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

[SimpleMeLike]

Actually, it might not be a bad idea. ET is mostly a waste of time assuming we have other priorities. I have a lot on my plate today and shouldn't really be posting here, but I'm tired after a long week and am procrastinating.

As for trading advice, you don't really need to be giving it out unless you have something to share that you know to be true. You came on strongly here saying the daily range is irrelevant. A statement I strongly disagree with as it's a vital part of my own trading methodology. You can check out my trading calls in the ES journal for last week. Most of them turned out fairly well and were posted well in advance or in real time.

I'm very careful to not write something off as it's quite possible that it's I who missed something or didn't yet figure something out while someone who's smarter than me or simply spent more time studying it discovered something I did not.

As for focusing on the simple and easy stuff - I don't think there's anything easy about trading the markets and I don't think a 'simple' approach will ever make anyone rich.

But, a complex approach or framework becomes simple and easy as you gain experience and knowledge.

Laissez Faire,

Thanks for the post, and I certainly apologize I came off strong towads your approach. I agree with everything you said above.

Actually using the daily range is probably a good thing if you are setting a certain profit target per day. For example, if you see daily range increasing, may want to choose 8 pt targets

 

[NoahA]

Laissez Faire,

Thanks for the post, and I certainly apologize I came off strong towads your approach. I agree with everything you said above.

Actually using the daily range is probably a good thing if you are setting a certain profit target per day. For example, if you see daily range increasing, may want to choose 8 pt targets

To get out of a trade is very dependent on your strategy. Some need to see a lower high, telling them the trend might be over, others don't overstay their welcome if they hit a target that was twice their stop lets say. It all comes down to their strategy.

But I do think for a trader who is not yet profitable, having a fixed type of target that hits in less amount of time and more often is perhaps the better choice initially. You want to train yourself to do something over and over again and not be too upset by the outcome. When your strategy involves the market "telling" you something, you're adding in a variable that is very subjective. A newbie has too much already in his head to worry about.

If the stop and target is fixed either by a specific value of points, of a specific break of a key level, then this is easier to process, and your only evaluation is if you did it or not. But if you're gauging the sentiment of the PA as a newbie, and trying to base your decisions on this, you're gonna stay lost.

 

[SimpleMeLike]

But I do think for a trader who is not yet profitable, having a fixed type of target that hits in less amount of time and more often is perhaps the better choice initially. You want to train yourself to do something over and over again and not be too upset by the outcome. When your strategy involves the market "telling" you something, you're adding in a variable that is very subjective. A newbie has too much already in his head to worry about.

If the stop and target is fixed either by a specific value of points, of a specific break of a key level, then this is easier to process, and your only evaluation is if you did it or not. But if you're gauging the sentiment of the PA as a newbie, and trying to base your decisions on this, you're gonna stay lost.

Hello NoahA,

Great post here.

I agree with you, when I enter a trade, I like to put my stop at location based on PA (beyond the entry bar or some logical base PA location), and set my profit target at know PA level (support or resistance) I see on the chart. And then wait for either stop or profit target to hit.

Question for you:

1.The challenge I face is sometimes (alot actually), my profit target (reward) is less than risk? The trade turns into a scalp, then I look/wait for another setup

What are you thoughts on this? In your opinion, should RR always be greater than 1.

 

[NoahA]

What are you thoughts on this? In your opinion, should RR always be greater than 1.

I know what you mean. Its like so often by the time the trade looks really good, it has already gone 1/2 of the way up the range or whatever it is you were looking for.

Honestly, for long term, less than 1:1 is difficult. Mathematically, it can work if you have a very high win rate. (ie. Risk is $100, profit is only $50), but you'd need over 80% win rate.

What is concerning in what you say is that your trade turns into a scalp. So you're already making the biggest mistake, which is messing with your trade before the stop or target hits. If what you want to do is scalp, then your stop can't be far away.

I saw some of your charts when you speak with volpri, and pulled up this random one. If you're shorting at the blue dot, I see no reason for this. You're just hoping and praying for it to continue. Any time price breaks some level, my first instinct is for it to retrace. I mean look at the size of the red bar. Its huge. And although there might be more down action, if the sucker retraces the move, even just 50%, its too big of a stop to use.

Even if mathematically you could prove that you have an edge with a small target and big stop, no way can you perform optimally and do the right thing every time.

I liked how you posted the follow-up chart, which is here, but perhaps there is no point in going into more detail unless you wanted me to. But what's clear is that your short was lucky since there wasn't too much more down action in that move (and there was even a retrace of that big red bar which then led to a double bottom). I know that perhaps you were looking for a second leg or something like this, but it didn't set up the same way as a long off the bottom that perhaps gives a second leg after the first big green bar. (all easy to say in hindsight of course)

Anyway, I think that R:R can be whatever your edge allows for, but this means you have to not turn trades into scalps and deviate from the plan.

