Jack advocates entering on the breakout, (that's what i read in his stochastic thread). So as a breakout -trader you need to ride trends in the Es, otherwise you get whipsawed bankrupt. Such a method won't work in 1 min timeframe. BUt hat doesn't mean a scalper can't have positive edge in the 1 min timeframe and beat the trendrider's bottom line at the end of the day.
how to manage false breakouts on NQ ES
- Thread starter pawpaw
- Start date
Jack advocates entering on the breakout, (that's what i read in his stochastic thread). So as a breakout -trader you need to ride trends in the Es, otherwise you get whipsawed bankrupt. Such a method won't work in 1 min timeframe. BUt hat doesn't mean a scalper can't have positive edge in the 1 min timeframe and beat the trendrider's bottom line at the end of the day.
Breakout,
Actually, I have been a member for a little less than a month or so. I have been reading many threads and trying to get up to speed as to what has been discussed to this point.
I was going to post a comment about trading trends while learning to scalp. Jack beat me to it and I commented on my agreement.
What is so interesting about that?
Should I have made my first post elsewhere and then come back to here...lol?
Actually, I have been a member for a little less than a month or so. I have been reading many threads and trying to get up to speed as to what has been discussed to this point.
I was going to post a comment about trading trends while learning to scalp. Jack beat me to it and I commented on my agreement.
What is so interesting about that?
Should I have made my first post elsewhere and then come back to here...lol?
See attached graph.
On the contrary. I think that when a trader limits themselves to trading with the major trend they suffer many drawdowns within the overall trend and limit money making opportunities.
In fact the scalper that has a fixed set of entries/exit signals and good money management won't be exposed to as many risks, especially overnight drawdowns.
Since the subject of this thread is index futures trading I will address my comments to index futures when I say that indices do not lend themselves well to trend trading because trendlines are frequently broken and then the direction is continues. There are many fake-outs and directional reversals that frustrate even the most disciplined trader.
This matters only if one defines trend trading in terms of a trendline, and only then if one exits simply because the TL has been broken.
I thought I knew what pawpaw was going for in his initial post, but I may have been wrong. For some reason, these discussions always wind up being about mechanical scalping, and that's a shame.
Okay...I see what you're saying, now. And that's cool. But, I
wouldn't be able to do that. That doesn't mean that you're
wrong and I'm right, okay. We're both right...it's just that I
would rather get in and out 5 times on the way up rather than
try to hold that 1 trade for a hour.
Thanks for posting the chart...a chart speaks a thousand words.
Nice set of comments. It is good to see where a person is in their methodology.
your explicite current challenges appear to be:
1. Drawdowns.
2. incompatibility of trend lines and futures indexes
3. "fake outs"
4. directional reversals
Some implicite ones:
a. money management exposed to risks.
Add the Breakout viewpoints:
See elsewhere.
This doesn't look good for you.
It does have to be said, however, that there is someone on the other side of where you are.
Again thanks for your comments. I can see that being in your place isn't too hot.