Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
Thanks, I have a similar background, I'm an IT professional working for a big US data analytics firm. Taught myself enough c# and java to get by.
I've been doing some of what you describe, building strategies in ninjatrader 8 with limited success. I deffo need to spend some more time on it. I'm curious when you are doing your backtesting/walkforward testing etc; at what point you would consider your strategies successful enough to run, Are you looking at Sortino ratio and ulcer ratio/max DD, or what's your preferred metrics here?
Don't you think there's a limited amount of edge to be had in trading lagging indicators based on technicals?
Have you ever explored scraping data feeds, using natural language processing to determine whether the language used/ topic etc is bullish or bearish and using that for signals?
I've been thinking about putting something together ever since Speculator Seth posted this chart a while back:
Yes.. However he was a floor trader and educated himself on multiple aspects of Market Theory.
You do require a foundational level of knowledge, prior to really absorbing the true talent of a practitioner in their element.
Jim Dalton didn't click for me until I immersed myself in his work for months.
Plus, on a side note..
I trade Monthly Options and have finally have a track record. You don't need to day trade Futures to make a sizable income in the markets.
I actually lost money trading futures, but now understand my own demons. I'm back on the path to slow daily gains, but I wouldn't call myself a profitable Futures Trader.
Everything else does take experience and education.
Here is your problem, right there. Everything you have described above. I guarantee you will loose money following this method. Stick to TREND strategies, eh? Did he also tell you when NOT to trade? Markets are NOT in trend mode 75% of the time, they are consolidating. Besides, everything he tells you to use are LAGGING indicators and in roughly 35-70% of the time you are too late for the move.
This is pretty much my formula, spot on. I wouldn't deem that I know every profitable trader's methods enough to declare that it's the ONLY way, but the above is certainly one way, and a formula that is successful for some.
I'd add that in order to do the above, or any method, successfully, you must cultivate a healthy winning attitude. That is, never blame losses on anything external, think probabilistically, never get too high or low emotionally, be objective. Mark Douglas "Trading in the Zone" is IMO maybe the only book on psychology you need.
One thing about verniman that you'll notice if you read enough of his posts is that he almost never tries to pick tops and bottoms. He waits, waits, waits, and then fires. It's how successful professionals trade. They don't buy a market which is collapsing and catch the bottom. They need to see something that tells them they are not alone in the fight, and that others with more money are likely to pay up or hit lower than they did. It's the "see it" part of this tweet.
The Hard Truth is that no one actually knows if any retail traders actually make money over the long term (5 or more years)
To actually know that a trader makes money consistently you need at least the following:
1) Two full sequential years of verified sequential daily broker statements/annual broker statements with very few gaps in trading days
(So you can see the year over year performance)
2) Summary Statistics: Expectancy, MAX DD, Net Profit/MAX DD, Average MFE/MAE
3) Additional years of verified daily broker statements/annual broker statements covering a wide variety of different volatility levels and different market regimes (including if available flash crash days, limit up/limit down days, market halt days).
*Important: all broker statements must be audited and signed by a regulated third party.
--------------------------------------------------------------------------------------------------------------
Take the following below with 'a big grain of salt'
The generally accepted thinking is that about 95% retail traders lose money over the long term
If you look at just retail traders who trade without having a robust statistical trading process that number is 100%
Of the 5% who make money, about 80% trade mechanical systems and 20% do discretionary trading
Again no stats here just compiled what I've read, seen, and heard over the last 20 years.
Before I go deep into explaining what I did to become profitable, all for free, could you please share how long have you been studying and practicing charts or paper trading? How many hours of efforts you are honestly putting in regularly not necessarily everyday? What markets have you studied, what type of trading you have studied and what market do you think will suit you best and why?
I've become profitable for last few months, knock on wood, using very simple techniques which I'll share here. You will be surprised to know how easy it is to make money in the market once you figured out what are the fronts you need to work on.
This week is my 9th week in the world of futures trading, and I've been paper trading for 4 weeks. I haven't been keeping track of the number of hours I've been putting in, but it's an absolute minimum of 2 hours per day, both through my mentors google drive/Youtube Vids & here on FIO.
