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  #81 (permalink)
 
aquarian1's Avatar
 aquarian1 
Point Roberts, WA, USA
 
Experience: Advanced
Platform: IB and free NT
Broker: IB
Trading: ES
Posts: 4,034 since Dec 2010
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BoltTrader View Post
I was just speaking in generalities. Essentially I have found that CL likes to move in a 10 tick ebb and flow (give or take or 2) and that the ES likes to move in a 4 tick ebb and flow. Therefore, when I am trading these markets I like to take some profit off somewhere around 10 - 15 ticks on CL and 4 to 8 ticks on the ES. This puts money in my pocket as well as reduces my overall risk. I do this regardless of what my target is. I learned this from an individual who traded 24 contracts on the ES and took 20 off at 4 ticks and let the remaining 4 run and on CL he traded 12 contracts where he would take 10 off at +10 ticks and let the remaining 2 run.

Hi John,

On the surface this strategy may sound very appealing to new traders. Certainly covering your risk and holding some runners for a profit sounds great. The problem with generalities is specifics.

Case A
If the trade gets stopped out too often then you end up grinding down your capital.
So if the trade moves against the trader 4 ticks before returning to the desired direction you are stopped out and on 24 contracts you have lost 24pts. If you do this 6 times before getting 5 winners (5:6 W:L ratio) then you are down 24*6= -144 pts. then claw back up +120 so now net -22 which you need to make up on your runners.

If 2 trades are runners which you kill at +3pts (or +2pts above the 4 ticks=1pt) you have
4*2= +8 on two trades = +16 which added to you -22 is still -6.

Case B
Now if your W:L ratio is higher 6:5 (instead of the 5:6 above) , then the math is:
-120 +144 + 16=+40

------------------------- danger to new traders -----

So the danger of your post on generalities is that new traders might read it and not get into the meat. Usually, in my experience something quick and easy "sell 20 and hold 4 for free" is that the devil is in the details, and quick simple things don't work out in the long run. IF they did a Chase Manhattan would use the same idea on
24 million contracts and print endless money streams. Since they aren't, and since they aren't dummies and have very bright and experienced traders, massive computers resources and massive money resources, and teams of physics PHDs who more about stats then most of us ever will..

a quick simple method to print money (along the lines of "Easy way to make $500 a trade -send now for your free copy"- most likely has a hole in it.


-------------------- for your friend --------

I'm not saying it does,or does not, work fine for him. Most likely it worked well for a few months. The key questions are "how long have you used this?" and the others I asked you in the post above.

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  #82 (permalink)
 
aquarian1's Avatar
 aquarian1 
Point Roberts, WA, USA
 
Experience: Advanced
Platform: IB and free NT
Broker: IB
Trading: ES
Posts: 4,034 since Dec 2010
Thanks Given: 1,509
Thanks Received: 2,593

End result
two wash trades net loss $50

2 contracts carried over 2368.75

(trade1b.png)


----------notes made prior to open

Monday 8:12 AM 2/27/2017
There is a small double top in the o/n at 2370 unless we open too far below that <=2363.50, we could go up to it.
However, it appears the work at the high end is done. We have a first leg est = -1 though DD is flat. Should we get close to 2270 the stop magnets will kick in and pull us up to 2374.50 and 2376.50 (breakout).

With Friday ending so strong the retail bulls should be in place eager for another day of easy money, and at open they may push it up a little to encourage them on-board before taking it down - should taking it down be their play.



We have FE=HE
H/L est 2365.75 2351.50

They will probably move it to(wards) 2367.50 after the open. FEa= 2367.50





Tip
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Thank-you everyone for your votes. Good luck to all!!
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Results for this journal:
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  #83 (permalink)
 
aquarian1's Avatar
 aquarian1 
Point Roberts, WA, USA
 
Experience: Advanced
Platform: IB and free NT
Broker: IB
Trading: ES
Posts: 4,034 since Dec 2010
Thanks Given: 1,509
Thanks Received: 2,593


Trade 1 +$50

Just a little trade to keep me occupied. Could have done better by enter and exiting on anticipation of swing move - which is what I usually do. I was trying something new - waiting for confirmation and found it doesn't work well.
The entire swing was 2.25 pts.


