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Digits For Dollars - My Experience Trading the Mini Russell
I have been watching the eminis since early 2005. Finally this year I have taken the plunge. I traded for 2-3 months on the demo testing out the TF, ES, and other markets. First week of September I pulled the trigger and a partner and I funded a live account and we have been trading live since. After much research I purchased Al Brooks Bar by Bar book. We also have his trading course and still working to digest the info in it.
Everything you think you know goes out the window once you are live.
Our Strategy:
We are trading a breakout strat based on the high and low set in the first 45 mins after the open. So after 9:15 AM (CST) if price penetrates the high or the low we look to go in that direction.
Profit Target: 1.5 PTs on the Russell which is 15 ticks. Initial Stop Loss: 1 PT or 10 ticks. Trailing Stop: Once profit hits +10 ticks stop goes to +5 ticks, once profit hits +13/14, stop goes to +10 ticks.
Entry: We look to enter on a .0 or .5. We also look for price to consolidate around the high or low before the breakout, if it does then we look to enter directly above the high or low. If it is not consolidated before it penetrates the high or low we wait for a pull back to establish our entry point. We have found this weeds out fakeouts.
Trade limit: 1 trade a day.
Also we trade on the 5 min chart and 3 min chart (we use 3 min for entry). Only indicators are 20 EMA and a daily high/low channel to help us determine high/low (also eliminates us having to draw lines [we have missed trades because we were in the middle of drawing line]).
Also we are trading on OEC and we use Cannon Trading as our broker.
Today our high at 9:15 was 1060.0. So we were looking to enter at 1060.5 if it penetrated the high. Order was filled around 9:35, our profit target was hit around 9:45.
#1 I had a miss fire. I place a stop order in at 1070.0 at 9:15. But price pulled away and I did not remove the order, so when we had the small pop I was entered and took a PT loss on the next bar. This is why we are looking for price to consolidate around our high or low before we look to enter.
#2 At this point I saw that price was consolidating around that area so I looked to go long again at 1070.0. Took profit at 1071.5.
I could have tailed my stop up and raised my limit to capture the big move up for the day, but after my miss fire I was just looking to recover my loss.
My trade today took some time to develop and I had a few fakeouts before I had a big pop. Between 9:15 and 10 AM we saw price flux widely back and forth. After 10 AM price began to consolidate closer to the high and within one point of our target price of 1080.0. I was filled at 10:35 and was able to trail my stop behind price until 1084 where I was finally stopped out for 4 points. I was expecting the price to pull back to the moving average and then continue to trend up, but we had well over our profit target for the day so we took it and left.
Not so good, we blew the account out. Regrouping funds now to restock the account. We have realized that our risk per trade was way too high.
We have purchased Al Brooks trading course and currently looking into trading M6E's until we can cut our teeth.
We found that this breakout strat works differently when the market is in different cycles. Good for trend days, horrible on range days. Interesting idea but not profitable over time. The strat could trigger bad trades and the worst setup. We have found it is better to study price action and pick one setup to master.
Once we get our setup / strat / and plan together we will start a journal to document that.
