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This is a good discussion, I personally do not know a day trader that can pay their monthly bills, very sad to say. Most are retired trading as a hobby that I come across. I use charts with two moving averages at most and a VWAP on one of them, nothing else. I am always thrilled to find folks making real money every month in the market. I wish everybody well in their quest of taming the market.
Small Potatoes here, but I'll share my nearly one year experience. Started early this year and tripled my money, I was nailing 7 out of 10 trades. Then a couple months later, it just seemed everything was going the wrong way, every time I entered a trade on what should of went my way, but didn't. Just finished a long losing streak (and a lot of dough!) working charts that weren't working. I tried the DOM, but on the CBOT Corn, there's just waaa-ay too much jumping around. Monday, lost over $500 that day and I was bummed (and pissed!), so I decided to fight back and figure out, why my charts weren't working. I studied the CBOT Ags for months to learn their behavior. For example, the first two hours of trading has the most energy and then the volume drops off significantly after that. You will get pretty good jumps, here and there after 1030, but not like the AM.
As I mentioned, I went back to the Charts to see why I was getting signals that didn't work. That was Tuesday. I was live lurking, not playing and I decided to change up from my 5 minute to the 1 minute. I've seen YouTube traders advocating switching between time lines and I did that in the past and it did not work out. The 1 Minute was too short and all over the place, you couldn't get a cohesive pattern. The 5 Minute was better, but it was lagging and changing up on me. So I added and reconfigured a new time button to my Custom Time Toolbar for 2 minutes, while I was live and suddenly, I saw a lot of great technical clues. I then spent Wednesday just watching, then analyzed it and it was far better than what I was doing.
Today, I made money. 2.75 points on a single trade, but there were at least two to six opportunities that I could see for at least 5 more points. I'll post again tomorrow and let you know how I do, win or lose. I don't play the first 15-30 minutes until I see solid patterns and especially trends form.
Here are my broker sheets from July. I made $1,000 one day and here's the proof. Let me see if I can get 1/4 of the way there, from here. PS: My background is a retired 31 year Finance Analyst for the Lockheed Martin Skunk Works and I'm a charting fool in Excel and Power Point. Built custom Access dbases too and now trying to make it here.
Thanks for sharing your broker's statement. I've been looking into treasuries, there are some good days with DOM and some bad days. I think ultimately, the market condition gets to have the last say of whatever method a person is using will be profitable or not. I was using just simple moving averages in the past and it too had some long winning streaks and losing streaks. I think it really takes some form of luck, be that for DOM or chart in the right market condition. I've also never seen an actual proof of any mentor who can have this kind of luck of being consistently profitable, despite all the claims of their methods having that "edge".
There's an evolution that a retail trader must go through when trading futures. Charting packages like ninja and sierra are popular because they are easy to convey to customers and are coupled with low barriers to entry. The X-axis represents time and the Y-axis represents price coupled with some sort of candlestick, bar, etc. You can throw a bunch of indicators and algos on top of the chart to generate signals to buy/sell/exit positions. Websites will sell you charting indicators all day long with promises of vast and consistent profits.
A poor analogy is harvesting a tree in a forest. As a small trader, my objective is to cut down a tree. That tree represents a profitable trade. Charting will show you a map of the forest but does a relatively poor job of aiding you in cutting down the tree. You can go into that forest with the latest gear, saws, etc, but if you aren't experienced with them you're going to likely fail or perform miserably. Price action is the core parameter a trader needs to follow to be successful. Professional traders trade from the price ladder. Everyone "uses" charts in the sense that they are all working in the forest and why not carry a map?
Learning what is shown on a chart is the best way to initially grasp trading a market for a beginner. The price ladder is comparatively simple but is far less sexy and marketable. A picture is worth a thousand words, and you would need those thousand words at least to describe what is happening with the price ladder. Someone can slap a chart on a Twitter feed or website with a quick blurb. You can't do that with a trade based on the price ladder since it will be missing context. You can demonstrate the price action that occurred and the subsequent trades in a video, however. Teaching/demonstrating price ladder trading is granular and tedious. For most, it isn't nearly as fun or visually stimulating as chart-based trading. There's little to sell outside of coaching and seminars. Indicators fair poorly with the price ladder because they are largely unnecessary for those that are using it appropriately. People don't like hard, but what is necessary and the most successful is usually difficult.
Transitioning from charting to a price ladder is eye-opening. Those that have made the jump understand what this means and how different the experience is from basing trades off of and executing orders from a chart. You're drinking someone else's milkshake, taking sips of others' while they attempt to sip your own. After X-sips, the goal is to end up with more milkshake than you started with and certainly not less. Your milkshake level may ebb and flow as you trade towards your daily goal, but you keep others' sips to a minimum. That's the price ladder.
Yes it can go up or down , 10 times down , 2 times up , 5 times down , 7 times up , 2 times down , 15 times up............
Its all over the place .
If it was 50% up or down all you would need is 1 tick more than your SL , like 4 SL 5 TP , and every time you get taken out you re-enter and over time that one extra tick would make you a winner .
Today, I was up 2.75, then down to 0.5, then ended up down another 2.75, for a total of 3.25 for the day. Traded the mid range between the major supports and going to quit that stuff and stick to the major support levels and see how that works. The market moves, the way it wants to move.
This was such a GREAT question and unusual with todays traders. When I started trading back 30 years ago (stocks) we ONLY traded with level 3 data, time and sales and an occassional tip from friends at the brokerage house. trading was a "FEEL" based on the motion of what we had. A chart was on a screen mounted above several desks and you would pay with your life to get you favorite stock up there.
Now a days we have so may indicators to choose from, but HONESTLY I can't trade without running the times and sales side by side to the DOM. My security blanket. However, this is a long lost skill. iT TAKES TIME in using it to feel right. YOu can color code the order flow and if its at the market a buy, sell and if the order was outside the inside market price (my fav) and filter by size coming thru. Also watching the size reduce and increase within at the current price the DOM is a specific spot to watch. WHen you get used to it you can actully see it change by the emotions of the traders orders. Friday was a great example, on the down move. CAll it getting heavy or lite, at aprice point.
So, the short answer is YES you can trade from the tape, T&S and DOM info. BUT THIS IS NOT for everyone and you can go a bit bonkers getting used to it. WIth that said the trader in as close to "The moment" of price action as possible. Charts are after the fact. Go for it! It maybe your fit too. Good trading, great question. Hope this was helpful. Robin
I trade futures now. But in the DOM look at the increase and decrease of the size at the trading price. You have to stare at it. Sometimes you will see the number jump from 40 to 140 and than back down to 40. Traders will try to stop the price from going down or up in the moment posting "fake" orders and then pulling them. HAvent traded level 2 for years (for equities) ...sorry no help there. Also try to draw a connection between the DOM price action and what's happeneing in the Times and Sales order flow action. ITS FAST takes practice. Good Trading.
