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1:1 risk reward, and targeting win rate?


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1:1 risk reward, and targeting win rate?

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  #1 (permalink)
Dallas
 
 
Posts: 6 since Apr 2020
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i've been wanting to get into futures day trading for a while, and i'm starting my regimen today. 30m-60m/day of trading the open(or before lunch really).

i'm using a basic setup: waiting for the 9/21sma to spread with the pSAR confirming, and then buying pullbacks into the 9ema and selling when they hit 4 ticks.

i'm also using 4ticks as a stop too. the ATR was like 10~ticks today, so things moved fast to say the least. average trade was 45sec. after 35trades i was down $113 after commissions, in a paper account.

is that a good idea with scalping or is it better to scale in your buys, and scale out of your wins? i'm curious as to what the different opinions are. i come from the trend following school, but i like the idea of having fixed targets and sitting on my hands to not interfere. Theres also a boatload of noise in the e-micro market, so 4 ticks can pass by in .2 seconds and not be part of a "move" at all.

any thoughts would be appreciated. this is my first post and im looking forward to learning more from this community and sharing what i can.

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  #2 (permalink)
Market Wizard
Fletcher NC
 
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the chances of making that idea works is not good . out running the slippage , commission , and over trading will not be easy day in day out. when you fail to make it work , then you will try to filter the pull backs . you would stand a better chance using higher time frames . like when when the ES is trading above the 8 day ema on the daily and weekly charts , take all pull backs to the 8 day ema on the daily with a 5 point stop. hold it until you make 15 to 30 points. use micro contracts if your cash account will not stand a 250.00 loss. that takes care of a lot of problems in your concept. commission, slippage , over trading , being glued to a computer all day long ... ect.ect

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  #3 (permalink)
Dallas
 
 
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i like that idea. idk if i can do that right now tho. $250 loss on a trade is a bit much. $5 at a time is a little easier to stomach! haha.

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  #4 (permalink)
Tokushima, Japan
 
Experience: Beginner
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I use a variety of indicators to help me to choose when to enter a trade. Exiting a trade is much easier as I am only interested in 5-10 ticks. To help with the whipsaw action and general noise in the trendline I use vwap/mvwap and of course support and resistance. I am working on an addon where I can click a button to adjust various time periods with vwap/mvwap in relation to ema and sma. Also I adjust the ATR calculation and I like to check the RMA and the SMA as SMA is not normally used with the ATR calculation.

In terms of when to trigger the stop loss I prefer to use 8 ticks instead of 4 so that I can ride some of the whipsaw activity. Also with the addon I am coding buttons to adjust the stop loss from 4 ticks to 8 ticks so I can quickly adjust when whipsaw activity is only 1-4 ticks. I don't look at this as slippage now that I have started using Bookmap.

Additionally, I have a chart with the ADX DMI strategy simply as a way to see how much of this data is matching up. I have Bookmap sharing the same monitor and I would argue that Bookmap is quickly becoming my most valuable tool for choosing my entries. I am still getting comfortable with Bookmap as it is an explosion of eye candy that my brain is still learning to process.

Part of the reason I am commenting in this thread is simply to help me organize my thoughts. So thanks in advance for forgiving me for this dizzy array of strategies.

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  #5 (permalink)
Dallas
 
 
Posts: 6 since Apr 2020
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forestcall View Post

In terms of when to trigger the stop loss I prefer to use 8 ticks instead of 4 so that I can ride some of the whipsaw activity. Also with the addon I am coding buttons to adjust the stop loss from 4 ticks to 8 ticks so I can quickly adjust when whipsaw activity is only 1-4 ticks. I don't look at this as slippage now that I have started using Bookmap.

wait, so you have an 8 tick stop but a 5tick profit target? am i understanding that right?

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  #6 (permalink)
Tokushima, Japan
 
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I am scalping. The trades last 1-3 min. If I have a tight stop then I will exit out with a loss. There is a whipsaw of 4-6 ticks in some trades.

How do you scalp 1-3 min trades?


djporter91 View Post
wait, so you have an 8 tick stop but a 5tick profit target? am i understanding that right?


