Techniques for Day Trading the ES, NQ, YM, MES, MNQ, and MYM

[SimpleMeLike]

Disclaimer: The below is for educational purposes only and for you to practice on a SIM if you like the ideas. If you use real money trading any concepts, including these in this post, and any other posts of mine anywhere on this forum or in any other forum, you just might lose your hat, bank account, car, and wife or husband, if you are a lady trading. So be warned beforehand that trading is hard and real risky. And any trades simulated, or otherwise, in this journal, or any post of mine, anywhere, does not mean that is the way it will always happen in the world of trading the financial markets. You need to know trading the markets is uncertain. We can never be 100% sure of anything in trading except that we can, and will, at times, lose money. That you can count on!

I tried to put the number of the trade above the bar where the trade was initiated. Since these were all short trades they will all have red triangle entries. The green triangle entries are the exits, or when I cover the trade. Sometimes, the green exits are hard to see on bear bars but if you blow the chart up or put some good spectacles on you will see them. They are there.


#1 Entry short bar 10:50 1 3075 based on NQ leading ES south. exit 3072 bar 10:55 +3pts

#2 Entry short bar 10:55 @3074 short SL 3082 PT 3068 TE 60%x6 =360 40x8 =320 Exit by mistake 3071 forgot to make PT 6 points exit bar 11:00 (+3 pts)

#3 short bar 11:05 3068 SL 3080 PT 3062 TE 80x6=480 20X12=240 exit 3062 bar 11:15 (+6pts)

#4 averaged down trade. ini Entry short 3049 bar 12:05 and up want to ave added 1 Ave price 3051.00 and added 1 bar 12:20 3054 Total contracts 3 new SL 3061 new PT 3044 TE 65x7.25=471 35x9.8= 343 give up point 3065 Exited 1 bar 12:25 @ 3048 and 2 bar 12:30 @3044 total points (+18 points)

#5 Entry late bar 13:00 3039 ini SL 3049 ini PT 3033 straight short scalp TE 70x6=420 30%x10=300 420>300 Exit same bar 3033 (+6pts)

#6 Entry short bar 13:05 3040 SL 3049 ini PT 3034 TE 70%x6=420 30%x 9=270 Exit same bar 3034 (+6pts)

#7 Entry 2 contracts bar 13:10 @3037 ini SL3042 ini PT 3031 TE 80%x6=480 20%x5=100 exited both bar 13:10 at 3031 (+6 pts)

#8 Short 2 bar 13:25 @3036 iniSL 3045 ini PT 3030 TE 70%x6=420 30%x9=270 EXIT bar 13:30 @3030 +$331.25 at this point. (+6 pts)

#9 Averaged down short Entry 1 3020 bar 14:00 added 1 short bar 14:05 at 3022.25 av 3021 Exit 1@ 3016.25 bar 14:05 exit next one bar 14:10 @3014.00 (3.75 pts on first entry & 8.25 pts on second entry) total (+12pts)

#10 short 1 contract bar 14:25 @3004 ini SL3014 ini PT 2998 Exit bar 14:30 2998 TE 70%x6 = 420 30%x10 =300 (+6 pts)

#11 short 2 contracts bar 14:30 @ 3006 ini SL 3014 ini PT 3003 TE 80x6=480 20%x8=160 Exit 2@3000 on bar 14:35 (+6 pts)

#12 Averaged down short 1 bar 13:40 @3010 bar exited 1 same bar @3016 los s(behind middle red triangle then short 1 @3016 added another at 3020 ave for 2 now 3018 PT exited 2 bar 14:45 at 3010.75 exited the one loss by mistake failed to adjust SL lost 6 pts on first entry then + 5.25 pts on second entry and +9.25 pts on last entry. So netted+ $523.75 at this point. (net +8.5 pts)

#13 short 1 bar 15:05 @3010 iniSL 3020 ini PT 3002 TE 70x8=560 30%x10=300 had to exit market cause time ran out. small loss 1 point loss (-1pt)

Trades 4,9, and 12 were averaged down trades. The rest were straight scalps. I had 13 trades in total. 12 winners. However I lost 6 points on 1 contract in trade #12 and trade 13 lost 1 point. You can add the total points gained for the day and substract the 7 points lost on those 2 contracts.

