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Old 03-22-2013, 11:11 AM   #1

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Making a Living Off of Trading 1 Contract a Week

I see that theres been some discussion here lately about how you should stop being a home run hitter and go for 1 and 2 points...

If you look at the daily range on any of the contracts (indices specifically) why not try to be a home run hitter!?

I diverged a bit but I wanted to pretty much open up this thread to people who are making a decent living off of trading a couple contracts a week. Can it be done? Whats your weapon of choice? How do you approach it?

I personally like to trade the NQ and I really can't stand all this talk about going for 1 or 2 points. I don't believe markets are random but I do believe that with the advent of HFT, your really flipping a coin in this dya and age when your scalping - Hence why the average retail trader's edge is not in scalping but in attempting to hit home runs, or swinging for that matter.

I look forward to hearing from the community
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Old 03-22-2013, 04:05 PM   #2

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Re: Making a Living Off of Trading 1 Contract a Week

Quote:
Originally Posted by suby »
I see that theres been some discussion here lately about how you should stop being a home run hitter and go for 1 and 2 points...

If you look at the daily range on any of the contracts (indices specifically) why not try to be a home run hitter!?

I diverged a bit but I wanted to pretty much open up this thread to people who are making a decent living off of trading a couple contracts a week. Can it be done? Whats your weapon of choice? How do you approach it?

I personally like to trade the NQ and I really can't stand all this talk about going for 1 or 2 points. I don't believe markets are random but I do believe that with the advent of HFT, your really flipping a coin in this dya and age when your scalping - Hence why the average retail trader's edge is not in scalping but in attempting to hit home runs, or swinging for that matter.

I look forward to hearing from the community
Small targets,tight stops,frequent trading/more commisions,low starting capital-unable/unwilling to hold overnight-if daytrading the logical solution is smaller size,bigger targets,and stops outside the "the noise" ie not in the place most likely to get hit.

This guy has some ideas that could help,he calls it "harmonic rotation"I guess you either keep your stop away from those zones or you aim for them ie enter while others are covering.
futurestrader71 - $NQ_F http://stks.co/2SsS NQ Harmonic rotations study result... | StockTwits

February 7th Chat: Harmonic Rotations | FuturesTrader71
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Old 03-23-2013, 03:53 PM   #3

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Re: Making a Living Off of Trading 1 Contract a Week

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Originally Posted by mitsubishi »
Small targets,tight stops,frequent trading/more commisions,low starting capital-unable/unwilling to hold overnight-if daytrading the logical solution is smaller size,bigger targets,and stops outside the "the noise" ie not in the place most likely to get hit.

This guy has some ideas that could help,he calls it "harmonic rotation"I guess you either keep your stop away from those zones or you aim for them ie enter while others are covering.
futurestrader71 - $NQ_F http://stks.co/2SsS NQ Harmonic rotations study result... | StockTwits

February 7th Chat: Harmonic Rotations | FuturesTrader71
Thanks for this Mitsubishi.

I must admit, I am a tape reader at heart but I really hate staring behind the monitors for the entire session. It creates clouded thinking because of uncertainty. All of my successful trades have come from a considerable amount of backtesting and research
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Old 03-23-2013, 06:04 PM   #4

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Re: Making a Living Off of Trading 1 Contract a Week

Quote:
Originally Posted by mitsubishi »
This guy has some ideas that could help,he calls it "harmonic rotation"I guess you either keep your stop away from those zones or you aim for them ie enter while others are covering.
futurestrader71 - $NQ_F http://stks.co/2SsS NQ Harmonic rotations study result... | StockTwits

February 7th Chat: Harmonic Rotations | FuturesTrader71
I got some useful ideas from that - thanks!

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Old 03-24-2013, 09:31 AM   #5

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Re: Making a Living Off of Trading 1 Contract a Week

Quote:
Originally Posted by suby »
I see that theres been some discussion here lately about how you should stop being a home run hitter and go for 1 and 2 points...

If you look at the daily range on any of the contracts (indices specifically) why not try to be a home run hitter!?

I diverged a bit but I wanted to pretty much open up this thread to people who are making a decent living off of trading a couple contracts a week. Can it be done? Whats your weapon of choice? How do you approach it?

