Micro E-mini Madness (2% per day)

[sstheo]

Here is a great comment from a good friend of mine in the other place I hang out. He was responding to someone trying to analyse the macro view of the markets.

"Since I day trade I can’t look to far out on a swing basis. I look at the macro view but don’t try to formulate a long term bias. I trade for the now, not the future. Especially since the market is a different dynamic currently with all the algos and machines. In the end, the market doesn’t care what anybody thinks - cause no one knows the day to day or week to week outcome. I Just try to keep an open mind and trade what the game is that day."

Certainly "What game are they playing TODAY?" is the question we all need to ask our selves each day.

 

[T-Mex]

$.78 per Round Trip, all-in.

That's the equivalent of paying $7.80 / RT to trade 1 lot of the mini Dow future. Assuming you cross, and the average spread is 2 ticks, every trade you start 4 ticks behind.
If the spread moves to 1 on the YM the ranges will be so small that starting 3 ticks behind will kill you even quicker.

What's your P&L YTD and what percentage of the gross was fees? How many trades?

The main thing for you is to realise what drop in average volatility will turn this strategy negative so you can turn it off before you give too much back. Keep running it as long as its positive but the sooner you get to 2 lots of the e-mini the more chance you'll survive. Volatility is cyclical and you'll likely get killed as it drops into Christmas if not up to size before that. Surely its faster to top up the account with earnings/savings until you can afford a mini?

Good luck!

 

[sstheo]

That's the equivalent of paying $7.80 / RT to trade 1 lot of the mini Dow future. Assuming you cross, and the average spread is 2 ticks, every trade you start 4 ticks behind.
If the spread moves to 1 on the YM the ranges will be so small that starting 3 ticks behind will kill you even quicker.

What's your P&L YTD and what percentage of the gross was fees? How many trades?

The main thing for you is to realise what drop in average volatility will turn this strategy negative so you can turn it off before you give too much back. Keep running it as long as its positive but the sooner you get to 2 lots of the e-mini the more chance you'll survive. Volatility is cyclical and you'll likely get killed as it drops into Christmas if not up to size before that. Surely its faster to top up the account with earnings/savings until you can afford a mini?

Good luck!

As stated in my first post, my purpose here is to demonstrate for newer traders that they CAN (with proper leverage and an edge) skip the funding company route and put the amount they would have spent on TST or OneUp, etc (est $2,500+) into a small account and then grown that account into a decent account big enough to trade the E-mini's ($5k minimum).

The extra fees are not invisible to me, and I hate them, and I want to get to the E-min's as soon as possible. Nevertheless I want to go longer that 8 weeks or even 12 weeks for sure. 6 weeks proves nothing. Let's see what I can do in the next few weeks.

I think this volatility will go on for some time, maybe up to 12 months or more. The market has gone NOWHERE for 18 months now, and I think a big break up or down is coming. Nevertheless, I will do my best to adapt to any decrease in volatility and not give back anything - but continue to grow even if at a slower pace.

Regarding my stats, here is an update.

• I been trading this micro account for 31 trading days so far (~6 weeks).
• I have taken 337 round trip contracts in that time. (Actual trades would be less, but not much less, as most are still singles.)
• That is an average of just under 11 contracts traded per day.
• Each trade has cost me $.78/RT in fees, and with 337 trades, that is $263 total.
• My total net gain is $996.
• So my total gross gain is $1,259 and so that is 21% in fees.
• My average net gain per contract traded is $2.95.

 

[sstheo]

It is a slow pseudo-holiday. I just took a short trade on MNQ this morning on a topping pattern but got blasted for negative $20 almost instantly. And to further add insult to injury, the market then immediately resumed my anticipated direction.

I know by using terms like "insult" and "injury" I am clearly demonstrating my emotional involvement in the market. After 13 years, I still haven't been able to neutralize these feelings and trade dispassionately. I certainly have a ways to go in my trading mindset.

I have to be able to treat this as a game of tennis. Who in their right mind loses their first game of the set and then just gives up? The match is far from over. As traders, we just need to take our losses as part of the game! If our strategy is sound, and our expectation formula is positive, then we need to just roll with the punches. Of course we are not happy with losses, but we have to immediately let them go and look for the next high-probability entry.

Trade well!

 

[Sweet Bobby]

It is a slow pseudo-holiday. I just took a short trade on MNQ this morning on a topping pattern but got blasted for negative $20 almost instantly. And to further add insult to injury, the market then immediately resumed my anticipated direction.

View attachment 211236

I know by using terms like "insult" and "injury" I am clearly demonstrating my emotional involvement in the market. After 13 years, I still haven't been able to neutralize these feelings and trade dispassionately. I certainly have a ways to go in my trading mindset.

