ES premarket

[Neoxx]

Quote from womblevader:

I trade ES after hours. Mainly becasue I live in New Zealand and I can be awake. There is plenty of movement but you have to be patient for entries. I set audible alerts [and sometimes limit orders] at my entry levels so I don't have to watch the screen all time.

Try putting a chart of the FTSE100 under your SnP chart, they move synchronously once the UK markets open [except on Thursday where the SnP looked decidedly heavy c/w with FTSE maybe coincidence but if I ever see that again I'm going short].

I target between 2-5pts. And am usually covered and in bed before the US news starts coming out.

The only time I have got into trouble was last Thursday where I was long and kept waiting for that lucky bounce that never came.

If your interested mY average win size is 3.9pts [17 wins] and my average loss is 20pts [2 losses]. I havent been using stops.

Cheers

Thanks Womble, the swings do seem slower with longer set-ups, so I think I may try setting audible alerts, or even OSO bracket orders, although the added screen-time wouldn't go amiss at this stage.

I'll definitely check out the FTSE100, this hadn't even crossed my mind. I've mainly been using INDU, NQ and a couple of other charts for intermarket confirmation.

You have a beautiful win percentage, but I don't think I could stomach a 20 pt loss. My win percentage is only 33% at the moment, with an average winner of +1.8 and an average loser of -0.7 (1 pt stops with occasional early exits). Then again, I've only placed 18 trades to date so I'm sure these statistics are meaningless. In any case, I'm more than happy to just be in the green (if only by a small margin) during the steepest part of the curve.

 

[Neoxx]

Quote from vertigo3:

I totally agree with brownsfan.

in the AH (after futures open in euroland 3am est) there are no big US players screwing around with price.

as long there is not some sort of world catastrophe, all you have to do is know how to read a chart.

the one drawback is the hours you have to keep. Knowing when european (and London) economic reports are due is helpful, too.

Thanks for the post vertigo.

I'm fairly new to macroeconomics... could you suggest which economic reports are most relevant, or direct me to any good online resources? Would be much appreciated.

 

[womblevader]

Neoxx

Looks like your stops maybe too tight and you are dying the death of a thousand stops. If your only going for a pt or 2 you should get around 50% wins by tossing a coin.

What is your rationale for your stop of 1pt?

I havent been using stops and after Thursday I am trying to work out a stop policy that I will actually follow rather than ignore.

19 trades is not enough to convince me I have an edge and I will be focussing on execution mainly putting stops in place on entry.....

Cheers adn good luck

 

[vertigo3]

Quote from Neoxx:

Thanks for the post vertigo.

I'm fairly new to macroeconomics... could you suggest which economic reports are most relevant, or direct me to any good online resources? Would be much appreciated.

here is a site for euro and London economic releases.
the url is their weekly schedule of reports.
they rank potential impact of the news based on forex, but it is a great source.

http://www.forexfactory.com/calendar.php

if the page for their weekly schedule did not come through with the url posted here, just explore the site and you should find it.

 

[Neoxx]

Quote from womblevader:

Neoxx

Looks like your stops maybe too tight and you are dying the death of a thousand stops. If your only going for a pt or 2 you should get around 50% wins by tossing a coin.

What is your rationale for your stop of 1pt?

I havent been using stops and after Thursday I am trying to work out a stop policy that I will actually follow rather than ignore.

19 trades is not enough to convince me I have an edge and I will be focussing on execution mainly putting stops in place on entry.....

Cheers adn good luck

Thanks.

1 point stops seem to work out quite well for the setups I trade, and have only faked me out once so far.

Also, these are only results from my first six days of ES trading. First six trades were all losses, but it's been 50/50 from there.

While I doubt I'll ever get close to your win percentage, I'm confident I can beat 50%. But lets just assume it was flip-of-the-coin 50%, at the current rate I'd be net +0.55 per contract traded. Factor in 2-8 trades a day, and that's a result I'd be more than happy with.

What's more, even an unusually long string of losses would result in a relatively small drawdown. Coupled with trading 1-lot per $5k (will halve the leverage once the account is bigger), equity is relatively insulated.

An added plus for me is that setting conservative profit targets eliminates greed, while setting tight stops eliminates fear, resulting in emotion-free trading, something I take for granted at the moment, but which will become increasingly important as the numbers get more meaningful.

Best of luck with your trading, and hope you find a stop loss system that works for you.

 

[Neoxx]

Quote from vertigo3:

here is a site for euro and London economic releases.
the url is their weekly schedule of reports.
they rank potential impact of the news based on forex, but it is a great source.

http://www.forexfactory.com/calendar.php

if the page for their weekly schedule did not come through with the url posted here, just explore the site and you should find it.

Cool, thanks for that Vertigo.

And the page came through just perfect.

 

[Pholeuon]

Neoxx, 1 point stop will kill your account, I take any bet. We all have been there, comissions will kill you - you will be nett a bit positive but big down due to commision. I do not know any discretionary trader sucesfull with that tight stop.

My personal opinion /I know this will be very controversial/ is that by scalping needs to be stop wider than average target and I am personally using distaster stop only. However if trade does not work you need end it on wave top in your direction without hesitation. Really, no hesitation, there are several scenarios possible you must choose the appoprate reaction.

