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brownsfan019

Market Wizard
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Posts posted by brownsfan019

  1. Posted

    The question boils down to this: at what point do you know you are on the wrong side of the trade? Does you stop have to be hit for you to know that?

    Why not one tick before? How about 4 ticks before.

     

    At some point prior to the stop being hit, you know you are on the wrong track. Why not exit at that point?

     

    I am wrong when my stop is hit. Not one tick before or one tick after. That's it. Until my stop is hit, I am not wrong, even if the trade is in the red currently. A loss does not become real until the stop is hit or until a trader hits the flatten button prematurely.

     

    I guess I should of mentioned I also believe in UNDER TRADING IN BOTH SIZE AND FREQUENCY.

     

    Hence I talked about entering at the right time to avoid the need to exit during the sideways action. Also note that I did not say jump aboard the market in the opposite direction. Here we are talking as if you got the direction right, just not the timing. Get out and wait. but be nimble.

     

    So, we want to be nimble and exit trades quickly, but also under trade? If you are quickly hitting the flatten button and then quickly re-entering, I believe that's the opposite of under trading.

     

    And again, Pit traders are not worried about commissions. As I said, these two gentle men are pit traders.

     

    I understand that, but as RETAIL traders commissions are a factor, especially based on what has been negotiated. We are all retail traders here, not pit traders, so to ignore commissions is a mistake in my opinion. If you are trading the YM and paying $5 round trip, you've just added another tick to your stop losses. To me, that's something that needs consideration.

     

    Until tomorrow, good trading everyone. Time for this trader to get off the computer already!

  2. Posted

     

    So what are the ways to exit with a profit?

     

    1. Being stopped out.

     

    2. Exiting a position because the day session is about to end and you are a day trader.

     

    3. Emergency situation that is going to take you away from the computer screen. And thus not allow you to watch the position.

     

    4. Have set profit targets before entering the trade and exit when these price levels are hit. Which in turn, can also lead to the possibility of entering a trade in the same direction as the previous trade once the initial profit is taken out.

     

    If price move against you, things are different. Do you really need to wait for your stop to be hit to know you are on the wrong side? If your initial stop is based on an area where if hit, all conditions (for your trade)would be changed, then waiting for the stop to be hit still makes little sense. Before it is hit, you know you may be right on direction but are wrong on timing.

     

    Until my stop is hit, I am not wrong. I do need my stop to be taken out to show me that I am wrong. Until then, I have a great possibility of reaching profit.

     

    Why not get out, with the intention of re-entering when price starts moving in the direction of the initial trade?

     

    This is a possible rule to follow when trading. I personally choose to just let my trade go and either prove me wrong - by hitting my stop - or prove me right - by taking my profit target out.

     

    A market moving sideways would be the same thing. The non-directional movement means you are wrong on timing, but could be right on direction.

     

    I would rather get to the party 'early' than too late. Now, if you work under the assumption that your direction is correct, then why on Earth exit the trade? If you are correct, but early - why can't you just sit tight and give it some time?

     

    Another thing to consider is this: Capital tied up in a trade has an opportunity cost. Most people do not trade multiple tradable (although they should), and if you have capital tied up in a trade that is going nowhere, that is money that can not be put into a market that is moving. Trend followers need trend. Some market somewhere is always trending. If a trend follower has capital tied up in a trade that is not trending, he is missing out on the very thing that gives him is edge-trend

     

    This is really just a function of the size of the account and the size of the current trade working. If you are trading e-mini's at $500 margins, you can trade 5 different markets on a $2500 account. If a person is over-leveraged in one trade, then something needs to be adjusted to the rules that are being followed. Now, I will aslo mention that trying to focus on too many markets for a newbie can be distracting and overwhelming. I personally trade 3-4 markets as I prefer to focus extensively on a small number of markets and understand how they move and react vs. trying to trade multiple futures, forex, options, and stocks.

     

    Pivot - great discussion here. I hope others do not take offense to this discussion, but I hope we are providing a few sides of the story to the OP and others reading. Hopefully our experiences of trading can help some other traders thru the very difficult learning curve...

  3. Posted

    Take a position, don't get married to it, get out quickly and be ready to get back in just as quick.

     

    And that is one way of trading. Another way is to be confident in your entry and stop level and then let the trade work. This will reduce commission costs considerably and help prevent overtrading.

