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Scalping the Bund with orderflow (DOM reading)
Started:October 1st, 2014 (04:40 PM) by nestor2022 Views / Replies:3,913 / 22
Last Reply:October 9th, 2016 (06:48 PM) Attachments:5

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Scalping the Bund with orderflow (DOM reading)

Old May 10th, 2015, 01:23 AM   #11 (permalink)
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Hi there,

Enjoyed watching your video and reading your thread. I see it's gone a bit quiet since November. Would you consider keeping it going?

Perhaps we could share thread's as I'm trading the Bund and the Bobl at the moment too.

Cheers

Z

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Old May 10th, 2015, 07:09 PM   #12 (permalink)
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Hi.

You are right. it's maybe time to update this thread a bit since i'm still trading. It may be of some use to other.

I have switched to FESX wich is deeper (in terms of liquidity), and less volatile. It suits my (very little) capital better.
I actually still trade the Bund sometime on specific setups (good established momentum to grab a few ticks, and the pullback reversal point i explained in november). but thats'it.
My prep as not changed (i added Market profile, but that is not a scalp timeframe nor sclaping purposes).
with the recent volatility i mostly trade momentum ignition to get 1-3 ticks (FESX). Ranges, trend pullbacks, stops triggering are my bread an butter.

I'm still on Sim since i have not met the consistency i am aiming for (yet).
I am profitable but not much.
I can stand at 85% winning rates for 2 full weeks, get back to my everyday job for 2 weeks, and when i come back, not get more than a 55% winning rates for the 2 weeks after (wich is not enough in scalping).

It's very hard for a wanna be retail trader to evaluate his current situation on the road to success (wich is consistency for me). There is no teacher, no mentors to point your failure. No one to yell at you, telling you to go home until you get your *** together when you reached your daily stop loss in one hour. You have to reinvent the wheel day after day all by yourself for every step forward you make. You can be stuck a week failing almost every day not knowing what has changed. Guys with real mentorship can rely on seniors to point a direction on such occasion. I cannot.
This is where i stand in my trading.

My reading does not change (it actually still improve over time). My setups don't change either (but i can stop trading some of them). I actually realize that all the difference between success and failure at my point is STATE OF MIND. I am in the right one: 90% winning rates. I'm not? 40%. same setups.

The difficulty is to set the rules that suits you, are relevant AND to recognize them for it. Let me explain:
I have recently achieved my first 2 weeks of high probability run. I was relieved. I thought i was finally there. After 2 years of work (yes i'm slow, but remember i'm alone), I was already seeing myself sending resume to some prop shop, to be able to live from my trading. I stopped 2 weeks, confident. When i started trading again, what a disapointment! loss after loss. everyday!

That was 2 months ago. I spend 2 month to understand that i was trading with a slightly different state of mind. I am now trying to identify the key elements to get them back. I had them, lost them, get some back, lost them again. It's a spinning wheel. it's reinventing the wheel day after day. Every point of your psychology is crucial. You miss one element at any moment of any trade for just a few seconds, and it's all gone (especially in those high volatility environement). You hit your stop loss. And you know you are done for today. That you probably won't make it for the rest of the session. You feel like shit for letting this happen. Your confidence is destroyed. You need a break. You will come back later.
That's why trading is crazy difficult. The key to success holds in nothing more than a state of mind. And it is as volatile as air.
The key is to be able to successfully induce it and keep it stable. That's what i am aiming for right now.

state of mind can be divided in rules. Of course i have some. You know? the ones you CANNOT deviate from. Like: "never let a winning trade becomes a loosing one" but here is a classic of what i want to demonstrate in my trading:
I take a setup. I don't know it yet but it's a below average probability setup (i will see it later on my review by telling me: "no no no, not here, it's too weak!") wich means i am already deviating from my "perfect" state of mind but i am not aware of it (error #1 weak setups).
The setups goes my way 2 ticks. I see the momentum slow. If i get out now (wich is what i should do), winning trade. But (and here is the state of mind deviation) i sometimes stay a little longer in the trade - it's the hope for the extra tick - but for now it is not shaped that way in my mind. it's just: "wait a little longer", it's blurry (error #2 not taking profits) and in a matter of seconds i get to my entry point (no support to my trade. Remember the weak momentum?). If i want out now, i have to exit on a market order and loose 1 tick. I don't want that. 10s ago i was on a winner (error #3 not accepting quick reverse of situation inducing a loss). I wait a bit more just to see if the market goes back. Someone smacks it for 3 ticks. I bail at -4.
That's my classic chain of reaction. The mess needs more than one mistake, but if i can eliminate the error #2 (the one i can master because i am not aware of the first one) or even the error #3, I'm safe.
But errors are justs thoughts and that's why it's so hard to eradicate them. It is just "come on, i give 5 more seconds to this trade".
You don't need anything more to fail. You just need to sit on your winning trade for 5 seconds. That's it. The world of loosers lies in those 5 seconds.

