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

[SimpleMeLike]

Thank you so much volpri for the detailed response.

I will respond shortly after work. Thank you

 

[SimpleMeLike]

That is how I look at it. INTIAL risk is simply a PROJECTION, not reality. That is, I think this trade might go against me so I put my stop here (In x place) just in case it does. But instead as soon as I enter ..bam... it goes my way... I suffered no adverse movement so in REALITY I had no risk! That is what IS REAL and the ONLY WAY to accurately measure the real reward to risk, when tabulating it after the entry and exit are complete..IMO.

Thank you and I understand now.

To exit quickly, grabbing a quick profit is counter intuitive as the tendency is to attempt to hold for a bigger gain ( “as in this baby is going to the moon”) but suddenly price reverses or has a PB that wipes out all paper profits and one is left with eyes spinning in circles wondering “what just happened?” Going my way with little or no risk also means this trade is a good R:R so I could jump out about anywhere and mathematically preserve the treasured concept guru’s spout out of at least having a 2:1 R:R. ROFLMAO

LMFAO. I been there and done that

I can take a quick 3 point scalp and have sometimes a good R:R as the trade immediately went 3 points my way after 2 ticks actual risk. So in the ES I risked $25 to make $150 per contract and I am out while the guru is waiting for his beloved 4:1 R:R based on his initial risk and soon finds himself eating crow as his SL gets hit because he failed to realize the PROBABILITY of price actually reaching his profit target before his SL. I’m on my way fishing while he is licking his wounds. Traders fail to assign probability to their trade after considering the larger and immediate context PA has drawn on a chart. A setup can be identical to another setup but the dynamics change according to the PA environment in which the same exact setup is found. PROBABILITY needs to be a part of the equation and not just oh..I backtested and this same setup gave me 60 wins out of 100. Everyday every chart changes and there are different dynamics at place.

I agree as well.

Great write up and thank you.

Grab those profits.

 

[volpri]

You are welcome. Hope it helps.

 

[SimpleMeLike]

You are welcome. Hope it helps.

IT helps sir. It really does.

It great to to have conversation from other real time traders.

Do you mind if I ask you another question with example related to actual risk and profit target?

 

[SimpleMeLike]

A word of warning though. Anytime a trade goes my way quickly with little or no ACTUAL risk I Grab profits EVEN MORE quickly. Why? I caught the move as it was already moving so it immediately swept me along. That also means there is generally LESS distance left in the move. To exit quickly, grabbing a quick profit is counter intuitive as the tendency is to attempt to hold for a bigger gain ( “as in this baby is going to the moon”) but suddenly price reverses or has a PB that wipes out all paper profits and one is left with eyes spinning in circles wondering “what just happened?” Going my way with little or no risk also means this trade is a good R:R so I could jump out about anywhere and mathematically preserve the treasured concept guru’s spout out of at least having a 2:1 R:R. ROFLMAO

I think you mean something like this. enter at blue dot and exit purple dot. Market just took me along for the ride and I quickly exit at bar close, expecting a pull back from the big move, rather than trying to hold 2RR or 1RR. Just have to take the profits and move on with it and get ready for next trade.

here is example of a trade I took today for $225.

Is this what it means when I read the quote "Take what the markets give you".

https://www.tradingview.com/x/ktcnN2PO/

 

[volpri]

I think you mean something like this. enter at blue dot and exit purple dot. Market just took me along for the ride and I quickly exit at bar close, expecting a pull back from the big move, rather than holding for 2RR or 1RR

here is example of a trade I took today for $225.

https://www.tradingview.com/x/ktcnN2PO/

Good scalp. Now with the pb you have an opportunity to short again and average down by adding to your new short if the PB continues. Thus on entering again short at the pb you will basically be compounding your profits because you grabbed your profits on the first scalp then on the pb to your first entry (that you exited with profit at your purple dot) you have now the opportunity to short again at your first blue dot entry. So you locked in that paper profit at your purple dot, price goes back up and you short again higher up from your purple exit. In my view if you enter short a second time during the PB (even “averaging in” as that second short moves against you) you are just setting yourself up for compounding your profits! Because the move south will likely resume. Why?

