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Trading fast markets

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  #571 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
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Posts: 1,517 since Feb 2013
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jlwade123 View Post
Buy higher, sell lower....

Not anymore. Fraking tired of having rejected orders and collect my jaw from the floor after seeing the slippage. There are better ways.

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  #572 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
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Posts: 1,517 since Feb 2013
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I have found a really really good market inefficiency that would even work if all setup taken blindly, but can sometimes create consequent losers and consequent losing days. I am looking out to find a way to enter these trades more intelligently, it might be similar way to how Pete Davis trades. This is not just gold related, works well on 6E too, also on Forex.

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  #573 (permalink)
London/UK
 
Experience: Intermediate
Platform: NinjaTrader
Broker: Optimus/Rithmic
Trading: ES, 6E, FESX
 
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Hello xelaar
Are you referring to pullback-based approach described in the E-mini course?

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  #574 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
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Trading: DAX, Gold, Euro
 
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isla View Post
Hello xelaar
Are you referring to pullback-based approach described in the E-mini course?

Can't say I studied e-mini course (I assume you mean JT ebook), just quickly glanced over it. I don't refer to anything. Just thinking out loud. I am obsessed with levels. This is what I moved to do with TST but got hammered by the largest losing day rule. In effect, it is crippling, because I started with a strategy that makes very small losers but during the slower markets make also small winners. So this rule actually was pressing me hard to revert to scalping. I am just so glad I am totally over it.

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  #575 (permalink)
London/UK
 
Experience: Intermediate
Platform: NinjaTrader
Broker: Optimus/Rithmic
Trading: ES, 6E, FESX
 
Posts: 105 since Jun 2012
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I've been following your journey for some time now and think you did a great job passing the combine. I experienced similar problem with volatility on ICE Brent when I moved from trading 1 to 2 lots and it just stopped moving for couple of weeks. It was enough for me to get chopped and to lose conviction in my approach to scalping it.
I gradually switched to trading 6E with jigsaw tools so will happily contribute if I can.

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  #576 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
xelaar's Avatar
 
Posts: 1,517 since Feb 2013
Thanks: 1,740 given, 2,565 received


isla View Post
I've been following your journey for some time now and think you did a great job passing the combine. I experienced similar problem with volatility on ICE Brent when I moved from trading 1 to 2 lots and it just stopped moving for couple of weeks. It was enough for me to get chopped and to lose conviction in my approach to scalping it.
I gradually switched to trading 6E with jigsaw tools so will happily contribute if I can.

Please go ahead. I am interested to know how order flow reading works for you in 6e, given only 5 levels on DOM and bit artificial/arbitrage type of volume (as futures currencies are arbitraged against must larger spot market).

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  #577 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
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Posts: 1,517 since Feb 2013
Thanks: 1,740 given, 2,565 received

Looks like any attempt I make at daytrading futures ends up in venturing into scalping, as I just can't justify most other approaches from risk-reward perspective. I will keep working on a rock-solid consistent strategy for a longer term approach, but most likely it will be aimed at Forex. The biggest issue I find in futures is inability to scale position precisely, so every time I naturally fall to using fixed stops approach which only good for pure momentum strategies, hence scalping. I can't get any sense from statistical point of view of most strategies that will require totally different risk ranging 2-3 times with no relation to probable success of the setup (which I don't believe can be established anyway, since any single trade is irrelevant in statistical sense and at best can be counted on as 50% chance).

I would be interested to hear your take on this issue and how any of you who are successful with it combat it. As for me, I will keep working on my swing trading strategy, but will be back to momentum trading futures. I will be focusing on GC and CL to have a better one to chose from based on their movement during the day.

It may sound silly after all these statement about scalping, but I just can't make any other sense. It might be that more stable markets where big differences in volatility are not typical (like ES, treasuries) fixed stop can make some sense. Like in Mack's strategy. However, I can only wonder how Vance is able to pull it off on Crude with 15 tick stops.

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  #578 (permalink)
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xelaar View Post
Looks like any attempt I make at daytrading futures ends up in venturing into scalping, as I just can't justify most other approaches from risk-reward perspective. ... I would be interested to hear your take on this issue and how any of you who are successful with it combat it.

Xelaar, I day trade for income on the short term scalp 3 minute charts and I put up some credit options over the weekend on weekly options for income.

But I always look for good position trades to enter 1 lot contracts on and find huge moves this way.

1. For day trade income trading, I use the Slow Hand method (Vance Virgil); which is like the Price Action Al Brooks method.

