What's a worthwhile daily take on the e-mini S&P 500?

[Laissez Faire]

Hi.

In your experience or opinion - what's a worthwhile daily take on the e-mini S&P 500 in points per contract? Daytrading the NYSE RTH session.

Currently, index futures in general offers a lot. Yesterday's RTH range was 32.00 points and the sum total of the minor swings were 254.50 points. And that's one of the least volatile days recently. So, obviously lots of points available, but that does not mean they're easily acccessible. This is a market where you quickly can rack up losses, too.

I briefly talked to a full time trader a little while back who blew my mind when he told me his only goal each single day was to net 1 ES point, but he did this with huge size and comfortably lived off it as he had a very high hit rate. He would call it a day as soon as he got that single point. If stopped - he would carefully assess the market and consider if it was worthwhile to take another trade.

To me, 1 ES point seems a bit too conservative and not very robust, but it's obvious that even a small daily take can be profitable - especially if compounded.

In general, there seems to be different ways to approach day trading. Some strive to maximize profits on any given day, but may also set themselves up for larger losses. Others may strive for daily consistency with smaller profits, but with less drawdown. The end result may not be that different in the end. However, it seems clear that if you want to compound your account, you need consistency.

So - any thoughts on the subject?

I ask newbies or paper traders to refrain from posting.

Thanks.

 

[jl1575]

If he traded 100 lot then 1 point per day would net him more than 1 million a year, and risk is low as he can really focus on, and only trade the best/optimal set up based on his long trading career presumably. In some lucky day then the ES rush 5 points with seconds after he entered, he then can take the whole week off. Besides, when he aimed at one point, he is more relaxed as knew there is always plenty of window/opportunity to get one point during the RTH , so he would not rush or chase trade that is always the trap for many even veteran traders.
Think about this: 100 lot for 1 point is always easier than 1 lot for 100 points. Of course we talk about people that have a big pocket and try to decide to make a choice between the different approaches. And again, it depends on two major considerations: 1) risk tolerance and 2) reliability/accuracy of the trading system.

 

[p0box4]

1 point each day is $1000 each month. If you can make $1000 each month constantly with one contract you are doing a great job. Scale it up to 100 contracts or even more and you are making a very good income.

Consistency is the most important thing over time, you can make 100 points today, but what is the point if you are going give it all back tomorrow.

Sure the volatility recently offers great potential, but that potential is for both the upside and downside.

 

[Gaslight Capital]

I ask newbies or paper traders to refrain from posting.

I lol'd at that as this is just the sort of question newbs do ask, don't they?

I believe there are very few profitable emini day traders, and of those who are profitable most net little per contract traded. I read recently that the average HFT algo nets fractions of a tick when all is said and done at the end of the day. I think that I may have read that discussed in the newly released book Flash Crash about Nav Saroa.

But as it relates to the retail crowd, which I presume is the crowd you are addressing, doesn't this all come down to the trader's methodology, the opportunity frequency of that methodology, and the trader's own ability to trade that methodology consistently?

I doubt there are very many individuals netting a living trading the emini. The majority of traders I know who have hit the big time trade stocks and options, not futures. There is a good journal here by @JesseJamesFinn1 where he is trading stocks and options with a small cash account (not PDT). I think it is more reasonable that a stock trader with a small account can make $100/day trading stocks than it is to expect that the same trader with the same small account will be able to net $100 trading the emini.

Isn't asking the question of what is a worthwhile daily take on the emini is not answerable in the sense that it is the cart, and putting out there like that has it now before the horse?

Maybe not. As I think about it, many here would probably sacrifice both testicles to be able to net 1 ES point per day, day after day. Something would have to be very worthwhile to get one to cut off his balls to achieve. So maybe the answer is 1 point after all.

 

[EsKiller]

With the current level of volatility, 10 points per day is possible

 

[C99]

3 times the daily range, lol.

RIP JH.

 

[CannonTrading_Ilan]

From my colleague Joe Easton who follows the ES closely every day:
In my opinion a worthwhile daily take for ES is between 8-15 points. Each day is different and needs to be treated as so.

