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Seeking for advice - Beginner - EMini ES
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Seeking for advice - Beginner - EMini ES

  #1 (permalink)
Trading Apprentice
Panama
 
Trading Experience: Beginner
Platform: NinjaTrader
Favorite Futures: Emini ES
 
Posts: 1 since Jan 2019
Thanks: 0 given, 0 received

Seeking for advice - Beginner - EMini ES

Hi all,

First of all thanks for taking the time to read this, cause im pretty sure you have maybe answered the same question a million times.

Im a beginner trader. Just have a couple of months experience. I took a course on a local company that taught me a very simple method of trading the EMini ES for 2 points daily. Sadly as i was practicing and doing more simulations i didn't feel very comfortable with all the indicators i was using or the rules for taking entries.

Currently i want to focus on Emini ES and aim for 4-6 point profit with a 2 point risk. Im using only a bar chart of 610 ticks and another of 5 minutes, no other indicators that im aware of.

What i usually do, is:

1. Before the market opens, i mark the highest and lowest prices for the european/asian session and usually after the price break those zones or rejects them, usually use them as support of resistances.

2. When i identify a trend i mark trend lines a wait for pullback to take the trade

I would like the polish my method and i was wondering if you could give me some pointers, maybe some books or maybe recommendations on what i should focus on to improve. I do like simplicity and the less indicators i can use the better.

Thanks in advance

JS

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  #2 (permalink)
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  #3 (permalink)
Elite Member
charlotte nc
 
Trading Experience: Master
Platform: ninjatrader
Broker/Data: NinjaTrader
Favorite Futures: Emini (ES, YM, NQ, ect.)
 
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The best place to start would be to kick the tires on this bet and extrapolate this out into the most likely outcome.


jsrdaytrader View Post
Currently i want to focus on Emini ES and aim for 4-6 point profit with a 2 point risk.
JS

Checking the quick math on your bet this is how it translates.

If trading with market orders, you are giving up 1 of your 2 ticks of stop loss by crossing the spread just to enter the trade.
If trading with limit orders, you will likely only get toxic fills, so you will also give up 1 tick just to enter a trade.

So you are basically betting you can make 4 to 6 ticks of profit before you hit your 1 last tick against you. Now if you are using a stop loss, then you are crossing the spread to get this last tick, so all it takes is a single price level to trade against you.

Because you are going to be down 1 tick to start every trade, then you really have to travel 5 to 7 ticks to get to your original 4 to 6 tick target.

If the market is volatile then most of your limit orders that get filled will come with a price sweep of 2 to 3 levels and fill your stop instantly. If you are trading market orders this won't be as much of an issue...

If you are very very good at predicting direction then you may have around a 60% to 65% success rate in picking the direction correctly. I don't think you will ever get it right more than that, and this is likely best case. Most people couldn't beat 50 / 50 odds if their life depended on it.

But picking the right direction won't lead to 5 to 7 ticks automatically.... It will only likely get you off of the first 1 to 2 price levels which is only worth 1 to 2 ticks. Picking a direction that will yield a run of 5 to 7 ticks would have odds closer to hitting blackjack vs. just not busting while the dealer busts.

So you will likely have an decision tree like this.

Pick the right direction: (Best Case) 60% to 65%
Pick the right direction and get a run to target 1 in 4 change (Best Case) 1 in 10 chance (worse case) This all depends on volatility and luck.

Number of ticks to hit your stop loss 1.
Number of ticks to hit your target 5 to 7.
Commission cost regardless of outcome: retail commission rate

Pick the wrong direction and go straight to your stop loss (40% to 45%) being very generous here.
Pick the right direction but fall short of your profit target and move to your stop loss which is much easier to hit.
Of the 60% to 65% you pick the right direction, this will still happen 3 out of 4 times best case, 9 out of 10 times worse case depending on volatility.


So this is what your particular bet translates to for most traders with nothing more than the basic house edge against you and an above average ability to pick direction.

You can do it maybe.... But you have a very tiny margin for error with your particular settings.



I'd recommend moving close to a 1x1 or greater risk reward ratio if you are trading an instrument that is commonly used by market making algo's playing the spread. If you are going for low odds of hitting a home run and that is your comfort zone, then pick an instrument with a lower spread cost such as the YM. And the mechanics of the spread won't kill you as bad.


Best of luck.

Ian

In the analytical world there is no such thing as art, there is only the science you know and the science you don't know. Characterizing the science you don't know as "art" is a fools game.
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  #4 (permalink)
Trading for Fun
Brisbane Queensland Australia
 
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jsrdaytrader View Post
Hi all,

First of all thanks for taking the time to read this, cause im pretty sure you have maybe answered the same question a million times.

Im a beginner trader. Just have a couple of months experience. I took a course on a local company that taught me a very simple method of trading the EMini ES for 2 points daily. Sadly as i was practicing and doing more simulations i didn't feel very comfortable with all the indicators i was using or the rules for taking entries.

Currently i want to focus on Emini ES and aim for 4-6 point profit with a 2 point risk. Im using only a bar chart of 610 ticks and another of 5 minutes, no other indicators that im aware of.

What i usually do, is:

1. Before the market opens, i mark the highest and lowest prices for the european/asian session and usually after the price break those zones or rejects them, usually use them as support of resistances.

