October was a major milestone for me - it marked 1 year of profitable swing trading, netting me $18k in profits trading ES ($19k including last week's swing trade). That may not be a lot compared to the people who make that every month, but it was a major milestone for me. I wrote a lengthy blog post about it but here's what counts: the account statement:
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I've been wanting to post that for a while now, but I always wanted to make sure it was consistent. So now it's been 12 consecutive months, going on 13.
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I was in 2 rooms that used small stops of 4 to 5 ticks.
The first room method traded off of a 133 tick chart with a 34 ema on the ER2. Trades where based on retracements off the 34 ema. The entries were all on bar close to cut down whip and to ease recording of MFE and MAE manually. Although the 133 tick is a fast chart the method was not to enter early but rather later. Example you start to get retrace off of a 5 minute chart then looking at the 133 tick you wait for a later retrace which reduced the amount of whip and increased the probabilty of success. The moderator kept stats(for years) and I kept stats for over a year and the average exit on losing trades was always below 4. Later switching over to ES the stops were moved to 5 ticks but the average exit on losing trades was below 4. The runner on the intraday swing was successful 20% to 25%. My ex decided to erase all info on my labtop so these stats are gone.
I think imo you can trade with a small stop but will have to consider what type of setups you take and when you enter the trade. Also rules for exit should be considered
Really enjoy your journal
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Thanks for your journal.
I think you are always really interesting in any approaches to the Marlet you suggest.
It seems to me your trading style is in part influenced from Barry Taylor style.
But for a period I have seen you trading the GomLadder in the L2ST style (probably.I have read your favourable review of L2ST trading room).
The are really IMO different approaches to the Market.
Can you add some considerations, from your personal experience, on this two different point of
view of the Market?
Is useful/worth a two side simultaneous approach to the Market with these different approaches?
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Hi Paolo, thanks for your compliments and your questions. I write both here and on my blog and try to avoid duplication between the two. I guess here is more focused on p/l and becoming profitable. I recently removed the sine waves & multiple timeframes. While they taught me a lot about the market, it's time to take the training wheels off. I'm a big boy now and I can handle the fact that the only thing important is what's happening now. Timeframes just hide the noise. In fact I want to be as timeframe independent as possible. You can have me leave the room, change the bar types & timeframes on my three charts, and it wouldn't make a difference to me. Just don't make them too big cause I'd get bored. That pretty much puts Barry's method out the window.
Better momentum is no longer an important part in my trading. I still observe it time to time but I really should remove it once and for all.
I'm still observing pro bars. In fact I'm working on a prototype of an idea to detect professional activity in a better way. In fact I'm waiting for Ninja to download L2 data for ES as I write this. I can never get L2 data for ES but fortunately I can get it for other markets.
So yes you mention the ladder. I put that one away for good but someone brought it up again in an email to me and so I've been looking at it again. The more I study the idea of "delta" the more I realize that it's flawed. Funny how Market Delta bases their company on this concept that I now consider flawed. If you think of the ladder as a neat way to tabulate time & sales then it's useful. T&S scrolls by too fast. The ladder keeps it nice and neet. But really the ladder is just a crutch for watching the DOM.
So what does that leave? Price, volume, & the DOM.
So to answer your question, if I had it to do all over again I would do it totally differently. I'd start by watching the DOM only (no charts) for months. As long as it took. And then I'd add charts only for support & context. Instead I went the other way. Pulling my hair out wondering why things didn't work as expected when in fact the answer was right there before my eyes.
I don't want to criticize any method. I made money with barry's tools and I'm sure others are too. Big Mike once told me I didn't need all that junk. I didn't believe him. I thought that the fact that I made money made me right. There is no right or wrong really, just what works. But I'm a perfectionist in constant search for perfection.
So to summarize, the only thing I believe in is what's happening right now. Is the market balanced or not? Is the current price getting accepted as fair? If not, in which way is it moving. I look in the past to see what was accepted or rejected to give me an idea of what I may find in the future. that's it in a nutshell. As simple as it sounds, it took me 3 years to be able to understand it. And I still have a long way to go. Anything connected to a specific bar type or interval is too dependent on the past and will not be predictive of the future. I wish I had fully understood that when I got started.
My L2 download is finished.
Wait no it's not. Ninja gives me a nice window says L2 couldn't be downloaded. Frustrating.
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One more thought.. I don't see them as different. Barry's method doesn't have any timing component. That's what the ladder was for. To see if I could time my entry. But now the markets are very volatile and one might get 3-4 long ladder setups in a row, each one a bit lower than the first. That'd mean stopping out 3 times before getting a winner. So the ladder isn't enough and can be misleading.
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I know for sure that some italian traders use only DOM and make consiistently money, but in the relative slow market of stocks,where DOM observing can leads to some footprints of the MarketMaker intentions.
Last winter I' ve tried to study from the detailed DOM data grabbed from the Zenfire API some
of the possible 'tricks' of the ES DOM (hidden wall,cancellation,iceberg,etc)
but I have abandoned that direction, becouse it' s a huge work on some liquid market as
ES where so much 'players' can have different directions.
Apart from some posts (and followers) in Elite about the 'nebulous' Jack Hershey method
I don' t ever heared about other DOM approach to read the market.
Anyway I continue to be one of your affectionate follower.
I have learned really much from your posts (in TL and BM).
The following 2 users say Thank You to paolfili for this post:
I wasted so many hours on Jack's stuff that I cringe whenever I hear his name. I started with jack when he was trading stocks. Man that brings back memories.
Learning the DOM is serious work. I hear it takes months of watching it intensely without charts every day. I'm up for the challenge but I bet few are. I certainly wasn't in the past, back when I thought I my indies would make me millions.
The only resource I've found is a book called "no bs day trading". Most people just tell me you figure it out on your own as the possibilities are endless and he only covers a few things in the book. It's far more of an art than a science. Also I believe that X-Trader is necessary.