Bottom line: SPBR trend. All trades were short trades. These SPBT (small pullback trend days) are some of the strongest trend that there are even though at times they can be grindingly slow. PB's in these sort of trends are usually good to average down on, for me at least, the guru's say no no NO!. This is the way I like to trade SPBT (small pullback trends). Jump in on PB's get a profit then jump out. Then on the next trade try to jump in at a better position than the previous trade's exit (in this case higher up since it is a bear trend) then exit with profit. Thus sort of compounding. You can see that effect in trade #1 and #2, #5, #6, #7, #8, #10, and #11

I also traded in mini Naz and made 170.50 So total Gross $516.25 on MES plus 170.50 on naz = $686.75. This is trading small size (never once over 3 contracts in MES in any one trade) and having a high win rate. High win rate is a very important metric for a scalper of 1 to 8 points in MES. I am trading small to show how a small trader with a small account can do fairly well. This could of as well been the ES and of course the profits would have been alot more. Or it could have been MES but trading 20 or 30 contracts a lick and been alot more moneywise. The point is the process is the same. For MES or ES. NQ or MNQ. Small size or large size. Nothing changes about the process itself.

The size and instrument a trader can trade is based upon the account size. A trader does not have to capture big moves and trends to make money. See these small moves 1 to 6 points over and over, locking in profits, are easier to assign probability to in the TE. By the way, if I don't show every trade with TE it is because I just didn't get around to it. Once you get good at the TE many times you can just figure it on the fly by the seat of your pants instead of with a calculator plugging in the numbers. And in fast moving markets that may be the only option. The point is I like to do it to assign probability. Whatever TF a trader trades in my opinion they need to use the TE.

A trader just needs to get REALLY good a scalping for 1 to 8 points. It is easier to extrapolate out 1 to 8 points that to try and extrapolate out 50 point or 100 points. I am being nice here to keep the guru's from choking on their spittle. The word really is PREDICT. ROFL

I may take a few trades tomm Friday then I'm going to take a few weeks off posting in my journal. With all the other things I do, plus trading, and journaling, well...I get tired. But this is enough to chew on for a few weeks. If you have a mind to you can practice on a SIM. Remember CONTEXT CONTEXT CONTEXT. That is way more important than any single setup. It is like LOCATION LOCATION LOCATION is to Real Estate. If you find a few mistakes in my write up on today's trades just overlook them. I am 65 you know. And not the sharpest knife in the drawer. But I think things are close enough in accuracy for you to see how I like to trade SPBR (small pullback bear trend) days. I just like locking in profits, compounding (cause in essence I am using profits from previous trade to make more money in a subsequent trade..I suppose..at least that is how I look at it). It is easier to extrapolate inertia 1 to 8 points on the same bar or next few bars than to extrapolate out lots of points, hours away, in bigger trends. I just chop up bigger trends into smaller bites and lock in those profits. Commissions don't bother me. Missing out on profits does.

Happy trading tommorrow and remember "we create our own reality in the markets"

Chart is MES 5 min for 6-11-2020

View attachment 230397

volpri,

You are simply amazing and thoughtful and considerate. Thanks for giving back.

From my own experiences trading day to day, what I am learning is its about continuous education, practice, and alot of preparing for IF THIS THEN THAT trading scenarios. But it is enjoyable.

Thank you very nice written.

 

[volpri]

volpri,

You are simply amazing and thoughtful and considerate. Thanks for giving back.

From my own experiences trading day to day, what I am learning is its about continuous education, practice, and alot of preparing for IF THIS THEN THAT trading scenarios. But it is enjoyable.

Thank you very nice written.

