ES Journal Archive (2006 - 2008)

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Quote from JSSPMK:

So if you can withstand 30 handle move against your position based on whatever event that MAY take place & by saying that justifying canceling your initial hard stops, then why would you question my usage of soft stops? Maybe I haven't made myself clear, like most rational people I do subscribe to the code of protecting capital. Of course I do have an ultimate stop where any trade is stopped out, but like Mr Chan has said, these stops are emergency stops.

I think some people, not you personally, discount money management. There are traders that regularly put all their eggs in 1 basket by overcommiting to 1 trade, I don't do that.
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Old trader is not alone in this approach. I knew another trader once who did the same on overnight positions. Only had stops working during the pit session. The reason was that he believed price action outside of the pit was not that relevant and that he might get stopped out on meaningless noise in a low volume conditions when some traders could push the market around.
 
Quote from LondonUSTrader:

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.
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I am a newbie to futures trading myself (stocks before that) - just over a year trading futures now, i mostly trade just the ES day in day out. No indicators just price action. I have been lucky to do very well so far from a shaky start -mostly luck i guess.

The way i figure it is that i know i can make small chunks from repeated price moves day in day out. I am not out to pick direction of longer term as i have no edge in that (no researchers, or models to forecast the future). Also, a big mistake is too think you can pick all the moves - i have to train myself to wait for a high probability setup.

Therefore, i focus on what can distinguish me as a small trader with the ability to move in and out of the market with ease.

I have often found that simply reviewing the days action does not help so much as anyone can play the perfect day with hindsight. This is why i advocate tick replaying as that way you are basically trading live on past data. With the speed increase it helps train your mind to be faster so you can pull the trigger far easier under real time conditions.

After a while if you are sharp enough and have some talent the patterns and way price moves starts to become embedded into your mind. You can start to determine what is a healthy trend and what is simple propping action.

I have always believed with a little talent anything can be done with practice, practice and more practice. I guess it all depends how hard your willing to work.

Markets are imo always going to be similar as at the moment they are still based on human emotions - even the programs are triggered by humans often. There will always be minor trends, so there will always be a chance to take some points.

Good trading to all.
 
Quote from LondonUSTrader:

Perhaps the most interesting thing I found was that although the market changes, it also remains the same.
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You have hit the nail square on the head.
Retail Traders seem to become lost within their own world and their own experiences and create their own visions of ES .
Given that the bulk of ES is traded by the big lotters, the main problem for retailers is front running the next pressure wave and getting filled.

The big lotters may be very clever and may have vast resources available to them, but through the very nature of the DOM and T&S, they leave footprints.
They also do not have the freedom that retailers enjoy.

When retailers understand this they will come to see the footprints.

regards
f9
 
Quote from LondonUSTrader:

Old trader is not alone in this approach. I knew another trader once who did the same on overnight positions. Only had stops working during the pit session. The reason was that he believed price action outside of the pit was not that relevant and that he might get stopped out on meaningless noise in a low volume conditions when some traders could push the market around.
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Exactly. I didn't invent this idea at all.

It's not just the idea that the pit is trading. It also has to do with the idea that stocks are trading, and after all, the ES has an anchor in the underlying stocks. The large firms do alot of hedging against stocks, basket trading, etc etc. In other words, the react depending on what the underlying stocks do. After hours there is no anchor. The contract can be pushed.

OldTrader
 
Quote from OldTrader:

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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I was never a floor trader and to be frank I don't think I would be very good at that because I am not that quick. I think it requires some different skills than electronic trading. Speed is essential on the floor as it is for scalpers who do many trades per day. However, speed isn't necessarily in electronic daytrading.

The advantage of the screen trader is the ability to think, analyse, take your time and see the bigger picture. Also, the ability to trade many different markets. Yet, most daytraders, from what I have seen, still try to focus on scalping one market. It's funny really they try to compete with floor traders on something they can't possibly compete with.
 
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