What happened? (ES trade)

Quote from AAAintheBeltway:

I've answered variations of this question many times here. My suggestion is to invest in some backtesting software and try your ideas out there. If you can't make money on historical data, how would you expect to do so in real time? I'm sure someone will chime in and say backtesting proves nothing, etc but I repeat, why would you try a plan with real money if it was a loser on backtesting?

The most important things you will learn are that indicator-based systems don't work, despite all the well-chosen examples in the books, the importance of knowing how wide to set your stops, the imporrtance of letting winners run and how to control risk. You also have to be very realistic about your own head. It looks easy to trade a system with a 35% win percentage because it generated great annual returns, but could you stick it out through 10 straight losing trades? Few can honestly say they could.

If you're serious about trading your own funds, I'd advise you to put maybe $15-20,000 in a futures account. Start out trading one lots only until you are consistently profitable. The most important thing is to avoid a bad loss or more commonly, series of bad losses, which will damage you psychologically. There is no substitute for watching the market trade all day and getting a feel for it. Good luck.
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I appreciate the response, and advice! What back testing software do you recommend?
 
AMT4SWA
Trueliquidity
Lindq
Opt789
Tango29
Crtrader
AAA30
AAAinthebeltway

I appreciate all of your replies, and advice! Have a great 4th!:)
 
Quote from musclemoney:

I appreciate the response, and advice! What back testing software do you recommend?
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I don't want to rec any s/w, as I am not up to speed on what is available now. There have been some recent threads on s/w, plus you can look at the s/w section of the site. What is optimal for you depends on numerous factors, including your programming ability, what you trade and how important cost is to you.
 
Quote from musclemoney:

I appreciate the response, and advice! What back testing software do you recommend?
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There are many others but to get you started you can look at NinjaTrader. Its free and I think would work well for backtesting one item like the SnP.

Its already been said but I will take it one step further. You IMHO should never trade more than one car at a time until such time as you feel you have a consistent profitable edge in the market. With trading the ES the odds are highly against you actually being able to reach that point. So why not find out with one car instead of 10 or even two.

As a RIA would you recommend someone new to daytrading start with anything higher?

Now with that being said I don't think you should even start out with the ES. If you want to be in futures start out with the NQ but otherwise the SPY is a great method.

There is no such thing as a free lunch. You can not consistently gain by daytrading unless you have an edge that is greater than transaction costs + risk of ruin odds.

If you can focus on what your doing and trying to learn for a year or more without worrying about trying to make money you may have a chance. If you just step up to the plate and try to grind out money from day one you have found the path going broke in a hurry.

Best of luck to you

Bob

P.S. perhaps your clients could be put into some GE that is paying 4.3% and you could right some calls against it and take the proceeds and buy some puts to give you a delta neutral position. You would lock down 4% for your clients and if the market continues down you look like a hero. GE just being one example that I am working with myself for the same reasons. There are other stocks right now that can do the same thing
 
If you feel like you made a lot of money in 1 trade then you are trading too large of size.

LOL, seriously thats a pretty good rule of thumb.
 
Quote from Renegen:

Trading the ES with 100 contracts with other people's retirement money? There must be a law against this.
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:confused: Please read the thread. I addressed this. I am trading my own account. And yes, there is absolutely a law (numerous) against a broker or advisor using their clients own money to trade with for personal gain. Not only would that be nuts to do, the person doing it would belong in jail.

I'm wanting to daytrade actively (my own money. lol!) in about three years, and know ZERO about scalping, or daytrading as I use a system for managing retirement assets, that is "ocean's apart" from day trading, or scalping. Therefore, I was basically asking for guidance from daytraders who trade to generate an income.
 
As you have indicated to us that you a RIA would you not you have a lot of contacts within your fraternity that could direct you to successful daytraders...you have plenty of time and opportunities as you will not be "daytrading for another 3 years".
 
Quote from 1Reason:

There are many others but to get you started you can look at NinjaTrader. Its free and I think would work well for backtesting one item like the SnP.

Its already been said but I will take it one step further. You IMHO should never trade more than one car at a time until such time as you feel you have a consistent profitable edge in the market. With trading the ES the odds are highly against you actually being able to reach that point. So why not find out with one car instead of 10 or even two.

As a RIA would you recommend someone new to daytrading start with anything higher?

Now with that being said I don't think you should even start out with the ES. If you want to be in futures start out with the NQ but otherwise the SPY is a great method.

There is no such thing as a free lunch. You can not consistently gain by daytrading unless you have an edge that is greater than transaction costs + risk of ruin odds.

If you can focus on what your doing and trying to learn for a year or more without worrying about trying to make money you may have a chance. If you just step up to the plate and try to grind out money from day one you have found the path going broke in a hurry.

Best of luck to you

Bob

P.S. perhaps your clients could be put into some GE that is paying 4.3% and you could right some calls against it and take the proceeds and buy some puts to give you a delta neutral position. You would lock down 4% for your clients and if the market continues down you look like a hero. GE just being one example that I am working with myself for the same reasons. There are other stocks right now that can do the same thing
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I've taken a look at ninjatrader. It looks like it will do what I need.

Instead of papertrading right now, I should probably do some more research, backtesting, then starting with 1 contract, and see how that goes.

As a RIA I don't recommend anyone daytrade with assets they cannot afford to lose. If they wanted to daytrade retirement assets, I would tell them that wasn't a good idea at all. I have a couple of Physicians retirement assets under management, and these guys like to trade a couple hundred grand with Schwab, Etrade, etc., In looking over those statements, there are usually many more losses than gains...

Why the NQ over the ES?

As for the SPY, are you going long/short with leverage?

I appreciate the recommendation on GE! That's a good strategy! Sounds like you've been through a bear market a time or two.
 
Quote from Now is Now:

As you have indicated to us that you a RIA would you not you have a lot of contacts within your fraternity that could direct you to successful daytraders...you have plenty of time and opportunities as you will not be "daytrading for another 3 years".
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The answer is oddly, no. I don't know any brokers, or other RIA's who know any successful daytraders. I guess that's because my "realm of contacts" if you will, are mostly managing retirement assets, which is totally different.

I've spoken to several CFA's, guys at the clearing firm, people at the trade desk, etc., with no luck. One broker knew what I was talking about, but he wasn't experienced in daytrading, nor did he know anyone who was.

You guys are the only people I've spoken with who know daytrading outside of the million and one different seminars, and marketing organizations who sell "systems." Who would sell a working system if it worked? So, you guys are about it when it comes to advice (mostly), and I pay close attention to it.
 
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