Trading is crazy difficult.

Don't worry, it gets better. Once you realize it, you can act on it. My rates are up again. But that thought is just around the corner.

Sorry, i needed to unburden myself a little. I hope it can be of some use or comfort to others in the same situation.

@Zefi.
I think it is a good idea to confront some scalping views, but maybe not on this thread. We can probably create a new one with links to our own trading journals video and comment it. I actually thank you to bring this back to my mind. It is probably time to continue it.


Last edited by nestor2022; May 11th, 2015 at 06:12 AM.
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Old May 11th, 2015, 04:56 AM   #13 (permalink)
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nestor2022 View Post
Hi.

...It's very hard for a wanna be retail trader to evaluate his current situation on the road to success (wich is consistency for me). There is no teacher, no mentors to point your failure. No one to yell at you, telling you to go home until you get your *** together when you reached your daily stop loss in one hour. You have to reinvent the wheel day after day all by yourself for every step forward you make. You can be stuck a week failing almost every day not knowing what has changed. Guys with real mentorship can rely on seniors to point a direction on such occasion. I cannot.
This is where i stand in my trading...

Excellent post. Explains a lot about trading. I ENTIRELY AGREE. And it is terrific IMHO.
Keep going as I am.

All well.

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Old May 11th, 2015, 06:14 AM   #14 (permalink)
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nestor2022 View Post
Hi.

You are right. it's maybe time to update this thread a bit since i'm still trading. It may be of some use to other.

I have switched to FESX wich is deeper (in terms of liquidity), and less volatile. It suits my (very little) capital better.
I actually still trade the Bund sometime on specific setups (good established momentum to grab a few ticks, and the pullback reversal point i explained in november). but thats'it.
My prep as not changed (i added Market profile, but that is not a scalp timeframe nor sclaping purposes).
with the recent volatility i mostly trade momentum ignition to get 1-3 ticks (FESX). Ranges, trend pullbacks, stops triggering are my bread an butter.

I'm still on Sim since i have not met the consistency i am aiming for (yet).
I am profitable but not much.
I can stand at 85% winning rates for 2 full weeks, get back to my everyday job for 2 weeks, and when i come back, not get more than a 55% winning rates for the 2 weeks after (wich is not enough in scalping).

It's very hard for a wanna be retail trader to evaluate his current situation on the road to success (wich is consistency for me). There is no teacher, no mentors to point your failure. No one to yell at you, telling you to go home until you get your *** together when you reached your daily stop loss in one hour. You have to reinvent the wheel day after day all by yourself for every step forward you make. You can be stuck a week failing almost every day not knowing what has changed. Guys with real mentorship can rely on seniors to point a direction on such occasion. I cannot.
This is where i stand in my trading.

My reading does not change (it actually still improve over time). My setups don't change either (but i can stop trading some of them). I actually realize that all the difference between success and failure at my point is STATE OF MIND. I am in the right one: 90% winning rates. I'm not? 40%. same setups.

The difficulty is to set the rules that suits you, are relevant AND to recognize them for it. Let me explain:
I have recently achieved my first 2 weeks of high probability run. I was relieved. I thought i was finally there. After 2 years of work (yes i'm slow, but remember i'm alone), I was already seeing myself sending resume to some prop shop, to be able to live from my trading. I stopped 2 weeks, confident. When i started trading again, what a disapointment! loss after loss. everyday!

That was 2 months ago. I spend 2 month to understand that i was trading with a slightly different state of mind. I am now trying to identify the key elements to get them back. I had them, lost them, get some back, lost them again. It's a spinning wheel. it's reinventing the wheel day after day. Every point of your psychology is crucial. You miss one element at any moment of any trade for just a few seconds, and it's all gone (especially in those high volatility environement). You hit your stop loss. And you know you are done for today. That you probably won't make it for the rest of the session. You feel like shit for letting this happen. Your confidence is destroyed. You need a break. You will come back later.
That's why trading is crazy difficult. The key to success holds in nothing more than a state of mind. And it is as volatile as air.
The key is to be able to successfully induce it and keep it stable. That's what i am aiming for right now.

