Seems liks day trading is all but finished!
- Thread starter fourcups
- Start date
the hell-bent-on-daytrading attitude is a definite negative for everybody even though some will get on hot streaks and feel on top of the world, its a great high. Its like a gambling addiction, and everybody figures it out sooner or later. Stop trading for the adrenaline rush and you will realize that a longer time frame and less leverage will allow you to have a normal life and still make money.
Normally in my daytrading, I try to locate a entry near the beginning of the days primary trend. For example, the emini range has been about 16 pts. My stuff will try to locate a entry within 3 points of the start of the primary trend and put on a 4 point stop. This gives me the 3:1 reward to risk ratio I try to keep. Normally, I'd ride the trend until the 16 point range was met and then apply a tight trailing profit stop.
In this market, my stuff is getting the start of a trend and then getting blown out by the countertrend moves. To avoid this, I decided to use a target of 1/4 of the days range (4 pts.) and go for a higher hit rate. This gives me 1:1 on the reward to risk, so the target must be hit early, otherwise my win:loss ratio is going to drop to around 50%. To make the same dollars as my previous method, I'm going to have to increase size of each position to 4x my previous size. I hate not letting profits run all day, but until the followthrough starts coming back I've got to be a little more defensive.
The idea doesn't change my entrypoint or really change the idea behind the trades. All it affects is my money management.
Here's a example using one of my production systems modified to use targets from the beginning of this year to the end of last month for 1 SP contract: