as a leveraged trader, one makes short-term decisions/trades, manages the risk/ keeps draw-downs to manageable levels and occasionally turns short-term winning positions into longer ones. that being said, the market and its past is identical for all observers. yet, the market and the future are understood uniquely by each trader. no matter how crude or refined a method one follows in ascertaining the likelihood of change, it still boils down to surviving against one's own incomplete intellect, a misfired bout of randomness, in controlling the risk, and in executing a set of consistent ideas day in and day out, so that chance can prevail. drilling down further, the end game is still about making the most money with the least cost. so, it's not how often you're right, but how much you're right. if you want to make money and do this for a living, then asymmetric payoffs and maximizing geometric returns should be front and center in your thinking.

there are a number of "leaps" one must make in their progression as a trader, and none is greater than the transition from "hobbyist" to "professional" i define professional trader as a trader who is able to live off of his p&l and continue to scale his account. trading takes on a new meaning and presents a vast new challenge when it becomes your sole source of income. you losses are now compounded, by the fact you now have to draw money from your account to live. a few losing trades in a row or more as the bills come due and your monthly-expenses disbursement hits your account, can be far more than many traders can handle; at least emotionally, if not financially.

the misconception among most traders making the transition is that they have achieved a consistent alpha-grabbing methodology that will allow them to "collect-a-paycheck". in reality, this couldn't be the farthest from the truth. if they have achieved anything resembling this kind of consistency, the odds are they are not taking enough risk i.e., trading not-to-lose, and will not be able to scale their strategy. in other words, most successful professional traders experience "lumpy returns" i.e., the majority of their profits come from the minority of their trades. therefore, to be able to "expect" to be aboard those "difference making" trades means you would mathematically have to sit through between 6 and 7 trades or more, until you could have "expected" to have had one of those of those big winning "minority" trades. this of course, requires great amounts of both monetary and emotional capital. the bottom line is growing your account by-way-of reinvestment and compounding is always going to be compromised by your cost-of-living (expenses). you can try to ameliorate the problem by withdrawing as small a percentage of your profits as possible, while scaling your size as aggressively as is allowed by prudent money management, but you better be EXTREMELY well capitalized and EXTREMELY well prepared emotionally, because the leap is a quantum one, at the least.

Trend trades are infrequent, as compared to taking a few points out of the market each day. Why not just use a high frequency occurring trade as a bread and butter trade for continued revenue?


If I read correctly you trade the first 60-90min. Those 90min have their own patterns.

not sure where you got the impression about the hours i trade, but you're incorrect.

you're also missing the point of my piece.

obviously, you can only take what the market gives you. i take 10 point scalps out of the market all day long, 5 days of the week. my scalping is extremely profitable. but it's not my scalping, that is the differentiator in my year end p&l; its the 15-20% of my trades where i press, build my positions up, and and take 50-100 pts out of the trade. it dwarfs what i make scalping.

hf trading takes place in a very crowded space, on a very uneven playing field. i don't care how quick you are, you cannot compete at the same level as virtu and others. hf is execution intensive, comes with a high cost due to the associated friction, and is limited in it's scalability. the most important shortcoming is it does not allow for optionality or asymmetric payoffs. its also much easier to shift gears from a long-term trader to a short-term trader, on range days; than from a short-term trader, to a long-term trader, on trend days.

its also much easier to shift gears from a long-term trader to a short-term trader, on range days; than from a short-term trader, to a long-term trader, on trend days.

not sure where you got the impression about the hours i trade, but you're incorrect.

you're also missing the point of my piece.

obviously, you can only take what the market gives you. i take 10 point scalps out of the market all day long, 5 days of the week. my scalping is extremely profitable. but it's not my scalping, that is the differentiator in my year end p&l; its the 15-20% of my trades where i press, build my positions up, and and take 50-100 pts out of the trade. it dwarfs what i make scalping.

hf trading takes place in a very crowded space, on a very uneven playing field. i don't care how quick you are, you cannot compete at the same level as virtu and others. hf is execution intensive, comes with a high cost due to the associated friction, and is limited in it's scalability. the most important shortcoming is it does not allow for optionality or asymmetric payoffs. its also much easier to shift gears from a long-term trader to a short-term trader, on range days; than from a short-term trader, to a long-term trader, on trend days.

I target 30 points/day

ot thread drift sry



just to clarify. Do you target and pull out 30 points in the ES a day?

i take 10 point scalps out of the market all day long, 5 days of the week. my scalping is extremely profitable. but it's not my scalping, that is the differentiator in my year end p&l; its the 15-20% of my trades where i press, build my positions up, and and take 50-100 pts out of the trade. it dwarfs what i make scalping.

I feel both amused and newly-educated to see this very experienced and profitable trader refer to "10 point scalps".

10 points???! Generally we see talk of 1-2 points, of 4 tick targets and 8 tick stops and the like as scalping. We also see it fail, in a blizzard of small losses, as a general rule....

I guess it's a matter of your perspective, what is a small trade and what is not. It's good to have that re-orientation.

Bob.

Edit: obviously, many would regard 10 points as a fairly good-sized move, and at least a "swing" move, and this is not necessarily wrong. The terminology is all relative, anyway, which is part of the point. That, and of course the fact that 10 points can be regarded as a smallish move, depending on how you look at it.....