Magic's Little Project

M

Magic

1. Intro

Hi everyone,

I don't know if anyone remembers me, but I made a short thread about an ES scalping project last year, which showed me that I still had a lot to learn about the market and I was unprepared for designing a trading system at that time.

The accountability and clarity that comes along with public disclosure, along with the constructive feedback that was offered to me by other members was very helpful to me last time, even though my project ended early and I did not achieve any successful trading results.

I've still been reading the forums here and there, and testing many ideas over the course of the past year. The inclination came to me to once again share an thought I had for a project with the forums. Hopefully it will be a positive experience again for myself and others.

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2. Project Goal

I want to try to keep things very simple and straight-forward so the project can be easily understood by everyone (and especially myself!). Also, this way the results can be easily analyzed and modified or tested further at the end of things.

Essentially, I am going to attempt to get a low-risk entry with minimal AE into a trend large enough to span at least several days.

These past two weeks, we've had a very quick rally, and I think there's a good chance that we won't be able to keep going up this fast, or at least there might be a decent counter-trend move in response, and I will attempt to make an optimal short as the trend begins to level out or turn down-ward.

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3. Funding

So, since negative emotions often cloud thinking and hinder successful trading, I decided to use $500 I have been saving up from a portion of my income that is budgeted for leisure every month as a max loss. I won't be trying to preserve the capital, and come what may of the results I consider this a satisfying end to spend my leisure money towards.

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4. Premise / Entry

I've attached a chart with a basic channel enclosing this past week's rally. I've boxed what I've classified as the two major waves making up the past week's rally. I see the mid-day reversal of today as the start of the third and possibly final leg of the rally, and will being trying to short the failure of it unless is shows surprising strength. Then I may just try to stake things out for another week until I start to feel like there's an opportunity around again.

The specifics of my trend classification and entry strategy aren't really the relevant part imo, so I'll spare the details on that, but I plan on watching very closely during the next day or two for points looking like exhaustion of momentum, and open short entries with small stops, likely around 2-5 points depending on how volatile things are.

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5. Conclusion

If they take off reasonably well I will move stops to break-even in order to prolong the project in case we don't get a strong down-ward trend. Hopefully I won't get two quick failures for the full stops right off the bat and have the project conclude in a seriously anti-climactic way lol.

Best case scenario would be I get into a down-trend that breaks through the channel and maybe we can all discuss how best to manage the position from there. I haven't really thought that far ahead at this point. Will post entries and stops if they are taken, or at least an update or two if things aren't looking like I'm thinking they might and no action is taken.

Hopefully this will be a little interesting and fun thread for everyone while it lasts! As always, feedback and constructive input are appreciated if anyone wants to offer it. If you aren't interested or think this is a waste of time please spare the negativity and just ignore the thread!

-Magic
 

Attachments

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I'm new to trading myself, I've just been soaking in as much information as possible. Then I've been filtering that information into my demo account so I can find a style that suits me and my current situation. It's good to see someone in the same boat :)

So, you have $500 capital? As far as your risk management goes I would recommend only risking a maximum of 5% each trade (or less). It gives you more chance of survival as you'll be able to make a few mistakes without getting kicked out of the game. And then as your account grows, you can reduce your risk per trade.

It may be better for you to start on the YM?
 
1. You're holding overnights on ES with a $500 stake.
2. You're trading ES with a $500 stake.
3. You're asking for group input on your trade decisions / management.
4. You've posted >5x the words 'hopefully', 'chance', 'likely', and 'thinking' with regards to your trade plan / strategy / etc.
5. Your listed stop is half of your stake.

Send me the $500 instead and write it off as a charitable contribution. You are not ready to trade.
 
Thanks for the input so far from you guys. To clarify, I am not trying to run up a $500 account, or create a protracted trading journal where I try to day-trade trade the ES successfully.

Think of the $500 itself as my 5% maximum risk. This is money that I am devoting to a single "trade" I've planned that may consist of multiple entries. I just wanted to have a space to post the details as they occur and perhaps learn something from the process, any constructive feedback offered is an added bonus.

I consider this more along the vein of a recreational endeavor. I know the loss of my $500 is very probable; I am aware of my inexperience as well and I wasn't trying to claim otherwise. Hope that clears things up a little.
 
The problem is you won't really learn anything from this process. Perhaps the only thing you will learn is that this isn't a feasible trading strategy, but we can tell you that now.

I'm still not sure what your goal is exactly...?
 
You think it's not possible to make a profitable trade on the ES without having to eat more than 5 points of adverse excursion? Going long on almost every single 30m bar on the 12th would've satisfied that criteria.

Sure, hindsight is 20/20, but I think it at least demonstrates what I'm attempting doesn't have a 100% chance of failure. Perhaps I'm mistaken though, and after two or three stop-outs you will be able to say 'I told you so.'

This project is for personal recreation, and the goal is simply to try to get an entry into the next decent counter-trend movement after such a quick rally with some extra money I have no qualms about losing. I thought I would share the details with the rest of the forum for some entertainment and to make it more engaging for myself.
 
$500 open a fore spot account, trade gbpaud using much small amounts, say $1 per pip, more flexible hours aswell.

You will learn more for your 500 don't think you can even open a futures account for less than 2k.
 
personal recreation? Then trade sim. This is for fun and losing money isn't fun.

Sure, anything is possible - but possible and probable are two very different things. You'll never advance as a trader until you face this and approach a strategy with it going forward.

I could have made $100MM buying CHF prior to the drop of the peg by the Swissies.... but I didn't. It's as relevant as your argument of buying the 30m bars on the 12th.
 
Tell that to the multitude of people that frequent casinos for leisure. I think it's a bit ego-centric for you to deem something as not fun just because you don't think it is. I think I would know better than you what is fun for myself.

I appreciate your concern for helping me develop as a trader, but I don't need anyone to save me from myself. I didn't create this thread as a cry for help, hoping someone would dissuade me from an idea that I had for fun. I already made the decision to go through with this trade, and I am not interested in re-evaluating that decision. Even with an abject failure hopefully my thread will provide a minute break from the monotony of the scores of people trying to use PA on the NQ in order to quit their jobs.

I'd argue that trying to catch a move like CHF is quite different due to its extreme scarcity than trying to get an entry with a 5 pt stop into a trend which is quite possible more days than not, but that is beside the point.
 
99% of people fail, so ofcourse 99% of people are negative, but you've got to try if you want to be in the 1% and if it wasn't for the 99% losing there would be no money for the 1% to take.

So hope you become in the 1%, if not, thanks for your money :)
 
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