How do you expect to take any real size in a trade if you are waiting for the "safest" entry? You do realize that at these moments that you are looking for, you will find the liquidity will be very poor. How are you going to compensate for this problem?
The treacherous path to $200k a year
- Thread starter coolweb
- Start date
Yes, but when the entry is so good and there is very little doubt the move will take place and go in a certain direction (intraday and with a very tight stop like Coolweb is always looking for), there usually isnt too much liquidity to take advantage of the move. You sacrifice being able to take a sizable position for an almost perfect entry.
Dont get me wrong, successful trading IS about waiting for the right setups and then being agressive when you see them, my only criticism of Coolwebs idea is he is severly underestimating just how rare it is to be able to fully size in to a trade and expect to make sizable gains with such a tight stop. The markets girate too much for this. There are those few and far between trades that do setup this way, but most of the time, the markets will whip first. If you are holding 100 contracts or 40k shares of a stock, whatever the case may be, a tight stop may prevent losses but may also not be enough breathing room to let the stock/or market make its move. Plus with taking size comes the risk of taking huge losses which is a whole nother issue altogether.
Just curious how Coolweb expects to overcome this.....if he wants to make 20k days like he is striving for.
Dont get me wrong, successful trading IS about waiting for the right setups and then being agressive when you see them, my only criticism of Coolwebs idea is he is severly underestimating just how rare it is to be able to fully size in to a trade and expect to make sizable gains with such a tight stop. The markets girate too much for this. There are those few and far between trades that do setup this way, but most of the time, the markets will whip first. If you are holding 100 contracts or 40k shares of a stock, whatever the case may be, a tight stop may prevent losses but may also not be enough breathing room to let the stock/or market make its move. Plus with taking size comes the risk of taking huge losses which is a whole nother issue altogether.
Just curious how Coolweb expects to overcome this.....if he wants to make 20k days like he is striving for.
Hello,
Even in low volatility areas for contracts
per tick liquidity are usually:
MININUM:
ES: 200 contracts on bid/ask per tick
YM: 20 contracts on bid/ask per tick
NQ: 50+ contracts on bid/ask per tick
per tick so lets say you are trying to buy 100 contracts
its done in one shot on ES (massive liquidity) everywhere. anytime. up to 200 contracts.
with NQ you can buy per tick
1696.00 (50 contracts)
1696.50 (50 contracts)
I also have scale in methods where I double contracts at each failed tests.
And also break scale in, where once breakout is broken, contracts can be bought in.
, but to give you a sense of liquidity
there is at least
3 ways you can keep adding contracts with low risk.
Right now, I only do the first entry and break scale in entry.
In fact usually the start of the trend, there is massive liquidity.
Unless you are trading 500 million+
Anything under 10-20 million is fine.
10 million is around
222 contracts ES (which flies around in time & sales every 45 seconds almostwith no change in price)
I don't count by the total numbers anymore since its bad trading thinking its worse to lose $12.50 per tick compared to $5 per tick on YM but if you think about it the rewards are 2x , just as the risk is 2x ,
I count by the tick counts, so
stops 3 ticks
target 30 ticks
scale in 4 ticks after
profit target 1/2 15 ticks after.
etc etc..
contract size is just a ++ leverage
once the strategy is proven and well.
Important thing is how many ticks you take home with the lowest risk.
Even in low volatility areas for contracts
per tick liquidity are usually:
MININUM:
ES: 200 contracts on bid/ask per tick
YM: 20 contracts on bid/ask per tick
NQ: 50+ contracts on bid/ask per tick
per tick so lets say you are trying to buy 100 contracts
its done in one shot on ES (massive liquidity) everywhere. anytime. up to 200 contracts.
with NQ you can buy per tick
1696.00 (50 contracts)
1696.50 (50 contracts)
I also have scale in methods where I double contracts at each failed tests.
And also break scale in, where once breakout is broken, contracts can be bought in.
, but to give you a sense of liquidity
there is at least
3 ways you can keep adding contracts with low risk.
Right now, I only do the first entry and break scale in entry.
In fact usually the start of the trend, there is massive liquidity.
Unless you are trading 500 million+
Anything under 10-20 million is fine.
10 million is around
222 contracts ES (which flies around in time & sales every 45 seconds almostwith no change in price)
I don't count by the total numbers anymore since its bad trading thinking its worse to lose $12.50 per tick compared to $5 per tick on YM but if you think about it the rewards are 2x , just as the risk is 2x ,
I count by the tick counts, so
stops 3 ticks
target 30 ticks
scale in 4 ticks after
profit target 1/2 15 ticks after.
etc etc..
contract size is just a ++ leverage
once the strategy is proven and well.
Important thing is how many ticks you take home with the lowest risk.
watch volume 3 min.
coolweb forgot yesterday, must be the turkey.
watch daily.
coolweb didn't forget but ZzzZzzz
sleeping
less entries
"Reviewing 2 of the trades (-1 tick) yesterday, both of them should not have been done because of bad volume action beforehand"
basically waste of my time.
