The Evolution of an E-mini Trader

[Huios]

Originally posted by vulture
...I understand that Huios likes the idea of gauging his trading against the total range between pivots or whatever the actual measurement is, but I think this is a bit of overkill......

Correct. Ultimately my long range goal is to capture half of the intraday travel range. Correct, it is a bit of overkill.

vulture
...The idea that one can capture a fixed percentage of this range is also a bit too ambitious UNLESS you are trading on bigger time frames...After all, how practical is it to measure the range of the market between two pivots if/when a trader has a scalper's risk tolerance...

So true. Combining swing wins, with scalpers risk. Too ambitious... thank you for being kind.

vulture
On the other hand, a person who is trading the swings and trading on a time frame greater than the standard 1-3-5 minute time frame is going to absorb that noise and going to have some potentially larger drawdowns, but is also in position to capture some of these bigger swings...

Yes. In my mind, this is what I was trying to do. But not using the right "skill set".

vulture
A scalper is looking to capitalize on it (noise), minimize exposure to time and price and to partial out as quickly as possible...From what I can tell Huios is trading out of positions almost the second they run against them, therefore the intra-day range might not be such a good measure...The greater the range, the more probability that the micro time frames are swinging higher as well...At that point, it becomes a bit of chance and luck that each entry will hit 2 pts of profit before it hits 2 pts stop against the entry...

Yes, a swing trader stuck in a scalpers body.



Vulture, I owe you.

 

[Huios]

Originally posted by vulture
When I say "conventional techniques" I am basically just speaking about the "consensus"...By consensus, I would say that the majority will use breakout systems intra-day or some very popular moving average and time frame to trigger trades...

This is probably still a bit vague, so maybe I should just call "conventional" everything that is written in books about what "should" work, but once you are in real time, it all comes up pitifully short...And many of the techniques or trade management concepts that "should not" work often do work...

OK, that is what I thought. What feels good, actually is not, and what causes me to pinch by butt cheeks together (pretty graphic ) is what I should be looking at.

Generally speaking.

 

[Huios]

Originally posted by vulture
the biggest risk in trading the indicies, IMO, is being stuck between time frames...Once you get into that gray area, you are filled with hesitation, apprehension and overall fear because you are not quite sure what the heck you are doing with the trade...

That, obviously (using hindsite), is what I have been doing these last 3 weeks. What I was doing in May, was using the "conventional".

vulture
It is much easier to just adapt one time frame and stick with it and make sure you know which one it is...

Yes.

vulture
And you are right that once in awhile you get the trade that immediately goes your way for a good chunk, like 4-5 handles without ever going against you...but truth is, to even find entries like that you are pretty much fading some short term momentum or fading one time frame against another, because you are catching the peaks and valleys...and to get into those types of trades you really have to be aggressive...

Yes. And I'm not sure that is what I want, right now.

vulture
The good thing about trading on a slightly larger time frame is that you are able to kind of filter the noise a bit and detach yourself from it...You can even be pro-active with it...I will often scale into trades and add to the first entry even when it is running against me, because I am trying to enter inside a specific zone of support/resistance...

Yes, I understand what you are trying to say. I was trying to do a similar thing, except I waited for the bounce in the opposite direction, and a confirmation that the short term trend has changed, ie a lower high, or higher low. My problem (other than the mixing of timeframes) is I did not know where the s/r was until after the fact. Although, I think that problem is somewhat solved.

 

[voodster]

Originally posted by easyrider
voodster

what setups do you use to insure that your R/R is better than 2/1?

I find that I can get the best R/R if I stalk a stock until I get the lowest risk entry as possible. I try to keep things simple and use most of the classic TA setups, but my discipline keeps me only taking the ones I have defined as optimal. What I mean by that is I will let a trade go even if it looks good if I happened to see the trade late - no matter how good it still looks.

