And I am moving ever closer to been a scalper. I don't know if it is good or bad but that seemed to be the evolution.
Techniques for Day Trading the ES, NQ, YM, MES, MNQ, and MYM
- Thread starter volpri
- Start date
Based on one of your previous posts, I assume you mean a la volpri, complete with averaging in and Martingale?
No, I couldn't make averaging in and Martingale worked for me.
As a way to pay forward, let me share it with all of you:
The key to my "success" is what @volpri said:
Give yourself enough room in your stop loss to accommodate the typical buy/sell push and get out when it is in your favor.
My approach is so simple it is laughable:
1. I used to trade continuously, trying to catch a "run" but now am very selective.
2. First I identify the rough order of price excursion and establish my stop loss and profit exit.
3. then I identify a set up, and enter.
4. Typically the price will likely move up/down within a short time frame around the entry point with a spread of around the predetermined rough order of price excursion,
5. I exit when the movement is in my favor. No exception.
This gave a very high win rate but profit per trade is very modest, just like scalping.
I paper traded using this approach for 1 week, got very high win rate (>80%) and low losses per losing trade, profitable everyday. Will continue for a few more weeks and if confirmed, may go live using this.
I think I am taking advantage that stock price is almost Markov, each price is independent of the past history and will likely move up/down with equal probability. I waited and only selected the outcome in my favor to exit.
With an 80% win rate, and approximating transaction costs, since you are making a little bit of money, it sounds like you are trading with an average risk:reward of 3:1 (or thereabouts), which, to my way of thinking, is about right for that type of scalping.
Glad it's working out for you in SIM. And if it ends up making money with real $, it's not laughable.
Thanks for the breakdown.
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It amazes me how long, if ever, it takes people to realize just one way, how to make (serious) money trading.
No picking tops/bottoms. No huge drawdowns. No drawdowns lasting hours/days/weeks/months.
Congratulations @ironchef!
Evolution, based on my experience, suggests your next hurdle will be the discipline of NEXT itself.
And don't forget to have fun too!
There are several take away from my experiments:
1. @volpri's scalping works.
2. Looking back, @VSTscalper's 1+ tick scalping works.
3. My original day trading method, using more traditional trend following and "let profits run" also works.
4. I am sure there are many other methodologies that work just as well.
When I re-read Market Wizards & New Market Wizards, I realized no two day trading market wizards traded exactly the same way.
The main take away is one has to develop a method that fits one's personality, risk tolerance... and stick to it. No one can give you your secret source,, you have to find it yourself. Of course having someone generous like @volpri helps.
1. @volpri's scalping works.
2. Looking back, @VSTscalper's 1+ tick scalping works.
3. My original day trading method, using more traditional trend following and "let profits run" also works.
4. I am sure there are many other methodologies that work just as well.
When I re-read Market Wizards & New Market Wizards, I realized no two day trading market wizards traded exactly the same way.
The main take away is one has to develop a method that fits one's personality, risk tolerance... and stick to it. No one can give you your secret source,, you have to find it yourself. Of course having someone generous like @volpri helps.
Thank you sir.
Yes, it is fun for this old dog to learn some new tricks.
It is really not about money because I can make money trading options, it is about conquering past failures and having fun doing it.
Dear Volpri,
Wish you all best wishes.
Below is my trade in previous day when news release. I want to capture as much as possible for you to easier to see the context.
In the trade no.2, my point of view is: after CPI news, the price create a wide TR and then BO, then the BO failed and will return to the previous trading range. So, I wait for signals and then short at top of the previous TR (create by the long bar and 17 bars later after the new). However, the trade was failed and I got stoploss.
My question is:
- Is my view of the context the market is correct or not? (news release -> TR -> BO failed and goes below 20 EMA, price break down 2 push up -> go short) ?
- In your point of view, after the CPI new release, where you will enter the trade and the reason?
I'm still in the learning process so your view and comment do a great favor for me. I understand that your schedule is quite busy, and I appreciate any time you can spare to address my query.
Thanks a lot,
Wish you all best wishes.
Below is my trade in previous day when news release. I want to capture as much as possible for you to easier to see the context.
In the trade no.2, my point of view is: after CPI news, the price create a wide TR and then BO, then the BO failed and will return to the previous trading range. So, I wait for signals and then short at top of the previous TR (create by the long bar and 17 bars later after the new). However, the trade was failed and I got stoploss.
My question is:
- Is my view of the context the market is correct or not? (news release -> TR -> BO failed and goes below 20 EMA, price break down 2 push up -> go short) ?
- In your point of view, after the CPI new release, where you will enter the trade and the reason?
I'm still in the learning process so your view and comment do a great favor for me. I understand that your schedule is quite busy, and I appreciate any time you can spare to address my query.
Thanks a lot,
@volpri scalps you swing.
Scalping as a general rule only works if one has the skills to recognize
the entries and can manage their emotional response when it goes against
them. In a trading range, scalping is easier because if your entry goes against
you, usually its not going far and you can scale into a bigger winner
In a breakout condition however, inexperienced scalpers are going to take a beating
because they do not recognize the condition soon enough to get out and minimize
losses. The result is that one big loss outweighs the small winners
In my experience, if you want to make a living at this, (eventually) you have to
have the skills to recognize WHEN to scalp and when to swing (and how to manage
both types of trades
the entries and can manage their emotional response when it goes against
them. In a trading range, scalping is easier because if your entry goes against
you, usually its not going far and you can scale into a bigger winner
In a breakout condition however, inexperienced scalpers are going to take a beating
because they do not recognize the condition soon enough to get out and minimize
losses. The result is that one big loss outweighs the small winners
In my experience, if you want to make a living at this, (eventually) you have to
have the skills to recognize WHEN to scalp and when to swing (and how to manage
both types of trades
