there's 10 text above and 10 text below your establish pricing when looking at that issue that I was discussing as far as breakouts go if you see a tick that the ticks around it only have two three four hundred traders and then one tick pops up with over a thousand traders you will generally see a pull back one or two points run from that high amount of traders that popped up. Opinion, for the most part that is amateur traders scared to death which in reality for most big traders that is an opportunity to take out a thousand and blow through their stops I don't know just an observation it's worked over the years for me.
ES/NQ Trading - looking for solutions
- Thread starter syswizard
- Start date
In today's market action, 7 ES contracts on $100K is suicide.
I am of the opinion that trading 7 contracts with only a hundred k it's the dumbest thing you could possibly do for your risk reward ratio it just has proven itself over the years the greed kills quicker than anything else even incompetency in trading
You said before that Multicharts was sending your trades to the IB API. I assumed they were being triggered automatically.
I'm not sure how you trade a system or method where the underlying concepts have not been proven with backtesting. Basically you are just guessing. It's not that backtesting will give you a profitable intraday system. Most likely it won't. But it will show you what doesn't work, ie pretty much everything. And it will give you invaluable info on stop placement, profit taking and max adverse excursion.
My experience has been that if you can't code your methodology, it is probably either too discretionary or too complex. Or maybe just not thought out sufficiently. That opens you up to emotional, reactive trading, which will only work in a raging, one way bull market.
Newbies need to always trade with the trend from the next higher time frame. They need to focus on one go-to pattern and trade it with perfect execution, rather than chasing a half dozen possible entries. They need to trade one lots until they are both solidly competent in managing trades and can show consistent profits.
They need to understand what invalidates their entry. For example, let's say you enter on a reversal bar off a pullback. If the low of that reversal bar is taken out however, your entry criterion has been invalidated. Time to exit or at least put your finger over the sell button. Do not wait for your hard stop loss to get triggered. Of course, the rest of the world can see your reversal bar and know that if they run the low, a lot of stop losses will be triggered. So you can get whipsawed without some discretion, but the fact they were able to move price below the low of the reversal bar tells you that buyers are not that strong. It might or might not be a winning trade but it is not the best trade. As a newbie, you only want to be in the very best trades.
I want everyone to understand that I am not advocating this. I am merely pointing out that IB, which many here accuse of having too high margin, allows a lot more.
There is a three way matrix of account size, max anticipated loss per trade and number of contracts traded. Loss per trade is essentially your hard stop, and it is determined from market vol and backtesting. Importantly, it has absolutely nothing to do with your account size. The market doesn't care how big your account is.
The idea is you don't want to lose more than 1 to 1 1/2 % of account equity per trade, worse case. So with a $100k account, that means you have to limit size to a $1500 loss. If your anticipated loss is 3 ES points, that means you can trade 10 lots. For most people, I would say good luck with that $1500 loss, because I know very well you will talk yourself into letting it ride and end up taking a $3-4000 hit at some point. So five lots is a lot safer and still leaves lots of room to bank serious money.
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OK + compare that to cash SPY. Yes I know its not as thrilling/leveraged.
been there done that I think it's a wonderful thing for you if you can achieve that over the years I have found it 200 a day is r realistic with a single contract then go fishing.
There are two things that determine your loss on a trade...
The stop, or the margin call.
I fucking did it again this past week. I turned a possible winner into a loser by closing out my trade when I thought it would fail even more than it was failing. That turned out to be the worst possible place to exit this week, at the very bottom.
Anticipated loss? How can there be any? How can one anticipate a move when the action changes daily? It cannot happen.
Analyze more about why you got out of the trade rather than the Loss. Frankly I just about even stop looking or merely glancing at the daytime status of the ES .the more I look at it the more the setups are becoming very similar to the 99 crash just a thought just an opinion.
You don't "feel" that way. You are "calm" when you are trading. That is not the emotion I'm talking about. Of course I can get mad when I'm trading. I'm not suggesting changing that. I'm suggesting that you follow objective targets and stop loss because this will handle most of the problems that you are facing in your current trading.
Its not about being quick enough, or having a hesitation complex. Set limit orders around your objective stop losses and profit targets and then let price fill accordingly, and if you lose, great, take that small loss and move to the next trade. If you make a profit, great, move to the next trade.