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The E-mini Adventures of Brutus
- Thread starter Brutus
- Start date
Originally posted by Brutus
...
Trade 1:
I jumped the gun on my first trade this morning. I was looking for a reversal based the time of the morning. The market tends to reverse course 15 to 20 minutes after the open. Probably should have waited to enter near the resistance at the previous days high of 946...
Hi Brutus,
I too use a few high probability time based strategies in the first hour of trading but only with confirmation from my favorite indicators (Japanese Candlesticks, Bollinger Bands).
Here's my question...what indicators do you use to confirm your reversals during certain time slots in the morning?
When I looked at your Short Entry @ 9:49:10pm est via the 1min chart (I saw this also and was watching it too) and then looked for confirmation via the 3min chart...it was a no go.
Why?
Compare today's 3min chart with the 3min chart on August 6th, Tuesday. There's strong similarities and reasons why you should not take this type of trade (at that particular time) with similar price patterns.
Just remember this...that particular time slot I lean very heavily upon the 3min chart, Candlesticks and bollinger bands to confirm my 1min chart entry.
Doing this keeps me out of some bad trades in that first 30 mins of trading in keeps my win ratio very high.
NihabaAshi
Originally posted by NihabaAshi
Hi Brutus,
I too use a few high probability time based strategies in the first hour of trading but only with confirmation from my favorite indicators (Japanese Candlesticks, Bollinger Bands).
Here's my question...what indicators do you use to confirm your reversals during certain time slots in the morning?
When I looked at your Short Entry @ 9:49:10pm est via the 1min chart (I saw this also and was watching it too) and then looked for confirmation via the 3min chart...it was a no go.
Why?
Compare today's 3min chart with the 3min chart on August 6th, Tuesday. There's strong similarities and reasons why you should not take this type of trade (at that particular time) with similar price patterns.
Just remember this...that particular time slot I lean very heavily upon the 3min chart, Candlesticks and bollinger bands to confirm my 1min chart entry.
Doing this keeps me out of some bad trades in that first 30 mins of trading in keeps my win ratio very high.
NihabaAshi
NihabaAshi,
I checked out the August 6th chart and you're right they are very similiar. I think trading mornings like the 13th and 6th can be very profitable if one recognizes the trend early.
As far as my short trade at 9:49:10pm est goes, I didn't use any indicators. I just based the trade off the time and the fact that it looked to me that a top was forming, a slow rounding top. The market proved me wrong on that call however.
The only real indicators I use are candlestick formations (if you call that an indidicator) and sometimes moving averages. I don't ever use a 3-min chart, why do you use a 3-min chart?
Brutus
Originally posted by Brutus
NihabaAshi,
...why do you use a 3-min chart?
Brutus
Hi Brutus
I use the 1min, 3min, 15min and daily charts.
As for my selection of the 3min interval or any other time interval...
in the beginning of my trading career I played around with many different intervals until I found the ones I was comfortable with.
Sorry if I implied the 3min chart had some sort'uv advantage via my saying I lean very heavily upon it.
It has no advantage nor disadvantage over any other interval...I just like them because it seemed like a good number between the 1min and 5min chart.
NihabaAshi
Brutus,
Thanks for posting a well-written journal. If you've followed some of the other journals, you probably know what I'm going to offer in the way of advice, but here goes anyway.
1. Stops. Too close. 4 points is nothing on the NQ. Do you have any data or backtesting that confirms that most of your trades that go against you by 4 points will be losers? Otherwise, it's just what you're comfortable losing. It is a fallacy to think you can control your losses with stops. You control the loss on one trade, but cumulatively too tight stops destroy your win ratio.
2. Profit target. Why? It is hard to make money cutting your profits short like this. You should instead be always looking for the big move. But don't be foolish. If the market has made a big, sharp move and looks like reversing, take your profits. Similarly, if you have a few points in hand and the market is chopping, maybe going flat is a good idea. But not just because it has moved in your favor.