I have to be able to treat this as a game of tennis. Who in their right mind loses their first game of the set and then just gives up? The match is far from over. As traders, we just need to take our losses as part of the game! If our strategy is sound, and our expectation formula is positive, then we need to just roll with the punches. Of course we are not happy with losses, but we have to immediately let them go and look for the next high-probability entry.

Trade well!

You’re doing awesome! I’m up $366 net today on NQ on a $3k account I just set up at Tradovate. I’m up $488 net total since last week. I like the platform so far but I doubt I’ll transfer more funds in. That’s the good thing about trading only 2 lot on NQ is you don’t need a huge account.

 

[sstheo]

One of my rules is to enter shorts on pops and enter longs on dips if possible, but the emotion, the fear of missing out (FOMO) got me short where I did on that trade. And I think the big boys planned it that way. So the second part of the emotional discussion (the first was accepting losses graciously) is for a good trader to recognize the emotions and determine if the exact opposite trade is warranted. Today is a slow day with a tight range. So today would be a good day to fade the emotional moves. Some days you just need to "go with" the moves. I think those days would definitely have higher daily volume. The higher volume allows for more momentum. The market is more likely to go at least a few more ticks before it is able to turn. I like to think of a battleship turning around. Takes time...

 

[sstheo]

You’re doing awesome! I’m up $366 net today on NQ on a $3k account I just set up at Tradovate. I’m up $488 net total since last week. I like the platform so far but I doubt I’ll transfer more funds in. That’s the good thing about trading only 2 lot on NQ is you don’t need a huge account.

Congrats. That is $92,000 per year. Time for a journal on ET! Share your successes (and failures) and I believe it will help you to stay focused and keep your rules as it has me.

 

[sstheo]

I kept trying to short the market today and hit my max daily loss of $50. Even though it hurts, these things happen and we roll with them, as I mentioned yesterday.

Relentless was the word of the day for sure. The bulls stampeded up the hill.

I unsubscribed from newsletters today. They have been distracting me. I don't need the big picture, I just need to know the immediate market direction. The newsletter boys are right often, but OFTEN they are not. Unfortunately, I don't know which day is which. So I will trade for myself, trading only what I see with my own two eyes.

Being flat is okay, but fighting the immediate market direction (seeing a bigger picture reversal) is now a thing of the past. It seems like all the rules keep changing in this market, so I am forced to take IMMEDIATE action when a trade goes against me.

I am going back to my roots: A simple 50 SMA will be my trend indicator, and I will only trade WITH the trend on my fastest chart, and get out fast. I will also use a 50 sma on my slower charts. This will be a guide, but not the official trend (for me.)

Also, I watched the NYSE-Tick today. The extremes were great spots for reversals and scalps. If I combine the 50 sma with the NYSE Tick extremes, I should be able to stay ahead of the AEM (Account Entropy Monster). That monster is HUGE, and very aggressive, and must be avoided at all costs.

 

[sstheo]

I wrote that I hit my max daily loss of $50 today. My max daily loss is actually 5% of the account, which is about $75 with my current balance, but I had had enough for the day.

I thought 5 days of a bull run would tire that heard of bovine out, but it was not to be today. WOW. 3,000 ES was reached and breached again. I saw the long bullish tail on yesterday's daily candle, and even commented to another trader about it. But still I decided to fight it today.

All time highs on deck again?

Reading my previous post I am now forced to admit that the answer to the previous question is, "IT DOESN'T MATTER." I am not trading on the daily time frame. I don't care if the market goes to 5,000 or drops back to ZERO.

I will only trade what I see.

I am not a swing trader. I am not a HFT machine. I don't like the term "scalper," even though it is probably the most accurate. I take "fast trades" looking for 8 to 20 tick moves. I guess the term I have heard that I like best is "momentum scalper."

I can do this. I can (1) keep my cash and (2) grow this account into something amazing to behold as planned.

 

[Overnight]

I wrote that I hit my max daily loss of $50 today. My max daily loss is actually 5% of the account, which is about $75 with my current balance, but I had had enough for the day...

And as Aaron pointed out in the room (which I don't think you have seen yet), you should not change a thing. So you had a losing day. Big whoop, it happens. If you try to change your system because market conditions change on a single day, you will probably screw it up worse.

"...but I had had enough for the day..."

And you recognized that you did not have it, you could not read the market today, so you stayed out. I did the same thing yesterday.

We have mirrored each other the past two days. Yesterday I lost $32, you made like $75.
Today you lost $50, I made $25.

So don't sweat a couple of losing days in your run, they are bound to happen. It is not yet time to change what you are doing, IMHO.