  4. Posted

    I'll have to say that if you see at that moment the trade seems to go against you, you exit. Then the next moment it does turn your way, you get in. This is the problem is that AT THAT MOMENT, what you see and interpret changes from one setup to another. This is what I consider trading on the fly, unplanned. If I come in with the trade, I have to know beforehand where I will be proven wrong, some resistance or support area, a valid objective level. Seeing the tape doing something I don't like at that moment doesn't give me enough to exit, because the next moment can be favorable. To me this is unplanned trading, intuitive trading. If you have it, great! if you don't, your account won't last long).

     

    tor - I would think that trading by the seat of your pants can make a lot of money. For your broker. You are correct that certain traders could make this a profitable strategy, but for most retail traders (and especially newbies) this is a one way ticket to blowing up your account, especially in futures.

  5. Posted

    So you want to position yourself on the side of the dominate order flow before it begins, yet you do not want to be waiting too long for it to appear.

     

    That may perhaps be the holy grail - get in a few seconds before a move and exit in 30 seconds when your profit is hit. Sounds great and looks great in a textbook.

     

    Obviously Pivot and I have different views of time stops. And if a 15 time stop works for Pivot, that's perfect. Time stops do not work for me. I agree that you want to be in the trade before the move, but I really don't care if that move is 1, 5, 30, or 60 minutes after I enter. As long as my stop area is respected, then it's a good trade in my opinion. The key is to realize which type of trader are you and then do the same thing over and over and over again. You cannot one day wish you were a time stop trader and the next day wish you just let the trade go.

  6. Posted

    I am more concerned with the return of my capital, than the return on my capital. --Mark Twain

     

    If price is around the same place you entered after 15 minutes.......

     

    It's time to get out.

     

     

    First - if you are only concerned with return of capital, then active day-trading is the completely wrong business to be in. Buy CD's at your local bank where they are FDIC insured.

     

    Second - time stops are a viable strategy if it works for YOU. Pivot you are making some very specific recommendations w/o knowing the OP and his trading methodology. To say that after 15 min's you must exit is a very specific recommendation after looking at one chart. I say that exiting based purely on time is for amateurs and if you turn a 'winning' trade into a loser, then your full losses are going to destroy your account real quick and the OP's initial post proved this very well. Is a trade a 'worse' trade simply b/c it takes 50 minutes to hit the profit vs. 10? My account shows the same $$$ regardless of how long the trade took.

     

    Here's another example from today on the EC (today was a great day for this discussion to come up) - at 9:22am EST I took a short. My 10 tick profit was hit and that's a cool $125/contract. Not bad. Here's how the trade played out though - at 9:53, 9:55, AND 9:59 my stop was ONE tick from being taken out. I just assumed this trade was done for a loss. But, the stop was never taken out and the profit target hit at 10:44am. That is one hour and 22 minutes later. Talk about taking heat and wanting to hit that flatten button so quickly... Again, my account balance simply shows a winning trade for +$125 per contract traded. It does not care that it took over an hour to deliver. The stipulation here is that I KNOW that my trades can take this long to develop. Does it suck? Sure. Is it a great feeling when you follow your rules and pocket the gain? You bet!! :D

     

    My point being that EACH person must test and trade according to what works for THEM. Nobody, myself included, can tell the OP what is best here. We do not know him, his methodology, his account size, his stomach for pain, etc. etc. Since we will never know him personally, the best advice for him to follow is test your trading yourself, paper trade in real time and then make a solid rule - either exit after XXX minutes or wait till stop or profit target. If you opt for the 2nd suggestion - simply set an OCO order and then walk away. Literally.

  7. Posted

    Thanks for the comments guys, some great thought there. I guess I just need to test it. I don't mind taking a bit of heat, no problem if it happens right away. But waiting 30-40 mins with price sitting there doing nothing is not exactly a great momentum trade. If price had gone up I would have been saying to myself, great trade you got out with 1 tick profit instead of stop loss getting hit.

     

    Thanks for the comments.

     

     

    Key - sounds like you don't even know if your setups need to be given 'wiggle' room or not. That's step 1 - prove to yourself that either a) my setups can take 30+ minutes to develop or b) they need to turn profitable soon (and how you define 'soon').

     

    There's great advice in this thread, but it's ultimately up to you to prove to yourself the best way for you to trade.