I've been studying MES because of my account size, but I check M2K, CL, & 6E post US session to see how they differ from MES and the number of potential trade set-ups during that day. I don't plan on doing a bit of everything yet, just looking.
I've been studying trend following strategies (retracements to EMAs) using Renko charts holding trades from a couple of mins to 30, basically, until I have a signal that tells me the trend is ending. I'm currently learning about trading s/r levels because I haven't been getting as many trade set-ups lately, and I keep hearing people using s/r strategies, so it makes sense to at least learn about them.
With only 10 weeks in to the trading, I would say you are very new to the trading world. It will help you greatly, trust me on this fella, if you wouldn't pay too much attention to why things aren't working 100% of the times, nothing is 100% in this trading world. If your strategy works 50% of the times, this would be a good start and with more experience you yourself will be able to tweak to make it 70-90%.
What you are learning from the Australian guy seems a good approach to me, as far as you get 3-4 opportunities about everyday and at least 3 times a week, you can do the math. On MES, this strategy should be able to give you on an average profit of 100-200$ (after commissions) about everyday with only one contract. Then its all about either moving to ES or scaling MES first and then moving to ES, whatever path you go with.
I've traded penny stocks, mid-cap stocks, options on mid and large caps before finally I settled with Futures from last 7-8 months purely because of tax benefits. Otherwise, I had been good with day trading options as well, just long calls and puts. I've total experience of 4-5 years with real money trading making sometime, losing sometime and the cycle goes on and on. So you are hearing from a amateur trader but with a wide spectra of experience.
Here is what I would like to share from my little experience:
The very first thing you have to find out is what type of trader you are. This means what you will be comfortable with. Scalping, swinging within the the day, swinging over couple of days or investing. I swing within the day (which means I like trades which should last anywhere from 15-20 minutes to couple of hours within the day), I do scalp but its not my first preference and I seldom does it. I trade the trend within the day (like the Australian guy is teaching you). Like today, ES was swinging 15 points up and down, I could had sold the tops and bought the bottoms on last two touches making around $400 easily on 2-4 contracts, but I don't trade what I don't like. I've prepared for solid two years to just let price do what I predicted and not enter the trade, this was to control the impulsiveness and really train in realtime how accurate is my pre-market preparation. I wanted to trade the break above or below the flag, which didn't happen so I didn't take more than one trade. The one I took, I was expecting the break to upside after buying the base but it didn't so I exited the trade for a tiny profit. We are not going to make target money everyday.
Do a pre-market study and try to chose a direction based of daily and/or 4hrs charts. Let market shake out for first 15-20 minutes after open, sometimes 5 minutes would be enough, this will come with experience. Once you have watched market for enough time (it took me about 2 years as I've a full time job as well and it was not feasible to watch market in action everyday with a day job), I would say 4-6 months should be enough depending on person's learning capability.
Then mark the consolidation range and trade break of top or bottom after confirmation only. Generally, market break in the direction of 4hrs and daily charts as bigger time frames control what will happen during coming few days. You can use 9EMA, 8EMA along with breakout. This is the simplest and in use by most day traders. Check some youtube videos, bullishbears.com have explained it best. They use it for stocks but this can be used with any instrument in this world that can be traded.
At last I would say don't be eager to be profitable in few weeks or months. This market has its dark side and to beat the dark siders, we have to be trading with them and not against them. Trading against them can also make money, but that should be with quick in and outs, as done in scalping. There are millions of ways to trade, you just have to find one and become a master of only one.
Last, don't listen to anyone that indicators are lagging. Issue is trying to predict what price will do based of indicators. Price is the king and master price action, then use indicator like Stochastic, MACD, RSI to see what price is doing in general. Never force on what indicator is doing, this will always lead you to lose money.
In trading it is more about learning to control impulsiveness and psychology than what strategy I should use to trade.
Focus on only one instrument, after looking at all main futures I can say ES is probably the best and starting with MES is the right approach.
Last but not the least, PLEASE DON'T BUY any indicator from anyone. No indicator makes us profitable, its how we trade and what we trade makes us profitable.