2. For long-term position trading, I set up a chart of the 5 EMA, 8 SMA cross. I also have a 21/to 55 EMA cross on the same chart. The I squeeze the chart together so I can see much more of the data and really see the trends better and clearly defined higher highs and lower low areas on the chart. When I scrunch the chart together, I can see all the position entry locations much better. I wait for a pullback to the 55 EMA and set my entry in the trend direction here at this point. For best probability, you can wait for the 21 to cross the 55, and the 5 to cross the 8. But then you are just trend trading. I usually don't wait, and get in when price crosses over the 55 and retests the low. I set the stop placement 25 ticks below the low point and this is usually enough to allow stop hunting to end and for the trend to resume. First pullbacks to the 55 EMA are the best ones to find.

3. I can then use fibonacci levels on these trending markets to anticipate the next areas of support and resistance. This helps me add on to positions or exit.

4. For ranging markets, I usually stay out, unless, if it is a good range like the Euro had been doing, I just use a stochastic oscillator and trade the ranges for daily day trading.

5. I also pay attention to ATR settings as there are several strategies I use to trade these ranges, including volatility trending strategies for when a range can reverse back to a trending market. This is the Bruce Babcock ATR method for reversals.

Stop management is key to trading long positions, you must be prepared to hold a contract overnight (pay maintenance) and put your stop behind last swing highs/lows; and or tuck it behind the 55 EMA and away far enough from the stop runs when you first enter. Don't ever take a position trade unless a trend is already clearly defined. Getting in on new trends is what I strive for, but the trend must already be in place with one clearly defined HH or LL. I leave my stop in place and don't move it up to take profits until the next area of HH or LL is established. Then I tuck it behind that next level. I love finding these longer term trades to make. It is like treasure hunting.

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  #579 (permalink)
prague, czech republic
 
Experience: Intermediate
Platform: NT7, MT4
Broker: LMAX
Trading: DAX, Gold, Euro
 
xelaar's Avatar
 
Posts: 1,517 since Feb 2013
Thanks: 1,740 given, 2,565 received


jlwade123 View Post
Xelaar, I day trade for income on the short term scalp 3 minute charts and I put up some credit options over the weekend on weekly options for income.

But I always look for good position trades to enter 1 lot contracts on and find huge moves this way.

1. For day trade income trading, I use the Slow Hand method (Vance Virgil); which is like the Price Action Al Brooks method.

2. For long-term position trading, I set up a chart of the 5 EMA, 8 SMA cross. I also have a 21/to 55 EMA cross on the same chart. The I squeeze the chart together so I can see much more of the data and really see the trends better and clearly defined higher highs and lower low areas on the chart. When I scrunch the chart together, I can see all the position entry locations much better. I wait for a pullback to the 55 EMA and set my entry in the trend direction here at this point. For best probability, you can wait for the 21 to cross the 55, and the 5 to cross the 8. But then you are just trend trading. I usually don't wait, and get in when price crosses over the 55 and retests the low. I set the stop placement 25 ticks below the low point and this is usually enough to allow stop hunting to end and for the trend to resume. First pullbacks to the 55 EMA are the best ones to find.

3. I can then use fibonacci levels on these trending markets to anticipate the next areas of support and resistance. This helps me add on to positions or exit.

4. For ranging markets, I usually stay out, unless, if it is a good range like the Euro had been doing, I just use a stochastic oscillator and trade the ranges for daily day trading.

5. I also pay attention to ATR settings as there are several strategies I use to trade these ranges, including volatility trending strategies for when a range can reverse back to a trending market. This is the Bruce Babcock ATR method for reversals.

Stop management is key to trading long positions, you must be prepared to hold a contract overnight (pay maintenance) and put your stop behind last swing highs/lows; and or tuck it behind the 55 EMA and away far enough from the stop runs when you first enter. Don't ever take a position trade unless a trend is already clearly defined. Getting in on new trends is what I strive for, but the trend must already be in place with one clearly defined HH or LL. I leave my stop in place and don't move it up to take profits until the next area of HH or LL is established. Then I tuck it behind that next level. I love finding these longer term trades to make. It is like treasure hunting.

Hey, thanks for that insight. This is very similar to the general concept I apply to longer term trading too, but as I said, I do have a problem with inability to keep risk on each trade constant. Unless you trade an account at least 100-200k and more, there is no way to scale position properly. So you can end up taking 1% account risk on one and 1.5 or 2% on another. It is especially true for smaller accounts.

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  #580 (permalink)
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xelaar View Post
Hey, thanks for that insight. This is very similar to the general concept I apply to longer term trading too, but as I said, I do have a problem with inability to keep risk on each trade constant. Unless you trade an account at least 100-200k and more, there is no way to scale position properly. So you can end up taking 1% account risk on one and 1.5 or 2% on another. It is especially true for smaller accounts.


I am waiting for new pullback to 55 EMA in Gold. Then, I will set my stop below this point and try and capture the resumption of the upmove in this market.

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