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  #7 (permalink)
Cairo+Egypt
 
 
Posts: 5 since Jul 2020

If you factor in the commissions, your 1:1 risk to reward ratio doesn't hold in practice .

I'd suggest leaving that idea & move to at least 1.5R to 2R trades, indicators don't work IMHO - try moving to volume profile if you're looking for longevity as a trader.

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  #8 (permalink)
Chicago IL USA
 
Experience: Advanced
Platform: Ninjatrader
Trading: ES CL SB
 
Posts: 4 since May 2020
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djporter91 View Post
i've been wanting to get into futures day trading for a while, and i'm starting my regimen today. 30m-60m/day of trading the open(or before lunch really).



i'm using a basic setup: waiting for the 9/21sma to spread with the pSAR confirming, and then buying pullbacks into the 9ema and selling when they hit 4 ticks.



i'm also using 4ticks as a stop too. the ATR was like 10~ticks today, so things moved fast to say the least. average trade was 45sec. after 35trades i was down $113 after commissions, in a paper account.



is that a good idea with scalping or is it better to scale in your buys, and scale out of your wins? i'm curious as to what the different opinions are. i come from the trend following school, but i like the idea of having fixed targets and sitting on my hands to not interfere. Theres also a boatload of noise in the e-micro market, so 4 ticks can pass by in .2 seconds and not be part of a "move" at all.



any thoughts would be appreciated. this is my first post and im looking forward to learning more from this community and sharing what i can.



I donít use actual stops, but I target 2-4 ticks (sometimes it moves fast and I may end up with 6-8 as I do it all manually) and try to get out 0-4 ticks if it stalls but sometimes if I just think my placement was wrong, I may put another order in and try to win that one and get out of the first at scratch or profit if my correlations are moving in that direction.

I donít scale out. If Iím trading a 5 lot, and out all 5. I treat each entry as a separate trade.

The rest I canít speak to as I donít use charts or indicators...

35 trades though is a lot to be down for the day btw. Even though itís paper, try and condition yourself to end the day of itís not going well.

I had 36 trades today 100% winners (a very good hour of trading), but if I was trading bad Iíd never have traded that many times... otherwise you are digging a hole with fees.



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  #9 (permalink)
Chicago IL USA
 
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forgiven View Post
the chances of making that idea works is not good . out running the slippage , commission , and over trading will not be easy day in day out. when you fail to make it work , then you will try to filter the pull backs . you would stand a better chance using higher time frames . like when when the ES is trading above the 8 day ema on the daily and weekly charts , take all pull backs to the 8 day ema on the daily with a 5 point stop. hold it until you make 15 to 30 points. use micro contracts if your cash account will not stand a 250.00 loss. that takes care of a lot of problems in your concept. commission, slippage , over trading , being glued to a computer all day long ... ect.ect



I trade 30-50 separate trades a day (sometimes over 100). I risk 1-4 ticks (limit exit usually), I take 1-4 ticks profit, I win 80-90%, but like today, I was 36-36 100% winners. To try and pick direction is a losing venture. His ideas (though, I wouldnít use charts, indicators or market profile to trade because none of it works) are far less risky.

I agree the commissions can add up, but if you win, they are nothing to worry about. If you are losing 40, 50, 60% of trades you have more to worry about than commissions.

I have no slippage. Thereís no slippage on limit orders. Itís not possible.


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  #10 (permalink)
Market Wizard
Fletcher NC
 
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dsheehan87 View Post
I trade 30-50 separate trades a day (sometimes over 100). I risk 1-4 ticks (limit exit usually), I take 1-4 ticks profit, I win 80-90%, but like today, I was 36-36 100% winners. To try and pick direction is a losing venture. His ideas (though, I wouldnít use charts, indicators or market profile to trade because none of it works) are far less risky.

I agree the commissions can add up, but if you win, they are nothing to worry about. If you are losing 40, 50, 60% of trades you have more to worry about than commissions.

I have no slippage. Thereís no slippage on limit orders. Itís not possible.


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