The treacherous path to $200k a year

Quote from BARLI:

Mike, lots of wisdom in your thought. can you please share some more relationship between price and time. I find it most important when day trading. One thing i know: if i am long and the market just sits at one spot i am gonna quit (from my experience it reverses back often)
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Without giving away the farm, I'll go through a simple analysis on the emdz5 contract for Thursday and Friday. The attached is a profile of the strong trend on Thursday. The two value areas are at ~742.60 buy side and ~745.20 sell side.

Notice Friday's collapse (chart in next post) from the sell side value area and eventual range completion into Thursdays buy side value at ~742.

The first 1/2 hour shows a sell side range completion and the rest of the day stays in value.

I suggest to everyone here that they read CME market profile. It is very useful tool IMO and much of my analysis is based on the theories presented in that text. I can provide a link if you wish.

Mike
 

Attachments

Mike, i didnt get get what you tried to show on the PDF file you presented:D thanks for the chart though. Sure, I'd love to have that link... another question: what time frame do you find works best for you? is it 30 minutes for the Opening Range or do you find some other time frames where risk is less but the chance that it'll be the low/high of the day is high...


thanks in advance
 
Here is the link to CBOT's market profile handbook:

http://www.cbot.com/cbot/docs/handbook.pdf

Its a big file - might take some time to load...

Attached below, you will find a short description of what I'm doing in the first PDF I attached. I've tweaked some stuff in my price/time range accounting so its custom to the way I like it.

I essentially assign letters to the range in every 1/2 hour time frame - this is purely a personal choice, you can use any time frame you like. Note that I trade 3 and 13 minute charts, not 30 minute charts. The 30 minute seems to work well for daily forecasting but is too slow for my style of trading.
 

Attachments

Quote from BARLI:

do you find some other time frames where risk is less but the chance that it'll be the low/high of the day is high...
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Not sure I understand what you are asking here...
 
Quote from Mike805:

Not sure I understand what you are asking here...
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I can explain this :) In the above example with Emini chart you used 30 min time frame to get a bias for the day, that means that if the low of that 30 min would be penetrated you'd get a neutral bias or would switch to bearish one... The question is have you seen some shorter time frames where the Opening Range is actually the low/high for the day? I am using all different ones, for Lean Hogs for instance it is 5 min, that means that i have lower risk than if that would be a 30 min bar(that comes usually with wider range). Please see the chart attached
 
contribution:

I've read most about the market profile stuff Mike805 posted.

While it has its merits in the idea, basically ORB methologies with volume, which I also use as well but in a different way.

but what I found funny is, Market profile is a product from CBOT.

CBOT likes to make traders think they are being informed but they do not say they'll be headfaked and commissioned out eventually :)

Has anybody ever found it funny that CBOT provides trading strategies on their site? I always thought that was odd, until I started 'getting it', and Most of the crap they post up are so BELIEVABLE IN PROFIT but in reality not even viable for long term profitability.

Basically ORB methods do not work successfully consistently unless used in conjuction with other very important ideas/strategies nobody will explain to you other then yourself.


Well I guess Market profile is good enough for the basic foundations, but surely useless unless combined with other very important ideas not mentioned.

Sort of like the engine, but if you want it to ride as luxurious as a lincoln, theres much more to add in.

Taking the ORB and adding in more filters would be a good start,
but understanding price action and converting it into daily would be the complete solution most likely not easy while using ORB as another filter.


The most interesting thing is.

Knowing the trend/direction/type of day of the market
won't even make you money consistently.


Because trend can change in 15 minutes, people who don't understand that will surely understand when the time comes for them.
 
Coolweb, I am curious. You mentioned before that you run a business or businesses and you also mentioned you are living somewhere in the NY/NJ area (I may be wrong about this, not sure). What business do you run, I'd like to check it out. Do you have a website? Are you in the yellow pages?

Quote from coolweb:

contribution:

I've read most about the market profile stuff Mike805 posted.