Ocassional bigger loss you need compensate with high winning rate.
I have from last 100 commodity scalp trades 95% winning rate, from previous 100 91% /just one bigger painfull loss between them/. I hope it will stay so I am clearly improving.
But with 1 point stop you will be chopped to death I am sure. I even will not think about anything bellow 10 ticks.

On contrary by swing trades you need have your target big and stop tight.
Again not under 10 ticks but in this case if you have target for example 80 ticks you can allow to you few stop outs.

Oh, and I suggest to you trade NQ or YM or FGBL or GB - something with smaller tick size and bigger waves if you are trading 1 contract. You will have more chances like with ES.

1 point stop is appropriate only in attack. You have your profit, you try follow the exhausting move but by first sign of reversal out. Eventually if you are catching falling flying knife and you do not want to be in trade if it continues exhausting move and makes next leg.
But under standard conditions /and this is more than 95% of time/ MM software is made that way that it will not allow you win with any too tight stop - and your edge can be as good as hell itself.

 

[BoyBrutus]

Quote from raker:

pre-market Es primarily is hedging activities done by brokerages before the upcoming 9.30am open of the stocks . What I mean by this is when instituions and portfolio managers and so on send their buy and sell orders to the brokers to execute , the brokers will use the Es to hedge the upcoming buy or sell orders of stocks and through out the day will gradually unwind futures positions as they finish buying or selling the stocks.

Hi raker

Can you give a detailed example of this, why do they need to hedge?

TIA

 

[Neoxx]

Quote from Pholeuon:

Neoxx, 1 point stop will kill your account, I take any bet. We all have been there, comissions will kill you - you will be nett a bit positive but big down due to commision. I do not know any discretionary trader sucesfull with that tight stop.

My personal opinion /I know this will be very controversial/ is that by scalping needs to be stop wider than average target and I am personally using distaster stop only. However if trade does not work you need end it on wave top in your direction without hesitation. Really, no hesitation, there are several scenarios possible you must choose the appoprate reaction.

I appreciate your comments, Pholeuon, and have no doubt you're a much better and far more experienced trader than I am. The friend who suggested I make the switch from options to futures is also an excellent trader. Coincidentally (?), he also uses disaster stops with discretionary exits.

I like to envision a time when I'm intimately familiar with price action and so in tune with the market pulse that I can replace rigid rules with artistic license. But that time is certainly not now.

At the moment, I don't have the skill or confidence to apply this successfully, and auto-mode happens to be (a) working well, (b) within my comfort zone, and (c) in concordance with my (admittedly limited) observations. If, however, two months down the line I'm frustrated by frequent whipsaws, fake-outs and other stop-gunning, then I'll have to reconsider 1-point stops. In the meantime, by removing my emotional investment in the exit decision, I'm much better placed to objectively scrutinize price action once the trade has been placed.

Occasional bigger loss you need compensate with high winning rate. I have from last 100 commodity scalp trades 95% winning rate, from previous 100 91% /just one bigger painful loss between them/. I hope it will stay so I am clearly improving.
But with 1 point stop you will be chopped to death I am sure. I even will not think about anything bellow 10 ticks.

I agree. I'm trying to keep realistic expectations, and so would be extremely happy if I could consistently achieve 60-75%. Only time will tell.

Oh, and I suggest to you trade NQ or YM or FGBL or GB - something with smaller tick size and bigger waves if you are trading 1 contract. You will have more chances like with ES.

5k isn't seed capital, it's just the minimum starting balance for a Tradestation account. I'm only trading 1 contract while I learn the ropes. I intend to scale up progressively.

 

[Pholeuon]

I am new to futures, I am trading just them just from February. Prior I was happy swing equity trader but during last half of year happened several very big disasters to me - nice position but for example former CEO is suing company for 5 millions and company is loosing 25% value?
Or unexpected downgrade and you have 50% from evening to night? Or something not approved and you have 30% drop? And short position getting stopped with stop guns all time?

So I started with futures. At first I made couple /exactly 3/ bad swing trades by those I lost quite a lot. Than I start scalping with tight stop - I was sucesfull in 60% /same stop like target/ from start but including comissions I was negative.

Than I widened my stops and my success rate is growing. What I need is stay in good trades longer for some homeruns, this is my problem that I need to solve. But I learned at first you need not lose. Preserve your capital.
You need learn at first when not to trade - stay on sidelines -patiently- unless you will see situation that you are familiar with - your edge. If you doubt wait - it will repeat.

But I doubt that tight stop will help you - it will save you longer in game but you must loose later or sooner.
Are you sucesfull in paper trading?
If not, you can not be in real trading.
I suggest paper trading until you will be very sucesfull in it - this way you preserve your capital better.
Ok, sucesfull papertrading does not speak that you will be succesfull in real trading /emotional issues/ but if you are not succesfull in papertrading you will be not in real for sure.
Papertrading is good for training strategies. You need find your edge in papertrading.

Try NQ you will be less stopped and mistakes are not that costly like in ES.

You need find your commodity. For example I am very sucesfully trading gold but I am fired in bonds. Ok, no bonds for now. ES is one of the most difficult futures.