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Back in the Markets and Pivoting from Opts to E-Minis - To Profitable Trading!


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Back in the Markets and Pivoting from Opts to E-Minis - To Profitable Trading!

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  #1 (permalink)
Medellín, CO
 
Experience: Intermediate
Platform: NinjaTrader
Trading: Playing with eMinis, coming from Options
 
Posts: 80 since Jun 2015
Thanks: 14 given, 43 received

TRADING PLAN:

Goals and Objectives:

Why do I trade?
- I used to trade in the late 90's when I was in High School (Options, mostly Indexed) and did exceptionally well and some in mid 2000's (always a volume and volatility girl). I've been poking my nose into the market here and there, mostly analysis for other people (I'm good at seeing patters, and suck at names or remembering things). Did Financial Advising stuff, CFA stuff, Valuations stuff, Teaching Mathematics stuff, and Consumer Focused Marketing stuff, and resisted the markets. Not because I burned out, I think I viewed it as a disciplined thing to do was not to enter. Came to realize the error of my ways. (Especially after my friends pool started involving a lot of location independent bloggers, programmers, and entrepreneurs.)

- My goal now is to step back for the next year, move to a country with a significantly lower cost of living, live on a budget of $12,000 or less, and spend the next year studying and building up my trading skills and portfolio from $1,000 - $$5,000 initial capital to the level of income I've grown accustomed to in the States (around 6 figures, not necessarily within this year but to a steady year over year at that level moving forward). I will not take income from the profits of trading for at least 6 months. Big reason for the shift into markets is to reduce stress and focus on building a family with my significant other while building a location independent income stream since we both love to travel and I don't like what his work is doing to him. Do more actual living, less working for a living!


Which Markets?
- I'm going to stick to trading e-Minis, mostly ES right now. Maybe with time I will introduce option spreads into the mix again.

What types of trading my personality is more suited for?
- Conditioned and controlled, can keep my focus on execution in panicked situations. I like good movement in the market and do not have issues with trading up or down shifts in the market. I like to limit my risk and exposure with good safeties and short term positions. I'm used to working and earning at piecework rate and like that way of working a lot: my earnings are directly proportional to how much work I choose to do or not do. I think that will come in handy choosing to take or not take trades. And really appealed to me when I was researching instruments to trade. I do not have an addictive personality, so I do not chase which should keep me out of trouble when trading.

What would my measure of progress be?
- Under 5% loss of my portfolio. (not necessarily trades, but the discipline not to let risk too much of my portfolio in trades) Survive to trade another day!
- Consistency of $200 net profit a day.

How would I define success in trading?
- Self mastery to hit the goals I set with good execution of the goal every time.
- 4 : 1 w/l ratio or better on positions I take with close to break even on losses.
- Having consistent even split of income and reinvestment of profits that is more than $2,000 on weekly basis.
- Mastery of the process over the profit since that is the only thing you can control!

Strategy

Only trading 8:45 to 12:30 EST or 7:45 to 11:30 CST. Volume really gets going about 9:30 Eastern and has a siesta in the afternoon until the 3 pm hour (CST) - This allows me to maximize my trading time and get on conmigo estudiar espanol.

Set Up
- Clean chart, candlesticks, EMA on main chart, to ticks. Price action approach.
- Volume and order size chart or indicator (not decided, but i like Volume Oscillator, Accumulation, maybe something that indicates flow of funds. Honestly, there is SOMETHING going on with reduced volume and bearish turns with ES, think maybe there is a good play to make money consistently on change of volume indicating loss of support.)
- Maybe a Heikin Ashi or line chart on a secondary or second chart to reference a smoother trend with an indicator (Since most of the big money in the S&B is in the ES, I want to know where the institutional money is moving and Level II bid and ask volume indicators)

Money Management
- No exposure more than 30% of the account to a trade and no allowance for more than 5% loss per trade. (So at $500 margin, I would have to have $1670 in account, and my loss allowance would be 6 ticks for $75, this would be my max stop).
- That means I cannot start allowing for runners with 2 contract entry until I hit $3340 in my account.
- For first 6 months of live account, up to 1 year, I cannot take any profits out for income. The account is in growth mode. I may allow myself to take out the initial investment at 6 months mark or when the initial investment is less than 10% of my account as a reward.
- Never enter without exits on place (setting this in NJ before I allow myself to go live).
- No going live until I have 2 weeks of 90% success rate in SIM.