3. Missing profit target. You had a trade that just missed your target, then you ended up taking the full stop loss on it. Not good. Once a trade has gone into "profit", meaning it has gotten past normal noise, NEVER let it go to a loss. Remember the movie "Top Gun" where Maverick kept repeating "Stay with my wing man"? You keep repeating "Protect breakeven."
4. Trade frequency. You seem to have resisted the urge to trade 45 times a day, which many newbies seem to have. There are usually no more than 3 or 4 good set-ups a day.
5. Keep your powder dry. I like the fact that you are keeping 2/3 of your assets in reserve. Make it your goal not to ever have to dip into that money.
6. Trade set-ups. Do you have any or is it just seat of your pants? I think most of the experienced traders here would say it is virtually impossible to make money just going by your gut or whatever you want to call it. This includes such well-known strategies as, "boy they look strong today", or the famous, "they can't go any higher". All you need is a couple of patterns or set-ups that work some of the time and you can do quite well.
Good luck.
Thanks for posting a well-written journal. If you've followed some of the other journals, you probably know what I'm going to offer in the way of advice, but here goes anyway.
1. Stops. Too close. 4 points is nothing on the NQ. Do you have any data or backtesting that confirms that most of your trades that go against you by 4 points will be losers? Otherwise, it's just what you're comfortable losing. It is a fallacy to think you can control your losses with stops. You control the loss on one trade, but cumulatively too tight stops destroy your win ratio.
2. Profit target. Why? It is hard to make money cutting your profits short like this. You should instead be always looking for the big move. But don't be foolish. If the market has made a big, sharp move and looks like reversing, take your profits. Similarly, if you have a few points in hand and the market is chopping, maybe going flat is a good idea. But not just because it has moved in your favor.
3. Missing profit target. You had a trade that just missed your target, then you ended up taking the full stop loss on it. Not good. Once a trade has gone into "profit", meaning it has gotten past normal noise, NEVER let it go to a loss. Remember the movie "Top Gun" where Maverick kept repeating "Stay with my wing man"? You keep repeating "Protect breakeven."
4. Trade frequency. You seem to have resisted the urge to trade 45 times a day, which many newbies seem to have. There are usually no more than 3 or 4 good set-ups a day.
5. Keep your powder dry. I like the fact that you are keeping 2/3 of your assets in reserve. Make it your goal not to ever have to dip into that money.
6. Trade set-ups. Do you have any or is it just seat of your pants? I think most of the experienced traders here would say it is virtually impossible to make money just going by your gut or whatever you want to call it. This includes such well-known strategies as, "boy they look strong today", or the famous, "they can't go any higher". All you need is a couple of patterns or set-ups that work some of the time and you can do quite well.
Good luck.
Sorry, but I gotta say that for some of your points there is a diametrically opposed point... it all boils down to identifying a style that the trader is comfortable with... that last point is, in my view, a key to trading success...
Brutus,
Thanks for posting a well-written journal. If you've followed some of the other journals, you probably know what I'm going to offer in the way of advice, but here goes anyway.
1. Stops. Too close. 4 points is nothing on the NQ. Do you have any data or backtesting that confirms that most of your trades that go against you by 4 points will be losers? Otherwise, it's just what you're comfortable losing. It is a fallacy to think you can control your losses with stops. You control the loss on one trade, but cumulatively too tight stops destroy your win ratio.
Tight stops are a pre-requisite for any scalping style
2. Profit target. Why? It is hard to make money cutting your profits short like this. You should instead be always looking for the big move. But don't be foolish. If the market has made a big, sharp move and looks like reversing, take your profits. Similarly, if you have a few points in hand and the market is chopping, maybe going flat is a good idea. But not just because it has moved in your favor.
