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

The flaw in your reasoning and the reason Volpri's method works for
index futures (MES and MNQ) is that price moves around (always
long tails on bars?). Ths moving around means the probability of
hitting a near target (closer target from averaging down) is higher
than hitting a stop determined from price action market strength.

Volpri is able to have high odds near targets will be hit before
stops. I am now even just trying to trade ranges because they
occur most of the time and trading channels in indices means a
strong reversal can easily happen very quickly. I think Volpri's
method may not work as well for futures that trend more such as
Gold.


traderking007 said:
if you read what you wrote its like questioning a child you watched eat the last cookie before dinner after telling gim no and listening to his answer as he tries to explain away the truth while not squirming too much.

you system is not a system it is gambling and thats ok because lots of gamblers make money in streaks on terrible risk to reward probabilities. if you just did the opposite of all of your trades imagine how much money you would have made almost risk free..all those losing averaging downs would have been winning averaging ups.

the beauty of averaging up is that when you are wrong on you last few averages it doesnt hit your account value or start value for the day. you are only giving back profit. here is an example.

2000 acct value. 930 am cash spy open bell.
you make a trade in es after a drop. you buy 1
mkt falls 2 points. then 2 more then 2 more so you keep adding lets say you add every 2 points.

buy 1 down 100
buy 1 total of 2 mkt falls 2 points
so now you are down 4 points plus 2 points
6 points now or 300 dollars.
or you are now down 150 dollars/3 points a contract but oh no mkt falls 2 more points!!
you add another 1 so now 6 points lower you
add a 3rd contract.
6x50= down 300
4x50= down 200
1 x 0= 0 even on that third add
down 500 now on 3 contracts.
which is 3.33 points per contract or 166 dollars
at this point you are like whoa. im in it now.
3 scenarios.
1 mkt rallies back up to what extent who knows
2 mkt goes sideways for awhile
3 mkt keeps selling off.
lets assume this is real life not elite trader and u have live money and bills on the line. because remember your trades are day trades right so u must exit by the end of the day.
scenario 1. mkt rallies back up
6 points= 100% retrace. you are now at a fee slippage loss. but overall dodged a bullet
8 point rally is a huge turn around. and yes you would be at 2 points profit
3x2 = 6 x50= 300 dollars. after not participating in an 8 point rally!! you made a whopping
300/3 = 100 dollars per contract or 2 points per contract gained. wow! and the mkt moved 8 points and in your infinite wisdom of technically calling out where to ppace stop losses on the chart you couldnt manage to wait and enter long at a more opportunistic point? so let me get this straight. you know where to place stop losses and exit but you dont know where to enter ? so you just add. lets come back to this point again remember we had an 8 point rally not a 50% retrace but more like a 133% rally.

dont even get me startedon all the buy sell forces working against you on this rally even your own fellow buying bulls would be selling back into to take profits

2. sideways. you spend hours watching this mkt trickle back and forth doing nothing wasting good capital for margin as you agonize over is it going up or down and the longer the mkt consolidates the bigger or harder it will fall or rally and again we have any news risk that can change the technicals instantly so again this is gambling and not good risk reward but for sake of example. you wasted your day

3. you are down 500 bucks on 3 contracts.
at this point in time every point is a 150 dollar loss.. falls 8 points below you are now
pos 1 8x50= neg 400
pos 2 6x50= neg 300
pos 3 2 x50=neg 100
you are now down 800 dollars.
you grabbed every single point of loss possible and doubleb tripled up into loss.

lets look at the opposite you never add to losses you only add once you have a winner of 2 points and then lets look at the scenarios.
2000 dollar account
buy 1 es future
mkt drops 2 points down 100
drops 2 more down 200 total 4 points
drops 2 more down 600
drops 2 more or down 800
so you are now down 800 on 1 contract.
where as in your example you were down 800 as well but this is where risk gets important.
if mkt falls 2 more points i am down another 100 and you are down 300 more on every point.
10 points im down 1000 and you are down 3000 and this is with 3 lots thats it.

i still have only used up 1 contracts for margin amd you have used up 3! thats another consideration. your hands are way more tied than mine for sure.

but lets look at this same scenario but i sell and add 1 contract every 2 points of profit and again this is a "v" mkt move intraday where the mkt sells off 8 points n rallies back the full 8 and possibly 10 when volpri was up 2 points of profit after his adds

sell 1 contract es
mkt falls 2 points profit = 100
sell 1 more es so profit is now half point es per contract.
mkt falls 2 points
so now
1 contract = 4x50= 200 profit
1 contract = 2x50= 300 profit
sell 1 more 1x0= 0 profit
so 3 contracts 500 gain= 3.3 points per contact of profit.
mkt falls 2 more points
so niw we are 6 points below
and we have how much in profit?
6x50= 300
4 x50= 200
2 x50= 100
800 dollars profit!! now we can decide what to do. take profits on some or all here are our choices
1. mkt rallies we lose out on Profit!!
2 mkt goes sideways. we either gain or lose slowly but as it builds could gain much more or lose out on our profit
3. mkt tanks sells and we crush it with a huge day.
More...
 
