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A tibdit. Your mouse is the meal. The market is a rattlesnake. If you're scalping in the equities, especially NQ, YM, RTY, but also ES at prime time hours, you have to set your stops and targets where the strikes miss the first (stops) but snags the second (targets). If you only set stops and not targets you guarantee you'll suffer stop strikes and never catch target strikes because your mouse won't usually know the strike occurred until its over and ghen your screen paints it and your speaker tells you the news.
Another tibdbit: Markets are very efficient in filling pockets, that is places where price move through a range without retesting the price levels in that range at least once. If the market goes your way and you didn't catch very near the absolute top or bottom of the swing level you are trading, you'll be tempted when price goes your way to move your stops to breakeven, hoping the first retracement toward entry won't stop you out. You're playing bad odds to hope for that. Either grab the first stretch in your direction with a well placed stop and re-enter on the pocket fill, or leave your stops alone at least until the second wave in your direction occurs. although if its a major turning point there will likely be more than one pullback and lots of testing before a sharp break in your direction.
If trading multiple contracts you can "campaign" into a position by setting more entries at favorable levels (high side of or above sideways noise if shorting). The problem with campaigning with micros if just scalping for 10 or 20 ticks is micros cost 3 times minis for the same commitment, so scalping multiple contracts with micros eats up profits you've made three times faster. A work around is to wait for a major entry level and use a mini to get in then scale partially out with micros if wanting to take some of the position off.
By the way, taking part of profits off half way to your target but not taking part of losses off until your full stop is hit is stacking the odds against you if target to stop ratio isn't better than 2 to 1 (to cover commissions).
If you set targets at strategic levels (not just x ticks of profit), if you're right about target level to expect you'll be tempted to close the trade before your target is filled on those frequent occasions when price almost reaches your target and pulls back from it, eating up your profits. Be patient. Seems the bots work at persuading you to get out prematurely. If it were your stop and not your target you as a novice would likely leave your stop alone when price pulls back from it, again damaging your target to stop ratio by cutting targets short but letting stops get hit. Be fair.
Last tidbit: If you use market orders you lose minimum of two ticks on every round trip, one on entry on exit. If scalping for a few ticks that's a heavy weight to swim with.
You are most likely absolutely correct. You might not have any edge yet. And you are on the right track by atleast acknowledging that; now the search is on. One key tip; dont assume anyone over the internet will hand you over the keys though. No one selling any subscription for any amount will do that for you. You will have to work hard at it and find something that works for you. Starting with how to find that edge.. and how to define it if you actually find something; and its going to be a long and rough ride. In the meantime save yourself heartache and trade as small as possible just to keep at the game.
One good resource to look for are books: read everything you can find.
Also if you go towards trading futures in and out; perhaps quantitative trading is what you should lean for instead of gut based which you cant quantify either ways. Perhaps not. Either ways searching for that will lead you to profitable places i hope.
Its very hard to make an assessment of where you are failing.
Trading involves many aspects:
1. The Type of trading you feel comfortable with (scalping or longer term trading)
2. Tolerance levels to drawdowns
3. How much pressure you have in trying to make a profit
4. Trading knowledge/experience
5. Capital
At least these 5 criteria or more needs to be carefully examined before you can trade successfully.
Try to learn each aspect before you actually try to trade live.
Tony,
I see lots of good advise here....good....Just wondering why you were going long....did you have a breakout of a MACD, or SMA Crossover, or the TDI was breaking to the high side or your ADX was rising, or the OBV was flying high....what exactly was your logic for going long....or was it just the price rising....the answer will tell us what you are doing and we can then help you...
You have already received on the whole good advice. I will highlight a few things.
First three old market maxims:
1. Know your edge, if you don't know what it is, you don't have one.
2. Always trade with a stop. It can be a "disaster stop", placed where you don't think the market is likely to go.
3. Scared money loses. Never risk money you need for your expenses.
4.Practice in SIM until you are profitable.
5.Use this calculator: https://evilspeculator.com/futuresRcalc/
Set your stop at .25 to .5% of your account size.
Calculate the ATR for the time frame you are trading and multiply by 2.5 to 3. If that stop is outside the .25 to .5% of your account size, then you need more capital to go live or you can pass on trading until volatility settles down. Don't think you can keep reducing the time frame to be able to trade with less risk, you will have lag time in decisions, order placement, execution.
