My name is Alberto. I'm 30 this year.
I have been looking into trading since September 2014, fortunately I found this place early on.
My finances are limited and my attention span is short, so after extensive reading of the threads on futures.io (formerly BMT) it felt like scalping was the way to go. Having spent around three months testing PAT's method I decided it didn't suit my needs: there's beauty in those second entries but they are too rare for me to concentrate long enough to spot them. PAT's method also does not address volume and order flow in the least, two components too important to overlook completely.
I know many users feel scalping actually makes it harder to be profitable and they're right, one needs to be right about both the direction and the exact timing in a trade, since stops need to be small. But from a learning point of view it's great to know immediately if you were right or wrong about a trade. And if in two hours I can take five trades, I learn five times more quickly compared to methods with which I would take only one. There's also a problem with how we define scalping, which can mean capturing anything from a tick up to a quarter of the day's range. Personally I've started aiming at one point targets and then moved to 2-3 points, up to 5 if volatility allows. Something like a 10 point move still puts too much stress on my patience, but I hope someday I'll be able to read longer time frame PA more accurately.
Enter Jigsaw. Order flow is a tool and you can use it anyway you want it. It can refine you entry or it can be your be-all and end-all. I'm still working out what it is to me. I bought the tools on the first of March and I'm still getting the hang of it, but from experience in SIM I tend to take these types of trades:
- When it's mainly trending, a continuation after a pullback;
- When it's mainly ranging, a fade off a prior level an extreme;
- When it was mainly ranging and it broke out, a re-test of the level that broke;
- Failure of S/R on a wedge when clearly visible in the direction of failure (elsewhere called triangles)
- Momentum trades I'll take these only in the context of a move that is going my way, to add to my current position, and even then I'd rather get in at the extreme of a rotation;
I'm going to use Jigsaw's DOM with the reconstructed tape. They're paired with a one tick range chart to give me an added visual aid on levels and day type, and a cumulative delta indicator that I am still learning how to use.
Instrument traded is FESX, I'm based in London so I can catch the first two hours before going to work, and it moves in a similar way to the ES, on which charts I have spent a few months on. After blowing an account that was too small anyway, I've switched back to trading ES through a combine.
It looks like this will be the first journal to attempt to scalp the FESX, and one of the few that uses Jigsaw. Illustrating trades based on order flow is hard because of all the flashing numbers so the results should be interesting.