Scalping and Trading

I am not sure what you mean by " off-floor " traders. but I agree with your premise.

On another note, this thread is meant to show my trading plan and show my actual results to see how close I come to it. I treat trading like any other business. I monitor my costs and plan out profit objectives based on realistic models. As you can see from my actual trading I do quite a bit of scalping in addition to my system setups in an attempt to add to my bottom line. Lately I have faired well in both the system trades as well as the scalps. This has tremendous effect on the bottom line although it effects my trading efficiency. For now i am willing to make that trade off.

When I began this thread i had hoped others would offer up their trading plans and I am wondering why no one really has. Is it because other traders think my approach to have a trading plan is wrong? Do traders not want others to see their trading plans? Do many traders not know how to write a trading plan ( even one as simple as mine )? Or am i just wasting my time in trying explain my belief of the importance of having one? Anyway it wont deter me from continuing this thread for now. Just some thoughts.

AllenZ
 
I also trade two separate time frames, although I feel that this is a difficult endeavour...For the most part, I try to separate the days in which I am going to enter a different mindset...If I am planning on entering a swing trade for a minimum profit target of 7-10 handles, I really need to be careful with the manner in which I start scalping...From my experience, swing trading and scalping require two entirely opposite mindsets and if you confuse the two it wreaks havoc on even the most well developed trading plans...

I will try to explain in more detail...To scalp, you basically have to partial out of trades extremely quickly and your reflexes have to be sharp...You do not have the luxury of time because a scalp is basically just trying to extract the minimal amount of profit with the minimal amount of risk exposure...To swing trade, you have to have patience, plain and simple...And not only that you have to increase your pain threshold since your profit/risk objectives are magnified...So, in essence, you are expanding your risk tolerance to allow yourself some wiggle room and to reduce or dampen the effect that the market noise will have on this aspect of the plan...The real problem occurs when your mind is somewhere in between...Like entering a swing trade with a minimum 7 or 10 pt profit objective and instantly finding yourself 3-4 handles ahead and covering...Or on the flipside, entering a scalp and finding yourself 3-4 pts in the hole and letting it run against you...

I say all of this because I honestly believe that I have never found any of the conventional techniques work for trading the indicies...The internet is littered with self described guru's who teach techniques that are basically only accomodating to one aspect of price action...They will post charts with beautiful flowing moving averages and little lines that show where you should have bought or sold...but the majority of it is hogwash...The truth of the matter is that so much of this stuff is adaptive and internalized...I respect some of Lundy;s posts because I feel that what he writes is much closer to the truth...The conviction is what wins in certain time frames...The quickness and agility is what wins in other time frames...Each time frame has a specific skill set that needs to be learned, but not compromised...When one time frame is compromised with the other that is when the errors mount...

So, essentially, what I am saying is that for me I have to know exactly which mindset I am going to be trading in for a specific period of time...When I break this rule I damage my plan...When I take profits too soon in my swing account, I leave big money on the table, money I will need to absorb the movement against when trading on a larger time frame...If and when I do not trade tight in the scalper time frame I am damaging my ability to come back from a series of what should be near scratch trades...
 
Allen

I trade a similar system to you in that I am looking to capitalize on the 3 or 4 moves a day of 6-12 points on the NQ's. Currently I am trading the Q's while I test my system but will move up to the NQ's next week as it looks as if my system is working so far.

I use a 2:1 Risk/Reward on every trade but will brings stops to b/e on a few of my setups when I reach 1R. I don't try and get cute with my system and will either get stopped out or my target will be reached. I've found that when I try and maximize profits by playing around with the exit once I am in the trade, I inevitably start taking smaller profits and larger stops. I also like the fact that this takes my emotions out of the game and allows the market to either give my 2R, give me a scratch or take my 1R.

Currently my system is producing 40% winners, 40% losers and 20% scratch. My target is 8-10 net NQ points per day average. I also split the market into 2 periods per day. 10:00-11:30 and 2:00-3:45. I will only initiate a trade within those time frames but will manage a trade through the doldrums if need be. I set a maximum loss of 10 points per trading session (20/day).

I hope this gives you some idea of what someone else is doing.

