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HighStakes
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Posts posted by HighStakes
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I will have to say that I have fallen in love with crude oil lately. Initially, I was a little afraid of the extreme volatility, but I have now learned to love it
So, day trading CL it is!
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Thank you all for your replies.
The common denominator here seems to be complaints regarding the social isolation. Fortunately, I am a loner and I do not need to be around a lot of people. However, there is a big difference between being just around just a few people or meeting and seeing people during your commute and actually not having to leave the house for the whole day
Still, I think I will give this a shot. The rewards are high and if I have not succeeded by the time I`m 30 (26 now), it`s still not too late to get a formal education.
I earned $1700 trading a single contract of CL today and that alone reminded me of why I got into trading in the first place
If I actually become a successful trader, I could rent myself office space somewhere. That alone should help tremendously with the social isolation even though I still will not be working directly with other people.
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I don't trade futures, just straight equities, so I have no opinion on the comments on the ES market.As for the TraderFeed example, if you're looking to track sector performance, just track the sector ETFs. No need to bother with a basket of stocks as the ETFs are the basket of stocks. (And more than you'd want to put into a spreadsheet.)
Personally, I have a watchlist for each of the sector ETFs with each component stock so I can quickly review all of the charts.
I agree. A watchlist of the sector ETFs should do the job
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I wouldn't bother with any 'technique' books. What you need to reed is Enhancing Trader Performance by Brett Steenbarger. Thats all you need book wise.However if you do really want a few techniques/methods to start you off, get them free off the internet.
Screen time is where you learn. You cant learn to trade from reading a book, just like a great chef never really learnt much from cookery books.
With all respect, I disagree with this statement.
I have a hard time believing that a neophyte with no knowledge of how the financial markets work can become successful just by sitting down and staring at a screen. How can he, when he does not even know what a candlestick is?
There comes a time where the trader needs to move on from the books and finds his own truth, but before that there is a lot of stuff to learn in my opinion.
Of course, if you are a scalper, the less theory you may need to know, but you would still need to know the basics.
youngsequan,
What are your goals and what do you want from the books? I could recommend you a dozen, but it would be better if you were more specific.
The book by Tharp is great and covers a lot of ground.
Mastering The Trade by Carter is also decent.
The Market Wizards series is also good.
Good luck!
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Hello traders,
I am curious as to how those of you who are trading full-time experience your lifestyle.
When I first started pursuing day trading for a living two years ago, I had no doubt that trading potentially was the ultimate lifestyle and there was nothing else in the world I would rather do. Even though I had prior experience and success as a swing trader, I was rather clueless as to what I had embarked upon due to a general lack of knowledge.
More than two years later and much of my time spent running in circles, I am finally seeing the end of the tunnel. I have been feeling a little burned out and poorly motivated to pursue my dream lately, but considering all the effort I have put down this far I really don`t see myself stopping now either. Actually, I got motivated writing this post
Hopefully, my upcoming vacation will recharge my batteries.My plan is to go live in September if things go as planned, but as always there is a trade-off and I will have to take risks that not only affect my financial life, but also my social life.
It would be interesting to hear the experiences from guys who actually made it and are living the dream (hopefully).
One of my concerns with this profession is the social isolation. Even though I have worked alone for thousands of hours in the past and managed just fine, I`m not sure if that is what I want for the remainder of my life, but there are of course ways to balance that.
Sorry if I`m rambling and thanks in advance for any valuable views
Best regards,
HighStakes
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I was not aware that this book is highly overrated, but I would personally highly recommend it
It may not teach you how to trade, but it will learn you to understand the profile of a trading system. Neophytes may be shocked to learn that it is actually possible to have a negative expectancy with a 90% win rate.
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Hello everyone,
Could replay of historical markets at high speeds be a valuable practice for learning pattern recognition?
I intend to experiment with this myself and I would like to hear if anyone has any experience or ideas in this area.