Well thank you. Even on bad days the challenge is always there to learn something new about the markets or about oneself. Yes, your right a good trader HAS TO prepare for "if this then that" otherwise we will trade by letting our emotions make our decisions. We cannot escape our emotions and we cannot do them away. They are simply there. They are part of our humanity. We just have to acknowledge them, accept them, but transcend them. The brain is a wonderful instrument. Way more powerful than any computer. But is uses a lot of the bodies energy. Our mind is constantly working even when we just wish it would settle down and be quiet for a while. While we are awake it is constantly bombarding us with all kinds of thoughts. While we sleep it is working archiving and summarizing the days activities.

As regards trading the thoughts may be true or they maybe simply an imagination that never comes to fruition. But the capacity to think is wonderful. And the ability to feel is marvelous. We just have to understand that our mind (thoughts) and our emotions are not always on our side in trading. But without them we couldn't trade. We couldn't even "observe" the markets without them. So we need them.

But, we need some sort of plan. I think and I feel this is what will happen, but if I take a position and it doesn't, then this is what I will do. Then celebrate a win with your emotions. Examine a loss with your mind. Then plan for the future. See, averaging down can work for me in the right context because I have a plan. If the contexts are viable I can average down but I may not "feel" like doing it that day. Maybe psychologically I am more adverse to risk today than I was yesterday. That is OK I don't have to do it. But if I decide to do I need some structure on how I will handle it if things don't go the way I was thinking they would go. I need a give-up point and trade small enough that I can reverse and double up after dumping my averaged down position. There are days I could average down on just about any trade but just decide I don't want to do it so I will just do straight scalps. The there are days straight scalps aren't working out for me but averaging down works like a charm.

Mindfulness is a psychological concept that can help a trader. It pays to be in the moment and focused on the moment and what is really happening in the market or our mind (bless it's heart) and our emotion (bless them) will trip us up. They ain't being mean. They are trying to look out for our good but they are fickle too. Thoughts are like clouds floating across a beautiful blue sky. They come and go. They are here and then they are gone, seconds later. We cannot control them or stop them. They have a life of their own. YOU CANNOT STOP YOUR BRAIN from generating thoughts. It is going to do so by the thousands every day. That is it's DNA and that is what it is built for. And the emotions give color to life. They are our friends and they generally mean well but they can sabotage us in any endeavor we undertake in life. And that is especially true in trading. But they are not our enemy. They are just part of our humanity. We have to learn to enjoy them but transcend them when necessary as they aren't always conducive to the task we have undertaken. But often they will save our hide too.

So we need to enjoy life. Enjoy the capacity to think. Enjoy the capacity to feel. But have some structure when our thinking and feeling is taking us down a wrong path unintentionally. That structure needs to be logical, based upon the "now" and based upon reality as it is unfolding.

Well I crawled my carcass out of bed (i was up last night into the wee hours as my brain thinks best at night) and am just now on my second cup of coffee and it is 10:34 a.m. chicago time. Guess I will look at the markets and see if I will trade anything.

My peas in my garden look like little soldiers marching in formation saluting. I'll have to snap a picture of them and post it.

 

[volpri]

I just took two trades. Larger context bullish. Overnight price channeled up from yesterdays 3:15 close. So opened with a gap up about 68 points or so. So looks bullish. But look what happens. It immediately begins to close the gap and by 9:55 has basically closed it. So while bulls are strong in overnight bears are just as strong in todays session. Then we get a reversal on bar 10:25 that becomes a 2 legged reversal that reach just through the 50% PB from the opening move down that closed the gap (grey lines). Because bulls and bears are balancing each other out but at the moment (immediate context) bulls are winning I decide to average down on two trades but I will not follow them very far because odds favor some more back and forth movement and since these are long scalps I want to grab the profit and jump out. So here are the trades. Both were averaged down. Both were two contracts after the averaging down. Profit at this point is $76.25 both are winners. Grab them profits.

 

[volpri]

And here is what happened as I typed the previous post. See why I grab them long profits quickly? Now will just look for another opportunity since I done went and missed out on some more while typing. But first got to eat breakfast and shower.

