Need Help Developing a New Trading Style for the ES

V

VisionTrader

I have traditionally used a strategy that looks for 2 point moves in the ES. My average positions during the day are about 7. I have typically traded the 1M chart and the 3M chart. If you want any info on this you can read it in my journal, "Chronicles of an Idiot".

I have done a fairly intense analysis on my bottom line and I really see how the commissions are eating away at my net. Also, being in all the trades is getting to be a little much for my stress level and is eating away at my brain. I would rather worry and stress about one position for a longer time. LOL.

I have been working on developing a plan that looks to hold a position for a longer period of time. I basically have been experimenting using the same plan, which is based on divergence, on longer time frames. Trying to step back and say, okay, based on an H4 or Daily chart where do I "think" the day is headed. I want to wait for the masses to agree with my thoughts and enter a position in this direction. I want to get in a longer term position and manage my profits thru stops.

I have been taking a close look at the 4 hour chart. I used to do this trading the FOREX. If the daily direction is clear and is trending with this chart I have been somewhat successful with larger point gains. Twice last week, I was able to hold a daily poistion for 10 points. These were two trending down days.

I am seriously considering only trading on days when these trends occur and are in line with my charts. I find that my NET profits are nothing to write home about when I try to capture crumbs from lackluster movement. I realize that it is not always possible to tell if the day is going to trend, but in general what I want to do is get in a position and cover myself and then see if my prediction develops.

My trade demons surface every day. One of my biggest problems is the "need to be in a trade". I fight it. This is my single biggest issue. I am realizing that if I don't conquer this problem, long term, I will not be successful. This is one reason I am trying to convert my style. The two days last week when I picked up bigger gains, I only made 2 trades each day. It was a breath of fresh air.

I think that it is unreasonable to expect to capture 10 points on a single position in one day. I think the daily fluctuation of the ES is around 20-25 points.(please correct me if I'm wrong). So let's focus on a weekly number. If the ES fluctuates 100 points a week, I want to capture 10% of this move on weekly basis. I think 10 points a week with enough lots on the line will keep food on the table.

I am trying to take baby steps. My confidence is growing and eventually I would like to hold a position longer. I have not held any overnight positions at this point.

Does anyone have any constructive comments or thoughts that might help me?
 
Here is an example of what I look for. I like to see a double top or double bottom which coincides with divergence on my setup.

Calling the turns on the H4 chart is not easy and DT and DB do not happen often. I will many times drop back to a 2 hour or 1 hour chart as the turn is approaching to look for setups to signal the longer term direction.
 

Attachments

Going from 1 min to 4h charts.... why don't you try 5 min or 15 min first, before changing your style so drastically?
 
Quote from Ditch:

Going from 1 min to 4h charts.... why don't you try 5 min or 15 min first, before changing your style so drastically?
More...

Good advice. It is actually hard to say what I want to say in a single post. My entries actually still come from these charts. It is really only the direction that I am guaging with the longer time frames.
 
I have a question along these lines too. I have a few trades I believe in based on setups. I would love to automate them and back test them and experiment with the best way to exit them, and then apply them to multiple markets. For a guy who is not a programmer. What is the most time effective way or platform to start attempting to become a more backtested trader.

thanks
 
vision....i just recently switched from 1 min charts to 5 min charts and its been great. i go for an average of about 40 cents / day trading SPY. average 3-5 trades a day, although i have been overtrading (this is something you will find yourself doing at first, if you switch to 5 min charts).

imho, 5 min charts represents a sweet spot. its fast enough to capture alot of moves, yet its slow enough to sail above all the sharks in the pit.
 
Well Visiontrader have a look at Woodies site and his CCI setup methods. Just started this week and the training and insight he provides on this indicator is outstanding. Lots of good proffessional traders there who post trades on the ES NQ YM along with some Bond stuff. No outside chat that distracts from trading just pure real good trading tips etc. Find him at his site Woodies CCI Club.com and breakdown and spend the $10.00 per month for the HotComm license fee and thats it. Wish I did it months ago. Woodies moto is traders helping traders. No one looking to soak you for a huge monthly subscription fee. This is what anybody learning needs.