Best regards,
HighStakes
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Earn the right to increase your position size.
Personally, I will allocate $4000 for every contract (ES). Thus, if my account increases by $4000, I add one contract. Conversely, if my account decreases by $4000, I reduce my size with one contract.
I will keep risk at a constant maximum of 2% per trade, ideally less.
It is not that hard to make basic Monte Carlo simulations in Excel. It can be very useful to do when learning to think about these concepts. Experiment with different input and observe the results of the simulations.
What kind of win%, average winner, average loser and number of trades do I need in order to meet my objectives? What will happen if I allocate less capital per contract or more? How much drawdown can I expect?
If you have an idea about your trading statistics or just want to experiment, you can simulate a week, month, year or more of trading, 10 000 times or whatever you like, to see what can be expected from that trading profile.
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Thank you for your input, Shrike.
Best of trading to you!
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Hey shrike,
Thanks. That is definitely helpful. From your experience alone, I think I will stay away from BarChart. Sounds very unprofessional.
I also saw some people on another forum who thought that maybe their $TICK data were messed up as well (during a certain period mind you, but that is enough for me), which is precisely one of the indicators I`m interested in.
Which broker do you use? Do you execute all your trades via the eSignal platform or do you use it just for charting?
Since I am only looking for market internals ($TICK, $ADD and sector EFTs from the S&P 500 universe), it might be overkill to get eSignal Premiere just for that.
Perhaps I`ll look into getting eSignal Live Charts.
Or possibly ditch Ninjatrader and Zenfire alltogether and go for the eSignal platform/datafeed and Interactive Brokers
Regards,
John
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What did you decide for, shrike?
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What did you go for, taotree?
I am soon opening an account myself and I need to decide what setup and broker I should use.
Since I will be trading futures exclusively, I am considering Mirus or Amp, but as you said, Zen does not provide NYSE data.
Like dandxg said, Barchart seems like an affordable alternative. Would this in effect replace Zen as a datafeed or can I use both?
Should I consider using IB?
I am currently also using a demo account from ThinkorSwim which actually provides all these internals for free, but I don`t know if I can rely on that when I start trading live. Also, I`m not sure how I like their charts and platform
Curious to hear what setups you guys use for trading futures.
Thanks in advance,
John
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Since you keep bringing this slippage issue up, what has your analysis shown for realistic slippage?Since I have not traded this contract live myself yet, I do not have any historical data to base it on, but in my simulations I have accounted for a 1 tick slippage on 30% of my trades.
That would be $375 after 100 trades. Adding commissions ($450), it would drastically impact the bottomline if one aims for 1 points winners or less.
I don`t know if this is realistic or not, but I still think my line of thinking is correct in that slippage and commissions needs to be taken into account if one goes for small winners.
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Those of you who are successful day trading the ES, how many points do you on average target per every trade and how frequently do you trade?
While it is tempting to aim for one point winners and increase frequency, my preliminary studies show that commissions and slippage really affects the bottom line when taking small profits.
Increasing the profit target to 2 points or even 3 points per trade, drastically reduces the impact of commissions and slippage.
So, I guess it boils down to trading style: 1) high frequency taking small profits or 2) lower frequency taking bigger profits.
The ideal would perhaps be to scalp for 1 points when the opportunity is there and then aim for larger winners when an opportunity is perceived.
Ideas? Opinions? Experiences?
Thanks in advance,
HighStakes
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Simply, the ES is one of the biggest traded contracts = biggest players are here. And they are good. Along with the bots, I'm not interested. You are pitting yourself up against the biggest traders in the world + the many bots out there ... not an easy task.What your eyes think they see as easily tradable (I assume you are looking at static charts) aren't so easy in real-time.
So while you are new and looking around to find your groove, it's worthwhile to examine some other 'different' markets - Oil, Gold, Currencies, Grains, even the RLM can act differently to the ES.