6. To scalp you must be nimble on executions. Learn to set up OCO orders, so you always have profit targets and stops in place and the opposite side cancels automatically.
7. View the market in multiple time frames. 1, 5 and 15 min has been suggested to you. Consider 5 minutes and less as very noisy and full of head fakes. Do not try to trade several time frames.
Use the middle frame as your trading chart, the quick one for refining entries, the longer of the three for an indication of the larger direction. You should always also look at larger time frames, such as hourly and daily. Always keep the daily in view and mark potential support & resistance there when you are between sessions.
8. Monitor your psychology (inner self-talk) and physical stamina. Are you sick? Don't trade.
Are you feeling negative or didn't sleep well or feel tired? Don't trade. Are you seeing the market as an adversary? Don't trade. You will need to be both alert and relaxed without feeling over-stimulated to have a chance to day-trade successfully.
9. Want what the market wants.
10. Trade Journal. Create a debrief for everything your do. Why? Stops/PT? How effective was entry/exit? How did you feel before/during/after the trade? You can't write too much. Review your previous entries from time to time. Reflect on how your perspective has changed and journal some more about that as well.
Trading is highly competitive -- it takes character, skill, and a lot of work to succeed. And you come out of the swamp every day with leeches all over you -- trading gurus and vendors of all kinds. On a successful day trading micros, my brokers take a big chunk of what I pull out of the Market.
Each of us comes to junctures where doubts and questions arise. We each have to decide for ourselves whether to jump into the ring another day or throw in the towel. I go along with Arnold in my response:
1. You need to get more capital that you can afford to go to zero before you stand a chance of being psychologically able to handle the ups and downs of trading.
2. You need to completely understand what you're doing and why. Learn to program or Bloodhound at least so you can at least understand if your particular system actually works. I can tell you after years of system developement most squiggly lines are useless so move past that.
3. You need to spend a great deal of time testing and incubating your systems on sim before you risk real cash.
4. You need to invest in decent hardware and begin to realize trading is a very serious business and you're competing with people who have vastly more money, experience and resources than you.
Just my opinion but its not just an edge you lack.
Hi Tony, i need couple of years and loss 10000 € before i understand some simple rules.
+Decide how much money you will make every day and on average per trade. (i Start with 5 Point MES)
+How much per average will you lose? (i Start with 5 Point MES)
+What’s your max loss per trade and per day and per week?
+Find good charting software. (Sierra Chart is free with AMP)+TT Data Feed
JonnyBoy's reasonably definitive guide to VWAP - Part One
Introduction
There are very few worthwhile sources out there regarding VWAP. I have seen many YouTube videos and forum posts about VWAP, but none that really get down to brass tacks of …
I would not quit. There is no trader not even the best of the best who do not have losses. The key is to work toward having more wins with bigger profits than losses with smaller amounts. The first thing I would do is paper trade until you find the right approach. On stocks do you day trade, swing trade, or in for the longer holding pattern. If you do stock options again decide on tour style day, swing, 30-60 days. If you are trading futures I would recommend E-mini S&P 500. It is a better market to learn and is a good market because you can trade small accounts as well as large accounts. There are also a lot of traders there so you can always find buyers when you are ready to exit a trade.
The next thing you need to do is concentrate on small wins. Do not shoot for the moon right away. 9 wins of $100 and 1 loss for $50 equals $850. But one win for $500 with 9 losses of $50 equals only a $50 win and if you are going for the bigger win chances are those losses would be around $100 each equalling a $400 loss.
Once you get in a pattern of winning 60% of your trades then you can place larger trades equally. If you are making $300 trades first and are hitting 60% wins then you can step all of your trades to about $500. Do not do some at 300, some at 500 because you cannot positively pick which ones will do better than others. Then as you improve move your trades to about $750 and then later to $1000. Patience and control is the key to success.
The nice thing about the E-mini S&P 500 is you can day trade, swing trade or do longer trades. Options do not fall under the day trading criteria like stocks where you need a minimum of $25k in the account.
I also use some great advisors. I do not promote or advertise for anyone but I personally use Chuck Hughes, Wendy Kirkland, Kyle Dennis, Jason Bond, Trade Alert 365 and others. I find people with extremely high success rates. But even they lose but if I am winning way more than losing I am happy. Their programs are rarely free but you probably payed for a few yearly subscriptions with the amounts it sounds like you lost.
