ES Journal Archive (2006 - 2008)
- Thread starter Buy1Sell2
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Out at 1500.00
+2pts
***
The reason I said "2pts and I'm a happy camper" is because of these stats for my trading:
Chance of Loss: 20%
Chance of 2pt Gain: 80%
Chance of 4pt Gain: 60%
Chance of 6pt+ Gain: 40% or less
So I'll take the 1:1 ratio with the extremely high odds of winning. Add-on geometric account growth through assymetric use of leverage, and the only other component you need is time.
Good trading,
JJ
The key to long term success is to trade with the trend as defined by the longer frames like weekly, monthly and daily. It is best to avoid taking short trades right now even though they may make you money. Here's the reason--It is much more likely that long trades will be successful for extended gains rather than short trades right now. The question is then asked "Won't I be missing opportunities when I don't take the short trades?" The answer to this is Yes. 
Quote from Buy1Sell2:
The key to long term success is to trade with the trend as defined by the longer frames like weekly, monthly and daily. It is best to avoid taking short trades right now even though they may make you money. Here's the reason--It is much more likely that long trades will be successful for extended gains rather than short trades right now. The question is then asked "Won't I be missing opportunities when I don't take the short trades?" The answer to this is Yes.
That is ONE way to trade, yes; however that is not the only 'key' to making money trading. There's plenty of ways to make money shorting in an up trend and vice versa.
Assuming that the loss is the same regardless of whether you hold for 2 or for 4, it makes much more sense to hold, at least if your figures are accurate.
Holding for 2 points=After 10 trades= 16 points (8 X2) profit - loss
Holding for 4 points=After 10 trades, 24 points (6 X 4) profit - loss.
Alright, we have a nice short setup for tomorrow. There should also be a great buying oppurtunity as well but only if we can get up to the resistance zone first. It has been a little while since I last posted because I havent seen much oppurtunity in terms of probability and risk/reward.
I will be getting short in the 1494-1497 area. I usually throw out a limit and add on with confirmation from a type of reversal bar entry. I cannot say exactly what price as it is still monday night and it will depend how the globex is opening tomorrow. There is some really nice support zones below the market at 1482-1484 and even stronger in the 1472-1474 area.
Here is the chart for visualization...
I will be getting short in the 1494-1497 area. I usually throw out a limit and add on with confirmation from a type of reversal bar entry. I cannot say exactly what price as it is still monday night and it will depend how the globex is opening tomorrow. There is some really nice support zones below the market at 1482-1484 and even stronger in the 1472-1474 area.
Here is the chart for visualization...
Hey smilingsynic, I looked over your math and guess what?
You are correct.
Then I looked back over my charts and the percentages that I had listed in reference to my setups, and once again.
You are correct.
***
However, while we haven't really gone into it on this thread (but we did discuss it in detail on 4re's Support & Resistance thread), the time factor involved in the 2pt trades is usually shorter than that required for the larger moves, and focusing on them will allow me to make my money and take care of a lot of daily business that I'm responsible for. For example, after my first trade I:
1. Had a quick breakfast.
2. Did some banking.
3. Talked over the details with a friend who wants me to beta test a new software he's bringing to market.
4. Caught up with a former girlfriend (wasn't my fault, she wanted someone who was more stable than a 40+ year old trader with a passion for the markets) who had emailed me to see how I was doing over the weekend.
I was also able to take another 2pt trade (which I saw move the full 6pts in the favor of my trade, BTW - it was the afternoon sell-off but I was happy to hear the cash register ring again on my 2pt trade), and
5. After my trade I left early and picked up some supplies from Duane Read before heading in to work.
So the point is, the short-term trades will also allow me to take care of a lot of other things besides trading, so there are intangibles which I factor into my decisions besides pure points.
But thanks for your analysis, considering the win percentage, it will be easy to scale-up as I start trading multiple contracts, and I could use a trade management algorithm such as Apex82 uses if I want to (sit in front of the screen all day)
and hold for the bigger moves.Good trading,
Jimmy Jam
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