I enjoy your contributions to this board and would urge you to continue. I actually spent a trial week in your room and although it was one of your worst weeks (early April) I did learn a lot and feel that I have picked up some of your relaxed trading style.

PS. From reading you're posts in this thread it looks as if you have bad day's when I have good day's and vice-versa. Hopefully the probabilities work for both of us and keep us happy in the long term.
 
Originally posted by macal425
Allen

...I don't try and get cute with my system and will either get stopped out or my target will be reached. I've found that when I try and maximize profits by playing around with the exit once I am in the trade, I inevitably start taking smaller profits and larger stops. I also like the fact that this takes my emotions out of the game and allows the market to either give my 2R, give me a scratch or take my 1R...
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I've found the same thing with my system Macal. You start micro managing, and you become a scalper and underperform... I started trading the NQ emini, but like the ES better now with my system. Depends on the day, but the ES is more profitable so far for me. The extra volume seems to make things more orderly.
 
Novice question here....(I assume it's OK, and likely to be answered in the spirit of helping a new futures trader, even though its a bit off topic?) Here goes:

I've been learning the basics of technical analysis, reading a few books, and working through some formulas in Excel. So I'm wondering that given the fact that the Emini's (I'm looking at the ES myself) are traded almost continuously the end of day data I get from myTrack give me the close price at 4:15pm, and the open is given as the time the markets resume trading for the overnight session (5:30pm)- instead of the 9:30est opening price of the wider markets.

In calculating the price-average based indicators for the next trading session, should I be using the 5:30pm "open" or the 9:30am open? Obviously this can make a significant difference, especially on a week like this where we have seen some substantial gap openings.

Thanks for the thread Allen!
 
Originally posted by sunnyskies
macal, may i ask what kinda stuff you use for entries?:cool:
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My entry rules are fairly basic and are based on a couple of ma's in a 3 min chart and a few familiar patterns. I do use some discretion in my entries but try and take the trades as they present themselves as much as possible. I also use a filter that keeps me out some of the chop.

I also try and determine major support or resistance areas, not as reasons to enter or exit a trade but to make sure that my target is attainable. If my target is beyond a major S/R then I will likely pass up on the trade.

Would like to go into more detail but I'm trying to get an early night before getting up at 2:30 for England v Brazil. Hopefully this will act as a filter and keep me out of tomorrows Triple Bitching mess.:cool:
 
Originally posted by tatertrader
Novice question here....(I assume it's OK, and likely to be answered in the spirit of helping a new futures trader, even though its a bit off topic?) Here goes:

I've been learning the basics of technical analysis, reading a few books, and working through some formulas in Excel. So I'm wondering that given the fact that the Emini's (I'm looking at the ES myself) are traded almost continuously the end of day data I get from myTrack give me the close price at 4:15pm, and the open is given as the time the markets resume trading for the overnight session (5:30pm)- instead of the 9:30est opening price of the wider markets.

In calculating the price-average based indicators for the next trading session, should I be using the 5:30pm "open" or the 9:30am open? Obviously this can make a significant difference, especially on a week like this where we have seen some substantial gap openings.

Thanks for the thread Allen!
More...

Technically the EMinis open at 9:15AM EST. The overnight session ends at 9:14 and the RTH session starts at 9:15 though it all flows together as one. However, for all intents and purposes the key time is 9:30 when the pits start trading. This is the open that makes the most difference.
 
I agree with Tripack. I look at the opening data from 9:30, although i will look at the 8am open also just to see if there is much difference pre market.

I am very pleased at the contributions by several of you to this thread. I dont think we realize how many people look at these threads that may not make themselves recognized. If your post helps even one person consider it a way of giving back. I am completely self taught and really would have been nice to have found something like this back in 1997 when i started trading.

This week has been one of my best this year. I would like to think that it is more than coincidence that it is over the same time period that i started posting my results on this thread. It had given me even more incentive to stick to my plan and to improve my scalping. My scalping was leaving something to be desired and then when i started this thread i noticed how really poor it was. Over the past two weeks i have worked even harder on the scalping and it has added much to my bottom line. Any way thanks again and keep posting.

AllenZ
 
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