Well I am a piker in comparison, so I fail to understand how you manage to control risk/reward by canceling stops for overnight/weekend long trades. If shit happens then would you just hold or accept the larger than expected loss and move on? Surely that would disbalance your risk/reward. Your targets ought to be quite substantial in that case, correct?
ES Journal Archive (2006 - 2008)
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Well I am a piker in comparison, so I fail to understand how you manage to control risk/reward by canceling stops for overnight/weekend long trades. If shit happens then would you just hold or accept the larger than expected loss and move on? Surely that would disbalance your risk/reward. Your targets ought to be quite substantial in that case, correct?
Again, what you find is that over time, the gaps tend to even out.
That said, the gap on 9-11 came in the direction of the existing trend. There was a big gap down in October of 1987 that started that move....again, in the direction of the existing trend.
The other thing I have found is that gaps against the trend don't typically last long...they get filled. Talking generalities here.
When the ES gaps against me, I have time prior to the opening to decide how I want to handle it. It could be a position I'm holding that I have a profit in, in which case the gap may just take back some of the profit. I'm going to look at that differently than one where I have a loss. I have to see the particulars. Sometimes I just take the loss. Sometimes I take what I have left of my profit. There have been times when I add to a existing position, especially one where I have a profit I'm working with.
This morning I came in with a short. We got a small gap against me. I didn't do anything but watch.
OldTrader
Yes, I do some intraday trading. What I generally do is trade in the direction my position is, if I have one. So right now for instance I'm short, so I would add a day trade if I saw something that I felt confident with.
It's kinda funny, even to me, but occasionally I have day traded against my position. I use ButtonTrader as a front-end. One of the things I can do with it is make a separate trade against another trade that I'm holding. ButtonTrader keeps track of it. Before anyone says it, I know this offsets the existing position. But I might scalp against my position if I saw something, then close the scalp, and continue to hold my original position. Of course, my broker doesn't make these fine distinctions! LOL.
Mostly I day trade in alignment with my existing position.
By the way, I doubt I'll post those trades, because it becomes too time consuming with the board.
OldTrader
For the record, I think the top is in today.
Have a nice rest of the day trading into a great weekend!
JJ
Have a nice rest of the day trading into a great weekend!
JJ
By the way, so there is no misunderstanding, I didn't trade on the CME. I traded on the KCBOT when the Value Line was a viable contract. I wasn't especially good at it.
I admired a couple of guys at the time. One was a spreader between S&P and the Value Line. He stood at the edge of the pit with a clerk behind him with an open line to the S&P pit, who constantly chanted the bid/ask on the S&P to this guy. Traded constantly all day long, and laid it off in the S&P. This guy was quick, no fear, had no belief in charts.
Another guy was more of a position trader. He made his initial money in the Russian wheat times. Big trader, held the position. Plenty of balls. Again quick. Pressed his bets when it was moving his way. He may have been the best outright trader I have ever seen.
Things have changed alot since then with screen trading. Lower commission, quicker entry/exit. But I still believe it's pretty hard for a guy sitting at a screen to compete with a guy on the floor. My belief is that a guy needs to learn to compete on a level where you use the floor traders weakness against him, rather than to try to compete with him on a level where you can't match his speed and commission cost. He doesn't have the ability to analyze, see all the markets, etc etc.
OldTrader
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