 

[volpri]

I took a third trade after breakfast. Averaged down and lost. Then took a 4th trade reversed and double up. Got back my loss and made some. I took that 4th trade and set all and jumped in the shower. Once I get my hair dryed I will give better explanation.

 

[yc47ib]

Volpri, thank you for all the posts you have made since Sept. 2019, I read each and every one of them with delight, I wish I had found them much earlier. I have been trading futures for 13 years, on and off, up and down, even though I made some money, lost probably no less in large lump-sums, I lost track.

It is your posts that give me the confidence that losing big will be history from now on.

I can not emphasize how grateful I am. I started trading ES with a gentleman named Don from Texas as one of my mentor (via internet, LOL), he was in his late sixties back then in 2007-2008. Now after 12 years, I found you, whom I respectfully consider my second life changing mentor.

So, do not complain that you are old, your mind is as young as a 18 year old when you are trading. While I am approaching my 50s, I appreciate the accumulation of life's wisdom through the years myself. Therefore, I found and enjoyed reading the philosophical gems in some of your writings every now and then, for example, #662. It must have related to your colorful life experience, I recall you mentioned you were an educator in another field before, I sure sense and appreciate your patience in explaining things in your post that only an educator possess. (I have been a professor for over 14 years of my life, in a completely unrelated field from trading).

I have been lurking around reading your posts for the past week, caught up to the speed today, thus it is high time for me to write a post and say I cannot express how grateful I am to your effort. Please keep them coming and keep healthy, and eat less bacon for breakfast maybe? LOL!

Daniel.

 

[volpri]

Ok on bar 11:55 I started averaging down long and by the next bar 12:00 I was long 3 contracts. Price was not going my way so I dumped the position on bar 12:05 then immediately doubled up 6 contracts. My entry for the doubled up position was 3022. I set the ini SL at 3038 ini PT 3011 TE 60%x11=660 40%x16=640 barely positive. I also set a give up point for myself at 3046.

I reasoned we were now (immediate context) in a bear channel the bears are winning the struggle and the bulls are capitulating (I just did ROFL). It was unlikely that price would retrace to my SL of 3038 and my give up point of 3046 before it would get to my profit target of 3011. I mean it could but odds slightly favored I could get my loss back. Up until the averaged down third trade I was up $76.25. Now I lost all that and some. What do I do? I have to go WITH the market. The bears are winning in the immediate context and also the fact that they were strong enough to close the opening gap well that tells me they aren't weak. But the overnight bulls weren't weak either. It is nearly a 50/50 market but the immediate context where I exited that third trade shows the bears winning and the bulls capitulating.

So I set all and jumped in the shower. I peeked through the steamed up shower doors and saw on my laptop (as it was placed strategically on the vanity in front of the shower LOL), that price started moving in my direction and was getting close to hitting my PT. I jumped out of the shower and with wet fingers tried to slide my PT down on the DOM. That doesn't work too good and before I could get her done PA popped down real fast and I was out. That is the way it goes. Anyway, I got back my loss and then made back more than my previous profit. By the time I exited the 4th trade with my 6 contracts on the doubled up position I was up $203.75. But probably could have made a lot more. I will have to check the market and see what happened after I type this.

That little #3 should be above bar 11:55 as my initial entry on trade #3 not above bar 12:05 which was my exit for trade 3. But in the "emotion" of the moment I place it wrong on the chart before taking the snapshot. So trade 3 was the averaged down trade I lost on and I started entering on bar 11:55 and exited with the loss on bar 12:05 then immediately reversed and doubled up on bar 12:05 and the next chart below shows my exit for that double up position. So trade 4 was initiated on bar 12:05. I will place the trade #'s for trade 3 and 4 in their correct position later today.

