Just starting Futures. Learning spreads, new hedging strategies and high volume click trading. Where I might have taken 30 trades in a day before, I have to take 300 now. All off the DOM which is also a kick in the face for a newbie.
Please, if you have any ideas on how I'm doing it wrong, or how I'm doing it right, share it with me so I can use this thread as a textbook.
I will record all my trades, the reasons I took those trades and whether or not I'd do the same thing again. After all a fraction of a good trading strategy is having good timing.
Not to be rude, but: The perceived number of (potential) trades sounds like complete overtrading without any clue what's going on.
Some advice:
Separate the process of learning platform features like DOM from trading, i.e. first learn and sharpen your tools and use them afterwards.
Develop a set of rules for choosing trades and evaluate it, e.g. by backtests; if the rules generate positive results and you put real money on the line, follow the rules.
Reduce overtrading (mostly a personal issue).
P.S.: Reading FIO journals + threads will give you a better perspective. You're not alone.
The following 2 users say Thank You to choke35 for this post:
Thank you very much, that is exactly why I started this. Direction. I look into it.
The firm I am currently trying for is fairly well established, and have been running us on drills to see how we perform. I am used to taking 20-30 trades a day, a conservative scalper, only going for 1 contract on a single tick. But if their methods work for them, I'll have to follow and see where that take me.
On your second point, I have an old strategy which has been tying in quite well. I agree overtrading can be a problem for me, especially when I take a trend continuation trade, get out out where I wanted to, but then without actually looking for my strategy rules for entering, re-enter the market and end up breaking even. Overtrading.
The DOM is made easier by the old strategy but I feel foolish revealing it. Are there any well known DOM training/trader journals/threads you could suggest Choke?
Regards
David
The following user says Thank You to DavidBaxter for this post:
Basically, I'm still a TA trader watching for reversals and trying to catch it when I see a bank of numbers building up on the DOM. But over the course of the next year, I hope to move entirely to the DOM, seeing where the change is on the chart and then seeing that on the DOM will help in that conversion.
It's a pretty standard stance on trading, I think. What's your edge?
I think what you have is a theory about how the market works. Unfortunately, that by itself is not an edge.
An edge might be possible from taking that theory, putting detail behind it, historically evaluating it, and determining that it has long term positive expectancy.
I'm glad you asked. Most people never even bother to really figure out if they have an edge. Most people also lose.
So, let's say you want to use your theory. Take that theory, and flesh it out...
I will enter long if a reversal (which you have to define) is supported by DOM numbers (which you have to define). I will exit via these methods: XXX, YYY.
Basically, nail down exactly how you want to trade.
Then, test the theory over hundreds or thousands of trades. If you are using the DOM, you really won't be able to backtest, unless you can find a DOM replay. So you may be stuck testing in real time, which will be tough.
The point is: how do you know your reversal is good? Or your DOM number threshold? Or your exits?
I'm saying you test it as well as you can, before you start trading with it. Otherwise, in my opinion you are just guessing.
Of course, it is a whole lot more complicated to do this than it sounds. Testing is hard. That's why most don't do it. But as I said, most people also lose, and that is one reason why.
The following 4 users say Thank You to kevinkdog for this post:
I'm game, I'll test it. I have a few more questions if you don't mind. I do generally feel like my strategy has a lot of guesswork factors in it.
could you share with me your edge? do you trade in a similar fashion and minimized risk in a certain way? TA? DOM levels? not trading news? Trading news? only trading start or end of particular sessions?
Another issue for me is that I haven't yet stared at a DOM long enough to see when levels are actually levels and not just a group of traders trying to make that level looks strong, until the market gets there and they remove all their orders... I've only read and heard about those situations.
So for me to state where a good entrance is on the DOM, with that in mind, would be guesswork as well.
anyways thanks for pushing me in the right direction!
I trade totally different than you are proposing. I create automated strategies, and just let them trade. Each one has a simple, but proven edge - I have validated each strategy thru a multi step process I use, and each strategy has a long term positive expectancy.
For example, if the close is greater than the close five bars ago, that might be a good edge to initiate a trade (of course, you have to test it, with exits, etc).
Testing is the key, eliminating guesswork where you can.
The following 5 users say Thank You to kevinkdog for this post:
