On the Path to Profitability

[Q3D]

I don't need to place stops or limit orders in a fraction of a second. I trade on average 2-3 RT a day. I pick my moments very carefully, which results in a high % of winning trades. While many daytraders have a lot of stress and jump around all the time, I watch my screen and wait 90% of the time to open or close a trade. Most of my trades go immediatelly in profit just because I try to be very selective and can patiently wait if necessary a few hours before entering a trade.
When I am trading 90% of the trading time I am just waiting. Can be difficult because I can lose my concentration because of lack of action.
I can buy, sell, reverse, go flat in 1 click if needed.

Good to hear. If you trade the euro/asian market open of the ES instead of US RTH readers would appreciate a disclosure. HFT and cross-market ETF correlations have totally altered price action for the RTH of the ES at lower timeframes.

 

[Simples]

Good to hear. If you trade the euro/asian market open of the ES instead of US RTH readers would appreciate a disclosure. HFT and cross-market ETF correlations have totally altered price action for the RTH of the ES at lower timeframes.

Are you chasing lower and lower timeframes still? If so, that can be a serious impediment to making progress. You're not going to find any edge in lower timeframes (TF) that you can't more easily find and exploit in higher timeframes. If you believe you're going to compete successfully against robot algos, HFT and market makers, your ego is fooling you. HFT means very little on higher TF. Fast moves can even be exploited if you're willing to buy weakness and risk. That something worked for couple of weeks in the past does not mean much now.

I know from experience that you'd rather argue and complain rather than listen to fellow ETers meaning well, but that won't help much either. You talk of ES but show example of AAPL, which is confused communication. If you look at AAPL in daily TF, you'll see that upwards wick movement is just a spike in a congestion zone. If you do proper risk management, it shouldn't be a catastrophic loss, but rather a more normal one + slippage etc. Not saying such movements isn't a bitch, but then it's up to the trader to neutralize that threat, and stop the damned hoping. Your PnL is nobody else's responsibility but yourself. On weekly, the spike is looking like normal price action and the bar is maybe even below average in volatility. Both daily and weekly show promise going long over 102.

Lost count how many times I've had to go back to the drawing board. At least on higher TF, if/when they work, they could be helpful in lower TFs later.

 

[Redneck]

If so, that can be a serious impediment to making progress. You're not going to find any edge in lower timeframes (TF) that you can't more easily find and exploit in higher timeframes.

RN

 

[Sure Chap]

Guys? This HFT stuff isn't really helping me out.

 

[i am nobody]

Are you chasing lower and lower timeframes still? If so, that can be a serious impediment to making progress. You're not going to find any edge in lower timeframes (TF) that you can't more easily find and exploit in higher timeframes.

Many daytraders think that risk can be limited and profits increased by going in lower timeframes. That's completely wrong. I think the most important thing is that the potential move should be as big as possible because you will never take the whole move. In a 5 ticks move you can almost make no money as you never take the top and the bottom. 1 tick slippage at entry and 1 at exit will already reduce the potential move to 3 ticks. But if you can identify 15 tick moves the chances to make profits are much higher. Here the 2 points slippage represents only 13% of the move, leaving 13 ticks of potential. So even with slippage there will be plenty of potential left. By trading bigger timeframes the impact of HFT is almost zero.

 

[Q3D]

Are you chasing lower and lower timeframes still? If so, that can be a serious impediment to making progress. You're not going to find any edge in lower timeframes (TF) that you can't more easily find and exploit in higher timeframes. If you believe you're going to compete successfully against robot algos, HFT and market makers, your ego is fooling you. HFT means very little on higher TF. Fast moves can even be exploited if you're willing to buy weakness and risk. That something worked for couple of weeks in the past does not mean much now.

I know from experience that you'd rather argue and complain rather than listen to fellow ETers meaning well, but that won't help much either. You talk of ES but show example of AAPL, which is confused communication. If you look at AAPL in daily TF, you'll see that upwards wick movement is just a spike in a congestion zone. If you do proper risk management, it shouldn't be a catastrophic loss, but rather a more normal one + slippage etc. Not saying such movements isn't a bitch, but then it's up to the trader to neutralize that threat, and stop the damned hoping. Your PnL is nobody else's responsibility but yourself. On weekly, the spike is looking like normal price action and the bar is maybe even below average in volatility. Both daily and weekly show promise going long over 102.

Lost count how many times I've had to go back to the drawing board. At least on higher TF, if/when they work, they could be helpful in lower TFs later.

Read academic studies on markets before questioning my motives, HFT makes up a higher % of vol in index futures than equities. I've talked to many traders who confirm my thesis that HFT's affect on the market's self-similar fractal nature has eliminated their higher time frame trading edges as well as intraday scalping edges.

 

[Simples]

Read academic studies on markets before questioning my motives, HFT makes up a higher % of vol in index futures than equities. I've talked to many traders who confirm my thesis that HFT's affect on the market's self-similar fractal nature has eliminated their higher time frame trading edges as well as intraday scalping edges.

Not questioning your motives, but your insight:
Care to share your thesis on this? Of course, such a blatant statement such as those above must cover all possible permutations of edges that are to be found in all markets..

If this is your conclusion, why try to trade at all?

Not saying HFTs aren't unpredictable and can royally screw over short-term traders. Just that there are limits to what they can accomplish on any given day. Before HFTs there were other ways you could be screwed. Seems screwing is a constant in human affairs..

 

[profitlocker]

How did you as a trader finally reach profitability? Did something kinda click? I'd love to hear stories of how you evolved as a trader. How was it when you finally made it?

If a daytrader doesn't understand how liquidity hunting works, they're fucked. It's nothing new, but just more prevalent with electronic trading. If you can figure out how to assess the supply/demand properly you will be a net winner. Statistics and multiple TF analysis seems to work for most professionals

 

[i am nobody]

Statistics and multiple TF analysis seems to work for most professionals

 

[benwm]

If a daytrader doesn't understand how liquidity hunting works, they're fucked. It's nothing new, but just more prevalent with electronic trading. If you can figure out how to assess the supply/demand properly you will be a net winner. Statistics and multiple TF analysis seems to work for most professionals

How to combine analysis from multiple TF is the hard part, I think. How many time frames to consider and for day trading, how many days of past data to include in your analysis? Do you go back just a couple of days or do you find predictive value going back weeks or even months?

I'm still grasping with this problem, despite trading being my sole source of income since 2008.