Reversal patterns generally have a larger R/R. I expect to be stopped out possibly 2 times in trying to refine the entry so I keep the stops very tight (1-1.5 points). Pullback strategies give me a lower R/R trade, but I found them to have higher win/loss ratios so I often do not look to re-enter more than once if I happened to get whipped out. From there if the trade actually moves in line with my view the money management startegies I learned from Tharp keep the trade profitable or at worst a scratch. A truly optimal trade would setup so that I could add to the trade such as in in the case of a flag pattern, but those don't happen too often so I'm usually scaling out and preparing for an entirely new pattern after that.

 

[Huios]

voodster
made me wonder whether critiques are welcome...

LOL, critiques are welcome. Maybe it is that I am a nice guy, that people are being nice. My wife would conccur.

voodster
you are not achieving multiple R trades very often

I know, actually my expectancy for May was -.77. Yikes!! For every dollar I risked, I was losing 77 cents. I was going to wait for the end of June, and figure it out for the month, as I made lots of changes from May to June, but, since my "revelation" (for lack of a better word), I am going to do it later tonight, or tomorrow.

voodster
...Tharp's Peak Performance course...Phantom's ebook... defined your entry and exit rules and followed them at all times.... Does this make sense? I only say this because you didn't catch any large trends just mini scalps. If you can accept what I mean you will realize your style does not enable you to catch the real money making moves.

Have (completed) the course. Printed Phantom's book. Yes it makes sense, now!!! The big question is, what is gonna happen tomorrow?????

voodster
Lastly, I understood the Phantom's "being wrong" rule as not so strict that you should cut your loss if your position goes negative but rather to get out if the view you initially had becomes negated. Big difference there! You seem so set on keeping your stops tight because you think you're wrong that you have ended up getting shaken out only to see the market go in the direction you were in.

I understand what you are trying to say about Rule 1. One of the ways the market was proving the trade correct, was that it went in my direction right away (few minutes). I also realize that I was confusing my swing and scalp ideas of what a trade proven correct was. It (I) was all messed up!!!

And yes, getting shaken out, and the market going in my direction was very frustrating, because, most of the time, I knew what the general direction was gonna be, but, because of my "scalpers risk tolerance", I bailed.

And, like Ditch, and others, I still like the tight stops.

How is this all gonna work out? Stay tuned tomorrow for the daytime series, "How the Evolution Evolves"!

Yes, it helps. Thanks.

 

[Huios]

Cesko
More important IMO is not to switch strategies (rules) every couple of trades.

Agree, but wonder how many people do this and not even know it, like I was doing!!!

 

[sunnyskies]

Originally posted by Dizzyspell
Easyrider & Huios,

The best setups are the easy ones like breakouts from support/resistance, double bottoms/tops, triangles, conjestion, equal ranges and retracements to a level. It all comes back to keeping it simple.

Dizzy, coud you please may be post a few charts showing the trading of these patterns you mentioned. I bet everyone knows these simple patterns but how many are making money off them consistently? You know what I mean?

 

[Dizzyspell]

Sunnyskies and others,

I will post a chart later today on 2 simple trades that were in the ES on Friday both using a 1pt stop. Judge for yourselves. The trades are there everyday with tight stops.

 

[nkhoi]

Originally posted by Huios

My problem (other than the mixing of timeframes) is I did not know where the s/r was until after the fact. Although, I think that problem is somewhat solved.

Jimsy post s/r level everyday in futureroom charts1 every morning http://www.talkstox.com/forum/forumdisplay.php?forumid=13

this site also calculate them http://e-minifutures.com/dailynumbers.htm

 

[Dizzyspell]

Sunnyskies,

Here is a 5min chart of Friday's SP Emini. These were 2 pretty simple trades on the sort of things I look for. Had a total of 5 trades for three winners and two 1pt losers.

This type of trading is not for everyone but it works for me. After reading heaps of books and doing courses I have learn't one simple lesson. Keep it simple.