I just did a little bit of manual backtesting on the ES intraday 5 min charts testing a simple strategy I put together looking at engulfing patterns.
The strategy looks decent, and from what I can see so far looks to give some good trades on both sides of the market, however, I feel like a simple candlestick pattern like this overlayed with another indicator is way too simple and cannot possibly provide an edge long term. Maybe I am getting in my own head because it's so simple but I feel like there is no way you could use something as simple as this to trade the ES.
Sorry if this is way stupid but I'd really appreciate some input from those of you who day trade.
Hello my friend !
It's not stupid, it's very good topic. But a bit complicated.
First, think about few things. 1. We live in system, where most people are very attached to money. 2. Trading is in fact very hard profession, where success rate is not so high (in fact it's low). 3. And, if you succeed you can make some good money. So adding that to ubiquitous moaning "how difficult it is", you can get false impression that you can't make money using something simple. And that's not true. Of course if your "toolbox" is better equipped and you have wider knowledge you can use it in more ways. BUT. Do you really need it at the beginning ? You need to be careful to not get into a trap, where you implicate yourself that you need to deserve for it very much, so that only if you will be the smartest and most knowledge then you will do it. This is self-sabotage, that tons of people make. There is one very nice sentence about it in this forum, that I very like. Not quite quote but: You don't need to build large, perfect modern boat with atomic drive to go for some small fishes.
Another thing - it's not the strategy what is most important, everybody wants set ups, strategy etc. But if you are discretionary trader it's about psychology and money and risk management the most. And attachment to money. If you think about it like earning and loosing money, you will have a problem. Of course trading is about money, but money is outcome of you doing your job well. It's like with sportsmen, most of them choose to be pro basketball players, football players etc. not because they wanted big money, they just love what they do, wanted to be best in it and that money, that everyone desires is just an outcome.
Don't get me wrong. I'm not saying that you will take some red dot/ green dot system, or some technical indicator and that's it. Because "simple" doesn't mean "easy". If you are involved in market, so you have any "basics" and you use it to analyze markets with your brain, and you try to spot patterns etc., that really can be enough for start. I observed something interesting among some good ballers, they dig into topics, they have really good wide knowledge but finally they end doing something really "simple". I remember long time ago, the best guy in office shared with us how he looked at the markets. And you know what ? We (me and other new fellows) was like, "Yeaaa, for sure. Management forced him to tell us something so he just tell us something shitty to have it done". But after long time, when I get more knowledge etc. I realized that he was really telling us how it worked, and it was that easy (it was coffee calendar play). He was not rocket scientist. He just spotted something simple that worked and was mentally able to use it as along as it was working. When it doesn't work, you spot something else (or in meantime). And there is a lot of stories like that. I think many robust ppl here saw that too in their lives.
And one more advice, try to don't listen to comments why you can't make it doing simple things. It usually comes from people, who can't do it themselves. If you are not a complete idiot, you have some basic knowledge and you want to do all the hard work, just try. I'm not saying that you will for sure make it this way but it's a good way. You will learn most just doing it (but only if you are able to make observations and draw conclusions).
Hook it up yo
