Trading the SLA/AMT Intraday

[dbphoenix]

I will take this opportunity to point out again that the trades that are taken at the extremes are not only the easiest but often the most profitable, particularly if one can stay in. If for whatever reason he can't, then he's faced with re-entering, and that can be not only difficult, but sloppy.

It's also worth pointing out, given the repeated intrusions by a recent visitor, that waiting for three or four or five bar intervals to line up -- not to mention the indicators -- before one takes the wrong side of the trade is not a consistently winning strategy.

It is always helpful to know (a) what one is looking at and (b) what to do with it.

 

[fortydraws]

It's also worth pointing out, given the repeated intrusions by a recent visitor, that waiting for three or four or five bar intervals to line up -- not to mention the indicators -- before one takes the wrong side of the trade is not a consistently winning strategy.

Someone told me he was using a 40 point ES stop on a day trade. Now I ask you: How could that be considered the "prudent use of capital" in any world?

It is always helpful to know (a) what one is looking at and (b) what to do with it.

All of which assumes that one observes intently enough to first recognize the possible existence of pattern of behavior. And that one then has the work ethic to go and back test it. Because in the end, most of us will only have the confidence to take the trade and stay in the trade or re-enter the trade if we have ourselves done the work. There are so many here at ET who have no clue what the work even is, much less how to begin.

 

[Buy1Sell2]

Prudent use of capital is essential to successful trading. It is the only true edge in trading. When I trade, I calculate my stop based upon a formula whereby I can lose no more than 2% of my TLNW (Total Liquid Net Worth). This is how position size is calculated. This is the first place to start when trading--not with where trend lines are or ranges. Proper risk management is paramount to successful trading. Suggestion would be to have a much greater focus on this aspect of the endeavor going forth. Emphasis is being placed solely on being right and none on how to be wrong correctly.

 

[dbphoenix]

You shorted the ES at 39 with a stop at 76. You're already 27pts in the hole.

This is prudent use of capital? Although it is clear that being right is not high on your list of priorities.

 

[fortydraws]

Position size is NOT an edge. Money management rules do not make an edge.

An edge exists where and when the probability of one immediate outcome is more likely than a different outcome, and the opportunity exists to make a bet and possibly profit should the odds play out in your favor.

In trading, for example, when the NDX and SP-500 both gap open up, and then the respective futures both try to fill the gap on an initial move lower that reverses higher without filling the gap in the first 30 minutes of the NYC open, the probability that the market will trend higher and close at its high is magnitudes higher than the odds that it will reverse and fill the gap. The edge therefore belongs to the long side player. He has the best of it. Anyone betting short on such a day is betting the dog. He has the worst of it. And for those who understand the notion of pressing a bet - that is precisely when one would bet larger than if one were playing an even money or slight edge. I have a usual trade size. I don't take low odds plays, so I never reduce from that size. But there are times where I go gonzo - when the opportunity and likelihood of getting on the right side of the move is so outsized that trading it normal size would be foolish, imo. That is the benefit of having a real edge. That is the benefit that comes from observing, and noting patterns of price behavior, and back testing, and forward testing, and then trading.

You are simply repeating some garbage you read from some other guy who failed as a trader. You have no idea what an edge is. You are just hoping that your 2% bet scheme will keep in the game long enough to actually figure this out. And since I've been trading, I have never had a drawdown in points close to what you have open on your current ES trade. My largest drawdown over a series of trades in the NQ has been 29 ticks or $145/contract - and I was green green green at the time. And that was over three trades, not one. So dude, seriously, you have some real credibility issues coming around here and seeking to school us on what is and is not an edge.

 

[Buy1Sell2]

The drawing of the lines is arbitrary. The drawing of the lines is in the eye of the beholder. The angles of the lines can be whatever the trader wishes them to be. They can be however steep or shallow that you would like them. What is more important however and is not being discussed here is the risk management that needs to accompany entries and exits. You would want your total loss on any one trade/idea to amount to no more than 2% of your TLNW (Total Liquid Net Worth). This is the extremely important aspect of trading that most here are missing.

 

[Buy1Sell2]

• You are ignoring content by this member.

You shorted the ES at 39 with a stop at 76. You're already 27pts in the hole.

This is prudent use of capital? Although it is clear that being right is not high on your list of priorities.

---What you would need to understand is that my stop loss represents less than 2% of my Total Liquid Net Worth and as such is not a huge detriment if hit. This represents prudent use of capital.

 

[Buy1Sell2]

• You are ignoring content by this member.

Someone told me he was using a 40 point ES stop on a day trade. Now I ask you: How could that be considered the "prudent use of capital" in any world?
----Of course, I don't use a 40 point stop on a daytrade.

 

[dbphoenix]

Someone told me he was using a 40 point ES stop on a day trade. Now I ask you: How could that be considered the "prudent use of capital" in any world?
----Of course, I don't use a 40 point stop on a daytrade.

--03/15/15 Sun Afterhours PM. Short 2039.00 basis June . Initial stop is 2076.00
--03/16/15 Mon Afterhours PM. Price is 2065.00 . Will maintain stop here RTH at 2076.00. If stopped, I will enter a new short order for 2047.00 RTH on a sell stop.

Hmm. Short 2039 (I presume ES) with an "initial stop" of 2076. 2076-2039= ?

 

[dbphoenix]

You shorted the ES at 39 with a stop at 76. You're already 27pts in the hole.

This is prudent use of capital? Although it is clear that being right is not high on your list of priorities.

---What you would need to understand is that my stop loss represents less than 2% of my Total Liquid Net Worth and as such is not a huge detriment if hit. This represents prudent use of capital.

You could also pile 2% of your capital and set it on fire. That would not only be as prudent but would also provide entertainment.