  8. Posted

    Hey keymoo,

     

    that does hurt I know. The way I look at a trade is...if it was a good trade, and I know that the trade has merit and that's why I put it on, then I'll leave it be. If the stop gets hit and I could have gotten out for less, then so be it. I'm not gonna sweat it out, because I know probabilities are in my favor.

     

    Maybe it's just me, but that's how I do it.

     

     

    I agree with Tin and 273 here.

     

    What it comes down to is knowing your system's strengths and weaknesses. Either you KNOW that trades can take a while to develop or you KNOW that they have to get into profit quickly. Noone here can tell you what is best for YOU and YOUR system. You HAVE to prove to yourself what is best. Just looking at this one trade, it appears that this was a great trade. I don't see any problems - your stop was never in danger and your profit target was hit. That's an ideal setup for me. Others want profit and profit instantly.

     

    Here's an example from right now - I took at an EC short at 8:45am EST today. At 9:02am the profit target was taken out. Just reading that, it appears to be a nice, good trade. However, here is what happened - at 8:48 and 8:49 I took a little heat. Now, when it came back down again I could have paniced and said just get a tick or two and move on. Had I done that, I would be sitting here, just as the OP, asking why did I get out? My stop was never in danger and this is a 'winner'.

     

    Bottom line - if you turn your 'winners' into a few ticks gain and take full stops, you'll never make money.

  9. Posted

    I have a similar problem. I get pretty drained mentally by the end of the way. Im planning on trading either the morning session or afternoon session only. Anyone know if either session provides a more profitable opportunity?

     

     

    nu - If I had to choose one session, it would be the morning session. Granted, moves can happen all day - incl lunch - but I think overall, the better action is in the AM. That's what I have found for me and my trading style. You'll have to examine each for yourself to see what fits you best.

  10. Posted

    Has anyone traded the Big Dow? The tick increments are 5 times the YM but is anyone familiar with the price movements of the BIG DOW?

     

    Soul - I haven't looked at it in awhile, but I think the volume is anemic. I was kinda hoping it might take off, but guess the interest is not there (yet).

  11. Posted

    brown, you trade around news time then? Do you trade or hold it overnight?

     

    tor - I think you have to watch the EC before, during and after news if you want to catch some moves early. I usually start watching it around 8am EST when there is 8:30am econ releases. And of course you always see setups in hindsight at 3am or so when other world markets are moving.

     

    I do not hold any futures contract - EC or not - overnight. It would not be surprising to see a fairly large gap on the EC if you walk away at 4:15pm and return at 8am the next morning. The contract is moving all night, but just looking at those timeframes can show a substantial 'gap'.

  12. Posted

    So...brown, do you use pivots with your trading on the EC? And if so, how often are you noticing that it does in fact trade to the pip on the pivots? I know MrPaul has been noticing this and taking some sweet sweet trades.

     

    Love to hear the info.

     

    tin - I personally do not use pivots. And w/o getting into another 2 page discussion on something off topic, I can see how it could react around pivots and round numbers like 1.3, which we saw this past week. The 1.3 was respected intraday a number of times and then a fairly decent collapse came through and 1.3 was blown away.

     

    It would be great if the 'regulars' here posted about the EC and how they are trading it as well. I trade 'micro' trends and this is why the EC works so well for me. I am looking for 10-15 tick profit targets on average, and when the EC wants to move, it can move!

     

    It also provides great trading opportunities around econ news. Any day there is an 8:30am release, I am looking for setups starting around 8:00am. On a nice day, I can make more money trading the EC from 8-9:30am than trading the indexes all day. Just makes you wonder... :)

  13. Posted

    That's why you never see anyone discussing EC separately. Good luck to you anyway. :)

     

    I have found that the EC is not discussed by itself simply b/c traders do not even know it's there! Which was exactly what happened here when I entered the TL chat room.

  14. Posted

    What I meant was, the moves in EC are identical to the moves in EUR/USD so any discussion of technical or fundamental influences on EUR/USD apply equally to EC. There are even CME "e-quivalents" which convert their EC price to the EUR/USD spot price. EC is just another way of trading EUR/USD. What sort of discussions did you have in mind?

     

    notouch - As my original post states, I simply wanted to provide a post that summarizes trading the EC futures contract since after I entered the TL chat room and found out that noone was trading the contract there. I've been trading it for well over a year after I found out about it and it's been a critical addition to my trading instruments. If I had to pick just one, I would probably take the EC over anything else - indexes included.

