Questions for experienced ES daytraders?

[speedo]

You may now have had your fill with comments from people who do not daytrade the ES. I do and have since 2003. My targets are modest and based on average favorable excursion rates, my stops are more modest however and are set as to S/R levels. I trade trends which would be difficult to see if not for multiple time frames as setups occur in consolidation patterns in lower time frames. Simple pullbacks in absence of divergence would be preferable but only occur when they occur. I will take a counter trend entry but only with significant divergence on my two major time frames and may only setup a couple times a week.

4 tick targets would be a tough way to go as Placing stops lower would likely not be effective and you would need a high win/loss % to make it work...tough.

Some of the other comments on here hold true as the ES can be flat and choppy at times but trading ANY instrument requires patience and discipline. The good news is one becomes familiar with it's behavior over time and it will accommodate size. There are more dynamic markets but to each ones own....good luck.

 

[wtfauoa]

I decided to do 2 trades today on ES. The first one was a risk of $150 to make $150 which worked out ok. The second one was a risk of $50 to make $75, which also worked out ok but was very difficult and I made a few mistakes. After I got filled on the second one price came along and sat on my take profit order of 2132.50 but I was not filled. It left very quickly and went back up. When it came back the second time I was filled, and it then dropped a small bit lower to 2131.50 and then went back up again. I should have been ready to close out my position the first time and will watch more closely the next time I try it. I decided to sit out the closing few minutes and have a look at how price behaved. Does any ES daytrader here trade the closing few minutes of US stock market, as it looks very tradeable with not too much risk involved?

 

[wtfauoa]

You may now have had your fill with comments from people who do not daytrade the ES. I do and have since 2003. My targets are modest and based on average favorable excursion rates, my stops are more modest however and are set as to S/R levels. I trade trends which would be difficult to see if not for multiple time frames as setups occur in consolidation patterns in lower time frames. Simple pullbacks in absence of divergence would be preferable but only occur when they occur. I will take a counter trend entry but only with significant divergence on my two major time frames and may only setup a couple times a week.

4 tick targets would be a tough way to go as Placing stops lower would likely not be effective and you would need a high win/loss % to make it work...tough.

Some of the other comments on here hold true as the ES can be flat and choppy at times but trading ANY instrument requires patience and discipline. The good news is one becomes familiar with it's behavior over time and it will accommodate size. There are more dynamic markets but to each ones own....good luck.

@speedo a few questions if you don't mind. Thank you.

1. What do you mean by "average favorable excursion rates"?
2. What do you mean by " in absence of divergence" or, divergence with what?

 

[wtfauoa]

I have day traded Big S&P500/ES for 31 years, took 7 years to get profitable and another 7 to learn scalping. There are other markets less as difficult than ES cause ES is used often as a hedge for the cash index. And you are wrong, when you on wrong side of a move, it is damn hard to get out, as it should be of any market. So many think ES is cheap trading, but CME gets much more money now than when there was Big S&P at $500 a point. I now have to trade ten times more contracts than before, but there is not ten times more volume at all. I now spend my time designing longer term methods and learning more on options.

1-3. I only day trade(automation) first hour of most markets, biggest volume, sizeable moves, I am in profitable trades right now at 1 minutes 45 seconds ave time, I use one minute bars for heavier volume instruments. I use other timeframes for other instruments that back test well that are traded 23 hours for other than scalping methods. Generally going against the crowd. I have one system that only used 60 minute timeframe and can stay in overnight, follows 23 hours and over 40 markets. Always use volume, but my definitions are often opposite of how stocks are traded.
4- . I don't use any indicators under the chart, none of those indicators for day trading but do use for weekly/daily. Scalping I use Bollinger Bands and Slow moving averages, speed gives too many false signals for me. Bar charts, Dome(spend couple years watching it as can aid sometimes), ES use to be mental stops, but retail should use hard stops.
10/11. I don't expect anything and often think this is silly and puts undue stress on the trader. Risk less than 1%
12. Stop trading ES at minus 9 points per lot in one day on original entries, less than 1% to 1.5%.
13. no/no/yes

As a Scalper who averages down on every signal, like Sept 9 and 12 were losing days for me, those days were hard trending days, my systems don't do well on these types of days. Lucky for me on Sept 12, price bars set off triggers within the system that turns trading off for twenty minutes so I lost minimal on Sept 12, and I believe it set off three triggers so whatever trading done, wasn't much. After having two losing days in a row, I increase size 50%.