A) price breaks south of your black channel line and the first PB does not close the gap and price does not go back into the channel so the channel line BO has FOLLOW THROUGH.

B) The PB after the first leg down consisted of 3 bull legs then price resumes south. There is a gap between the highest point of the PB and the moving average. Bulls and short covering on the PB could not push price through the MA.

C) Because of A and B the next PB (second leg) will likely not be a reversal because of no previous real strength coming back in. If that first leg PB would have been a deeper and stronger PB then the upcoming second leg PB might become a reversal, thus more dangerous to short and to average in with more shorts. But at the point of resumption of the second leg continued weakness is evident.

Why short a second time after locking in profit from your first scalp?

1) to compound via grabbing a real paper profit (Your first trade) then entering short again in a higher up position.

2) it is a BO of a channel (see your black channel line..you just didn’t draw the top channel line) plus it is a BO of a larger trading range that the channel is nested in. The Bo has two pushes down by the time price reaches your exit. The BO will likely see some profit taking at this point by shorts creating a PB and the second opportunity to get short after locking your first scalp profit.

3) As mentioned in A,B,C above continued weakness plus the BO South of the range, and the nested channel, breaks below the more than last 100 bars (more or less). Two legs down by your purple dot exit. Odds are after shorts taking profits two legs down we are gonna get a PB then a resumption south. So, I would have no qualms about shorting again and adding to that short during the second PB after your purple dot exit. However, IF that PB were to morph into a strong reversal I would exit all short positions, double up and go long.

 

[SimpleMeLike]

Good scalp. Now with the pb you have an opportunity to short again and average down by adding to your new short if the PB continues. Thus on entering again short at the pb you will basically be compounding your profits because you grabbed your profits on the first scalp then on the pb to your first entry (that you exited with profit at your purple dot) you have now the opportunity to short again at your first blue dot entry. So you locked in that paper profit at your purple dot, price goes back up and you short again higher up from your purple exit. In my view if you enter short a second time during the PB (even “averaging in” as that second short moves against you) you are just setting yourself up for compounding your profits!

Thank you so much volpri for the detailed explanation.

It took a few times for me to read it through and comprehend.

https://www.tradingview.com/x/AZY63J2f/ here is how price action played out

Question:

1. Are you suggesting to re-enter the trade after the first scalp (enter blue dot, exit purple dot), with a limit order at first entry and exit at puple dot again as shown in the link? If so, I can agree with that because its high probability this PB after my first exit will atleast extend back down to my purple dot again for another scalp?

 

[SimpleMeLike]

Good scalp. Now with the pb you have an opportunity to short again and average down by adding to your new short if the PB continues. Thus on entering again short at the pb you will basically be compounding your profits because you grabbed your profits on the first scalp then on the pb to your first entry (that you exited with profit at your purple dot) you have now the opportunity to short again at your first blue dot entry. So you locked in that paper profit at your purple dot, price goes back up and you short again higher up from your purple exit. In my view if you enter short a second time during the PB (even “averaging in” as that second short moves against you) you are just setting yourself up for compounding your profits! Because the move south will likely resume. Why?

A) price breaks south of your black channel line and the first PB does not close the gap and price does not go back into the channel so the channel line BO has FOLLOW THROUGH.

B) The PB after the first leg down consisted of 3 bull legs then price resumes south. There is a gap between the highest point of the PB and the moving average. Bulls and short covering on the PB could not push price through the MA.

C) Because of A and B the next PB (second leg) will likely not be a reversal because of no previous real strength coming back in. If that first leg PB would have been a deeper and stronger PB then the upcoming second leg PB might become a reversal, thus more dangerous to short and to average in with more shorts. But at the point of resumption of the second leg continued weakness is evident.

