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

[SunTrader]

Because shorting in TR PA has high probability trades shorting in top 1/4 and even average scaling in on FBO’s and high probability doing the opposite at the bottom. In bottom 1/4 going long and averaging down on FBO. Why is this higher probability? Because 80% of BO attempts top or bottom of a range FAIL and prive will head back down within 5 bars or so towards the range or even down into the range for good scalping. But PA has to be going sideways for 20 bars or more to be called an establish range? Why is this? Because tge market has inertia and tends to keep doing what it is doing at least for a while longer until it doesn’t and there is a successful BO at takes price out of the TR and keeps it there. That is So exactly what happened after that large bear bar that I covered. For 10 bars after that bar the BO held. So, I would have changed my tactics to BO trading tactics (bearish). I didn’t trade any of that (must have been busy) but I am explaing the vharts PA and how I trade that type of PA.

Use TR scalping techniques in a trend and a trader can lose over and over again. The trend has inertia too and if one tries to scalp like it is a range kiss money goodbye.

That said I do scalp in trends too and reversals but use different techniques. Broad ranges will have trends in them and also nested ranges and channels. They can be scalpedbon smaller TFs if one has a mind too.

That reversal up after tge opening bear move …well the later 1/2 or so of that reversal later was clear seen to be tge first leg up in a developing TR. But a trader doesn’t know that until more than 20 bars later bar 10:10 PA bottoms after retracing 50% of the opening reversal up. Then on bar 10:15 it starts heading back up towards the previous high. This is TR behaviour. Hence tge reason I begin shorting as it nears the top of a TR box I can now draw. Inertia inertia…FBO’s 80% chance all BO attempts will now fail. Price is going to keep going side ways. At least for a while.

So, I don’t get greedy. I scalp and cover in top half of a drawn TR box and go long in lower 1/4 and exit those longs in bottom half (sometimes 1/3). I DO NOT TRY to capture all the TR movement. Because as a scalper I believe in locking in profits before they dissipate into thin air and I use what I call FOT or frequency of trades. I had rather be trading than waiting for the move to the bottom or top of the TR to capture the bigger move. I use high win rate and FOT to my advantage.

Maybe this will explain my perspective and why I do what I do? Maybe it will answer your questions?

Thanks but was just looking for answer as to why have a range and not make full use of it.

I understand it is hard to say why do this or that other than pointing to specific chart pics and explain each as they had happened. Of course trading live decisions have to be made.

Been around the block myself a time or two ... decades plus.

Carry on.

 

[volpri]

Dear Volpri,
Thanks for your sharing.l I just wondering about the stoploss. In some case, you continue to add (average down) into the loss position. In another case, you take the stop very fast. So, How and when identify the approriate stoploss for the trade in PA?
I read through Al Brooks books but besides the stoploss must be wider, there is no specific mention about the way to place a stoploss in his book.

Thanks for your answers.

Usually there can be more than one ok place to put a SL. I usually place it out side the previous swing low or swing high. But will sometimes place it back 2 swing lows or swing highs. Volatility of the moment has something to do with where I will place it.

TR SLs can be a bit more tricky. I will place far enough out of the TR top or bottom where I don’t think it will be hit. That may or may not be outside a swing low or swing high and it too depends on volatility at the moment.

Strong reversals like that one in the chart above that we have been discussing after the open as it is trading up my first SL is below the starting point (low)of the reversal bar (bar 9:00). After the PB and it takes off on bar 9:35 and I place a long trade I will place my SL 2 or 3 ticks under bar 9:20. In strong reversals or trends i don’t tighten SL but usually widen them especially if I am averaging down. I just know that big moves can have deep PB. I know tharpt sounds wrong and opposite of what many traders do but proper SL is important or one will bleed their account by a thousand paper cuts so to speak. I want to give my trade a chance to work. That said much of the time I am upside down on initial R:R but often find actual risks was much less when it did turn and go my way. So after a trade is over I consider only my actual risk plus 1 tick when I figure my R:R and many times I will be 2:1 or 5:1 and occasionally 10:1 or 12:1 (reward to risks) based on actual risks and actual profit.

The way I handle it if my wide SL looks like it it going to get hit before it does I will just take the loss then double and reverse and in short order get back my loss and not fight the whole session trying to get back a loss. I also consider how far the PB that is approaching my SL has traveled in distance against the previous move. 70% and I am ready to ditch the trade.

 

[Trader_as_a_job]

Dear Volpi,

Thanks for your well response. You did a great favor from me. As you did mentioned in many post, the most importance thing before engaged into a trade is to define the phase of the market (trend, TR, channel) and then use the appropriate strategy. However, I usually freak out and mixed between the phase of the market.

As yesterday, when trading for us500.cash (my broker do not have e-mini only have this indies). I think that the market was in trend phase. So, for the first break out, I sell 2.5 contracts (big size in compare with my account). Then when market PB, I freak out , try to average down by 0.5 contract. Finally I got out with a small lost.

