I managed to mess up to fine ass trades...That's cause for an extra Heineken tonight
ES Journal Archive (2009 - 2010)
- Thread starter Jahajee
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lol
Quote from Airwaves:
Im not going to go through it all again, but I can tell you that since starting only longing the ES, ive been on the wrong side of some FREAK downmoves based on terrible news etc that make this current move seem comical, and even then, i've been able to trade my way out of it.
Im not even mildly concerned, lol. I have a hell of a lot more 'shots' left to improve my average.
I didn't see this concern for Ammo when he's been shorting the last few hundred ES points rally, but I am grateful nonetheless
I think it's important to clarify for the many beginners and wannabees who read this thread that this style of trading is ONLY for HIGHLY EXPERIENCED traders with large accounts and a long-term track record of survival.
When I was a wannabee futures trader, I sim-traded many strategies, this being one of them. I was entranced by this method of trading because it was difficult to fail, and basically just seemed easier. You didn't have to wait patiently for perfect setups, you didn't have to worry about tight stops shaking you out, you didn't have to worry about taking losses, etc. I followed Ammo and Flatron at the time, one short, the other long, working this style very nicely. I PM'd ammo about his style of trading and he gave me one of the best pieces of advice I've ever gotten, in a nutshell, "Don't try this at home."
The sim account IB gives you is huge, and so I had no problem playing the game of with-trend or counter-trend average down strategies in which you don't have to pick perfect entries, because you're betting on the statistical edge that the market swings up and down over time and you can capture profits consistently by entering and adding through a point in a swing that has a strong likelihood of retracing, AND you have enough experience to bail out with no breach of your account's structural integrity.
New traders with little or no experience and small accounts have no business trading like this. I'm sure it's a #1 cause of blowups.
A trader on this thread averaged down during the May 6th plunge from the 1140.00 level through the move to 1060.00 until he had an average price of 1097.00 and walked away with 35 times his initial profit target on the rebound. But he trades with a tiny tiny fraction of the margin available to him. Let's imagine a different scenario, where trading halts limit down and when the market re-opens, price drops another 10% and takes over a year to recover. Now, this guy's account could take this kind of hit without any core damage, but a smaller account (like my own) would be wiped out or close to it, even if the averaging down was just 1 lot at a time. In Oct '87 the market dropped 20% and took over a year and a half to recover, so this was not an unlikely scenario given the irrational bull run and the extreme fear at the time of another global financial meltdown over Europe.
The whole point is that this trading style requires years of experience, including experience in dangerous fast markets (such as Fall 2008 and April/May 2010) and an account that can pass a worst-case scenario stress-test with this trading style.
Ammo, Schizo and few others warned me to be careful because I was sizing up a bit during this time and really had no business doing so with so little futures trading experience under my belt, especially under the volatile market conditions at the time. I took their advice and I hope the new/wannabee traders reading this thread understand that you have to learn to trade in a way that preserves your capital first, then grows your account, not wipes it out.
Once you grow your trading account to a 6-figure level, then you likely have what it takes to trade riskier styles and larger size.
1122.50 after NFP on Friday ? We must be living in Disneyland...
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