 

[SimpleMeLike]

I know what you mean. Its like so often by the time the trade looks really good, it has already gone 1/2 of the way up the range or whatever it is you were looking for.

Honestly, for long term, less than 1:1 is difficult. Mathematically, it can work if you have a very high win rate. (ie. Risk is $100, profit is only $50), but you'd need over 80% win rate.

What is concerning in what you say is that your trade turns into a scalp. So you're already making the biggest mistake, which is messing with your trade before the stop or target hits. If what you want to do is scalp, then your stop can't be far away.

I saw some of your charts when you speak with volpri, and pulled up this random one. If you're shorting at the blue dot, I see no reason for this. You're just hoping and praying for it to continue. Any time price breaks some level, my first instinct is for it to retrace. I mean look at the size of the red bar. Its huge. And although there might be more down action, if the sucker retraces the move, even just 50%, its too big of a stop to use.

View attachment 240641

Even if mathematically you could prove that you have an edge with a small target and big stop, no way can you perform optimally and do the right thing every time.

I liked how you posted the follow-up chart, which is here, but perhaps there is no point in going into more detail unless you wanted me to. But what's clear is that your short was lucky since there wasn't too much more down action in that move (and there was even a retrace of that big red bar which then led to a double bottom). I know that perhaps you were looking for a second leg or something like this, but it didn't set up the same way as a long off the bottom that perhaps gives a second leg after the first big green bar. (all easy to say in hindsight of course)

View attachment 240643

Anyway, I think that R:R can be whatever your edge allows for, but this means you have to not turn trades into scalps and deviate from the plan.

Hello NoahA,

I like the conversation.

Yes, that scalping has high win rate. I had like 16 winning day straight on scalping out of trades. One day I got carried away and gave back some profits over trading too. That ES whip my ass one day.

On that big bar short, I was not looking at risk or luck, but high probability of a win. That big red entry bar looks like about a 15 point stop loss or risk. Had I put my RR=1, I would have taken a loss here.

Normally when I scalp out, I am scalping out at local support and resistances. The downside is risk is higher than reward.

 

[NoahA]

Yes, that scalping has high win rate. I had like 16 winning day straight on scalping out of trades. One day I got carried away and gave back some profits over trading too. That ES whip my ass one day.

What more needs to be said if you had 16 winning days and only one losing day? (assuming the losing day isn't worth more than 10 winning days)

If you are having such luck with scalping, is there a need to change anything? Perhaps these trades only work when volatility is high and a spike in price tends to continue, but if you can identify the variables under which your scalping works and just stick to these times, you might be closer than you think.

Based on your posts that I read, it sounds like you're trying to figure out every market condition and get every trader to agree with your method. Nobody here can really say what is right or wrong. If you're scalping with ES, and you made $250 on that trade, why not just try micro ES live and hope to make $25? You will very quickly learn if you are profitable, or if the problem is you or your strategy. Nobody here can really tell you this.

 

[SimpleMeLike]

What more needs to be said if you had 16 winning days and only one losing day? (assuming the losing day isn't worth more than 10 winning days)

If you are having such luck with scalping, is there a need to change anything? Perhaps these trades only work when volatility is high and a spike in price tends to continue, but if you can identify the variables under which your scalping works and just stick to these times, you might be closer than you think.

Based on your posts that I read, it sounds like you're trying to figure out every market condition and get every trader to agree with your method. Nobody here can really say what is right or wrong. If you're scalping with ES, and you made $250 on that trade, why not just try micro ES live and hope to make $25? You will very quickly learn if you are profitable, or if the problem is you or your strategy. Nobody here can really tell you this.

Yes NoahA, that is correct. Everyone trades differently. I am definitely trading Micro ES once my money gets transferred to broker next week. ES trading ranges are too large, the loss hit account too hard. yes, that one day loss was some over trading.

Yes, so far so good with the scalping story. Either way I measure both ways.

 

[IamTheCasino]

On that big bar short, I was not looking at risk or luck, but high probability of a win.

High Probability wins = higher risk than normal most of the time.

If you are already trading ES then you can trade MES with size and make as much if not more than ES with less capital risk.

 

[SimpleMeLike]

High Probability wins = higher risk than normal most of the time.

If you are already trading ES then you can trade MES with size and make as much if not more than ES with less capital risk.

Yes, that ES risk is just too big right now. Last week, I took a $500 loss on 2 trades. I was able to keep on scalping and recover. If I was trading the MES, that loss could have been $150 (3 contracts) which is an amount I am comfortable with.

I'll have to return to ES when ranges reduce some. That damn ES not bullshitting around lately.

 

[SimpleMeLike]

High Probability wins = higher risk than normal most of the time.

If you are already trading ES then you can trade MES with size and make as much if not more than ES with less capital risk.

Yes, I like the high probability wins. Makes me feel good after the win. And getting alot of wins in a roll gives the confidence.