Many strategies require profit targets to work e.g. a 1:1 scalping strategy, where you either take the hit or take the profit objective
3. Missing profit target. You had a trade that just missed your target, then you ended up taking the full stop loss on it. Not good. Once a trade has gone into "profit", meaning it has gotten past normal noise, NEVER let it go to a loss. Remember the movie "Top Gun" where Maverick kept repeating "Stay with my wing man"? You keep repeating "Protect breakeven."
I agree with this point, particularly on strategies with a greater than 1:1 objective.... it is important to lock in partials in a methodical manner if you get a retrace back to appropriate levels
4. Trade frequency. You seem to have resisted the urge to trade 45 times a day, which many newbies seem to have. There are usually no more than 3 or 4 good set-ups a day.
Can't agree on this.. contingent on strategy, there may be anything from no opportunities to 100 or more for any given day... it all depends on the strategy being deployed, and this brings us back to finding the best fusion of a trader's personality with a given trading strategy...
5. Keep your powder dry. I like the fact that you are keeping 2/3 of your assets in reserve. Make it your goal not to ever have to dip into that money.
I agree with this
6. Trade set-ups. Do you have any or is it just seat of your pants? I think most of the experienced traders here would say it is virtually impossible to make money just going by your gut or whatever you want to call it. This includes such well-known strategies as, "boy they look strong today", or the famous, "they can't go any higher". All you need is a couple of patterns or set-ups that work some of the time and you can do quite well.
I fully and wholeheartedly agree with this..
Good luck.
Brutus,
Thanks for posting a well-written journal. If you've followed some of the other journals, you probably know what I'm going to offer in the way of advice, but here goes anyway.
1. Stops. Too close. 4 points is nothing on the NQ. Do you have any data or backtesting that confirms that most of your trades that go against you by 4 points will be losers? Otherwise, it's just what you're comfortable losing. It is a fallacy to think you can control your losses with stops. You control the loss on one trade, but cumulatively too tight stops destroy your win ratio.
Tight stops are a pre-requisite for any scalping style
2. Profit target. Why? It is hard to make money cutting your profits short like this. You should instead be always looking for the big move. But don't be foolish. If the market has made a big, sharp move and looks like reversing, take your profits. Similarly, if you have a few points in hand and the market is chopping, maybe going flat is a good idea. But not just because it has moved in your favor.
Many strategies require profit targets to work e.g. a 1:1 scalping strategy, where you either take the hit or take the profit objective
3. Missing profit target. You had a trade that just missed your target, then you ended up taking the full stop loss on it. Not good. Once a trade has gone into "profit", meaning it has gotten past normal noise, NEVER let it go to a loss. Remember the movie "Top Gun" where Maverick kept repeating "Stay with my wing man"? You keep repeating "Protect breakeven."
I agree with this point, particularly on strategies with a greater than 1:1 objective.... it is important to lock in partials in a methodical manner if you get a retrace back to appropriate levels
4. Trade frequency. You seem to have resisted the urge to trade 45 times a day, which many newbies seem to have. There are usually no more than 3 or 4 good set-ups a day.
Can't agree on this.. contingent on strategy, there may be anything from no opportunities to 100 or more for any given day... it all depends on the strategy being deployed, and this brings us back to finding the best fusion of a trader's personality with a given trading strategy...
5. Keep your powder dry. I like the fact that you are keeping 2/3 of your assets in reserve. Make it your goal not to ever have to dip into that money.
I agree with this
6. Trade set-ups. Do you have any or is it just seat of your pants? I think most of the experienced traders here would say it is virtually impossible to make money just going by your gut or whatever you want to call it. This includes such well-known strategies as, "boy they look strong today", or the famous, "they can't go any higher". All you need is a couple of patterns or set-ups that work some of the time and you can do quite well.
I fully and wholeheartedly agree with this..
