How do I develop my day trading strategy?

[palm44]

I would say if you are going to attempt to develop a scalping strategy, first you need to subscribe for and download good DOM software(jigsaw is sufficient). Then spend at least 15 full market sessions watching the ES in relation to the 30,10 and five years futures. Also gold is another contract you might want to add later on. The basic premise is as treasuries push session lows, equities almost always make an initial five-six tick up, and the opposite as T bills press session highs. During periods of stagnation in the T bills direction, watch for changes in behavior among the market participants on the offer compared to the participants on the bid. If you see offers quickly backing off as bids try to lift into them(drying up of liquidity on that side of the spread) it is a sign of weakness and the probability of a very short term price move is about to take place. The same pertains to bids quickly backing down lower as people try to step down into them. Take notes every 10 minutes on which side of the spread is more populated. Take note when the population differential changes. Mark that price. If the market starts to create a spread at this price(gap between bid and offer)a rejection could be about to take place. There are many nuances to observe as professionals make spreads. Markets trend through range extension generally only when the longer term time frame participants are engaged. Spotting other time frame participants besides the local and day time frame, can be a real edge if one can learn to see them among the order flow. The general rule is 20-15% of the time markets are trending. While the other 75-80% of the time markets are range bound between an upper extreme and lower extreme. So on the fairly rare occasion(20%) the long term participants enter the market, aside from adjusting inventories, they cause the longest price swings. Just download jigsaw and watch the ladders for 10 straight sessions. If you pick out various low volume areas from the profile and focus on them while observing the ladders you could catch a 35+ tick rejection. But that is market profile not scalping.

I agree with a lot of what he said to you. If you can master Jigsaw where you understand everything it is telling you I think you should be fine, less then 85% make it in this business. But to be fair and honest, advice from a professional trader and hedge fund owner, if your not profitable by now game is over (unless your already rich), if you refuse to give up, try a completely different way and completely different category of futures to make money if you've been doing the same thing. Like go fundamental and siwing trade if your a day trading tech. I'm just being honest with you, these past years have been so easy for us traders to make money it almost is boring. best of luck, mkt delta charts is great for charting fyi, and pick one contract and know it back and forth, try the DAX

 

[palm44]

Hello guys.

It's been half a year since I started this thread and thought I would give some update and ask some further questions for those who are willing to offer me some advice.

I received lots of help from folks here in ET and thanks to that I feel I have made significant progress. I managed to pass the combines and have been making decent profits in the funded account as you can see in the picture. I've been trading the funded account mostly the first 2 hours of RTH open. Trading 1 or max 2 ES contracts. So, if I count combine days + funded account days, I guess I managed to stay positive without breaking risk limits for about 2 months now. To be honest, with the type of range we have had, I don't feel it's much to brag about but to me was a significant improvement.

However, I can't help feeling that my current method only works thanks to the volatility and momentum the market has been providing. The break-outs have been awesome, pull-backs and continuations have been plenty. It's nice to be able to have big risk:reward even if I only get half my trades right.

My question is, how do you guys/gals deal with choppy days where ES does nothing literally the whole day. I ask this because past few years, ES had periods where it didn't do anything for months at a time. Getting fills at my preferred level felt impossible, finding the right condition to put on a trade felt impossible during those times. Especially if the RTH range is below 10 pts throughout the day.

My time frame involves 10,000 volume charts, 5min, and 1 min charts.

I was taught a few methods from very experienced traders here but never did really manage to duplicate the same results. Instead, what I took away from trial and error trying to apply those methods helped me improve, internalize some of the market momentum/rhythm and patterns. Yet, I have not found a proper way to trade low volatility/range choppy environment.

So, I would like to ask about what to look at to deal with those type of days. Bigger time frame? Smaller time frame? Micro support/resistance? Bigger stops?

I would really like to be able to trade all kinds of market environment, as I noticed the markets can stay choppy for a really long long time. I want to be trading full-time and I feel in order to do that, I still need a way to stay in the market (even if to scalp 3-4 ticks) watching for opportunities everyday.

I'm willing to do my research but this part still escapes me from where to start.

Anyway thanks for reading and all the help that has been given is much appreciated.

1st-be proud of your 2 months, you[ve beaten the odds and this business only take confident people.
There is volatilty, break outs and volume, your just reffering to way above avg. There are always trades.
Worried about learning different trading way/strategy- As time goes on sometimes you realize it and lots you won't but your learning lots of different ways to trade you just don't know it yet; and always don't be afraid to try new things.
Dealing w those days-u can call them whatever type of days you want- I call them bad days and my bad days are when I am not making money or am down which happens about 3x a month to me, 1st I switch contracts and if I still am just doing awful and lets say it's an hour into my trading day I get up and go home. I am off and am losing and there is no point to continue, I am reckognizing that something is wrong and being honest wth myself. I've been a trader for a long time, now I own a hedge fund and that is one of my rules for all employees not just the traders. But don't blame the market and maybe don't go home but watch it and paper trade so you can learn what your doing wrong or what you need to be doing or how the market reacts on these days your having trouble. Manage your losers/losses/bad times.
I then come back the next day super ready to attack and usually make an avg week gains in an hour.
No to bigger frame and all those questions. Learn the market. Don't worry about how long your trading or any timing, your in this difficult yet excitling business to make money, worry about making money as that is the only reason we trade, the rest will take care of yourself.
Learn to read the tape/DOM/ order flow-
Make sure you have a the best data provider, the best and fastest platforms, tt, jigsaw, cqg

I hope that helps, I know I was sort of vague- but your problems sounded like you needed to hear how simplistic this business is when successful even though when I'm watching my 14 screens it looks like chaos even if im up 100k the 1st hour of the day with all the different sceen toys
best of luck

 

[TraderEX]

I used market replay until I cracked the code. The same time in the past over and over using ddifferen t valued brackets. Collected all the data, anaysis, planformulation, execution. Continue to reanalize and ad filters as needed. I trade es emini. Do you want 3-10 trades or a days pay?

 

[TraderEX]

1st-be proud of your 2 months, you[ve beaten the odds and this business only take confident people.
There is volatilty, break outs and volume, your just reffering to way above avg. There are always trades.
Worried about learning different trading way/strategy- As time goes on sometimes you realize it and lots you won't but your learning lots of different ways to trade you just don't know it yet; and always don't be afraid to try new things.
Dealing w those days-u can call them whatever type of days you want- I call them bad days and my bad days are when I am not making money or am down which happens about 3x a month to me, 1st I switch contracts and if I still am just doing awful and lets say it's an hour into my trading day I get up and go home. I am off and am losing and there is no point to continue, I am reckognizing that something is wrong and being honest wth myself. I've been a trader for a long time, now I own a hedge fund and that is one of my rules for all employees not just the traders. But don't blame the market and maybe don't go home but watch it and paper trade so you can learn what your doing wrong or what you need to be doing or how the market reacts on these days your having trouble. Manage your losers/losses/bad times.
I then come back the next day super ready to attack and usually make an avg week gains in an hour.
No to bigger frame and all those questions. Learn the market. Don't worry about how long your trading or any timing, your in this difficult yet excitling business to make money, worry about making money as that is the only reason we trade, the rest will take care of yourself.
Learn to read the tape/DOM/ order flow-
Make sure you have a the best data provider, the best and fastest platforms, tt, jigsaw, cqg

I hope that helps, I know I was sort of vague- but your problems sounded like you needed to hear how simplistic this business is when successful even though when I'm watching my 14 screens it looks like chaos even if im up 100k the 1st hour of the day with all the different sceen toys
best of luck

What amount in your account to be able to play for 100k in an hour?