As indicated there is 100s or even 1000s of points to be had by catching every minor gyration. However this is foolish thinking. Using the days range is much more reasonable approach. So if the days range is about 30 points, getting 1/3 to 1/2 of the range is a job well done. Typically to make 10 -15 points you have to make closer to 17-22 points and account for stop outs and not perfect execution.
The big question is what are the losing days look like??

 

[Laissez Faire]

If he traded 100 lot then 1 point per day would net him more than 1 million a year, and risk is low as he can really focus on, and only trade the best/optimal set up based on his long trading career presumably. In some lucky day then the ES rush 5 points with seconds after he entered, he then can take the whole week off. Besides, when he aimed at one point, he is more relaxed as knew there is always plenty of window/opportunity to get one point during the RTH , so he would not rush or chase trade that is always the trap for many even veteran traders.
Think about this: 100 lot for 1 point is always easier than 1 lot for 100 points. Of course we talk about people that have a big pocket and try to decide to make a choice between the different approaches. And again, it depends on two major considerations: 1) risk tolerance and 2) reliability/accuracy of the trading system.

We lost touch, so I don't quite know how he managed his trading, but I actually had the impression he never took more than 1 point, so he probably entered with a pre-set limit. He specifically said he knew he was leaving a lot on the table, but since he lived well from it and wit a minimum of time invested, it worked for him.

1 point each day is $1000 each month. If you can make $1000 each month constantly with one contract you are doing a great job. Scale it up to 100 contracts or even more and you are making a very good income.

Consistency is the most important thing over time, you can make 100 points today, but what is the point if you are going give it all back tomorrow.

Do you trade the ES yourself?

He was doing it with 50 contracts when we last spoke.

 

[p0box4]

We lost touch, so I don't quite know how he managed his trading, but I actually had the impression he never took more than 1 point, so he probably entered with a pre-set limit. He specifically said he knew he was leaving a lot on the table, but since he lived well from it and wit a minimum of time invested, it worked for him.



Do you trade the ES yourself?

He was doing it with 50 contracts when we last spoke.

Yes, i only trade ES (and swing trade stocks). So, 50 contracts and 1 point a day would give him $50K, assuming he never has a losing day.

How does he handle losing days and what does his losing days look like? Also just 1 point?

 

[Laissez Faire]

I believe there are very few profitable emini day traders, and of those who are profitable most net little per contract traded. I read recently that the average HFT algo nets fractions of a tick when all is said and done at the end of the day. I think that I may have read that discussed in the newly released book Flash Crash about Nav Saroa.

I believe HFT by their very definition nets very little per contract/per trade. It's essentially market making or a variation thereof. Of course, if you do that a zillion times per day, you're netting more than 1 tick per contract traded.

But as it relates to the retail crowd, which I presume is the crowd you are addressing, doesn't this all come down to the trader's methodology, the opportunity frequency of that methodology, and the trader's own ability to trade that methodology consistently?

Isn't asking the question of what is a worthwhile daily take on the emini is not answerable in the sense that it is the cart, and putting out there like that has it now before the horse?

Maybe not. As I think about it, many here would probably sacrifice both testicles to be able to net 1 ES point per day, day after day. Something would have to be very worthwhile to get one to cut off his balls to achieve. So maybe the answer is 1 point after all.

Yes.

I'm mostly interested to hear what people with experience would say is a decent long term result or how to reasonably approach day trading ES as a business. Either from traders themselves or people who otherwise know the business.

Personally, I feel that as long as you're consistently profitable and get ahead by end of the week/month, you're doing really well. And if you want to compound your account - you should really watch that drawdown.

My own trading took a turn for the better when I started considering anything above 3-10 ES points net as a great result. Essentially trading my smaller account like it's a huge account.

When I achieved this - I would want to find a very good reason to take another trade and usually don't. Or I'd take another trade on half my maximum size or with a trailing stop on my realized profits to ensure a winning day can't become a losing day. For example, if up 10 points -> I'm allowed to take one more trade with say a 3-4 point stop. If hit, I'm done for the day.

Of my last 16 trading days I have 14 winning days and I am now slowly compounding my account. Prior to that, my green days have been approximately 80 % in the last 6 weeks.

So, I'm trying to gain that consistency and I'm thinking that I can focus on maximizing profits later on. Consistency first.

But yes. Interested to hear what people have to say on the subject.