ES Journal Archive (2006 - 2008)

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Quote from OldTrader:

This guy was quick, no fear,
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I will agree with OT. I have been around awhile and on the floor. The guys that impressed me were quick. On the options floor the first guy to yell gets the trade so you have to be quick, but the good traders are quick in every way. They can analyze a trade, assimilate new information, change their tactics, etc. very quickly. Taking a loss or a big gain didn't affect them much, they just went on with their job. I watched some of the exceptional guys trade and thought to myself, I would pay anything for half that guy's talent - not unlike the 25 handicapper watching golf on TV.
 
Quote from opt789:

I will agree with OT. I have been around awhile and on the floor. The guys that impressed me were quick. On the options floor the first guy to yell gets the trade so you have to be quick, but the good traders are quick in every way. They can analysis a trade, assimilate new information, change their tactics, etc. very quickly. Taking a loss or a big gain didn't affect them much, they just went on with their job. I watched some of the exceptional guys trade and thought to myself, I would pay anything for half that guy's talent - not unlike the 25 handicapper watching golf on TV.
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If you were to make a comparison between really talented people, no matter what trade, what seems to unite them is how little time they need to get out of a mistake, 0 emotional attachment. Phenomenal ability to recover.
 
Quote from JSSPMK:

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?
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Extremely low leverage. I agree with OT about pulling hard stops in low volume periods.

Say your account is $200,000. You could easily hold 25 ES contracts overnight and have plenty of excess liquidity. Now imagine, if you only traded 2 contracts? Even if you took a 50pt loss, you would only lose 2.5% of your capital. 100pt loss, 5%.

Now imagine someone who has 2MM in capital and they can make a very comfortable living (especially with TBills or other interest bearing instrument)

The only problem with trading like this is your return on capital is low.

I saw trading like this when I worked in Private Banking. The average customer had 5MM and had 80% in munis and then 20% in safe conservative trades to keep up with inflation.
 
Quote from Mins:

I would like to add that my analysis of price action has taken me a long time to acquire and i am still learning each and every day.

Markets by their very nature hardly ever produce identical results and i guess you always have to be one step in front of you opponents.

One thing that helps me understand price action is watching charts and also replaying data. At the end of each day i replay the data (with each bar loading every 5 seconds) and then decide where i was wrong or how well i followed my plan.

I tick replay previous months, weeks data nearly each and every day. This way i trade the past and place my entries and stops as i would do in real-time. I then tally points at the end of each replayed day and see where i am going wrong or where i am not following the plan. I can also statistically note which one of my plays is most profitable so i can increase size on that particular play. Please keep in mind i have some auto strategies but my discretionary trading cannot be programmed as of now so cannot be back-tested with accuracy unless i replay countless hours of charts.

I advise any newbies to immerse themselves into the market and replay days and days of previous data to get a feel of how price moves.

Before the start of every day i usually go through at least 10 days worth of replayed data (2 second bar loading for 1min chart) to mentally prepare myself for the day ahead. Also, when volatility conditions change in the market and the wave cycle changes i go back and replay previous months or years data which closely resembles the cycle phase we are in.

This is my method if preparation.
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Researching extensive historical data also helps. I found it illuminating to analyse every intraday move in the ES back to when the contract began. It was interesting some of the crazy moves that happened toward the end of the day in 98 and 99. Of course, it takes a long time looking at every minute of action in the ES since 1997 (think months).

Perhaps the most interesting thing I found was that although the market changes, it also remains the same.

I am a novice trader myself, only began day trading the ES in 2003.
 
Quote from Mins:

I don't agree with this at all especially not for day trading markets like the ES.

A 2 point stop unless volatility is extremely high is more than adequate to be placed outside minor noise.
My day trading is usually based on smaller time frame (swing trades in separate account with wider stops). Typically on any given day i average about 5-6 trades per day ES. Therefore, if i had kept wide stops this would most likely average 2 trades per day.
I have tried wide stops in the past and statistically it did not improve my profitability whatsoever, bear in mind i am talking strictly about day trading with average holding time about 15 mins for most trades.

A wide stop not only kept me in bad trades hoping it will turn around but also meant my hands were tied when a new play presented itself.

With my system i need only a batting average of 40% wins to be profitable day in day out. I have no need for wide stops because they often force day traders to become relaxed and lead to bad entries with the hope wide stop will bail you out.

If you feel day trading has way too much noise then you are trading the wrong market. Even on quiet days the ES has many profitable opportunities which require only 2 pt stops, i think a lot of traders don't understand the smaller time frame nature of the ES and then post that small stops will destroy you.
If i am wrong with my trade then my stop will prove my point, if the play is still valid then re-entry is always an option. No need to waste potential opportunities in the hope you are going to be proven right.

This is my opinion on small stops, obviously every day trader has their own methodology and therefore there is no right or wrong answer. Keep in mind, my method of trading requires extreme discipline to stop revenge trading and impulse trades.

Good trading to all
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If it works for you, keep on doing it. There are probably many different routes to successful trading. We can all only speak from our own experience and of those we have known.
 
I want to see 2044-2047 on NQ to get short.... if we could wedge up to that level that would be awesome. I've had to exercise alot of patience to stay out of the market most of today because there haven't been a ton of opportunities, so this would be nice.

60-min RTH Div coming down on NQ and ES adds to my bias.

:edit: that little sell-off just f'ed things up.... zone is still good, but I wont expect the waterfall selling from it... alota stops were just cleared.
 
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