If I was just starting out, learn options on stocks. People don't realize how much you have to remember in seconds. Say you are a corner of busy intersection, and you witness head on accident between two cars, what do you do? If you stand there, you lost; if you noticed one was newer Volvo and other 20 year old Ford-you dash to driver side of Ford calling 911, then start talking to driver and check if others in car, if others crying from pain-you know they are alive. You have to make dozen split second decisions if you going to help. Trading is very similar, which signals do you disregard and which do you take.

@Handle123 I have looked at the first hour for stocks, but not for ES. A few questions if you don't mind. Thank you.

1. Why do you think volume is significant on the 1 min chart for ES?
2. What can bollinger bands show that chart patterns can not show?
3. What is so significant about the 60 min chart, say as opposed to the 30 min chart?
4. Why do you average down on trades, as is this not adding to losers to recover losses when wrong instead of adding to winners to maximize gains when correct?
5. Why do you not expect anything, as is it not better to have targets and take the profits when targets are hit. How does this equate to stress?

 

[speedo]

@speedo a few questions if you don't mind. Thank you.

1. What do you mean by "average favorable excursion rates"?
2. What do you mean by " in absence of divergence" or, divergence with what?

1. Move in the direction of the trade prior to a retracement. There are some operational distinctions which will vary from trader to trader, you have to develop your own.
2. I use a double stochastic oscillator. Other than the aforementioned double divergence ( 2 time frames), they are not signals themselves but serve to filter entries. As with #1, these were developed through observation and testing.

 

[wtfauoa]

1. Move in the direction of the trade prior to a retracement. There are some operational distinctions which will vary from trader to trader, you have to develop your own.
2. I use a double stochastic oscillator. Other than the aforementioned double divergence ( 2 time frames), they are not signals themselves but serve to filter entries. As with #1, these were developed through observation and testing.

1. Let me see if I have this right? You said "My targets are modest and based on average favorable excursion rates" which means your targets are based on a "Move in the direction of the trade prior to a retracement". I am a bit confused about this? Do you mean that your targets are based on a previous move amount before price retraces some, and when it retraces you measure the previous move amount to work out your target if the trend resumes it's original direction?
2. I understand this now. I took divergence meaning divergence between the major indices levels.

 

[speedo]

1. Let me see if I have this right? You said "My targets are modest and based on average favorable excursion rates" which means your targets are based on a "Move in the direction of the trade prior to a retracement". I am a bit confused about this? Do you mean that your targets are based on a previous move amount before price retraces some, and when it retraces you measure the previous move amount to work out your target if the trend resumes it's original direction?
2. I understand this now. I took divergence meaning divergence between the major indices levels.

I found a sweet spot in mean moves on the ES. It sometimes goes well beyond that before it retraces which used to bother me but I am looking for a piece of moves. My gains exceed and out number my losses and at the end of the day, that's good enough for me.

 

[Apophenia]

I found a sweet spot in mean moves on the ES. It sometimes goes well beyond that before it retraces which used to bother me but I am looking for a piece of moves. My gains exceed and out number my losses and at the end of the day, that's good enough for me.

That's what I am doing too but I have no directional bias (Do you have one ?) ... Just take what comes first. However I don't manage my downside very well ... Since there's a high probability for breaking (at least) even plus the fact that I am well undercapitalized. No Good I know I've been wiped out friday 9th due to a false sense of security (Low Vol Holidays + BE%). One need no more than 0.01 P(Loss) just to blow up with mismanagement.

 

[speedo]

That's what I am doing too but I have no directional bias (Do you have one ?) ... Just take what comes first. However I don't manage my downside very well ... Since there's a high probability for breaking (at least) even plus the fact that I am well undercapitalized. No Good I know I've been wiped out friday 9th due to a false sense of security (Low Vol Holidays + BE%). One need no more than 0.01 P(Loss) just to blow up with mismanagement.

My directional bias comes from my upper time frame with lower time and oscillator filters. My personal margin comfort level is 5000-6000 per contract. I can certainly do as well on less but if it compromises my comfort level, it's not worth it. Starting out trading with minimum capital requirements and expecting to succeed is difficult to impossible.

 

[Apophenia]

My directional bias comes from my upper time frame with lower time and oscillator filters. My personal margin comfort level is 5000-6000 per contract. I can certainly do as well on less but if it compromises my comfort level, it's not worth it. Starting out trading with minimum capital requirements and expecting to succeed is difficult to impossible.

I should review my trades and drop those in sync with the Prevailing & Higher TF Bias to compare performance. What's your %Risk with 5K margin ? Sure, you better be at your ease while trading. Agree for the minimum capital requirements however this alone ain't what determines success or failure but, definitely, sufficient capital allows one to stay (longer) in the game. Sure it's going to be from harder to impossible but Infinite Capital and Zero Skills doesn't work neither.