Has to be the turkey. I'm a volume freak, how do you forget to watch volume is beyond me.
In business one has to filter out 100s of business opportunities to put your precious small time in the few that is worth your time/effort with the biggest market avaliable (customers).
Just like in trading, one has to filter out the bad trades so his time is spent efficiently on the trades that should matter instead of churning.
Filter filter filter.
But not over filter.
coolweb forgot yesterday, must be the turkey.
watch daily.
coolweb didn't forget but ZzzZzzz
sleeping
less entries
"Reviewing 2 of the trades (-1 tick) yesterday, both of them should not have been done because of bad volume action beforehand"
basically waste of my time.
Has to be the turkey. I'm a volume freak, how do you forget to watch volume is beyond me.
In business one has to filter out 100s of business opportunities to put your precious small time in the few that is worth your time/effort with the biggest market avaliable (customers).
Just like in trading, one has to filter out the bad trades so his time is spent efficiently on the trades that should matter instead of churning.
Filter filter filter.
But not over filter.
Today was a SPECTACULAR day. I only paper traded
but had some new edges added into my style:
I'll let you guys on a little insight of the discretionary/automatic TRADER.
coolweb: some ideas
coolweb: i was paper trading today
coolweb: discoverd some new shit
coolweb: coded that baby in tradestation
coolweb: fucking awesome
BB: what's that?
coolweb: added in some volume analysis with my
coolweb: signals
BB: volume, sounds good
coolweb: you know BB
coolweb: ist like this
coolweb: trading is sort of like driving a car
coolweb: if you are driving shitty car, you have to deal with shift stick , non-automatic windows where you got to curl up
coolweb: all that bs
coolweb: while you are driving the car
coolweb: which causes you
coolweb: to be not as quick
coolweb: you know?
coolweb: but if you are driving a good car
coolweb: you have everything automatic
coolweb: it tells you
coolweb: anti locks breaks
coolweb: it tells you, we are on cruise control
coolweb: when you press up, the windows goes up automatically
coolweb: less shit to think about
coolweb: you just worry about your driving
BB: yup
BB: understand
coolweb: you know, so like in tradestation
coolweb: i ain't doing anything like special
coolweb: i'm just adding in extra notices
coolweb: "volume is low"
coolweb: "volume is high - caution"
coolweb: simple shit
coolweb: but if you look back the charts
coolweb: how fucking insanely accurate it is , maybe like 80%
coolweb: thats the difference.
coolweb: you can't tell usually at the very moment sometimes.
coolweb: cause price moves fast man
coolweb: 10 seconds get in or you are not in at all
coolweb: to analysize twenty things is sometimes impossible
coolweb:
BB: yup, cool stuff, very good idea
coolweb: you are going to see
coolweb: a much better trader
coolweb: from me
coolweb: in the next week
coolweb:
coolweb: or this week
coolweb: REFINEMENT IS THE KEY!
BB: BB checking dictionary wtf refinement is
BB: ok gotcha mr earl
but had some new edges added into my style:
I'll let you guys on a little insight of the discretionary/automatic TRADER.
coolweb: some ideas
coolweb: i was paper trading today
coolweb: discoverd some new shit
coolweb: coded that baby in tradestation
coolweb: fucking awesome
BB: what's that?
coolweb: added in some volume analysis with my
coolweb: signals
BB: volume, sounds good
coolweb: you know BB
coolweb: ist like this
coolweb: trading is sort of like driving a car
coolweb: if you are driving shitty car, you have to deal with shift stick , non-automatic windows where you got to curl up
coolweb: all that bs
coolweb: while you are driving the car
coolweb: which causes you
coolweb: to be not as quick
coolweb: you know?
coolweb: but if you are driving a good car
coolweb: you have everything automatic
coolweb: it tells you
coolweb: anti locks breaks
coolweb: it tells you, we are on cruise control
coolweb: when you press up, the windows goes up automatically
coolweb: less shit to think about
coolweb: you just worry about your driving
BB: yup
BB: understand
coolweb: you know, so like in tradestation
coolweb: i ain't doing anything like special
coolweb: i'm just adding in extra notices
coolweb: "volume is low"
coolweb: "volume is high - caution"
coolweb: simple shit
coolweb: but if you look back the charts
coolweb: how fucking insanely accurate it is , maybe like 80%
coolweb: thats the difference.
coolweb: you can't tell usually at the very moment sometimes.
coolweb: cause price moves fast man
coolweb: 10 seconds get in or you are not in at all
coolweb: to analysize twenty things is sometimes impossible
coolweb:
BB: yup, cool stuff, very good idea
coolweb: you are going to see
coolweb: a much better trader
coolweb: from me
coolweb: in the next week
coolweb:
coolweb: or this week
coolweb: REFINEMENT IS THE KEY!
BB: BB checking dictionary wtf refinement is
BB: ok gotcha mr earl