2. When i identify a trend i mark trend lines a wait for pullback to take the trade

I would like the polish my method and i was wondering if you could give me some pointers, maybe some books or maybe recommendations on what i should focus on to improve. I do like simplicity and the less indicators i can use the better.

Thanks in advance

JS

Forget everything that course taught you and start again . You are starting one of the hardest journeys you will ever take and outside a marriage/divorce , buying a new E class mercedes or House will likely be the most expensive thing you do unless you have the smarts to win the trading lotto . As crazy as it sounds the best advice you can give most wannabe traders is DONT do it . It really needs to be an obsession to make it in this game . If you must persist learn all you can and NEVER start trading actual money until you can trade sim profitably for six months continually . That little piece of advice would have saved literally 90% of those going down this path thousands for 6 months of profitable every month is super hard to do but i think its a decent enough bar to clear before putting real hard earned on line . Gives you a half reasonable chance of making it rather than trying to face major league pitchers at first time to bat which is what you do starting trading ... Otherwise good luck

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  #5 (permalink)
Elite Member
Wiltshire, United Kingdom
 
Trading Experience: Beginner
Platform: TSTrader, Jigsaw daytradr
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iantg View Post
If trading with market orders, you are giving up 1 of your 2 ticks of stop loss by crossing the spread just to enter the trade.
If trading with limit orders, you will likely only get toxic fills, so you will also give up 1 tick just to enter a trade.

So you are basically betting you can make 4 to 6 ticks of profit before you hit your 1 last tick against you...

He said 2 point risk, not 2 tick risk



jsrdaytrader View Post
Currently i want to focus on Emini ES and aim for 4-6 point profit with a 2 point risk.

You want to risk two points and target two to three times that so your risk:reward is on the right side and you are not intending to just try and scalp a tick at a time. Sounds good to me.


jsrdaytrader View Post
1. Before the market opens, i mark the highest and lowest prices for the european/asian session and usually after the price break those zones or rejects them, usually use them as support of resistances.

If price breaks the overnight high or low it is making a new high or low for the day. If price accepts the break or rejects the break there should be enough movement over time to reach your target either way. Same with a break of yesterday's high or low.


jsrdaytrader View Post
I do like simplicity and the less indicators i can use the better.

Great, that will keep you away from the perpetual search for the perfect indicator combination and the huge amount of time wasted relearning things again and again. Choose something simple that makes sense and start with that and give it time and only change things after a lot of consideration based on the careful trade logs you keep. (Keep a trading journal from day one). Good luck.

Trading, ideally structured, is a vehicle for expanding consciousness, not damaging it. - Brett Steenbarger
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  #6 (permalink)
Trading Apprentice
Queens, New York
 
Trading Experience: Advanced
Platform: ninjatrader 7
Favorite Futures: emini es
 
Posts: 1 since Apr 2017
Thanks: 0 given, 0 received

My little 2 cents that may be worth something here is to look into zooming out a bit more of your current tick chart size if you want to hold for more points. That has helped me a lot. Start with doubling that 610 to 1220 and play with multiple chart sizes. Study market structure, confluence, candlesticks and some basic elliott wave theory.

If you are not comfortable with the strategy you have learned then maybe that strategy is not for you. We are all different and therefore everyone has a different approach which is ok. There is more than 1 way to skin a cat. The journey in this game is to find the right approach for you that stands through the test of time... and that will be your edge.


There are no shortcuts in this unfortunately. Good luck.

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  #7 (permalink)
Elite Member
Los Angels
 
Trading Experience: Intermediate
Platform: TradeStation
Favorite Futures: Emini
 
Posts: 26 since Aug 2018
Thanks: 26 given, 7 received


Ozquant View Post
It really needs to be an obsession to make it in this game . If you must persist learn all you can and NEVER start trading actual money until you can trade sim profitably for six months continually . That little piece of advice would have saved literally 90% of those going down this path thousands for 6 months of profitable every month is super hard to do but i think its a decent enough bar to clear before putting real hard earned on line . Gives you a half reasonable chance of making it rather than trying to face major league pitchers at first time to bat which is what you do starting trading ... Otherwise good luck

I paid the dumb tax by trading before simulating! The best advice I have heard is to simulate trades for 6 moths before jumping in with actual money.

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  #8 (permalink)
Market Wizard
virginia
 
Trading Experience: Intermediate
Platform: ninja
Favorite Futures: ES
 
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Posts: 5,834 since Jun 2009
Thanks: 781 given, 7,428 received
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jsrdaytrader View Post
Hi all,

.. EMini ES... I do like simplicity and the less indicators i can use the better.

Thanks in advance

JS

ditch the ES, the queue is just too long!

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  #9 (permalink)
Trading Apprentice
Pecs, Hungary
 
Trading Experience: Beginner
Platform: Tradestation
Favorite Futures: ES, CL, GC
 
Posts: 14 since Jun 2018
Thanks: 7 given, 8 received


cory View Post
ditch the ES, the queue is just too long!


Hi cory,

What future do you recommend for this type of strategy?

Thanks

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  #10 (permalink)
Market Wizard
virginia
 
Trading Experience: Intermediate
Platform: ninja
Favorite Futures: ES
 
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Posts: 5,834 since Jun 2009
Thanks: 781 given, 7,428 received
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compare the queue then pick either YM or NQ

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