Why short a second time after locking in profit from your first scalp?

1) to compound via grabbing a real paper profit (Your first trade) then entering short again in a higher up position.

2) it is a BO of a channel (see your black channel line..you just didn’t draw the top channel line) plus it is a BO of a larger trading range that the channel is nested in. The Bo has two pushes down by the time price reaches your exit. The BO will likely see some profit taking at this point by shorts creating a PB and the second opportunity to get short after locking your first scalp profit.

3) As mentioned in A,B,C above continued weakness plus the BO South of the range, and the nested channel, breaks below the more than last 100 bars (more or less). Two legs down by your purple dot exit. Odds are after shorts taking profits two legs down we are gonna get a PB then a resumption south. So, I would have no qualms about shorting again and adding to that short during the second PB after your purple dot exit. However, IF that PB were to morph into a strong reversal I would exit all short positions, double up and go long.

Thanks volpri for your write up. Good conversation.

In regards to averaging in, I can see some logical reasoning for me to try and average in trades for a better position in a trade I already know have a high probability of a win.

I only trade 1 contract.

For example, it makes sense for the trade below to average in (1 additional contract) after Buy Stop entry at blue dot (profit target at purple dot, stop loss at orange dot). Price goes against me a bit.

https://www.tradingview.com/x/Y0GV3QD4/

For this case of 2 contracts and average in at red dot and exit both contracts at purple dot.

https://www.tradingview.com/x/uk16lpvv/

So yes, I can see the purpose of averaging in with my case, as I like to trade with contract for the time being, but when I enter positions price does go against me, good time to average down.

 

[volpri]

Thank you so much volpri for the detailed explanation.

It took a few times for me to read it through and comprehend.

https://www.tradingview.com/x/AZY63J2f/ here is how price action played out

Question:

1. Are you suggesting to re-enter the trade after the first scalp (enter blue dot, exit purple dot), with a limit order at first entry and exit at puple dot again as shown in the link? If so, I can agree with that because its high probability this PB after my first exit will atleast extend back down to my purple dot again for another scalp?

That is exactly what I am suggesting. But I would be adding multiple shorts during the pB. That is, I would let price retrace 1 or 2 points and enter short again. Then add to that initial short entry averaging in again short when it moves against me a second time, another point or two. Finally, I would then add short again another point or 2 higher. Then I would wait for a break south and exit below my first entry short. I would be building a short position during the PB. My exit of this second short position would be around your second purple dot.

However, since you are trading one contract at a time you would probably want to wait until you saw some weakness in the pb. That red bear bar with your entry (blue dot) near the top of it shows some weakness so ok to show short there at your blue dot or even the top of the next bar which was a bull bar.

Then I would certainly be going long 9 bars past your second purple dot on the close of that big green bull bar that went way above the MA. I would be betting that it would continue up a little more after that strong close, for at least a good scalp.

 

[SimpleMeLike]

That is exactly what I am suggesting. But I would be adding multiple shorts during the pB. That is, I would let price retrace 1 or 2 points and enter short again. Then add to that initial short entry averaging in again short when it moves against me a second time, another point or two. Finally, I would then add short again another point or 2 higher. Then I would wait for a break south and exit below my first entry short. I would be building a short position during the PB. My exit of this second short position would be around your second purple dot.

However, since you are trading one contract at a time you would probably want to wait until you saw some weakness in the pb. That red bear bar with your entry (blue dot) near the top of it shows some weakness so ok to show short there at your blue dot or even the top of the next bar which was a bull bar.

Then I would certainly be going long 9 bars past your second purple dot on the close of that big green bull bar that went way above the MA. I would be betting that it would continue up a little more after that strong close, for at least a good scalp.

Thank you Volpri for the response. I will give this average in a try this week, but only 2 contracts per position at time. I see how it can help me. And I definitely took the long trade at bar 9 for a scalp.