Pabst's Blue Ribbon Trades
- Thread starter Pa(b)st Prime
- Start date
Quote from dhpar:
I do not know what to say - have a great weekend and hopefully it goes better next week.
Thanks. Actually I had an eventful but ok day.
My bean futures scalp made up most of my bean option loss and Cotton could have been a lot worse. Also I was very lucky to not have been filled worse on my Bond stop at 24. I sold 10 bonds back on a 17 sell stop (I also lost 2 ticks on another 10 lot scalp) so my bond p/l will be up around 3k (I can't see my $ real time, distracts me!) on the day with cotton and beans costing me about half that. Cest' la vie.
Weekend positions:
L 5 May Cotton 53.37 Mch/21
L 5 July Cotton 54.45 Mch/26
L 3 July Cotton 55.48 Mch/30
S 10 USM (ZB) 111.17 Mch/30
S 5 May 780 Soybean puts @.20 Mch/30
Bond p/l closed positions: +7968.75
Soybean Futures p/l +1125.00
Great question Atticus and certainly most worthy of a philosophical debate.
Here's my premise: Everyone who actively trades futures loses. The only guys who make money are the fund managers posting 20% a year on a zillion in assets. As far as a regular, retail trader trying to scalp his way to riches? I don't know whether off the floor if it's ever been done.
What we DO know, is that quite a few trend following speculators have taken several thou into several mil on several trades. Those trades involve adding to winners and VERY often giving back temporary gains.
Yes it sucks to see your account go from up a nice amount back to flat because you didn't "lock in" a profit. Do you know what's worse? Taking a nice safe profit and seeing that same trade be worth tens of thousands more per contract a few months later.
Making or losing a penny in Cotton will not change anyones life.
Making 40 cents on Cotton with a pyramided position could allow someone to step into the next league.
Futures are attractive for one primary reason. LEVERAGE!!!
I used to wonder why a trend following system in futures wouldn't be better suited for stocks. After all we'd mostly agree that stocks trend better or more more frequently than most commodities.
In stocks though your margin is 25-50%. In futures, margin is typically a tenth that amount. Thus a stock move needs to be tremendous for one to "add" with the use of proceeds from a winning trade.
Catching a double in stocks allows one to possibly quadruple their account. In futures that type of move could propel one to retirement. Equally important: In stocks if you diversify your buying power in any single position is even further decreased. In futures one can carry positions in multiple markets (crucial since we don't know which trades will be good or bad).
Kudu's for that comment Atticus!!
Yea, I know (sigh) but after a quarter century hiatus perhaps this strat will work once again. Certainly Gold, crude and the EuroFx move from 02-05 were all great candidates. I was too busy fading those moves to be rich! I guess I'm searching for a better way.....
Call me crazy, but it looks to me like you're still scalping based on the trades you've posted. LOL! What did I miss?
Don't get me wrong....I'm not as jaundiced about "scalping" as you seem to be, depending on how you define scalping. Jumping in and out for a couple of ticks in the ES would not be my idea of a viable trading method. On the other hand, trading in and out recently on some of the intraday swings in oil for instance, give enough potential given the risk to make for a decent trading vehicle.
OldTrader
Let me state a couple of things for the record. For one Old Trader, ever since I first "met you" in that IRC chat room on a Sunday back in 2003 (maybe '02) I've held you in huge respect (as do my friends like Commisso and Vulture). Your approach to your craft, your discipline, your maturity are all things I want to model and emulate. You've done it right since the 60's while I've squandered it since the 80's.
Your posting of trades on TT (90% of which are GREAT trades) was one of the factors that allowed me to step outside the minutia of tick fucking.
You saw yesterdays oil "scalp". Would you not agree that the results of a trade like that are as random as random can be?
Granted I had a stop and close to a 2-1 r/r but I couldn't even honor either target but rather got out with a dime.
I just don't see a large sample of those types of trades as being fruitful. Granted as volatility picks up my fractal stuff gives me some decent short term opps but can I stay disciplined and focused if my trade frequency increases?
Question. When you enter the Index or oil market are you not looking for a trade that has at least swing potential?
Pabst:
Thanks for the comments. But trust me when I tell you I've made more than a few mistakes since the 1960s....lol.
You know really, what's most important to me has to do with the type of market. What you need is a market when you can use a reasonable stop that still allows you to focus on a worthwhile profit...if that makes any sense.
In the crude oil market for instance, I work with stops of $.50-$1 usually. Now, I think crude is volatile enough these day that even with a stop of this type, you can get a worthwhile reward even on an intraday basis.
In the ES (normally the only index I trade), most of the time I have to think multiday because I use wider stops. In fact, that would be true for me in gold, T-notes (I don't trade the bonds).
That said, I use wider stops AND I use smaller size. You mentioned leverage above. And it's true...the futures market gives you plenty of leverage. What I've found though is that you have to be cautious with the leverage because the stops that you can reasonably set create too big a percentage loss in the account. The way people handle this sometimes is they decrease the size of the stop so that the $ losses are smaller, but in doing so they create a loss small enough that it makes successful trading difficult. I view this as the day trade syndrome. Guys using a 1point or so type of stop in the ES.
What I've learned is that trading a little bigger game is important and that one of the keys to doing this is smaller size, wider stops. That said, once I enter a trade, it needs to prove itself...so if the wrong things are happening I'm going to close the position whether deep in my heart I want to make a multiday trade or not....lol.
Enjoying the journal Pabst. Have a good weekend.
OldTrader
EDIT: I realized I left something out that I wanted to say. I like to fade the day traders at key points. I think one of the edges I have is the idea that I can think multiday unlike the day trader, I have a bigger risk threshhold and probably a bigger account. These are all advantages which allow me to fade the typical daytrader at a point where I have maximum potential. I think as you age, you have to use the advantages you have. I'm not going to beat some of these guys at the speed game, so I just don't play that game. Some of my advantages revolve around the willingness to trade the larger picture, take on bigger risk, hold more than one day, etc etc.