Entry Strategies
- Range Market:
**
- Trent Bullish:
**
- Trent Bearish:
**
Trade Management
**

Exit Strategy
- Set up and trade automated strategy. For stops at 4-6 ticks (market condition specific to be determined). For profit at 4-8 ticks (market cond tbd)
- Adjust stops to break even.
- If trading multiple entries with a run, pull up the stop 2 ticks above break even on running position with profit at 45 degree mark.



Other:
- I need to play with OnDemand on Think or Swim for a week or two (Mac user) while I migrate to a PC for SIM trades and get my NJ and IB set up properly. I know people love other brokers and I need to look at them for active trades since IB's margins are $2875 intraday. (AMP, ATC, Ninja just opened a brokerage by the time I decide to switch maybe they will expand)

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  #3 (permalink)
Sydney, NSW Australia
 
Experience: Intermediate
Platform: Ninjatrader
Trading: ES, CL
 
Posts: 26 since May 2015
Thanks: 17 given, 19 received


Good luck with it :-)

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  #4 (permalink)
Medellín, CO
 
Experience: Intermediate
Platform: NinjaTrader
Trading: Playing with eMinis, coming from Options
 
Posts: 80 since Jun 2015
Thanks: 14 given, 43 received

Do not understand why my my chart is not matching my order fulfillment and my Active Trader. I can't trade off chart and have to manage my position off active trader.

Placed a 2000 tick chart with 21 bar EMA. Active Trader, I found good for monitoring sentiment as well as larger orders on the sales monitor. Due to the chart to order disconnect, had to place single orders.

Since the day I traded, May 21st was a good bullish trending day, I placed my buys just above the EMA, then aimed for 8 tick scalp. And when the trend ended ended would wait for confirmation on a downturn and going short. Was not able to get my stuff to sink across the instruments so I entered each trade manually (Accidentally ended up selling 2 orders on a short then not paying attention and covering only one.



Nice $387 for the day, even though I had to wait a while to cover my last contract cause I forgot about it.



LEARNINGS:

The EMA is very nice springy tool and love watching market sentiment. Really need to figure out how to sink them all to sale price, or is it supposed to be that way? Or is it a TOS OnDemand issue?

Have to learn how to use the tools properly.

I have yet to find a good tool for entries, I know people like the Square of Nines and Febs. From tools I saw, they are offer several interpretations of Gann's theory. I understand the math behind Fibs, Square of Nines, and properties of 2s but I do not understand the tie in to the pyramid. It seem like over doing a relatively simple topic. I want to good size of orders and velocity of orders indicator, ideally something that has buy or sell to entry but that may be a tall order. Something that had maybe overlaying bars that look at size of orders at which point from the sales feed. Will have to look at that.

I did like the use of Heiken Ashi for same time period to show reduction of velocity. Did not have too good of a time with MACD or Boulanger bands time around, will do a day or so on those indicators to fully rule them out. Continue looking for other indicators.

If I continue having the issue with mismatching data across instruments, I will run to NJ a bit quicker.

Want to start capturing video of what I'm doing in real time to anywise my mind frame at time of positions. Noticed a bit of anxiousness.

LOVE that I can do 7 trades that are not at all dramatic in moves and meet my set $200 a day profit.

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  #5 (permalink)
Medellín, CO
 
Experience: Intermediate
Platform: NinjaTrader
Trading: Playing with eMinis, coming from Options
 
Posts: 80 since Jun 2015
Thanks: 14 given, 43 received

I am still having the issue where my Active Trader does not correspond to the values on the charts. PLEASE HELP!

Chart Setup:

Main Chart: 2000t with 21 EMA
Second Chart: 2000t Heikin Ashi with a 20 EMA
Active Trader and Times Sales and Level 2

Trade Zero: Tried to OCO Bracket and it stopped me out as soon as I set it. The price difference with Chart vs Active Trader is messing with me.

First Trade:
When the bar at 8:26 printed, I Decided to enter at the AT value at $2103.25 about 1000 ticks in into the next candle (I'm curious about the candles that intersect the EMA, if the first candle that crosses has a wide spread, it tends to be followed by an opposite, also big spread candle), there was also a nice storing up trend earlier in the morning and then a nice 45 solid angle decent, good trends within a range market.

Entered at 2103.25 with a stop at 2102.25 (4 ticks) and a limit of 2105 (7 ticks).
Once the first green bar closed, I moved my stop to 2103.5 (1 tick above break even)
The next bar i moved my stop to 2104 kept the limit at 2105
I think it will go above my target limit, but I feel very comfortable at 2105 especially since I think it will go flat and stay in range for a couple of bars.
Ticked through my 2105 at 9:25 and I took my profit. And took the stop off.