Also - daily volume means nothing when you first start. Slippage on 1 contract should not be a factor in your decision making. With 1 contract, you could easily trade the QM with minimal slippage. Check daily volume on that one to see what I mean.
Thank you for your observations and recommendations. I will definitely keep an open mind for other contracts.
To clarify, I have been trading and observing the ES contract in real time.
Hi HighStakes,I'll ignore the question of trading the /ES and get back to your original question about markets to track.
I think it's worth making a distinction between intraday tracking and after hours tracking because some of the things you really want to monitor when you're placing trades and other things are fine being reviewed when you're preparing for the next day just to get a sense of the overall market.
I also think it's worth making a distinction between markets and indicators. Your list includes both.
First of all, you make a lot of comments about mid-term/long-term time frames. So this isn't a market, this is your perspective of the market you're trading. And I'm a big fan of watching multiple time frames. Alexander Elder's book "Come Into My Trading Room" has an excellent writeup about using triple time frames. Check it out and definitely investigate creating a setup screen to view all the time periods simultaneously. It works much better than flipping between windows.
As for what to watch intraday, everyone is spot on with warning against including too much and suffering from analysis paralysis. (It will also affect computer processing power.) Only add things you know you will use and do it incrementally. Remove what you don't use.
In regards to indicators, my screen includes A/D lines, A/D Volume lines and TICK, one set of each for the NYSE and Nasdaq. I take all of these into account when planning trades and rank them high on the list of things to watch.
As for markets that I keep open on my screen, I watch the SPY, QQQQ, IWM and XLF. I also watch the VIX, US Dollar futures, and TLT (30 year treasuries). These aren't the markets I trade, they are simply the markets I watch.
I keep things like gold, oil and other currencies in a "Market Overview" watchlist and will review them from time to time, sometimes during the day, many times not. I guess this is where a lot of the "after hour" candidates can find a home. Things like sector performance, currencies and foreign markets fall into this category. I have found constantly monitoring specific sectors during the day is definitely information overload with very little value added.
Also keep in mind: The auxiliary markets that you track can and should change over time as they become more or less important. For example, a few months ago, the SPX had a very close correlation to the USD. If the dollar fell, the market went up. Eventually that correlation disappeared (basically when the USD started to rise) but while the correlation existed, it was worth watching closely.
But in the end, trading is about finding your style, your edge and what works for you. So take people's suggestions (or criticisms) into consideration but in the end, there's no single best way to trade.
Hello OsbourneCox,
Thank you very much for this informative post.
Yes, the distinction between tracking in real time and after markets is important. My work would be after the market close to get an overall sense of the markets as you say and a heads up if an important market is close to an important price level. This was what I alluded to in my initial post.
I`m aware of Elders triple screen system and I will definitely be using that for my main contract on a dedicated screen.
Are you trading the ES contract exclusively yourself? I would appreciate your opinion on this market if so.
An example of how sector performance can be tracked: TraderFeed: Tracking a Basket of Stocks for Volume Weighted Average Price
It should be very valuable for gauging the probabilities of a breakout from a range or a mean reversion trade.
Regards,
HighStakes
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Thank you all for your opinions.
Just to clarify. I am not looking to track 10 different markets in real time in order to help me make a decision on a potential 2-point trade in the ES
That would not make sense.I agree regarding paralysis by analysis, so I will definitely try to limit what I`m watching during the daytrading session.
My idea was that by tracking a select few (5-10) related markets (probably not any other equity indexes at all) at the end of every day, it could help me gauge what would happen the next day or during the week. More like getting a view on the big picture.
I have made quite a few good trades the last weeks using only a 1 minute chart, simple trendlines, S/R and patience, so I will be very critical of adding anything that does not provide value and that may potentially cloud my judgment.
Perhaps I`ll drop my initial idea alltogether.