Good luck.
candle,
You are right that some of my points would not apply to scalpers. My experience has been that scalping is not a viable style for off-floor index futures traders. Certainly it is easier now with the e-mini's than before, but I still have grave doubts that very many traders, particularly newbies, can make any kind of money scalping. Still, I am willing to be wrong. Anyone out there making any money scalping the futures?
You are right that some of my points would not apply to scalpers. My experience has been that scalping is not a viable style for off-floor index futures traders. Certainly it is easier now with the e-mini's than before, but I still have grave doubts that very many traders, particularly newbies, can make any kind of money scalping. Still, I am willing to be wrong. Anyone out there making any money scalping the futures?
-.5 pts, 6 round trips (2 winners, 4 losers)
Trade 1:
Got in on the pullback looking for continuation of the upward trend @ 913.5. AAA's comments about not letting a winner turn into a loser echo through my head today. I had my target limit order at 918. After I got in the trade the market continued to move up and a few trades went off at my target of 918. My limit order however was not hit. As things turned out the market reversed direction and I was stopped out for a 3 pt loss. I did bump up my stop loss by 1 point but I should have moved it more.
Trade 2:
Got short in this one looking for a break of the day's low @ 909.5. Thus my target was set at 905.0. Well in this case the market eventually moved down and traded at 905.5 but then reversed. I convinced myself that 2 close calls like this could not happen to me on the same day so I didn't move my stop loss at all. Well I guess 2 close calls can happen in one day. I was stopped out for a full 4 pt loss. Arrrgg.
Trade 3:
Jumped in on the slight pullback of the upwards move @ 913.5. Got my target price hit and was out of the trade with my first profitable trade for the day.
Trade 4:
Before I executed trade 4 I was looking to buy @ 920 but I was not able to get my price. I had an outstanding sell limit order at 926, a half point above the high for the day hanging around. Then all of the sudden the market moved up in a hurry and hit my sell order. I didn't really think this was a good trade looking at the chart but I decided to stay with it. In a matter of few minutes I was quickly stopped out. This trade had a bad feel from the start and I should have just got out early with a smaller loss.
Trade 5:
I sold a this point because it looked to my like the 935 region might provide some resistance looking at the 15 minute chart of the 12th, 13th and today. The upward trend was too strong for any resistance there (if there was any) and I was stopped out.
Trade 6:
I looked at the full chart of NQ for the day and something told that this trend had some more juice left in it so I went long @938 on the slight pullback from the high. I also had this feeling I could milk the trade for more than my usual 4.5 points and set my target at 10 pts @ 948. A couple of points below 950 where I though there might be some resistance. The market did indeed have more power behind the move and my target was hit. I never would have guessed though that the NQ would have hit 970. That upward move was rather strange because it was a straight line going up without any major pullbacks along the way. I can't recall ever seeing something like today before.
Lessons learned ...
1) Don't let a winning trade turn into a loser
2) I am more comfortable trading trend continuations than playing trend reversals at what I consider resistance levels. Trend reversal trading is probably better called picking tops and bottoms which most people will say is a no-no.
Trade 1:
Got in on the pullback looking for continuation of the upward trend @ 913.5. AAA's comments about not letting a winner turn into a loser echo through my head today. I had my target limit order at 918. After I got in the trade the market continued to move up and a few trades went off at my target of 918. My limit order however was not hit. As things turned out the market reversed direction and I was stopped out for a 3 pt loss. I did bump up my stop loss by 1 point but I should have moved it more.
Trade 2:
Got short in this one looking for a break of the day's low @ 909.5. Thus my target was set at 905.0. Well in this case the market eventually moved down and traded at 905.5 but then reversed. I convinced myself that 2 close calls like this could not happen to me on the same day so I didn't move my stop loss at all. Well I guess 2 close calls can happen in one day. I was stopped out for a full 4 pt loss. Arrrgg.
Trade 3:
Jumped in on the slight pullback of the upwards move @ 913.5. Got my target price hit and was out of the trade with my first profitable trade for the day.