Waiting for trade 2 (noted a nice reduction on volume and a red candle):
I saw the volume reduction and the 2 dojis with a nice moderate sized red candle. (I was writing a journal entry at the time). By the time I finished My though the next candle got 2000 candles in a snap, went down to the trend. If it closes mid body through the EMA, and the next candle gets a nice green body on 1000 contracts, I will look to go long.

Trade Two:
After a nice long drop, I tried to go long at 2102, got stopped out at 2101. Still the bar is far from EMA, Will look to Re enter long.

Trade Three:
Entered at 2101.5, limit of 2100.75, Stopped out again. I am out and waiting for the trend to reestablish itself. The market is in chop. Go for a walk.

Trade Four, Five, and Six
I made a mess Ended up not removing my limits and stops and ended up with 6 bullish order. On the upside, I ended up scaled out with good profit (Thank god for play margins, otherwise I would have been up the creek)

Trade Seven:
Went short at 2102.5 because I saw the triple bar at EMA and low volume. Went for a lovely 2100, got filled in 3 minutes. The trend went down into the 90's.

Trade Eight:
After some chop, the confirmation of a 2 green candles I entered again on a buy at 2095.5, and within a minute my limit of 2097.25 was hit. I did initially toy with the idea of going for 2098 but decided I already did $1000 for the day and why be greedy. I would have been filled, but the market went into several bars of chop.

Looked to enter for a last trade if it occurred to me until 11:30, but was not actually eager to enter. And it was interesting looking at chop. It looks amebic.

Very tight band. It is trying for a trend reversal but too much volume before lunch. And the bulls want to be fed. Even though they are fighting against the trend. The market looks to be headed to the bears for the day. Not really caring, since I do not trade afternoon.

Learning:

ORDER ENTRY, making a mess with margins is not going to play out well when trading real money.


Decided to call it a day at 10:50 am.

FF: At 10:56 I had my 2 candles at EMA, Green Confirmation than a bit to a rally until 11:04, than a nice 4 bar slip to the EMA by 11:13, 3 bar retest by 11:23, than a nice steep 5 point slip by 11:29. 4 Possible trades in 40 minutes after I decided to call it a day. It's ok.

I made $887.5- for the day. To total of $1,275 for 2 days, less than 8 hours trading. I can live on that. (Like that's my monthly budget.)

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  #6 (permalink)
Baltimore, MD
 
Experience: Intermediate
Platform: Sierra Chart
Broker: Stage 5/DTN IQFeed
Trading: ES
 
Sg7JR's Avatar
 
Posts: 91 since Jun 2015
Thanks: 88 given, 167 received

Do you have ToS paper trader or a live account? If you have a live funded account then it should be live data, but if it is a free paper trader account the data on the DOM (what ToS calls the "active trader") is delayed, but the chart data is live, that's why you have a discrepancy.

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  #7 (permalink)
Medellín, CO
 
Experience: Intermediate
Platform: NinjaTrader
Trading: Playing with eMinis, coming from Options
 
Posts: 80 since Jun 2015
Thanks: 14 given, 43 received

I'm not in paper money, I'm in the Realtime Data account but doing OnDemand, so basically back dated testing. (It's 9:45 pm here, and i'm trading June 1st 10:12 am)

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  #8 (permalink)
Medellín, CO
 
Experience: Intermediate
Platform: NinjaTrader
Trading: Playing with eMinis, coming from Options
 
Posts: 80 since Jun 2015
Thanks: 14 given, 43 received

Look at this craziness under the gray arrows!


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  #9 (permalink)
Medellín, CO
 
Experience: Intermediate
Platform: NinjaTrader
Trading: Playing with eMinis, coming from Options
 
Posts: 80 since Jun 2015
Thanks: 14 given, 43 received

Charting like 5 points above. BUT following the same trajectory. Don't get it. Nice long legs, no chop in the morning. Kinda beautiful!



Made a mess with order management.



Horizontal lines on the volume... Something about the lower volume and bearish turns.



Beautiful short, 8 for profit, 4 for stop.



Patterns!!!

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  #10 (permalink)
Puerto Rico
 
Experience: Intermediate
Platform: thinkorswim
Broker: TD Ameritrade
Trading: ES
 
rmejia's Avatar
 
Posts: 377 since Oct 2010
Thanks: 3,600 given, 432 received



Lady View Post
I'm not in paper money, I'm in the Realtime Data account but doing OnDemand, so basically back dated testing. (It's 9:45 pm here, and i'm trading June 1st 10:12 am)

When using OnDemand you have to enter the complete symbol. So instead of just using /ES it would be /ESU5 or /ESM5, /ESH5, etc, depending on the month and year.

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