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

[volpri]

Many traders will not trade PA like todays PA. They consider it chop. I traded from 9:48 a.m. to 11:04 A.M. Chicago time (just a tad over an hour). I bot 9 ES contracts and sold 9 ES contracts during that time period. I grossed $412.50 before commissions. I had to stop trading to work on my water well, otherwise, a lot more $$ could have been made during the RTH's session. And this with the ES basically going no where. Most of the trades were straight scalps of 1 point each. If I remember correctly on one trade I bot 1 contract long added 2 (averaging down but also martingaling) when it went against me 1 point, then sold all the contracts, at the same time, for a profit on that trade.

Today's type of price action can be traded with little risks, be very lucrative, and repeated over and over when I scalp the way I like to scalp the ES for 1 to 8 points.

 

[schizo]

Well, hindsight analysis is easier said than done. Not sure if it's a lucrative business though. Just saying.

 

[Overnight]

Well, hindsight analysis is easier said than done. Not sure if it's a lucrative business though. Just saying.

Welp, you gotta' admit. Trading 9 ES contracts at any given time takes some serious balls. Bigger balls than I have. 1 point down, -$450. But somehow it worked out.

 

[Illini Trader]

Well, hindsight analysis is easier said than done. Not sure if it's a lucrative business though. Just saying.

volpri trades live and shows many of his entry and exit points so I am not sure what you are referring to when you say "hindsight analysis".

 

[volpri]

Welp, you gotta' admit. Trading 9 ES contracts at any given time takes some serious balls. Bigger balls than I have. 1 point down, -$450. But somehow it worked out.

It was several trades all made between 9:48 and 11:04 All were 1 contract at a time. Buy one sell one. Sell one buy one. That sort of thing. Only one was 3 contracts in …three out. I guess I failed to explain that. Risk was small as volatility was not much. All trades but the one were for min scalp of 1 point, as the range was not broad. In summary, 9 contracts bot and 9 sold but not at one wack. Nine contracts over seven trades.

 

[Relentless]

Well, hindsight analysis is easier said than done. Not sure if it's a lucrative business though. Just saying.

Jealous much?

 

[volpri]

Well, hindsight analysis is easier said than done. Not sure if it's a lucrative business though. Just saying.

The charts are certainly after the fact. I can’t very well show or explain a non-existent chart can I?

Most of the annotations on the charts are done as the trades are being executed or shortly afterwards. It does slow me down being able to execute more trades because I am typing up the last trade’s annotations to explain it. In doing so I may only get 3 to 7 trades off during the entire session because of all the typing. There are 81 bars in a 5 min chart and money can be made on most all of them. However, most RTH’s sessions will render 15 to 40 trades GOOD trades but I simply cannot take them all, annotate the charts, and explain things.

Please understand, in this journal my goal is to show “how” I trade by giving clear explanations. I am certainly not telling anyone to trade the way I do. It took me a very long time to get it all down in my head to where it is second nature. I didn’t track it but I would say well …well over the famed 10,000 hours of study…forward testing…and practicing until I finally “got it”. I am not the sharpest tool in the toolbox. I gave never done any backtesting. All my testing, while learning was and is live forward testing on a SIM or with real monies, with the exception of the few times I did real paper trading by writing the trade entries and exits on paper and not executing them.

For instance, today it was 6 trades of one contract each and one trade that was 3 contracts. So a total of 7 trades RT in about one hour and fifteen minutes of trading. So, I was basically, on average, making a trade every 2 or 3 bars.

I know this chart doesn’t have the platforms execution triangles because I only traded for a little while and left to work on my water well. I didn’t make a snapshot at the time. Then the session ended. But the purpose of today’s chart is to show on a slow day, in chop, and scalping correctly can still render good profits, even on small positions.

Most of my charts show the platform executions. I don’t draw them in manually.

 

[ondafringe]

Just thinking out loud:

From my perspective, since you shouldn’t average-in beyond a reasonably number of times, averaging-in before the market moves at least two points against your last entry (not your last average price) doesn’t seem prudent, nor worthwhile, because there wouldn’t be a significant improvement in your average price.