Trade 4:
Before I executed trade 4 I was looking to buy @ 920 but I was not able to get my price. I had an outstanding sell limit order at 926, a half point above the high for the day hanging around. Then all of the sudden the market moved up in a hurry and hit my sell order. I didn't really think this was a good trade looking at the chart but I decided to stay with it. In a matter of few minutes I was quickly stopped out. This trade had a bad feel from the start and I should have just got out early with a smaller loss.
Trade 5:
I sold a this point because it looked to my like the 935 region might provide some resistance looking at the 15 minute chart of the 12th, 13th and today. The upward trend was too strong for any resistance there (if there was any) and I was stopped out.
Trade 6:
I looked at the full chart of NQ for the day and something told that this trend had some more juice left in it so I went long @938 on the slight pullback from the high. I also had this feeling I could milk the trade for more than my usual 4.5 points and set my target at 10 pts @ 948. A couple of points below 950 where I though there might be some resistance. The market did indeed have more power behind the move and my target was hit. I never would have guessed though that the NQ would have hit 970. That upward move was rather strange because it was a straight line going up without any major pullbacks along the way. I can't recall ever seeing something like today before.
Lessons learned ...
1) Don't let a winning trade turn into a loser
2) I am more comfortable trading trend continuations than playing trend reversals at what I consider resistance levels. Trend reversal trading is probably better called picking tops and bottoms which most people will say is a no-no.
Attachments
Originally posted by AAAintheBeltway
Brutus,
Thanks for posting a well-written journal. If you've followed some of the other journals, you probably know what I'm going to offer in the way of advice, but here goes anyway.
1. Stops. Too close. 4 points is nothing on the NQ. Do you have any data or backtesting that confirms that most of your trades that go against you by 4 points will be losers? Otherwise, it's just what you're comfortable losing. It is a fallacy to think you can control your losses with stops. You control the loss on one trade, but cumulatively too tight stops destroy your win ratio.
You're right a 4 point stop is what I am comfortable with. To me a 4 point stop loss seems to be the sweet spot. Of all the times I've been stopped out, the market usually continued going against my original position. Probably only a few times has it hit my stop and reversed. I think a 3 point stop would be too tight so I would not consider making my stop smaller. In the end I think stop placement is dependant on style of trading
2. Profit target. Why? It is hard to make money cutting your profits short like this. You should instead be always looking for the big move. But don't be foolish. If the market has made a big, sharp move and looks like reversing, take your profits. Similarly, if you have a few points in hand and the market is chopping, maybe going flat is a good idea. But not just because it has moved in your favor.
Yes, I think I should be more flexible on my targets and adjust my target to current market conditions. This is something I will slowly phase in to my trading. It is easier said than done to know when to let the profits run more
3. Missing profit target. You had a trade that just missed your target, then you ended up taking the full stop loss on it. Not good. Once a trade has gone into "profit", meaning it has gotten past normal noise, NEVER let it go to a loss. Remember the movie "Top Gun" where Maverick kept repeating "Stay with my wing man"? You keep repeating "Protect breakeven."
Yes, I have to learn to protect my gains. Check out todays trades.
4. Trade frequency. You seem to have resisted the urge to trade 45 times a day, which many newbies seem to have. There are usually no more than 3 or 4 good set-ups a day.
5. Keep your powder dry. I like the fact that you are keeping 2/3 of your assets in reserve. Make it your goal not to ever have to dip into that money.
6. Trade set-ups. Do you have any or is it just seat of your pants? I think most of the experienced traders here would say it is virtually impossible to make money just going by your gut or whatever you want to call it. This includes such well-known strategies as, "boy they look strong today", or the famous, "they can't go any higher". All you need is a couple of patterns or set-ups that work some of the time and you can do quite well.
I do have a few general setups that I am looking for in the market. Its up to my discretion however on when to act on what I see. I think descretionary trading of certain setups is the way to go.
Good luck.