To make myself accountable and to hear feedback from those who have the experience to give constructive feedback. As I am in Australia, trading the ES and in this session is not something a lot of people here do.
The why is simple, I see a challenge and i want to master it. Day trading will challenge my psyche and teach me the art of self control in terms of patience and discipline, two things I think will round out a good personality.
I believe that day trading is a natural evolution from higher time frames as one further explores and delves deeper into the how and why a market ticks.
Why the ES and the Euro session
My day time job is as a stockbroker specialising in ASX stock and options. After exploring index options and SPI futures as a vehicle for day trading, I came to the conclusion it is extremely hard to do due to the thin volumes. This brought me to the ES. I initially traded the Euro open but switched to Euro close where volumes were up to 4x higher. Trading the Euro open felt like watching paint dry at times.
Now that I am trading specific zones, I trade the entire Euro session from 2:00 to 8:30 ET with alarms for setups.
Goals
Live trading after confirming I won't blow up my account with a system that has at least 30 sim trades. I don't necessarily need to see positive expectancy but I do want the comfort of knowing I have the risk controls in place to not blow up and that I can follow rules. Goal reached.
A system and execution discipline to produce 0.5 point expectancy, then 0.75, then 1.0 and so on and so forth until the system and discipline shows a positive expectancy of 3-4 points.
Size up
Entry and exit rules
Daily bias: set with daily VP
Location: inflection point at S/R zones in VAH/VAL, LOD/HOD
Absorption: congestion and absorption of momentum
Divergence: Delta and price divergence for entry
Add1: Pullback
Add2: 2nd Pullback
Exit1: Momentum loss, Volume Spike, LOD/HOD
Exit2: Momentum loss, volume spike
Risk Management
Daily stop loss: $500
Weekly stop loss: $1000
Monthly stop loss: $2500
Maximum DD from initial stake $2500, reset every year
Maximum inflection points per day: 2
Maximum poor execution trades in a row: 3, then reduce to trading 1 lot until confidence and execution efficiency is back
Daily checklist
Check for upcoming scheduled announcements and take note of the times
Have financial juice open to get news flow as it comes through
Set daily bias using VP analysis
Check relative volume, thickness and lots per minute. Is there enough volatility to trade?
Take stock of Y-Hi/Lo/Cl, D-Hi/Lo/Cl, PP, R1-R3, S1-S3, Naked POC/VAH/VAL - mark inflection points