Best of Luck
 
Quote from jem:

I have a question along these lines too. I have a few trades I believe in based on setups. I would love to automate them and back test them and experiment with the best way to exit them, and then apply them to multiple markets. For a guy who is not a programmer. What is the most time effective way or platform to start attempting to become a more backtested trader.

thanks
More...

Afraid, I can't be of much help here. I use TradeStation which does an adequate job of backtesting a defined strategy that can be written in easylanguage. Problem with me is that I have always traded subjectively. Poke around a little here. www.tradestationworld.com. Lots of good stuff on strategy testing and development.

The only computer I like to use is the one on top of my neck.

Geez. Maybe that the problem.:D
 
Quote from VisionTrader:

I have traditionally used a strategy that looks for 2 point moves in the ES. My average positions during the day are about 7. I have typically traded the 1M chart and the 3M chart. If you want any info on this you can read it in my journal, "Chronicles of an Idiot".

I have done a fairly intense analysis on my bottom line and I really see how the commissions are eating away at my net. Also, being in all the trades is getting to be a little much for my stress level and is eating away at my brain. I would rather worry and stress about one position for a longer time. LOL.

I have been working on developing a plan that looks to hold a position for a longer period of time. I basically have been experimenting using the same plan, which is based on divergence, on longer time frames. Trying to step back and say, okay, based on an H4 or Daily chart where do I "think" the day is headed. I want to wait for the masses to agree with my thoughts and enter a position in this direction. I want to get in a longer term position and manage my profits thru stops.

I have been taking a close look at the 4 hour chart. I used to do this trading the FOREX. If the daily direction is clear and is trending with this chart I have been somewhat successful with larger point gains. Twice last week, I was able to hold a daily poistion for 10 points. These were two trending down days.

I am seriously considering only trading on days when these trends occur and are in line with my charts. I find that my NET profits are nothing to write home about when I try to capture crumbs from lackluster movement. I realize that it is not always possible to tell if the day is going to trend, but in general what I want to do is get in a position and cover myself and then see if my prediction develops.

My trade demons surface every day. One of my biggest problems is the "need to be in a trade". I fight it. This is my single biggest issue. I am realizing that if I don't conquer this problem, long term, I will not be successful. This is one reason I am trying to convert my style. The two days last week when I picked up bigger gains, I only made 2 trades each day. It was a breath of fresh air.

I think that it is unreasonable to expect to capture 10 points on a single position in one day. I think the daily fluctuation of the ES is around 20-25 points.(please correct me if I'm wrong). So let's focus on a weekly number. If the ES fluctuates 100 points a week, I want to capture 10% of this move on weekly basis. I think 10 points a week with enough lots on the line will keep food on the table.

I am trying to take baby steps. My confidence is growing and eventually I would like to hold a position longer. I have not held any overnight positions at this point.

Does anyone have any constructive comments or thoughts that might help me?
More...

Very comprehensive post that hits all the flags which need attention.
 
Quote from funky:

vision....i just recently switched from 1 min charts to 5 min charts and its been great. i go for an average of about 40 cents / day trading SPY. average 3-5 trades a day, although i have been overtrading (this is something you will find yourself doing at first, if you switch to 5 min charts).

imho, 5 min charts represents a sweet spot. its fast enough to capture alot of moves, yet its slow enough to sail above all the sharks in the pit.
More...
I guess I may need to shut down the old 1 minute chart at some point if I go this route. It will be a sad day. The last couple weeks I have been trading a combination of my VisionTrade system and what I am now calling FutureVision. (i need a life:D ) If you followed my journal at all you may remember that I paper traded it. The last two weeks I have been live trading the system. The first week was not good, not because the of the system, it was more me getting acclimated to the entries, etc. This past week the results were pretty good. They were right on line with the journal results. I made 11.5 points trading 1 contract in real time.

With that said, you may be wondering why the hell I would try to change something that at least shows signs of working. Well, truth is, the amount of time executing during the day is not exactly an easy task and requires tremendous concentration. I would like to develop the same type of system for longer periods, trade less, spend my time analyzing instead of clicking the mouse button every few seconds. Part of my process here at ET is to figure out where I want to go. I'm on the journey and enjoying it.
 
You must log in or register to reply here.
Back
Top