How to Improve your Stock Trading via Futures Trading

Quote from mdl060374:

I have been trading stocks rather unsuccessfully for the last 4 months. I tried NASDAQ and listed and have recently switched to futures e-mini using the Don Miller method...

I have been paper trading (for what it is worth) for the last 1 1/2 weeks and only had 2 down days (small losses) and my winning days averaged about 3-4 points....

Yesterday was I went live and had four losses in a row all within 1 hour close to the open.....
I sat there dumbfounded, reflected later on my decision making process for each trade, AND realized AT SOME POINT DURING EACH TRADE, I BROKE EVERY RULE I USED TO PAPER TRADE THE DON MILLER METHOD..
1. stay away from the open: 2 of my trades were in the first 1/2 hour....
2. use only price or MA crossovers: I tried to get fancy and fight the tape and lost..
3. use tight stops: I used subjective mental stops and this added to slightly more losses...

in short I was so anxious to make the $$$ I was making on paper, I lost all my composure and rushed into out of trades that didn't make any sense..

In short, stick to your discipline and don't go live (from paper trading) unless you are sure you can be as objective and stress free as you were on paper..

I am doing much better today and picking my spots with tight stops..
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mdl060374,

That's what makes trading so difficult. It's EASIER to know what to do than actually DO IT! If you read Market Wizards many of the great traders said even if they print their trading rules/strategy on the front page of the Wall St Journal, people would still NOT make any $. Because most people don't have the discipline to stick to the trading game plan,

This so called "improvement" that I've been experiencing is actually me being able to FOLLOW my rules!! So, it's not like I just found some secret holy grail trading system. The sad and surprising thing is that it's literally the EXACT same trading plan/strategy/system or whatever you want to call it that I've been "trying" to trade for over a year. It's just that somehow something triggered in me mentally that allowed me to TRADE as I planned and stick to the discipline.

So, figuring out a good strategy is only have of the battle. The other half is being able to execute it and STICK to it in real life trading. Holding onto winners as long as it's in your favor. Cutting losers fast. Money management. Position Sizing. We all have read it. But have we practiced it faithfully in real life?

think about it...

good luck!
 
yep, good point.


it's like an average male basketball player on the men's team, then having a sex change and then playing on the women's team.
 
Quote from prox:

yep, good point.


it's like an average male basketball player on the men's team, then having a sex change and then playing on the women's team.
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prox,

pretty FUNNY shiet! LOL! But i think its kinda incorrect analogy in a detailed sense. The equity market is very very very CRAPPY for ultra-short term scalping as evidence by anyone here who trades. Just read all the complains on here. But it's still OK to trade if you are willing to hold for bigger gains over 10-30mins or even hours or days.

Futures, on the other hand, is still good for scalping. Unfortunately, I was so much in scalping mode on futures, that I banked profit too soon(bad habits from stock trading days) . Otherwise, I would have gotten 110pts/contract on the Dow eminis on this morning's short. That's like $550/contract. Not bad on 15contracts. But I banked too soon. oh well!

now, i need to learn patiences on the futures as well. What do you trade?
 
Quote from trader99:




prox,

pretty FUNNY shiet! LOL! But i think its kinda incorrect analogy in a detailed sense. The equity market is very very very CRAPPY for ultra-short term scalping as evidence by anyone here who trades. Just read all the complains on here. But it's still OK to trade if you are willing to hold for bigger gains over 10-30mins or even hours or days.

Futures, on the other hand, is still good for scalping. Unfortunately, I was so much in scalping mode on futures, that I banked profit too soon(bad habits from stock trading days) . Otherwise, I would have gotten 110pts/contract on the Dow eminis on this morning's short. That's like $550/contract. Not bad on 15contracts. But I banked too soon. oh well!

now, i need to learn patiences on the futures as well. What do you trade?
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lol, I kind of meant it as the worst bench guy on a male's team would be a superstar on the women's team...

but, you are correct .. daytrading stocks takes a huge amount of capital to make any money after commissions.
 
trader99,

I thought futures is a "harder" market to trade. Well, by the various replies and the basketball sex change analogy it seems to be. So why is it that a guy who struggled trading stocks strikes it rich in the futrues markets? Is it only because your personality and trading style suits the futures in the first place? Or maybe you're just a good trader to begin with that found his stride because it was something new and different.

But then you go back to stocks and you're doing much better. It's interesting stuff. Especially since I'm contemplating the move as well.

Actually the analogy is backwards. It's a good female basketball player that goes and plays in the men's game and comes back and realizes how much easier it is in the women's game. Or from an actual example, it's the same reason why female tennis professionals insists on male practice partners.
 
Quote from agora:

trader99,

I thought futures is a "harder" market to trade. Well, by the various replies and the basketball sex change analogy it seems to be. So why is it that a guy who struggled trading stocks strikes it rich in the futures markets? Is it only because your personality and trading style suits the futures in the first place? Or maybe you're just a good trader to begin with that found his stride because it was something new and different.

But then you go back to stocks and you're doing much better. It's interesting stuff. Especially since I'm contemplating the move as well.