And there is an anomaly associated with averaging-in: Although averaging-in digs you into a hole, the fastest way out of that hole is to… dig a deeper hole! That’s what Martingale does. It’s a sirens’ song. It’s averaging-in on steroids. As it digs you into a deeper hole, you get a much, much better average price and a much, much faster recovery when the market turns in your favor. Unless the market doesn’t… turn in your favor… in which case, you come face-to-face with Pale Rider, the fourth horseman of the trader’s apocalypse. <lol>

I doubt I would ever Martingale with real money, but I do think a hybrid, of sorts, might be worth trying. Something risky, but a little less risky than Martingale. A deeper hole, as it were, but not too deep. So instead of 1-1-1-1-1-1 or 1-2-4-8-16-32, you would use something like 1-1-2-2-4-4.

So taking the above into consideration, and to add to what I wrote back on Page 144 / Post 1436, here is a chart from yesterday (8/13), drawn up to show what (to my way of thinking) would have been a logical way to approach trading for that day (no I didn't trade that day), although you would have only hit the first average-in twice. Maybe my logic is faulty, so anyone who wants to slap me down, feel free to do so! <lol>

 

[steve2222]

I doubt I would ever Martingale with real money, but I do think a hybrid, of sorts, might be worth trying. Something risky, but a little less risky than Martingale. A deeper hole, as it were, but not too deep. So instead of 1-1-1-1-1-1 or 1-2-4-8-16-32, you would use something like 1-1-2-2-4-4.

There is lost of variations of Martingale. One that does what you allude to was 'devopled by a French mathmatician: Jean le Rond d'Alembert.

His Martingale variations are commonly known as D'Alembert gaming/betting strategies.

At the simplest level, wheras Martingale sequence goes 1, 2,4, 8, 16 etc until you get a win at which point you have one net winner; D'Alembert sequencing goes 1,2,3,4 etc but when you finally get a winner, say on '4' then the next trade would be '3', assuming a winner the next trade would be '2'. If you then got a loss the next trade would be '3'.

So Martingale gets you to one net win on the first win after a losing streak whereas D'Alembert will take a series of trades after a losing streak to get you back to net 1 win, but has a much drawn out compounding of contracts so keeps you in the game longer.

So if you had a series of trades as follows:

W W L L L L L L W W W L W W W W

Martingale would see the following bet sizes:

1W 1W 1L 2L 4L 8L 16L 32L 64W 1W 1W 1L 2W 1W 1W 1W= net = + 9W

D'Alembert would see the following bet sizes:

1W 1W 1L 2L 3L 4L 5L 6L 7W 6W 5W 4L 5W 4W 3W 2W = +9W

 

[MACD]

There is lost of variations of Martingale. One that does what you allude to was 'devopled by a French mathmatician: Jean le Rond d'Alembert.

His Martingale variations are commonly known as D'Alembert gaming/betting strategies.

At the simplest level, wheras Martingale sequence goes 1, 2,4, 8, 16 etc until you get a win at which point you have one net winner; D'Alembert sequencing goes 1,2,3,4 etc but when you finally get a winner, say on '4' then the next trade would be '3', assuming a winner the next trade would be '2'. If you then got a loss the next trade would be '3'.

So Martingale gets you to one net win on the first win after a losing streak whereas D'Alembert will take a series of trades after a losing streak to get you back to net 1 win, but has a much drawn out compounding of contracts so keeps you in the game longer.

So if you had a series of trades as follows:

W W L L L L L L W W W L W W W W

Martingale would see the following bet sizes:

1W 1W 1L 2L 4L 8L 16L 32L 64W 1W 1W 1L 2W 1W 1W 1W= net = + 9W

D'Alembert would see the following bet sizes:

1W 1W 1L 2L 3L 4L 5L 6L 7W 6W 5W 4L 5W 4W 3W 2W = +9W

My like is based on your statement
There is lost of variations of Martingale. One that does what you allude to was 'devopled by a French mathmatician: Jean le Rond d'Alembert. But @volpri makes a fine distinction that is not really using "Martingale" per se .