If you want to start trading one of the worst contracts in the world, then you should focus exclusively on that since it seems as if you don't really have a trading plan just yet. You are planning to dive right into the deep end with the biggest players and they are waiting for you and your money any day now. Finding a reliable edge in the ES will be difficult enough that to overload your brain with info from 10+ other markets will just make this an even harder task.Could you please expand on what you mean by the worst contract in the world?
I have heard so many different opinions regarding this contract and I feared the worst, but my experience so far (observation and demotrading) shows that it is highly tradeable. Of course, I`m not stupid enough to make snap judgments based on papertrading and a relatively small sample.
I made a comparison of the different contracts on the CME and I found that the ES has by far the most volume of the equity indexes. That alone should make the ES the preferred contract to trade among the equity indexes (less slippage). Actually, overall, the ES is only surpassed by the eurodollar contract and that by a small margin.
There are many contracts that have twice or thrice the average true range of the ES, but more volatility is not necessarily better if it is less predictable and less liquid (more slippage).
Just thinking out loud here...
You are correct in that I do not have a complete trading plan yet, but I am working on it on a daily basis and I have a very good idea about how I`m going to trade. Part of my plan is to look at different contracts the following months and eventually decide to trade one exclusively.
If you have any suggestions to aid this process or simply a better alternative than the ES, I would appreciate it a lot:)
All the best,
HighStakes
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I am not sure 'tracking' is a good thing unless you have a good (and very specific) idea how you can use the information you are tracking. Sometimes less is more, as AK suggested maybe a breadth or depth indicator but only of you have a exact idea of how you are going to use it to help make trading decisions.The idea is to keep track of what the most important and related markets are doing on a daily basis.
I will not use it to generate trading ideas for my own market (ES). For that I will focus purely on price action, NYSE TICK, volume at bid/ask, new highs vs lows, etc.
My initial thought is that due to the correlation between several of these markets, it might be useful to be aware of where other markets than the one I am trading are moving. If oil is moving towards an important support level and I am not aware of what is going on, it might cost me.
Not sure how to keep track of it yet though. I`m leaning towards a spreadsheet.
That, or I could possibly just review daily charts of all these markets at the end of the day or on a weekly basis.
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I agree that the template in Mastering The Trade by John Carter is a great starting point. High Probability Trading by Marcel Link also has some good stuff on writing a trading plan.
In my opinion, your trading plan should contain every aspect of your trading business:
- Why you are trading and what your objectives are
- When you will be trading
- What you will be trading
- How many contracts/stocks will you trade as a function of your account size
- Money management
- Drawdown rules (for example, stop all trading for the month after a 20% drawdown)
- Your trading system (this can be as simple as moving average crossover system)
- Notes and reminders regarding psychology
- A solid system for tracking performance on a daily, weekly and monthly basis
- A journal detailing your trades, psychology, general market comments, etc
- How you will start your trading day and how you will end it
- Trading rules
- Montecarlo simulations including commissions and slippage so that you can learn what to expect from various trading systems.
My current trading plan is over 10 pages and covers just about everything. Attached to the plan there are several spreadsheets that is part of the plan.
Writing my journal has really helped me pull together everything I`ve studied and learned so far. It has also revealed several weak areas that I`m now working on.
When my plan is complete, it should be so detailed and conscise that I could give it to anyone and they could understand and use it.
Trading without a plan is planning to fail
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Hello everyone,
I am currently writing my trading plan and preparing for live trading by September 2010.
As a part of my plan I want to include how to keep track of other markets than the one I will be day trading (most likely the ES contract).
I am thinking that for my main market, the S&P 500, I should track sector performance, advance/decline, breadth, highs vs lows, etc, support resistance at higher timeframes, long-term trend, etc.
For the other markets, I will maybe not be that detailed, but track the long-term trend, mid-term trend and short-term trend. Important support resistance on various time frames, etc.
Any important statistic that I have forgotten?
What markets then are important to track?