Actually the analogy is backwards. It's a good female basketball player that goes and plays in the men's game and comes back and realizes how much easier it is in the women's game. Or from an actual example, it's the same reason why female tennis professionals insists on male practice partners.
More...


agora,

I got GOOD NEWS! If you have been reading my recent postings on the other threads (Bond Futures) and (Straight Up Tomorrow), I've been IMPROVING a lot in the futures market. I've finally crossed a critical threshold! Whoohoo! I hold many futures contracts with the same calmness that I hold a few thousands shares of stocks despite the higher leverage and the multiplier effects of the futures.

I wrote on page 4 on this thread May 1, 2003 "i need to learn patience on the futures as well. What do you trade?"

Well, I'm glad to say a little over a month later, I've FINALLY learned to HOLD ONTO winners in FUTURES! Yesterday, I held some ZN(10yr bond futures) short for an ENTIRE move of the trend which basically lasted an ENTIRE hour.

And last Friday, I shorted a bunch of Dow emini futures YM. But I got out a little soon, but still had a healthy profit.

I'm glad after a little more than a year of struggling to daytrading stocks and more recently futures that I'm FINALLY faithfully applying my strategy consistently. I've CROSSED OVER to where I can say I basically following the principles of good trading: 1) cutting losers fast 2) riding winners(this is the hardest to do! still trying to perfect it.) 3) learning about position sizing/money mgmt(this is still in progress!)

now, i need to learn about position sizing to maximize my profits. wished it didn't take this long, but 1yr isn't too bad considering you are going to make trading a career.

But to answer your question,"I thought futures is a "harder" market to trade. Well, by the various replies and the basketball sex change analogy it seems to be. So why is it that a guy who struggled trading stocks strikes it rich in the futures markets? Is it only because your personality and trading style suits the futures in the first place? Or maybe you're just a good trader to begin with that found his stride because it was something new and different. "

I think you got it reversed. I started out in stocks first then came the "crappy" markets we had late last year which made it almost untradeable. I didn't wanted to look at another stock again. Then I started doing futures and did OK but I wasn't following my own trading rules because things move so fast and had leveraged. But I made OK profits. Then I went back to stocks and found it to be SLOW! Very slow. Which is good because it slowed "time" down for me and allowed me to HOLD LONGER onto my winning positions. Before I was just trying to scalp for a few cents. Now I can easily hold for 50cents to $1 move on a good trending stocks without fear and without needing to get out. After going from a fast market like the futures then going back to a slower market like stocks, I found it to be a GOOD THING for my STOCK TRADING.

And then I pondered the INVERSE. After trading and holding onto winners for a LONGER time period in STOCKS I reasoned maybe I can do the same with FUTURES. And that's why on May 1 , I LAMENTED and wished I could hold longer onto winning futures positions despite the SPEED and LEVERAGE.

And as I said,, on Friday and yesterday especially, I finally had that BREAKTHROUGH! And that's why I'm proud of myself. I think I have a decent trading strategy, but psychologically I couldn't follow it. But now I can. So, hopefully I can continue to improve and make a decent living out of this! So, for all of you/us traders STRUGGLING, there's light at the end of the tunnel. BUT YOU HAVE TO FIGURE OUT WHAT'S WRONG AND CHANGE!!!

good trading to all!

99
 
trader99,

thanks for the post! I enjoyed reading some of the posts you written last year while you were struggling. It seemed like you made some really good progress. I'm just starting out and it was tough until the rally came. But still bumbling my way through. I'm still learning those trading principles you outlined firsthand. It's painful. Hopefully in 1yr, I can say the same thing you are saying now. And I hope you succeed. Hope I'll last that long!

It's tough to trade for a living. And I want to cheer anyone who struggled and move to the next level. Wishing you luck and making tons of $ before the marekt reverts back to its "crappiness" that you mentioned. haha.

thanks!

misc
 
TRADER 99... in response to your observation... you are absolutely correct..........once you have traded the speed and the depth of the futures markets.............trading stocks is much easier.........i find myself able to completely ignore market maker b/s and really follow the price action as if i am watching slow motion movie.... WAY TO GO TRADER!!!
 
99,

Nice. It's always great to hear that someone has found that threshold and crossed it. I guess it's what we hear all the time in trading circles... "it'll click," "it'll gel..." etc.

In the end, you were able to find your biggest weakness, identify it correctly and then find a solution. How ever you got there, it must be a great feeling.

I am currently trading equities. Mostly listed stuff. But I'm trading it off the SP's. I find that I'm correctly making calls in the SP's but constantly frustrated by being in the wrong stock. The SP's rip, the stock(s) doesn't. I've recently had some luck with trading SPY's but there too I'm finding that it tends to back and fill a lot and the move isn't as "clean." I guess that's the reason that I started contemplating maybe trading ES.

But thinking one can trade something and actually doing it is often worlds away. I'll have to demo the platforms and look into paper trading it to get a better feel.

Anyway, congrats!! Nice breakthrough!

Gus
 
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