Nasdaq 100 Trading

B

Brutus

Well after around roughly 4 months of trading 100 share lots of QQQ at IB for a $1 I am still not profitable. I am however not losing my shirt either because of my small trading size. My account is essentially only down the cost of my commissions. I've looked back at all my trades to determine how I am doing ... what I am doing right and what is wrong. The conclusion I have come to is that my "edges" have not turned out to be edges. Money management and disciple is not my problem. I think my money management has prevented me from loosing more money. What I need to work on is finding an edge with more that a 50/50 outcome.

I am not looking for someone to give me an edge but rather if you have some advice or resources on developing an edge on the Nasdaq 100 I would be interested. I am not interested in trading regular stocks ... my focus is only the Nasdaq 100 whether it be through the e-mini or QQQ. This is my own personal style that I like and want to stick with.
 
Brutus
What setups do you trade? What is your criteria for entry and exit

P. S. If you cannot answer these questions with precision, that is your problem?
 
this might not sound real helpful, but it may end up being the case

one year of daily trading to start making money - from skill as opposed to luck - and to see and experience a yearly cycle - and another year to get those hone those skills and concentrate on a trading style

and this is a prettty good option - compared to 3 - 5 years to learn a profession and then having to look for a job!
 
Brutus,
Our situations are almost identical. I have also been trading 100 shares of QQQ on IB to train myself. At this point I don't feel that I lack discipline. I also understand risk and money management. My trading thus far has been at a break-even pace...

I'm starting to wonder where my "edge" will come from. Will it derive from the pure experience of trading? Or do I have to discover a pattern or system that I can follow to the tee?

I know a lot of people say that trading is all psychological, but I think that without an edge (a system with positive expectancy), you will lose your shirt no matter how disciplined you are... You can follow your rules, but your rules may be bad ones.

I believe psychology is really important when you already know what you're doing. It's like 2 world-class sprinters: They are both well trained, fit, and have gotten the techniques down perfectly. When they compete, their sound mental state pushes them into a class of their own... However, you can't grab a strong willed average joe and tell him to "will himself into winning".

Anyway, this is getting a bit long winded, but I'm also looking for that "edge", and I'm not sure how I can develop it.
 
My personal opinion about this, (remember this is only one opinion), is that the bear market has an entirely different feel and therefore requires different trading tactics...The entries are far more important in this environment and losses cannot be recaptured as easily because the markets tend to compress very often...You have very sharp spikes off of lows into areas of resistance and either you step up and sell the strength or you find yourself flat and without an entry...This market requires a very counter-intuitive approach...I often track a small variety of common systems to see where they enter and exit and many times the systems are "triggered" by a few handles and then annihilated...

Past few weeks, the market has basically been a cover off of the lows and sell into the longer timeframe resistance...Regardless of what people say about "not picking tops and bottoms", fortunately or unfortunately, that is how money is made in this environment...
 
Originally posted by easyrider
Brutus
What setups do you trade? What is your criteria for entry and exit

P. S. If you cannot answer these questions with precision, that is your problem?
More...

Easyrider has asked a very good question.

I too have asked others the same question (a question that mostly goes unanswered).

Hopefully, you can upload an intraday chart of your last trading day (winners and losers) with annotations of price entry/exit...this may help you into getting some good advice...shouldn't take more then a few minutes to do so.

Thus, you may have a good strategy but you may not be aware of its weakness and maybe someone can point such out so that you'll know when to use it and when not to use it.

Simply, every strategy has its strength and weakness. Traders tend to concentrate on the former.

Nihaba Ashi
 
vulture- I find the observations you have made to be informative and just so you keep making them you get one very solid agreement here. By the way which software are you using to track the common systems.

P.S. Consistent with vultures views -- I have not seen a market like this and I have been trading full time since around 1996. To you experienced traders is this just what happens in a bear market or is this some sort of structual change- inflection point that could mark the end or a new beginning etc.

I ask as I suppose this is the first real bear in stocks since the advent of stock futures. Or perhaps early 90s. I wonder if this is what happened after the big bull moves in the commodities in the 70s. Any input based on experince or careful study would be seriously welcome.
 
Originally posted by cclee
Brutus,

I'm starting to wonder where my "edge" will come from. Will it derive from the pure experience of trading? Or do I have to discover a pattern or system that I can follow to the tee?
More...

I think any system that you, myself or anybody discovers will have it's good points and bad points. And probably will not work forever. If it works long enough to make you some money and you can recognize when it is starting to not work (that's the difficult part :) ) trading patterns or systems is the way to go I think. This is the way I currently trade but none of my systems have worked that well.


I know a lot of people say that trading is all psychological, but I think that without an edge (a system with positive expectancy), you will lose your shirt no matter how disciplined you are... You can follow your rules, but your rules may be bad ones.
More...

I think psychology is only important when you trade a system with a loose set of rules ... when everything is not spelled out and the trade is based on your feelings/interpretation of the setup. If you have a system with strict and exact rules, psychology doesn't really mean anything as long as you stick exactly to the rules.

Trading with a loose set of rules subject to my interpretation is how I want to trade but I don't think I have enough experience to do this type of thing. Then again I won't ever get experience trading strictly rule based systems.

In the end I think trading just boils down to trading experience and getting back up when you fall on your face. I don't think any successful traders have started winning from the start. If you analyze your failures and use them as feedback successful trading should come eventually.

Brutus
 
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