Anyway, this was a good example of how to handle a loss on an averaged down trade and then how to get it back and quickly be back in the money. I hate taking losses but as traders we must never ever be afraid to take them when we are wrong and have to take them. I have always hated losing ever since I was young, even as a child pulling my little red wagon in that salt and pepper sand in Florida and it would get stuck. Boy did I ever get mad. I have always detested losing. At anything. Monopoly. Volleyball..whatever. My wife would laugh at me because she could beat me in monopoly and I would get irritated and dump the board and she would just laugh and laugh and I would huff and puff. To this day I hardly won't play monopoly.

As traders we have to learn that losses are going to happen. If there is anything certain about the market it is that! Guaranteed 100% that a trader will lose at times but how we recover is what is vital to our account. If we "dump" the monopoly board we WILL lose over time.

 

[volpri]

Volpri, thank you for all the posts you have made since Sept. 2019, I read each and every one of them with delight, I wish I had found them much earlier. I have been trading futures for 13 years, on and off, up and down, even though I made some money, lost probably no less in large lump-sums, I lost track.

It is your posts that give me the confidence that losing big will be history from now on.

I can not emphasize how grateful I am. I started trading ES with a gentleman named Don from Texas as one of my mentor (via internet, LOL), he was in his late sixties back then in 2007-2008. Now after 12 years, I found you, whom I respectfully consider my second life changing mentor.

So, do not complain that you are old, your mind is as young as a 18 year old when you are trading. While I am approaching my 50s, I appreciate the accumulation of life's wisdom through the years myself. Therefore, I found and enjoyed reading the philosophical gems in some of your writings every now and then, for example, #662. It must have related to your colorful life experience, I recall you mentioned you were an educator in another field before, I sure sense and appreciate your patience in explaining things in your post that only an educator possess. (I have been a professor for over 14 years of my life, in a completely unrelated field from trading).

I have been lurking around reading your posts for the past week, caught up to the speed today, thus it is high time for me to write a post and say I cannot express how grateful I am to your effort. Please keep them coming and keep healthy, and eat less bacon for breakfast maybe? LOL!

Daniel.

Thank you for your kind words and encouragement. I do hope sharing how I trade does help traders. I would not like it if my sharing in anyway hurt traders. That is why I say practice practice practice and practice on a SIM over and over if the concepts resonate with you. I really do like trading. I rail on the guru's but that is usually for 3 reasons:

1) To provoke traders to think out of the box
2) To decode us from our traditional thinking about trading. There is a lot of stuff we have learned that needs to be dispensed with and some of it can be kept but we need to understand the context to apply it in
3) Just for fun and some entertainment and humor.

Much of the time the trading concepts set forth by the guru's aren't necessarily bad but we just have to learn when to apply them.

For instance, I holler grab them profits! Cut them profits short and average down into losers. That shakes traders up. But there is a truth to what I am saying and I try to show that in my trading posts and charts. However, there is also a truth in "letting your profits run". I couldn't get out of the shower quick enough to "let my profits run this morning"! I am not against the concept of letting your profits run but it has to be done in the right situations. I concur that averaging down is for losers if done in the wrong context!

I am gonna check and see how much I missed out on by having wet fingers!

Once again thanks!

 

[volpri]

uh oh see what I missed out on because of wet fingers! My bad. Dad used to tell me when I would miss out on a deal or something like buying a car. "Son, there are more out there; another one will come your way". We must never be afraid if we miss a trade. FOMO is generally not too good of a thing. As dad say's "another one is out there!" However, in strong BO's one has to be Johnny on the spot and make quick decisions to just take a position and set a large SL.

 

[volpri]

Just took a 5th trade. 1 contract short.


Trade 5 short at 3033 SL 3039 ini PT 3027 TE 65%x6=390 35%x6=210 Positive traders equation. Price is trading in the upper 1/3 of a trading range. Since bar 11:35 we can declare this an obvious TR. So I short for a scalp believing the odds favor I will make 6 points before I lose 6 points. However, if it goes against me I am will to average down because we are in a TR and I like selling high and covering back lower on moves to the center of the range. But I was taken out quickly as it moved quickly in my favor Exit 3027 (+6pts) +$233.75 at this point. Little by little I chip away.