While it has its merits in the idea, basically ORB methologies with volume, which I also use as well but in a different way.

but what I found funny is, Market profile is a product from CBOT.

CBOT likes to make traders think they are being informed but they do not say they'll be headfaked and commissioned out eventually :)

Has anybody ever found it funny that CBOT provides trading strategies on their site? I always thought that was odd, until I started 'getting it', and Most of the crap they post up are so BELIEVABLE IN PROFIT but in reality not even viable for long term profitability.

Basically ORB methods do not work successfully consistently unless used in conjuction with other very important ideas/strategies nobody will explain to you other then yourself.


Well I guess Market profile is good enough for the basic foundations, but surely useless unless combined with other very important ideas not mentioned.

Sort of like the engine, but if you want it to ride as luxurious as a lincoln, theres much more to add in.

Taking the ORB and adding in more filters would be a good start,
but understanding price action and converting it into daily would be the complete solution most likely not easy while using ORB as another filter.


The most interesting thing is.

Knowing the trend/direction/type of day of the market
won't even make you money consistently.


Because trend can change in 15 minutes, people who don't understand that will surely understand when the time comes for them.
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Quote from coolweb:

Hello my fellow friends,

I am now posting a journal since I started to convert my previous occupation (running businesses) into trading/investing for real. I want to make sure I succeed under all circumstances. Or else how would I pay for chow :D

I am 2X years old, I have been running things since I was 13 , a few failures a few successes, those successes made me a happy man, those failures made me even stronger.

Capital:

I have a nice size capital, I trade with usually around $100 K Buying power, and scale up to $200k

Psychology:
I have no self esteem issues, I don't do revenge trading, I do get frustrated and over trade, I definately know I'm a mini me compared to the mighty market.

Me = stupid


I am risk adverse, I know how to lose, 0.3% stops mental.
but of course even with these stops;

Me = stupid.

So I'm bound to have slippage :)


Position size:
Right now I use $60k , until I can get a nice profit so I can reward myself with a bigger size $120-150k

$60k allows me to buy around 2000-3000 shares of $30 stocks

Once I put on a $60k , it should make money immediately, immediately afterwards I will initiate another position in a 2nd stock to put me around $100k invested.


Strategy:
nasdaq stocks.

One or two opportunities day at extreme rallys or sells.
I will only sell at extreme rallies, buy at extreme sells.
I will short more often then I buy, for some reason,
Short is my friend, Its sort of like what one of the ET members said

"once I hit the "buy" button, it automatically steals my money"

so I use this to my advantage and change this into the "Short" button.



Stops:
0.3%
Thats all I allow the market to take from me


Trades:

I only allow myself 1 or 2 trades a day,

That means If I get stpped out twice, thats it buddy,
Go home. You should have been more patient instead of shorting everything or longing everything on sight.

Next time you'll know better then throw away your opportunities.


Again Me = stupid.


Experience: Been trading on and off for 2 years, almost full time since Last year doing position trading.



Goals: 1-2% each trade , Month = 2-3% a month
Trading windows. 6-9 times a month.

My goal of this journal is, I want to make it to a full time trader because I need a used porsche and live in a hotter area in NYC , I need to make money and I need more $$$$$
I missed out on the real estate boom of 2000, I cry myself to sleep almost every night.


I'm here for the money, I will under no cicumstances mess with myself and do dumb things.

Me = stupid.

Stating that, I'm bound to do dumb things :D

Money Goals: with a capital of $200-400k , I'm hoping to do 1% per trade and make $2k- $4k each successful trade, If I can accomplish $10k a month, I'd be happy for that time.
but I'd like to hit $20k a month. When I hit $20k a month, I'd probably want to hit $40k a month, When I hit $40k a month, I'd probably just be skipping in place all day.

Although I am only using $60k right now, because Me = stupid.
Stupid people can't be managing $400k until they prove themselfs!

Considering Me = stupid, Thats a mighty task for a youngling like me.

Time to walk the treachrous path.


AIM in profile
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Have you refined any of these views since this post?

TIA.
 
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