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They say no question is a dumb question....I have a Buy / Sell question.


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They say no question is a dumb question....I have a Buy / Sell question.

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  #1 (permalink)
Tokushima, Japan
 
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forestcall's Avatar
 
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Lets take MES as the example-

MES is on a Bullish trend. Based on the support and resistance and the MA-14-20-40-200 and the volume all give clear indications the market is going to go up at least 10-20 ticks in the next 4 hours.

In this example, lets say I buy 20 contracts on the MES or 2 ES with a 5-10 tick buy-sell and a 80 tick stop.
So we wait 30-60 minutes while we have multiple bars in a down trend and then the trend goes up and we reach the sell profit stop.

Why doesn't everyone do this?

I did this July 1 and made a gross of $276.25 and a Total PnL of $225.25
The market is actually bearish today but I felt very confident I would hit my tick sell-top.

Am I missing something? Yes I know the market could go crazy bearish and continue down.
But I am using Bookmap and NT8. I am looking at multiple data points.

Seems like this is a fairly easy way to make a steady $1k+ a day with very carefully planned exits. I can exit going down or up depending on the market trend and what the data is telling me.

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  #2 (permalink)
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Because with a large enough trading sample size, you're going to find that the times that you do have an 80 tick losing trade (and you will) along with commission, are going to eat up all your profit unless you have an edge in the market. Out of curiosity, in your example, why not just trade 2 ES contracts? Isn't MES 1/10th ES?

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  #3 (permalink)
Tokushima, Japan
 
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I have been trading Micro's since October. But with this new strategy, I might trade ES with multiple accounts so that if I blow an account I wont have more than $2k-$3k. I will need to put a stop loss that equals my balance so I don't get into trouble.

As far as the bad days when the market plunged. I am researching all the days in the pas 10 years and the time of day/minute when the various main Futures markets plunged. There appears to be a pattern worth noting.

I cant wait for this holiday to be over so I can get back to trading :-)


TheShrike View Post
Because with a large enough trading sample size, you're going to find that the times that you do have an 80 tick losing trade (and you will) along with commission, are going to eat up all your profit unless you have an edge in the market. Out of curiosity, in your example, why not just trade 2 ES contracts? Isn't MES 1/10th ES?


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  #4 (permalink)
Albuquerque, NM, USA
 
 
Posts: 29 since Jul 2012
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An 80 tick stop with a 5-10 tick target (an R:R anywhere from 16:1 to 8:1) makes me cringe! And a few wins doesn't mean you can do it consistently. Spend some time at a craps table and you'll see what I mean.

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  #5 (permalink)
Valencia (SPAIN)
 
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The method has no math foundation: R/R means nothing if you don't know the probabilitu distribution behind it. In general if you SL is tight you are moving in the Gaussian noise range, then in gaussian enviroment you will have no edge.

Then in the rest of teh thread you assume that you can deduct a distribution by looking at past behaviour of ES .... so you wanna look at things mathematically but you basically treat the subject without rigurous math approach.



forestcall View Post
Lets take MES as the example-

MES is on a Bullish trend. Based on the support and resistance and the MA-14-20-40-200 and the volume all give clear indications the market is going to go up at least 10-20 ticks in the next 4 hours.

In this example, lets say I buy 20 contracts on the MES or 2 ES with a 5-10 tick buy-sell and a 80 tick stop.
So we wait 30-60 minutes while we have multiple bars in a down trend and then the trend goes up and we reach the sell profit stop.

Why doesn't everyone do this?

I did this July 1 and made a gross of $276.25 and a Total PnL of $225.25
The market is actually bearish today but I felt very confident I would hit my tick sell-top.

Am I missing something? Yes I know the market could go crazy bearish and continue down.
But I am using Bookmap and NT8. I am looking at multiple data points.

Seems like this is a fairly easy way to make a steady $1k+ a day with very carefully planned exits. I can exit going down or up depending on the market trend and what the data is telling me.

Sent using the futures.io mobile app

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  #6 (permalink)
Tokushima, Japan
 
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I fully realize I have a lot of logic points that need to be figured out.

Moving forward I will design a trading strategy from a pool of data points in addition to a traditional trading strategy. I actually do not understand enough to comment on how I will make my trades.

Based on initial (extremely brief) research of the past 4 years, the market did not (appear to) crash between 11 am EST and 5 pm EST. I will look at each day over a 10 year period with a fine-tooth comb.

Criteria are based on a single dip of more than 10 points in a short period of time. I need to collect more data points before I can determine what a dip looks like in terms of time.

I'm documenting via a simple PHP/MySQL DB the following data points:
  • date
  • time of day
  • amount of points in the initial dip
  • points between the initial dip and close of market.
  • news that may have triggered the dip

I plan to open multiple accounts with $1k-$3k in each account.
I will transfer out each day's profits.

The general line of reasoning is that I will profit between $1k and $5k per day.
In a 30 day period, I can expect to lose $X amount based on a strict R/R measured against the account balance including profits of the day.

I will design this strategy so that I am only losing 1 account that has open trades.

@SamJames
You are totally correct, sincerely. This is essentially controlled madness. As far as using a mathematical methodology I think this will become more apparent as I collect more data points. I will put together some mathematical formulas to help evaluate my strategy. I fully understand that this method is not comfortable for anyone who does not feel comfortable going into this with the full understanding of having days when an account will be blown.


@TheShrike I fully agree. If the market turns and bites me then this will blow my account. I must be able to trade 90%+ of a month earning more than $1000 a day. If I lose 1-2 days a month and there is only $1k in the account then I will think of the loss as a business expense. As far as the actual difficulty of trading, I tried this for 49 paper trades with no loses so I do not think it is difficult. I traded only one (1) time with real money and stopped with a $225.25 PnL, as I need many data points so I am not utilizing this strategy blindfolded.

Thank you everyone for your constructive criticism as this helps me to think how to reduce the risk and to form a proper plan.

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  #7 (permalink)
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its important to play what you see.....not what you think.....you will learn this if you don't know it yet....many people play stocks that way and in many cases they can wait until that happens.....with futures...you don't have enough money to do that....play the market for what it is doing not what you think its going to do.....because all the logic in the world doesn't know where the market is going...

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  #8 (permalink)
Legendary Market Wizard
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never gets old

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  #9 (permalink)
Tokushima, Japan
 
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Iím going to journal this experiment / theory. I will keep you all posted.

The doubt fuels me.

What would be helpful is if anyone knows of any resources to databases of historical data of the main futures markets? Such as the S&P-500.

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never gets old


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  #10 (permalink)
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forestcall View Post
Iím going to journal this experiment / theory. I will keep you all posted.

Good. I was going to suggest that.

If you're going to journal trades, you should open a trading journal rather than using a more general-purpose thread such as this one.

For non-Elite journals, start here: https://futures.io/newthread.php?do=newthread&f=16

For Elite-only journals, here: https://futures.io/newthread.php?do=newthread&f=42

Bob.

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