From the top of my head, I`m thinking: the other US equity indexes (YM, NQ, TF); currencies (euro, pound, yen, etc); bonds (30 year treasuries, ?), crude oil, gold and possibly some other indexes from the rest of the world (Europe and Asia).
If one makes a spreadsheet for this, it should not be too much work to track and update this information on a daily basis after every trading day.
To make it manageable, one should perhaps try to limit the number of markets without leaving out any that would be important.
Any suggestions or ideas are highly welcomed!
Thanks in advance,
HighStakes
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Thanks, chaotic!
You have made some very interesting observations about your own performance. Knowing when not to trade and being disciplined enough to follow it, is definitely an edge.
Good luck to you as well!
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Allright guys.
Average daily volume is representative of March 2010 and was obtained from CME.
ATR was plotted around 20th of April I believe, so it might not be totally accurate as of today, but it should be illustrative for the purpose of the sheet.
You might miss a few contracts, but these are the ones that are relevant for my trading. Every contract is traded on the CME, except for the TF (Mini Russell) which is traded at ICE.
Enjoy!
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Thank you, chaotic!
I started swing trading stocks on OBX along with my daytime job in late 2007. During the first two quarters of 2008 I was very successful and I more than tripled my account. I did not know much then, but I had a very simple method and I always used a stop loss.
As happens sooner or later, one highly leveraged trade went badly against me and I could not pull the trigger and get out when I should have. I held on for a few days and then sold close to the bottom. I then went into revenge trading since I obviously wanted to get my money back. Buying at tops and selling at bottoms again. Hope and fear were my two dominant emotions at the time.
Very textbook actually.
I lost probably close to 70% of my account before I withdrew all my money.
With what I had left, I naively quit my job by summer to start studying the markets full-time and hopefully go live by the end of the year.
Of course, I had no clue what I had gotten myself into, so my plans changed quickly. I did study full-time for 6 months or so before I got back to full-time work though.
Since then, I have been studying books and the markets whenever I have the time. Looking back, I would have done things very differently and I would not have read as much as I`ve done.
I`ve read probably over 80 books and there is so much garbage out there. I feel that I have a pretty good overview now of what works and what suits me though, but I could have saved myself a lot of time and money not wading through all that stuff.
My trading plan and all my preparatory work is almost complete, so I will start exclusively demotrading by the end of May.
Hopefully, I can go live by September with a small account.
I am not quite sure how I will break into trading yet, but I think my best option would be to trade part-time in the evenings.
Oh, and yes. I will most likely be daytrading CME futures. Equity indexes, currencies, crude oil or bonds. I have not decided yet, but will know more as I start demo trading.
Best regards,
John
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Hello everyone!
I`m a young man from Norway that was stupid enough to delve into the world of trading a few years back instead of going to school
Hopefully, I will not regret that decision in the end
I think I will enjoy my stay at these boards. My impression is that there is a tremendous amount of valuable knowledge here, while keeping noise levels and negativity low.
Since the pursuit of trading is a lonely one, it is nice to have some like-minded individuals to share and discuss with.
Best regards,
John
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I made a comparison by volume and dollarized ATR on the most popular contracts on the CME. If anyone is interested, I`ll upload it tomorrow.
Actively Day Trading One Single Market VS Day Trading a Handful of Markets?
in Day Trading and Scalping
Posted
Hello everyone,
It`s been written and recommended several places that for the new day trader it is smart to focus on trading just one single market: learn everything about it, become one with it and master it.
This has made perfectly sense for me in theory, but now that I`m in the practical process of choosing a market to trade (and paper trading), I have a hard time to decide which market to choose.
Actually, the idea of day trading a handful of markets seems more appealing to me right now. One obvious benefit I see is that by trading several markets, it may be easier to not overtrade since you most likely will get more high-probability set-ups. When one market may look hard to trade, the perfect set-up may materialize in another market.
If I had to choose a single market though, I have to say that I have really started to enjoy crude oil lately.
Appreciative of any advice on the subject.
Best regards,
HighStakes