state of mind can be divided in rules. Of course i have some. You know? the ones you CANNOT deviate from. Like: "never let a winning trade becomes a loosing one" but here is a classic of what i want to demonstrate in my trading:
I take a setup. I don't know it yet but it's a below average probability setup (i will see it later on my review by telling me: "no no no, not here, it's too weak!") wich means i am already deviating from my "perfect" state of mind but i am not aware of it (error #1 weak setups).
The setups goes my way 2 ticks. I see the momentum slow. If i get out now (wich is what i should do), winning trade. But (and here is the state of mind deviation) i sometimes stay a little longer in the trade - it's the hope for the extra tick - but for now it is not shaped that way in my mind. it's just: "wait a little longer", it's blurry (error #2 not taking profits) and in a matter of seconds i get to my entry point (no support to my trade. Remember the weak momentum?). If i want out now, i have to exit on a market order and loose 1 tick. I don't want that. 10s ago i was on a winner (error #3 not accepting quick reverse of situation inducing a loss). I wait a bit more just to see if the market goes back. Someone smacks it for 3 ticks. I bail at -4.
That's my classic chain of reaction. The mess needs more than one mistake, but if i can eliminate the error #2 (the one i can master because i am not aware of the first one) or even the error #3, I'm safe.
But errors are justs thoughts and that's why it's so hard to eradicate them. It is just "come on, i give 5 more seconds to this trade".
You don't need anything more to fail. You just need to sit on your winning trade for 5 seconds. That's it. The world of loosers lies in those 5 seconds.

Trading is crazy difficult.

Don't worry, it gets better. Once you realize it, you can act on it. My rates are up again. But that thought is just around the corner.

Sorry, i needed to expand myself a little. I hope it can be of some use or comfort to others in the same situation.

@Zefi.
I think it is a good idea to confront some scalping views, but maybe not on this thread. We can probably create a new one with links to our own trading journals video and comment it. I actually thank you to bring this back to my mind. It is probably time to continue it.

That was a great read and a lot of things here will be very useful for traders starting out and also people who've been in the game for a bit and are struggling with a few things. I certainly took something away from it, thanks!!

Have you invested in your education with order flow? If not I would HIGHLY recommend John Grady's NO BS day trading course. He usually coordinates them around US treasuries' hours however he has done a EUREX one and I believe at some stage will do a live course.

It's great because he acts as the mentor enabling you to fire any questions at him at any time if you've got some problems with your strategy/psychology. Plus there is so much depth to his course. Before it begins he sends you around 25 hours worth of material to get through before the live 2 week course even begins to get you up to speed with his trading setups etc.

Anyway, yeah I'd love to start a co thread soon on Bund/Bobl.

All the best

Z

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Old May 11th, 2015, 06:38 AM   #15 (permalink)
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The rule of 10,000 hours

Futures Edge on FIO

nestor2022 View Post
Hi.
..........................................
I thought i was finally there. After 2 years of work (yes i'm slow, but remember i'm alone), .............

2 years it's not so much, and it's not about how many years but more about how many hours of practice. Search the rule of 10,000, in the Outliers book Malcolm Gladwell says that it takes roughly ten thousand hours of practice to achieve mastery in a field.....

Take your Pips, go out and Live.
Luke.
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Old May 11th, 2015, 07:15 AM   #16 (permalink)
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Hi
I know the 10 000 hours rule, and fully agree with it. But as you said, it's to achieve mastery in a field. We should be able to become decent discretionary traders in less than that. I do not know if i have what it takes to become a master trader. But a decent one consistent in his profits? I believe i do. I bring the 2 years period because prop shops train people in terms of month. Not years.
And it makes me question my ability to success in trading solely by myself. I play the violin. What is the most effective: a violin teacher or online courses on violin? I go for the teacher. I am not saying you can't do it by yourself, i'm saying a teacher gives you shortcuts when you need them. You may never find them by yourself, or it could take years for you to discover the same things.
10 000h with a teacher is not the same as all by yourself.

@Zefi
Yes I know John grady's courses. I have read his book but that's it. I'm a bit tired of online courses right now.
I have found in France a 2 month live seat training courses. it costs 10 000. The main trader is there every day trading his own account. There is also some backed traders there i think. It may be a good place to learn. I don't know. That kind of money is my capital. I may go for it if i struggle too much. But for now, i still do it on my own.

Cheers

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Old May 12th, 2015, 05:34 PM   #17 (permalink)
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a video to illustrate my last posts

Hi,
I comitted a new video. I hope your english / american / australian ears are not too sensitive to my french accent / errors.

What i wanted to demonstrate in my last posts happenend to me again today. The exact same scenario. I was aware of it but i did not succeed to act on it.

I show my trading journal in the beginning of the video.
cheers

EDIT:
I realize i haven't answerd the previous question:
I actually trade an average of 10 days/month spending at least 5h/day on trading (sometimes more). And i don't count the books, webinars, forums (not so much these days) in it.