     

    As for discussions, that's up to anyone here that is interested in discussing the EC contract. Like I said, this thread is not the place for EC vs. Spot - Buk already pointed out another thread that deals with that topic. This thread is all about the EC and the EC only. If noone else wants to discuss it, so be it, but at least it's here and available for future reference to traders.

  15. Posted

    You can't separate the EC from EUR/USD spot. It doesn't have a life of its own at all so I can't see what sort of discussion you expect to have about it. Sorry to be blunt.

     

     

    Well, there's plenty of discussions about the ES, YM, ER2 and NQ, so why should this be any different? This is a futures contract, posted in the futures forum; therefore, I assumed the discussion could revolve around the EC futures contract.

     

    As for your comments, the EC does in fact have a life of its own. Every day about 150,000 contracts trade through it. Traders like myself trade the EC and don't touch the spot, so it does appear to have a life of its own.

     

    I apologize for taking time to write up a post about this contract and trying to discuss it. It was purely done to help educate and stimulate discussion on this futures contract that many traders overlook. That's it. As I said, if you want to start a futures vs. forex thread, go for it and I'm sure people will chime in.

  18. Posted

    I have visited the chat room recently and was surprised that no one was familiar with or trading the Euro FX contract. For information purposes, thought I would start a thread here for current and future use.

     

    In a nutshell, the EC is similar to the Eur/Usd in Forex trading. The obvious big difference being that the EC is traded at the CME and is under the same regulations as the other contracts being traded there. I personally do not touch Forex due to the lack of regulation currently there. The EC provides a way to trade in currencies with the same futures brokerage account you currently have and diversify into currencies.

     

    Here is a link to the CME site on the EC: CME Euro FX Futures & Options

     

    In my trading, here are my observations on this contract:

     

    • It has the potential to trend much more than the US indexes.

    • Each tick is $12.50, so if you like the ER2 at $10/tick, this may be of interest to you.

    • It does not move in conjunction with the indexes, thereby providing an instrument to trade that is ‘independent’ of the US indexes. For me, this has provided trading opportunities when the indexes are not providing much action.

    • The volume is good – approx. 150,000 contracts per day currently. This is more than YM or ER2.

    • Commissions are slightly higher than on the indexes since this is a full-sized contract, not a mini. There is a mini-EC; however, the volume there has never taken off. While the commissions are higher, any good broker will negotiate based on your expected trading volume and they ARE NOT that much more than indexes, regardless of what your broker may tell you.

    • Depending on your charting platform, you may already have this feed or need to turn it on.

     

    I have traded the EC for well over one year now, and it is a perfect addition to the indexes that so many of us trade. While the Forex arena is not for me, this contract provides a way to enter the currency market without entering something so unregulated. Now, once the CME FX Marketplace is up and running, that may be a different story (Reuters and CME To Create FXMarketSpace).

     

    Good Trading!

     

    Note: Some charting services do not use EC for the ticker symbol. When you do a symbol lookup, make sure to seach for the Euro FX contract, not the mini.

  19. Posted

    Hey guys, I use a platform called T4. It's like an XTrader knockoff. You won't find it called T4 at brokers as they allow the broker to brand it as their own. I use Mirus Futures and Dorman Direct (the branded T4). You may want to take a look at that as well if you are going to compare. I love it.

     

    Here's a link directly to T4: Home - CTS

     

    Here's how you can get a sim thru Dorman: https://www.dormandirect.net/Register/

     

    Should you decide to use it, I would ask that you at least consider going thru Mirus as they have been excellent to me - good rates and good customer service. ProActive Futures is also a good IB in my opinion.

     

    I should note that you can easily alter the appearance and look of T4. I hate the initial default the program uses, but with some clicks and dragging, you can customize this like you wouldn't believe. Also, not sure if this is of use or not, but for tape readers they have some volume things you can have right on your dom. Again, I don't use it, so not sure if that's useful or not. Also, this is probably the main reason why I use it - all of your orders rest on T4's servers, not your computer or the exchange. If something goes down - you or the exchange, your orders still are out there. This is important to me b/c I use smaller profit targets and stops. I set my orders up on an OCO and then I know I am good to go. If something happens on my end, my orders are out there and set to OCO.

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