I personally like to trade the NQ and I really can't stand all this talk about going for 1 or 2 points. I don't believe markets are random but I do believe that with the advent of HFT, your really flipping a coin in this dya and age when your scalping - Hence why the average retail trader's edge is not in scalping but in attempting to hit home runs, or swinging for that matter.

I look forward to hearing from the community
It depends in part on what one means by "making a living". I, for example, have no debts. Therefore my cost of living is a small fraction of what it would be for most.

More than that, however, it is not so much a matter of strangling price and taking quick profits, or losses, nor of hitting it out of the park. Rather it is a matter of understanding price movement, taking off the collar, and letting it do what it wants to do.

The "harmonic rotation" study, for example, arrives at a conclusion, or at least a hypothesis, that is more or less true, but it gets there in a roundabout way, ignoring the dynamics of price movement. Yes, it is true that the "adverse excursions" or reactions in the NQ tend to range from 4 to 9pts. However, this is of little use in real-time trading, unless one is willing to sit helplessly like a deer in headlights and hope feverishly that price won't retrace more than nine points. To do so without understanding what he's looking just increases the likelihood of loss, which increases the fear and frustration that the trader feels, which makes it that much more unlikely that his next trade will be a successful one.

The extent of the retracement has less to do with statistical study than with the psychology of those who are holding and those who want to get in. This is why a retracement equivalent to or less than 50% suggests strength while a retracement greater than 50% suggests weakness. How far the retracement goes depends on how far the preceding rally or reaction got.

For example, if as on Friday the NQ rallies 8pts, the reaction should not move more than 4pts, which is what it did. If it subsequently rallies 17pts, it should not retrace more than 8.5pts (it retraced 10, finding support at the last swing high, to the tick, depending on one's data feed).

The day before, price opened to 80, fell to 68, and retraced 50%, after which it fell back and tried to rally again, all the way back to 80, where it retraced 50%. It then rallied 7pts, to 81, then retraced much more than 50%, leading to a 20pt decline.

What matters, then, is not the number of points in the retracement but the relationship of the retracement to the immediately preceding move, which is why the point retracements in the ES will be different than those in the NQ.

Rather than "hitting home runs", then, one should focus on letting price do what it's going to do, then step in when it looks like price is going to stop doing it and do something else instead.
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Old 03-24-2013, 01:18 PM   #6

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Re: Making a Living Off of Trading 1 Contract a Week

Quote:
Originally Posted by suby »
I see that theres been some discussion here lately about how you should stop being a home run hitter and go for 1 and 2 points...

If you look at the daily range on any of the contracts (indices specifically) why not try to be a home run hitter!?

I diverged a bit but I wanted to pretty much open up this thread to people who are making a decent living off of trading a couple contracts a week. Can it be done? Whats your weapon of choice? How do you approach it?

I personally like to trade the NQ and I really can't stand all this talk about going for 1 or 2 points. I don't believe markets are random but I do believe that with the advent of HFT, your really flipping a coin in this dya and age when your scalping - Hence why the average retail trader's edge is not in scalping but in attempting to hit home runs, or swinging for that matter.

I look forward to hearing from the community
There are ways to trade with or against "HFT" and scalp many emini markets as well as homeruns. You first need to understand how they trade. Once you do and your method is sound then trading regularly with high probability setup(s) is very realistic and a decent living follows.
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Old 03-24-2013, 03:24 PM   #7

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Re: Making a Living Off of Trading 1 Contract a Week

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Originally Posted by DbPhoenix »

What matters, then, is not the number of points in the retracement but the relationship of the retracement to the immediately preceding move, which is why the point retracements in the ES will be different than those in the NQ.
Should one also consider the distance of the down move before the rally as a clue to how far the current retracement may go?
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Old 03-24-2013, 04:22 PM   #8

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Re: Making a Living Off of Trading 1 Contract a Week

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Should one also consider the distance of the down move before the rally as a clue to how far the current retracement may go?
It's all part of the picture. You may be working your way toward a trend, a trading range, or a hinge. Each wave is a tell, and at some point, traders will show their hands.
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