Attached Files
exemple_chain of errors.flv (151.83 MB, 84 views)

Last edited by nestor2022; May 12th, 2015 at 05:53 PM. Reason: i forgot a question
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Old May 12th, 2015, 11:15 PM   #18 (permalink)
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nestor2022 View Post
Hi
I know the 10 000 hours rule, and fully agree with it. But as you said, it's to achieve mastery in a field. We should be able to become decent discretionary traders in less than that. I do not know if i have what it takes to become a master trader. But a decent one consistent in his profits? I believe i do. I bring the 2 years period because prop shops train people in terms of month. Not years.
And it makes me question my ability to success in trading solely by myself. I play the violin. What is the most effective: a violin teacher or online courses on violin? I go for the teacher. I am not saying you can't do it by yourself, i'm saying a teacher gives you shortcuts when you need them. You may never find them by yourself, or it could take years for you to discover the same things.
10 000h with a teacher is not the same as all by yourself.

@Zefi
Yes I know John grady's courses. I have read his book but that's it. I'm a bit tired of online courses right now.
I have found in France a 2 month live seat training courses. it costs 10 000. The main trader is there every day trading his own account. There is also some backed traders there i think. It may be a good place to learn. I don't know. That kind of money is my capital. I may go for it if i struggle too much. But for now, i still do it on my own.

Cheers


Personally I have found what works for me is making sure everything I'm doing contributes to the be becoming a consistently successful trader. I'm certainly not there yet but by everything that I do that I've written down in my daily and weekly plan ensures my belief system that I will become a consistently successful trader at some stage and perhaps even mastery at some stage along the journey.

A few things that help me on a daily basis:

Morning prep: I do market profile prep of key levels and reference points however just a basic chart values assessment on key weekly,daily, previous day and overnight levels give me points to trade off and points to watch out for throught the day.

Written down setups: I fade mainly however my goal is to flow with the market and to take opportunities that arise dependent on the context of what is going on that day in the market.

Written rules: when to trade, when not to and the types of setups I'll trade and stick to etc.

Afternoon run/workout: Based here in Aus I'll do this around 2.30pm so that it gives me time to limber up before trading.

Meditation/Visualization/Affirmations: Visualizing the setups I trade and seeing it happen over and over. Affirmations of 5 lines that enable me to feel consistently successful.

Bio-mechanical feedback log: 1-100, if I'm below 50 I won't trade (perhaps I've got a cold or had an argument with the wife etc)

Once I start trading I will try to RIGIDLY stick to my setup plan and play the waiting game until the market makes an opportunity available to me. It's key for me not to get bored a fire off unnecessary trades although it can be hard to do a times. I'll try to judge the context of the day, whether it's trap action (thick/thin with unusual moves, as we've seen recently). If none of my setups are coming into play and the market is crazy I'll switch off the computer and go again another day.

Log trades and log how I felt on each trade and with the losers I'll write down a lesson learnt from that loser if there is one.

I haven't started recording my trades, although I think this could be really beneficial with my log especially.

End of week review: Have I stuck to my game plan? how many stupid trades were taken? How tricky was the market action this week? etc.


Thought I'd share this to offer some insight and secondly by telling others about my trading plan about it helps me become more committed as I like anybody can deviate away from it at times.

Btw: I'm having more success with the Bobl at the moment as it's thicker and less crazy with it's swings than the Bund, have you thought about trading it?

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Old May 13th, 2015, 09:31 AM   #19 (permalink)
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Hi,
thank you to share your experience. I still haven't opened a real account yet so i'm stuck with the demo data feed in wich i have no access to the Bobl nor the Schatz.
That's why i do not trade the bund much these days (besides volatility). I am not able to see the relationships / spread activities as they go on. That put me at a disadvantage.

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Old December 20th, 2015, 04:00 PM   #20 (permalink)
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nestor2022 View Post
Hi,
thank you to share your experience. I still haven't opened a real account yet so i'm stuck with the demo data feed in wich i have no access to the Bobl nor the Schatz.
That's why i do not trade the bund much these days (besides volatility). I am not able to see the relationships / spread activities as they go on. That put me at a disadvantage.

Hi nestor2022 and all, thanks for sharing your own experience.

I used to trade the Bund live up to around June this year - it seemed to respond well to certain economic data releases, such as German IFO, GDP and CPI.

Then in June Mario Draghi said the bonds would become more volatile - which they did - and the Bund has been more unpredictable ever since. So I too switched to trading the EuroStoxx 50, which is generally a thicker market. This too seems to generally respond well to certain economic releases - especially the German IFO one...

Regarding the 10,000 hour rule, I agree that's for mastery. Someone pointed me to a youtube video where they talk about learning anything in 20 hours, with a certain methodology, and I am doing that with Order Flow at the moment.

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