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Agreed, there's a good view on this from Michael Patak (PTK) during a tour of the floor at the CME: (skip to 20 minutes into the video for the relevant bit)
Any time I have tried to look to trade other markets while also trading the ES, it has always been more of a distraction than a help. If anything, I miss opportunities in the ES that I should have taken if I wasn't distracted looking somewhere else. It also adds more decisions to make. When you are advanced, these decisions are made almost automatically, but as a beginner, they require a lot of mental energy. Adding more markets just uses up more of my mental energy causing more fatigue and mistakes.
I agree with @TalB. I experimented trading CL along with ES for a couple of months last year. The prep work for the day was much longer, monitoring two instruments was draining energy and in rare instances, where there were setups in both instruments, risk management was hard. I just felt I wasn't quite there yet and switched back to trading just ES.
If you are sim trading and are disciplined (which you seem to be from your meticulous routine and journaling), I would advise you to think about live trading 1 contract. Even with 1 contract, there will be a big difference between sim and live trading psychologically and you have get comfortable with it along the journey.
If you are already live trading, you might want to add a contract and incorporate scaling techniques. Currently, that is what I am doing. Trading 1 contract was hard, but it taught me the discipline and risk aspects. Trading 2 contracts has its own challenges. I realize I am getting more discretionary (for good or bad only time will tell) that I find it hard to put in words, but I am transitioning to trade more of contextual themes than raw setups (H1/H2,Wedge etc) with the goal to capture 1 or 2 swings in a day and use Limit order entries.
Thank you for your comments. This is exactly what I was concerned about.
I'm still sim-trading, but I don't want to go live until I see that I'm profitable in SIM.
A next step in my learning process that I also have considered is to start to pyramid my position with a 2nd contract when I feel that I'm right. Scaling in at a better price (=averaging down) does still feel a bit advanced at this point. Do you know of any good posts or webinars etc that are about pyramiding and scaling techniques? ( Al Brooks talks about scaling in his webinar on FIO "When A Good Trade Goes Bad: Risk and Probability". This was very instructive and I will watch it a again soon.)
Higher TF charts and ON Daily chart: We have had the first PB after ATH and are trading in a bull channel just below ATH. Monday, April 24th, made a big gap up and the gap low around 2358,25 is likely still a target. We have had 4 consecutive small range sideways bars which increses the chance for a wide range day.
120 min. chart (ETH): TR and broad 8 day bull channel. Market is trading sideways at support in the bull cahnnel and near the high of the major TR. This may be the beginnig of a MTR short.
30 min. chart (ETH): We are trading sideways in the mid of an upper TR.
Type of Day:
- Daily bar: Four consecutive small daily bars means increased chance for a wide range day.
- Higher TF context: Market is trading at the high of the major TR and in a broad bull channel. We may soon have a BO up towards ATH or a reversal down, back in the prior TR.
Scenarios (blue), S/R-levels (pink) and Targets (green)
I scale in and out. I believe an all-in/all-out approach implies that you have identified an "absolute" in the market, which is impossible. Scaling in whether it be dollar cost averaging or whether it be adding to a winning position implies …
As a one lot trader I have made aiao work, but I think scaling adds another very important tool for maximizing profit.
Trade 1 (BoPb, short): - 1,25 points
Reasons for taking the trade:
- L2 PB at VWAP and 60 min EMA 20 (resistance)
- Possible MM down
- signal bar (Micro DT)
Comment: Not OK entry plan. I realized soon after my entry that the failed L2 in fact could have been a L1 and that the current PB very well could be the L2. Futher more I did enter long just at a likely resistance level (VWAP and 60 min EMA) so I decided to get out. Good decision to get out.
Trade 3 (BoPb, short): -2,0 points
Reasons for taking the trade:
- L2 PB at VWAP and 60 min EMA 20 (resistance)
- Possible MM down
- L1 and small bear reversal bar on 30 min chart triggered
Comment: OK entry plan. At this point I didn't belive that the wedge bottom would trigger any more, but it did. (Stopped trading after 3 losing trades according to my trading plan.)
Hindsight Thoughts
Today I had three consecutive losing trades so it wasn't a good day, although I almost did no major misstakes according to my trading plan. Obviously the MM down after the first bear spike was unrealistic since we are in a 4 day TTR on the daily chart, I suppose.
The best trade today would have been a short after the 2nd bar at 15.40 GMT +1. There were several reasons to enter:
- Resistance
- Wedge top on the ETH chart
- Micro DT
- Opening reversal?
Right now my rules are not to enter on a wedge top without a 2nd entry and a good signal bar. But I have seen several examples when the market opens at S/R that trades have worked very well without a 2nd entry. And the RR-Ratio is usually high. A backtest of this would be intresting.
One comment I would make about today is to beware of taking swing trades off of tight trading ranges, particularly in a day that may be shaping up to be a trading range day. The tight trading range can chop you up with multiple failed breakouts before the actual breakout occurs.
Higher TF charts and ON Daily chart:We are trading sideways in a TTR at the high of the major TR just below ATH. Today is FOMC and market may stay within the TTR until the announcement. Monday, April 24th, made a big gap up and the gap low around 2358,25 is likely still a target.
120 min. chart (ETH): TR and broad bull channel. Market is trading sideways in the bull channel and near the high of the major TR.
30 min. chart (ETH): We are trading sideways in the mid of an upper TR.
Type of Day:
- Daily bar: 5 days TTR.
- Higher TF context: Market is trading at the high of the major TR and in a broad bull channel. We may soon have a BO up towards ATH or a reversal down, back in the prior TR. I will assume that we will have no successful BO before FOMC news.
Scenarios (blue), S/R-levels (pink) and Targets (green)
Hindsight Thoughts
Difficult day. I traded until the FMOC news (at GMT +1: 20:00 / EST: 14:00) but I can't see any trade that I should have taken. I was expecting a HL after the wedge bottom at 17:00 GMT+1 but price reversed up without any 2nd entry. That was a bit disappointing.
