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

traderking007 said:
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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every 100 points add
 
wha if we did a reverse pyramid where would our averge price be right now in the nq?
wew will add 1 position every 100 points and we will add another lot every 100 points and lets see what this does to our aveage price.
 
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.

12125 buy 1
12025 buy 2 so long 3
11925 buy 3 so long 6
11,825 buy 4 so long 10
11,725 buy 5 so long 15 total what is our averge price on 15 ?
11,858 this is lower than 11,925 but not by that much so we must chagne the model and this is why a discretionary exit and add doesnt work you cannot play with the numbers with any regularity becasue there is no consistency
but lets try a new way instead of adding a 1 lot lets do 1 on the next one then 3x on the next and see what happens
12125 buy 1
12025 buy 1 long 2
11925 buy 6 long 8
11825 buy 6 long 14
11725 buy (6x3) B18 plus 14 = long 32 what is our averge price now?
11,803 that is our average price and we are downhow much based on the original adds?
not that much really we are actually in a profit now you can do a spreadsheet analysis of all of these positions and base it on todays moves and you can then see where the max drawdown was and analyze all of this to get the best adding method possible based on what cycle and where you think the market is but just senselessly adding 1 and adding 1 and adding 1 doesnt do much for your average price which ends up looking like everyone elses average price. trust me you and volpri are not the first people to realize that adding to losers in a bull market can make you money if the bull continues.
 
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!

here are our 3 examples mkt is at 11,791 at the time of this analysis lets see how these shake out?
1. adding a buy every 100 pt s= down 13,400 bucks total/5= -2,680 per contract
2. adding a doubleevery 100 = 11,858 avg on 15 - 11,791= -20,100/15=-1,340 per lot
3. 3 x adding every 200 pts = 11,803avg on 32=11,803 -11791= -7,680 wow! look at this number it is actually less loss than the 5 lot !! and per contract it is
7,680 negative /32= -240 bucks a contract that is it you are down 240 a contrct now any retrace higher gets you into profit but sure you have more total risk or do you? how far for it to fall to be equal to the max risk of all of our models? which was 20,100?
well
20,100 /32= 628 dollars per contract /20 =31 points so take your average mMINUS 31 points

11,803-31 points = 11,772 at this point you are as bad as your second strategy and none of this means you will make more money because it depends on your yea you your ability and skills to make money by betting on the correct direction of the trade!! over and over and over
 
this is exactly how LTCM and most other huge trades blow out they just keep adding and adding and adding hoping that wow.. all i need is a 10 point move an im back to break even back to good again but a 10 point move in the other direction with TREND mind you will DOUBLE THEIR LOSS!!!!! at the point where they are down the most!
 
traderking007 said:
this is exactly how LTCM and most other huge trades blow out they just keep adding and adding and adding hoping that wow.. all i need is a 10 point move an im back to break even back to good again but a 10 point move in the other direction with TREND mind you will DOUBLE THEIR LOSS!!!!! at the point where they are down the most!
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depending on your time frame your time slice what you do and when you do it that is how you figure out or OPTIMIZE what style of adding will work best for YOU this is all about you and your trading and this is why guys that are successful will use systems to tweak this kind of stuff because you cannot tweak a DISCRETIONARY system of ART FORM technical trading and expect to not have HINDSIGHT BIAS i had it big time even in my examples because i already know where the market started and ended in so far today!

VOLPRI you have a great journal and some great ideas and you have a great read on the techincals it looks like and gret for you but many who follow you are clueless about the fact that it is your cumulative skillset that is the difference between winnign and losing and not ADDING TO LOSERS. that is all i am saying and have been trying to say this whole time

if it makes VOLPRI money that is great for him
 
traderking007 said:
...
12125 buy 1
12025 buy 1 long 2
11925 buy 6 long 8
11825 buy 6 long 14
11725 buy (6x3) B18 plus 14 = long 32 what is our averge price now?...
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Irrelevant. You'd not be able to average down that deep on NQ without some serious cash in your account. By 11925 yer in trouble. Remember, about 16K per contract required for entry. 16K x 8?

Do the maths.

You'd want high 7 figures in your account to even contemplate doing the above.
 
The ideal would be to add the winners for example buying 5 contracts, then 3 and then 1.
(But for that you need a good trend, something that does not happen many times in the indexes)
But we usually do just the opposite by adding the losers, we buy 1, then 3, and then 5.
Then the price does not go in the desired direction, we do not admit the error and inevitably the account explodes.
Thats the big problem.
 
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