Dear Volpri,

Could you please comment in my trade? I knew my 1st entry was a bad one (way big than normal size 2.5 vs 0.5). I feel like I tried to scalp but it turn out a swing trade. The closed all entry with small loss when market goes according to plan also a bad decision. In case if it was you, which entry will you take? And when you will exit?

Thanks alot and wish you a nice day!

 

[Trader_as_a_job]

New trade jump in today, now I'm not lucky to get out safe:
(below is 5 minute chart)
Join market at selling 2.5 contracts at a tight trading range (my mistake)
Sell more but not reasonable only 1 point above (5081.5 vs 5080.5 original entries)
Have to get out with a loss cost me 1 week of profit at 5093.5 (

1. My mistake is: (again) too big volume so I can not average down properly
2. Have 2 chance to come out of the trade and 0 loss but reject
3. Late in get out of the trade, a strong strength with no tail
4. At 5093.5, try to revenge by reverse into buy, but feel my mental stage is not good to manage the trade -> get out immediately with loss.
I have no one to blame but me

 

[maxinger]

New trade jump in today, now I'm not lucky to get out safe:
(below is 5 minute chart)
Join market at selling 2.5 contracts at a tight trading range (my mistake)
Sell more but not reasonable only 1 point above (5081.5 vs 5080.5 original entries)
Have to get out with a loss cost me 1 week of profit at 5093.5 (

1. My mistake is: (again) too big volume so I can not average down properly
2. Have 2 chance to come out of the trade and 0 loss but reject
3. Late in get out of the trade, a strong strength with no tail
4. At 5093.5, try to revenge by reverse into buy, but feel my mental stage is not good to manage the trade -> get out immediately with loss.
I have no one to blame but me


View attachment 335428

What a strange trade.
Why did you do counter-trend trading?!

I guess you traded during the European session.

For the past few hours, the Asian Index futures (Nikkei, Taiwan,
Hangseng, India Nifty ...)were up strongly.

NQ, ES were up during the European session.

 

[Trader_as_a_job]

What a strange trade.
Why did you do counter-trend trading?!

I guess you traded during the European session.

For the past few hours, the Asian Index futures (Nikkei, Taiwan,
Hangseng, India Nifty ...)were up strongly.

NQ, ES were up during the European session.

in my view, The 5 minute chart is a PB of the down trend (US500 down for the whole day yesterday), so, the big trend (daily) is bullish but for 5 minute, I think it was down for 1,2 more days. So, I planned to sell. As in the picture, the yellow is down, so a PB then go south is my view. I sell as the price break the trendline.

 

[maxinger]

in my view, The 5 minute chart is a PB of the down trend (US500 down for the whole day yesterday), so, the big trend (daily) is bullish but for 5 minute, I think it was down for 1,2 more days. So, I planned to sell.

That is not the way to trade.

All the best mister

 

[Trader_as_a_job]

I

That is not the way to trade.

All the best mister

updated the chart above. As you see, in 5 minute, the big trend is down. :")

 

[maxinger]

I

updated the chart above. As you see, in 5 minute, the big trend is down. :")

I give up explaining it to you.

 

[SunTrader]

View attachment 335399 Dear Volpi,

Thanks for your well response. You did a great favor from me. As you did mentioned in many post, the most importance thing before engaged into a trade is to define the phase of the market (trend, TR, channel) and then use the appropriate strategy. However, I usually freak out and mixed between the phase of the market.

As yesterday, when trading for us500.cash (my broker do not have e-mini only have this indies). I think that the market was in trend phase. So, for the first break out, I sell 2.5 contracts (big size in compare with my account). Then when market PB, I freak out , try to average down by 0.5 contract. Finally I got out with a small lost.

Dear Volpri,

Could you please comment in my trade? I knew my 1st entry was a bad one (way big than normal size 2.5 vs 0.5). I feel like I tried to scalp but it turn out a swing trade. The closed all entry with small loss when market goes according to plan also a bad decision. In case if it was you, which entry will you take? And when you will exit?

Thanks alot and wish you a nice day!

The first trade you had the right idea, but don't mention where your stop is located. If say your stop was above swing pivot high 5091-5092-5093 area then you would be right to hold on. Note personal preference I only add when price is going in my direction, not against. Then once it broke again you needed to have a little more patience. Easy for me to say I know. We all do that sometimes. But winners have to be maximized when they can be.

Second trade was just a bad one. I don't use squiggly MA lines with rare exception inside ROC indicator (which is itself based on close versus close x nbr bars ago, so no averaging). But if I did use MA (as on chart pic) it would tell me to exit short trade fast once price was moving higher away from it.

Volpri is a good guy and will respond but likely is tied up again so it might be a day or two or more.

HTH