saying volpris method works is like saying you can swim the atlantic. you have no idea and how is the strategy working tonight. let me guess...no trades when full on trend because je can read when to get out from a chart but never when to get in properly.

sounds like someone is trying to build a buz around a ridiculously discretionary sim trading platform
 
yc47ib said:
Excellent write up Volpri, enjoyed reading it. I want to add, that there are only about 5-10% of the bars are BO bar(s) in any timeframe chart one trades, and those are the bars not fitting for averaging down if you are trading against the trend. Many who remembered never to average down probably did it in such a BO mode against the market, it is surely a pain trade.

All others parts of the chart (90-95%) will work fine with averaging down. But where to add and how much to add depends on the account size and risk profile, that is the harder part to learn, need to learn it with a lot of experience and fast simple math while the market is unfolding.
More...
Spot on.
 
lets see all those executions from adding and holding today? days like today will blow you out when you should be absolutely killing it!

made most of this hedging my long tech stocks that im not selling due to capital gains taxes but it was just a 13 lot hold from yesterday near the close of business tha created 60K of this no in and out and no adding to loser however ultra short term i may add to losers but exit immediately at certain points.
today is a good example where volpri can site and show and say i didnt do anything or i got here because of this etc. when other times in the same pattern the same volume the same everything he is adding and getting lucky due to the bull market that would save his butt.

I am not putting him down just the method of adding to losers i feel bad for anyone following this advice today
 
also volpri will not ever give you an exact exit point for risk beacuase he always defaults to how it is completely discretionary and based on how he reads the charts.

NOW IN DEFENSE OF VOLPRI and his METHOD that he says works for him.

it is very possible he is highly skilled at reading the mkts and the charts and because of his own ability that works for him but knowing that it is discretionary is exactly why it is not reproducible for others who follow him unless he did a real time room or call area where you could then move with him at the same time entering and exiting due to his skill set and read on the mkt.

i think that is the only BONE i have had is that his method should not be copied by others becuase it is discretionary in nature and not even close to a true system
thats all and i think the wa he talks about it as if it is a true system is very misleading to many on this site.
 
traderking007 said:
also volpri will not ever give you an exact exit point for risk beacuase he always defaults to how it is completely discretionary and based on how he reads the charts.

NOW IN DEFENSE OF VOLPRI and his METHOD that he says works for him.

it is very possible he is highly skilled at reading the mkts and the charts and because of his own ability that works for him but knowing that it is discretionary is exactly why it is not reproducible for others who follow him unless he did a real time room or call area where you could then move with him at the same time entering and exiting due to his skill set and read on the mkt.

i think that is the only BONE i have had is that his method should not be copied by others becuase it is discretionary in nature and not even close to a true system
thats all and i think the wa he talks about it as if it is a true system is very misleading to many on this site.
More...
i asked for a max risk number months ago for the day for the trade for the position and guess what just wont ever answere so i knew right then it was not a true system but that does not mean it does not work for him.
 
I have won for 13 days adding the losers but today they killed me.
I have lost everything I gained in 13 days and more. One thing is clear.
You have to have a daily loss limit.
They have advised me that my daily loss limit is the average of my winning days, what do you think?
Or maybe, should I change systems?
Although actually entering ES and immediately being in profit and then adding winners is next to impossible, price usually always pulls back before making the expected move.
 
no one would ever disagree with you about adding to winners in the es short term can be deadly but your short term may be diffrent than mine. in the old days the pit traders had the order flow advantage and computers were not running it all at lightening quick speeds so you could and did get follow thru to add to winners it seems very difficult to do even in a bull market.

Sorry to hear about your losses but at least you had some gains to cushion them. yes of course the bull mkt saved you on all of your adds that is all it was.. positive price order flow sellers selling higher and buyers eating it up. the cycle you just went thru is the problem with adding to losers and also why this is a zereo sum game.

i would if wantign to add to winners learn how to trade on a larger time frame even if not in the market what this means is .. if the mkt is bullish and you do a day trade and make money on a shortt erm time frame. trade as if you have positions in the mkt already and increase the size of your bet going with the trend but jsut on your initial entry understand.

so even if not in the mkt if you see a good buy before earlier in the day lets say a sell off was bought and now you are seeing a nother sell off .. what i fyou were a longer term day trader say a 15 or 30 min player ? or even a 1 min player who held the trades up to this point and guess what it would be time to add right ? adding to a winner? so this is when even if not in the market i would play as if i was and i would be adding to a winner! to open my trade. those usually end up being my best trades as far as what i call the whoosh factor.. im in and whoosh no threat no heat. just the elevator up and that is because at that point sellers are not scared and jumping out they are moving sell prices higher and buyers must give chase.

