I’m developing my day trading strategy for the ES and it is based on very solid money management and a conservative weekly target of 8 points.
I’ve been doing sim trading for several weeks and outrunning my targets. Basically I’ve been very patient and selective on my trades, using different time frame graphs to get the feeling of the big picture of the market structure.
I’m very excited on my results, although I know is a lot different when you put real money on the line. Mi plan is to keep trading on demo for a few more months and then start trading with 2 contracts (to allow a second level target and always using tight stops ) and if everything comes out right, start increasing my position ones a reach specific levels on my account value.
I have run my numbers following my plan and 8 points a week is all I need to start a successful trading business, off course I need to take special care on the drawdown and be very discipline on my rules.
I’ll appreciate if you could share any personal experience you may have had, because I don’t want to be trapped on my excitement. Always the paper trading and the spread sheet projections works like a charm, but then really hits you right on the nose…
Also if you could share any simple and reliable strategies to follow I’ll be grateful…
Yo también soy de Monterrey, pero actualmente vivo en el DF por cuestiones laborales. Soy economista y trabajo en el departamento de inteligencia de mercado de una de las Big-4. Quisiera ponerme en contacto contigo para platicar acerca de temas relacionados con trading (e.g. tu experiencia, metodología, money management, performance, mercados, etc.). Como sabrás, hay muy poca gente en México con la que se pueda platicar sobre estos temas, y no se diga en Monterrey. ¿Podrías pasarme tu correo electrónico? (yo no te paso el mio porque no puedo postear mi mail si no he posteado 5 mensajes como mínimo en esta site).
I average about 2 points a day on the ES. My focus was always on consistency and scalability, not big moves. The advantage of the ES is that you can easily scale up to 100 cars, which can give you a decent income.
Mind you, I also have some strategies for capturing bigger moves (now), but I never felt that was the right way to start. I preferred to have a smooth equity curve to give me to confidence to do this full-time. Each to his own....
There are many ways to trade, the important thing is to find a way that suits your personality. I had position traded stocks a couple of years prior to switching to futures. I also spent a year watching charts before going live. My first trading "system" (and I use that term loosely in this context) was an EMA crossover on a Heiken-Ashi 89 tick (YM) chart with pivots (thank you, TTM!). I really had no idea what I was doing. I actually made money though, but that was because I was filtering trades intuitively. It seems I am naturally decent at "reading" price. Gradually I removed all my indicators and traded pure price action of a range chart. Mostly horizontal S/R lines and range breakouts. Then I started to investigate Market Profile and began using tools like cumulative delta, volume profile etc (check out Investor/RT or MarketDelta). Now I am automating more and more of my trading. I've worked too hard to give my system away, but it is pretty basic statistical analysis coupled with decent risk/ money management.
My best advice is to think outside the box, but to keep it simple. Be aware of what you're doing and why. Are you using a time, range or volume chart? How did you arrive at the chosen interval value? If you're using indicators, which ones and why? If you're using (e.g.) MACD, do you know how it's calculated? And what would be the advantage of using it on Constant Volume Bars over a 5 minute chart? Viewing anything other than a tick chart (T&S) is filtering price, which technically is an indicator. Price only moves vertically from bid to ask (and vice versa) and different chart types will give very different visualizations of that movement.
My point is merely that it seems a lot of new traders just chose a random chart type and indicator and dive in. I would recommend a more systematic approach. There are countless ways to approach the market, but the competition is stiff and you should know what you're doing. I would also recommend a thorough understanding of the fundamentals of exchange-traded derivatives.
I actually took a couple of online classes at Northwestern, but you can easily learn on your own. It might be worth checking out the free resources on the CME Group's website. It would also be favorable to study macroeconomics, at least superficially. And lastly, a basic understanding of statistics and probability is critical, in my honest opinion.
A lot of traders struggle with psychological stress, I firmly believe that can be alleviated by attaining knowledge of the fundamentals, and rigorous testing of one's system. If one's just trading off a chart without any understanding of market mechanics, it is not surprising one would be fearful.
Take a step back and think strategically and philosophically about what you want to do. Then utilize the tools necessary to get it done, or create your own (which you very well might have to do).
I'll include a few links to what I'm talking about. To learn more about MP, I'd recommend you check out books by James Dalton and Peter Steidlmayer. Brett Steenbarger has written a lot about market psychology on his blog TraderFeed and some excellent books. I am a big fan of trading books from the early 1900s, there are a lot of wisdom to be learned from that era. I find that most of the newer trading books are just rehashing a lot of the ideas brought forth by the pioneers of intraday trading, and, in my opinion, you are better off going straight to the source. Wyckoff's books are highly recommended (several of which you can download for free on Traders' Laboratory. Check out the Wyckoff forum and a user named DbPhoenix). My favourite is Jesse Livermores's "How To Trade In Stocks".
I want to add that I don't necessarily follow everything (or necessarily anything) from the links I've posted. But hopefully they will help you develop your own way of extracting money from the markets.
I think you need to forget the "all I need part", as if you are not asking for much. Otherwise you will just be extremely frustrated when this is not so easy to figure out.
Considering you could scale 8 points a week to 100 cars for an average persons yearly wage, it is not asking for a little bit.