The Evolution of an E-mini Trader

qwik,

Excellent post, as usual. Nice to have you back, been too long...

Hopefully the Trading Gods are treating you well. :)
 
Lots of good posts this weekend. Sorry I didn’t get back sooner, but we’re looking to move into larger quarters, so I have my own office, which will help with one of my biggest gripes, distractions.

Note on stops, which I believe are the most important part of a trading system, even more important than entries, imho. I keep tight stops (although not this morning). My style is scalping, or so I think. My eyes were opened when I did the MAE (thanks to AAA, AllenZ, and vulture: starting at pg. 37) several pages ago, and found what I found. It is in the back of my head, and will be drawn on at a later date, or maybe tomorrow. I gotta keep separate things separate, or I will go bonkers.

gotrader
Some liken the S & P emini to war, but to me it’s more like poker verging on a soap opera. Gauging the mood of the character is the first step in adjusting stops. Whether its "Chop," "Smooth Trend," "Green Scream," "Ping Pong," "Melt-up or Down," all determine a stop's intrinsic risk/reward "weighting,” whether set monetarily or on a market structure basis. The latter is better, since it is based on objective price action and character of the market; the former is worse typically based on the tolerance of the trader. Price usually always returns; you do get a second pull back entry opp. or a level to reverse quickly, unless the momo is pure blow and go. One usually knows if s/he's right or wrong...right away. And if you entered on good signals, and it goes against, just reverse because, no doubt others acted just like you..its a race to reverse...why get buried, when you can take the move?
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Gotrader, I like your descriptions of the moods of the day. And, I have been doing my stops monetarily because of the scalping style I want to trade. I agree that price returns, and you usually get a second opportunity to enter. What I try to do is wait for that second time to put in my order. As for reversing quickly, I see that happening a lot, but I do not do it, just like I do not chase. Thanks for contributing.


qwiktrade
Huios..

just a couple notes on your trading.. first, id like to say that i enjoy your journal.. second, i think you are wasting your time.. i dont want to be offensive.. im just telling you what i learned by losing many thousands of dollars.. you have too many setups.. you dont need 5.. you need 1 at this point.. you are better off trading one setup that you know VERY well.. than trading 5 that you are trying to learn about.. look back at your trades, what setup has given you the best R/R and occurs at least once or twice a day? thats the one you should focus on.. the illusion of the game is that there is always something you "should" have seen or some different way that you "should" have interpreted market action.. having too many setups will cloud your judgement on all of them.. the only order in the market is your control over what you do.. and you wont gain control when you have so many ideas floating around in your head.. so narrow it down.. third.. remember always that this is a game of expectancy.. if you expect 60% of your trades to come out winners, then remember to expect 40% to come out losers.. just because a trade goes against you doesn’t mean something is wrong.. if you manipulate your setup every time you get 3 stops in a row you are going to drive yourself nuts and go broke.. you will be under the illusion that whatever you changed made the difference in the next trade that goes in your favor, when you might have actually hurt your expectancy over the long term..

good trading.. oh, btw.. i noticed your signature line.. have you ever read Jack Winters book "The Home Coming"?

-adam
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Quiktrade, this is a great post. I really thought I could trade 5 setups. My rational was that three of the 5 happen in the first hour, and if I miss one, I can get one of the others, and what usually happens is (like this morning) I screw up on the first (ie took too big of a loss) and it gets me out of sorts, and then I miss, or screw up the remaining setups. My best trades by far has been the “Trend Retracement” setups. I am going to only trade that for the next two weeks, and use the 5 min for my setups, but still look to the 1 for my triggers, once I’m triggered, I may just shut down the 1.

I’m glad you enjoy The Evolution, I enjoy (usually) writing it. And no, I never read Winters book, but I’ll skim it next time I’m at B&N.

liltrdr
Linda Bradford Raschke has many setups that are already backtested and show an edge
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Everything from LBR’s website that can be printed is, and I review it at least once a month. Several of my setups are “derived” from her. Was in her monthly “Free Day” last month, but something happened with the server, and I never got reconnected. There are no more free days, as per Chartwiz (?) who is a co-host in her chat. He was in the ET chat for several weeks, this was right before I left due to me being too distracted.


NihabaAshi
…. why you need to follow the 1min chart or post charts of your trades here at ET via 1min charts… If your reply is that your just looking at the 1min chart for a possible improved entry/exit...then that means the 1min chart is part of your trade setup. ……And those trade setups?……

Note: I had re-emphasized a few comments made by others in your journal thread just to make sure you it has a chance to sink in on you :)
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N, didn’t mean to chop up your post, but I did. My setups are based on the 5 minute with the 1 minute used for the trigger. I figured today my stops are based on the 1 minute (loosely) also. I believe I am screwing something up here, but not sure what it is. Only using one setup the next few weeks, like previously mentioned to Quik. I believe I am just going to try the 5 minute for setups, triggers, and stops. Been watching the market today based on this thinking, ie trend retracement setups based on the 5 min, with stops based on the 5 min also. Interesting. And yes, some things are sinking in.

hardcash
just one tactical thing on entry. if you watch 1min, you can see, that the market is always ticking back and forth...if you want to go long, enter when market is ticking back with a market order (and vice versa). it is a good exercise, cause it feels "not right"...
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That is what I have been trying to do at different times. You are right, it does not “feel right” at all.

Dizzyspell
are you getting confused yet by everybody’s different ideas. Not really a good environment to be learning from I suppose.
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It’s called the wheat and the chaff. Just gotta separate it out. I realize, especially after this last month, that there are just as many different ideas out there as traders. The one that is right for me is the one that is right for me. I need to find that out for myself, just hope I don’t go broke before that happens!!!! A wise man learns from others mistakes, a foolish one has to learn from his own. Not sure which boat I’m in right now.

I’d be interested in seeing your chart for today, with some of your trades posted, if you don’t mind.
 
I am trading a different style tomorrow. Not looking at the 1 min at all. Only the 5 and larger timeframes. Only trading one setup, the trend retracement, and basing the setups on the 5 min chart. Stops will be based on the chart and price action, instead of # of points. If the risk is too large, greater than 1% of account equity, I will pass on the trade, and wait for another.
 
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