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  #84 (permalink)
 
aquarian1's Avatar
 aquarian1 
Point Roberts, WA, USA
 
Experience: Advanced
Platform: IB and free NT
Broker: IB
Trading: ES
Posts: 4,034 since Dec 2010
Thanks Given: 1,509
Thanks Received: 2,593

Trade 2 $650.00
I closed last night's two at the top edge of the LZ
Buy [email protected] 2/28/2017 11:17 AM


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  #85 (permalink)
 
aquarian1's Avatar
 aquarian1 
Point Roberts, WA, USA
 
Experience: Advanced
Platform: IB and free NT
Broker: IB
Trading: ES
Posts: 4,034 since Dec 2010
Thanks Given: 1,509
Thanks Received: 2,593

Trade 3 ($787.50)
Closed 3 carried overs - 2 left
Buy 3@ 2359.5 2/28/2017 11:28 AM




Trade 1 $50.00
Trade 2 $650.00
Trade 3 ($787.50)
total ($87.50)

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  #86 (permalink)
 
aquarian1's Avatar
 aquarian1 
Point Roberts, WA, USA
 
Experience: Advanced
Platform: IB and free NT
Broker: IB
Trading: ES
Posts: 4,034 since Dec 2010
Thanks Given: 1,509
Thanks Received: 2,593

Wednesday
9:02 AM 3/1/2017

2388.00, 2386.00 are key levels to watch.

We had a big o/n up move
The gap was an incredible 16.75 - just shake-your-head unbelieveable.

With a late start and time spend in typing the "ES 50K or $1,452 combine" things are a shaping up to a back-to-bed day.
Discipline says "no" to that so I wait for a sparrow trade.

Here's my thoughts - for a new journal - but I'm still thinking on the merits.

------------- draft version ----------
ES 50K 0r $1,452

In this journal I'll be following the combine rules:
Account Bal = $50,000
Min Ac Bal = $48,548
Profit target = $$3,000
Max loss = $1,000
Max Drawdown = $2,000
Losing day max = $999
Max lot 5
Trade 10 days



Intention
I will try for little trades with quite small stops for the majority of the trades. If I see a setup in the morning that looks like a big day I swing harder. The main focus will be not to blow-out a combine rule so I may only trade 1 contract for some trades so as not to violate the $500 rule.



Watermark nipping at your heels
I see the difficult of it (the combine) as having little losses yet at the same time a big gain -yet with a rising watermark nipping at your heels. The watermark combined loss means you can't really use your profit cushion as drawdown. It would be easy in the ES to have 4 days of $500 stopped-out days in a row.



Beginning is very tight

At the beginning of the period you only have 1,452 loss (Min Ac Bal=48,548) so you don't even have the $2,000 until you have $548 profit.

So this means that your drawdown isn't really $2000 its $1,452 (the rest your profit). So 1,452 isn't even 3 stopped out ($500) days - its two days and a $452 day.

Once you've had two days in a row =-$1,000 and you only have $452 left you are trading very tight. Knowing you have only 452 left you will be tempted to cut winners. If you are down $1,000 and have to make $3,000 profit you'll need $4,000 you'll need 8 $500 days with no losers - yet be cutting winners.

Let's see how it goes...

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  #87 (permalink)
 Ddawg 
Phoenix Arizona
 
Experience: Beginner
Platform: MotiveWave
Trading: CL
Posts: 125 since May 2013
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Ian, when u start combine you do start with Max $2000 loss. However, any money you make is the rising watermark behind you. Like you mentioned, it is very tough to stay ahead of.

This is what I am personally struggling with right now. Not sure what the answer is...logically speaking I should be adding money every week or so. I just need to become much more consistent.

Danny

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Last Updated on March 1, 2017


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