JS Services, though 350 a month is pretty hefty - thanks for the tip.

Please keep the comments coming, it's been a big help so far.
 
Tech Analysis

Impressed with your 17 ticks a day! Can I ask how many trades you've been averaging on these days in question?


I use 5 tick with BB's. Breadth indicator and CCI on es5. Plus a couple of ema's.
 
Originally posted by Sophomore Jinx
Thank you very much for the feedback. I will definitely factor those in.

EC - If you can PM me some parameters for looking at pivot points, that would be great.

Hybrid - Regarding money management, can you recommend any great books on the subject? I've skimmed some of Ralph Vince's stuff and also read Ryan Jones' "Trading Game."
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Unfortunately, I don't have any good recommendations, I just learned the hard way from personal experience. Have a look at my thread "Blown Out" in the Journal's section. You'll also read from successful traders on that thread that money management is one of the most important aspects in this business. Perhaps I should have done some reading on money management before I got started :p
 
Originally posted by traderkay
hybrid, in my humble opinion you're a quite a bit off here. You wanna get a nice positive expectation thru the appropriate Win % and W/L ratio. Now it's easy to say just make sure your wins are twice as large as your losses. Sure anyone can do that. Just make your target 2x your stop. But then a funny thing happens.. your Win % goes down to like 20%.. and you're no longer a happy man.

Anyhow my point is that the objective is an edge (positive expectation resulting from Win %, W/L ratio combination). You coming on here and saying "well just achieve this Win % and that W/L and you'll be OK", is like saying "When running your business just make sure your profits exceed your losses". Getting an edge is hard. And the relevant question is HOW to get it. What method(s) will give the Win % and W/L you mentioned? That's the question.

And by the way, many people confuse trade management (which influences your avg W/L and Win %) with Money Management which is basically bet(position) sizing. The topic brought up by hybrid relates to trade management rather than MM described by Tharp, Jones, etc.
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My point was that new traders focus almost soley on win/loss. It surely is important, and a good win loss will drive your profits.

Certainly having an edge makes the difference between regular traders and the masters, but early on no trader has an edge, they are learning. That being the case, it is very important to focus on profit and loss, coupled with position sizing. This prevents the early trader from getting blown out. It allows you to survive the learning process.

Speaking of P&L ratio, it must be set realistically within the frame of time that you trade (Say +3 points -1 on the ES with 5 minute charts, or whatever you trade). As long as you keep your P&L targets realistic, your win/loss ratio should not be adversely affected.
 
I am hearing you loud and clear. Will check out your "Blown Out" thread and glean what I can about trade management and money management, hopefully it'll give me some food for thought when it comes to building that part of the system. Thanks a bunch for your responses.
 
Originally posted by sussex
Tech Analysis

Impressed with your 17 ticks a day! Can I ask how many trades you've been averaging on these days in question?


I use 5 tick with BB's. Breadth indicator and CCI on es5. Plus a couple of ema's.
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About 5 roundtrips a day. I'm very selective and I avoid the first 15-20 minutes and the middle of the day. That alone will halve your losses. The number of reversals and false breakouts/downs that occur in that time period is staggering.

I use 2-minute bars; tick charts drive me crazy.
 
Let's continue from the original question. Maybe specify my parameters a little more.

The goal would be to create, backtest and refine a volatility strategy for daytrading the ES, using 5 minute bars. System would ideally trade less than 5 times a day, within a limited time period. Goal would be to average 2+ points per day, based on 1 lot.

I just read the Charlie Wright series on ET called "Trading as a Business," which gets a lot into developing a winning strategy. This seems to be the kind of process I'm expecting to have to undertake in developing a system. However, I notice that in one of his examples, when he wants to juice up a system, he does so by making the system more complex, rather than simple (by adding an indicator, or another rule).

Is this what you strategy traders have done as well? Start out basic, with just price and 1 favorite indicator, test various parameters, refine them, and then find that if you just add 1 or 2 more indicators or rules, it makes a significant difference? (I hope not! I'd rather keep as simple as possible. :))
 
You seem to be doing something similar to what my general goal is, in terms of trading within a limited time window and making about 5 trades a day (on 2-minute charts).

Are you a discretionary trader, strategy trader...?
 
Very discretionary and very conservative. I miss a lot of trades by being that way, but at least I can end the day ahead (usually!).

I'd rather miss a run than chase or take a low-probability trade.
 
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