I would also think about doing random coin flips at your desk and just start playing with adds and subtracts on every coin flip. you will start to get a feel for random walks and how they truly can trend.. and you will see that sometimes unless you have a real edge you are just getting lucky with the long long adds .

there is no strict correct answer. had you been sizing down or up based on what you were doing with profits maybe that would make a difference.. exits and sizing are the most improtant but least talked about in trading because everyone wants you to enter the mkt right they really doo we all need volume but few want you to exit because as you enter many times they exit ..

aka all these stock splits was to let big and smart money out of the mkt fast without much impact but they could only hold it for so long.

good luck and that is meant as a nice way telling someone in tradin gyou wish them the best.
real traders always say good luck and mean just that good luck we hope you make money
 
the only other way i have ever seen anyone add to losers and do well is with a reverse pyramid but in the end it can end up being bad if you dont size it properly and the correct intervals if your just not a good mkt timer as far as the turns and trends then you shouldnt be sizing at all.

lets look at all your trades for the last 13 days you said you were long. well what i fyou just put our your max position and held 13 days ago? you would still be up because we only just now wiped out 6 days of rallies? then you would only concern yourself with exiting not entering. that is if you put your full position out there and held.. all you are doing is managing the exits instead of adding to a winner if you do this right you can keep the exact same position size and never increase your risk while adding to losers and winners have you thougth about that?

say a 5 lot is your max trade. you go long 5 and mkt ralleis 5 points you take off 2 and mkt falls 4 points and you hold the other 3 lots and then mkt looks to rally again so you add your other 2 so now you back to 5 and all you are doing is manager your max position over and over and over again but you must always keep 1 position on and never sell it because this is the 1 position that captures each and every point in the bull mkt up for the day every single one and that is the problem to just adding to losers. you are holding losers and more and more positions for the max number of points!! that is the killer. your first second third lots are downlike 20 30 50 nq points each! if you play with averaging you will come to realize holy shit it takes a lot to move that average price of yours lower and do you have unlimited money and how in the hell do you size up with this kind of strategy being down 800 on a 5 lot micro is $ 8000 in minis come on how will you ever handle being down 8k and adding

I know a guy who makes 7 figures every year trading always and his max drawdown and he was freaking out about it was 30K and when he talks about it he is like.. omg i was actually down 30k! so when you look at from his kowledge his perspective it is more important to be
CORRECT in the trade and MAKE less than it is to LOSE more in the trade and still make less? it would be different if adding to losers allowed you to make more but it doesnt! it allowes you to try and work your way to break even and then maybe a little bit above that but
do you know who really watches that stuff? HFT and algos. they feast on people novices who add that is why so many times your average price is the mkts average price in a time slice and you are like how is this possible the mkt is resting on my average and everytime it gets close to it and im long it sells and then when it touches it ..it will rally a lil and sell and then when i exit it screams higher! and i am out now. this is what they do you are in the same boat as the majority adding to losers and being on the wrong side of the market and trying to get back to even instead of trying to hold and make more gains.

you could have a set amoutn say every 10 points in es you add 1 position but it must be a constant or a percetnage and it must be very far from your entry or else your average is going to look just like everyone elses and you do not want that!!
example from today
nq lets say every 50 points you add 1 yes i have hindsight bias right now i know how much it fell so far but lets take a look
9.30 12225
then 12125 buy 1
then 12025 buy 1 long 2
then 11,925 b1 long 3
then 11,825 b1 long 4
then 11,725 b1 long 5
where is your averge price and how much are you down?.
average price is your average price is 11,925!!
mkt is at 11,791 so you are now down 11925-11791= 134 x5=670 points x20 = $ 13,400
and you need to get all the way back to 11,925 to break even again you are trying to get to break even. if you are in a trade and hoping or trying to get to break even then just exit and start over!

what is the mid level of the market range today right now this is a rough estimate ok
12225-11726= 250 points so 12225- 250 = 11,975!!! Omg what is our average entry price with all of our adds? 11,925 so we are looking for a 50 % retrace to profit and that is it when we should be looking for that retrace off of the bottom not the average this is why adding to losers is folly and a road to ruin.
 
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