Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
Profit ($) / Number of Contracts Traded / Tick Value ($) = Expectancy in Ticks per Contract Traded
or
Profit (in Ticks) / Number of Contracts Traded = Expectancy in Ticks per Contract Traded
Ticks per Contract means you can compare the expectancy for products that have different tick values and isn't influenced by how many contracts are placed on a trade (expectancy per trade would vary dependent on the number of contracts traded).
I like net profit, after fees and commission. So say after trading 30 contracts you have made $1,000:
1,000 / 30 / $5 tick value (for the NQ) = Expectancy of 6.7 ticks profit for every contract that was traded.
You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden
Thinking about one or two patterns to look for in the last 90 days, I've found the following opinion of Brooks,
"The easiest time to make money is in the first 90 minutes, and some of the easiest trades to spot are failed breakouts and breakout pullbacks of patterns from the prior day. Beginners should avoid trading in the middle of the day and in the middle of the day’s range.
...
Focus on Failed Breakouts and Breakout Pullbacks from patterns from yesterday. If there is a strong reversal bar, take the first entry. If there are three or more largely overlapping bars, wait for a second entry. After you have about 50 cents to 1 dollar profit, move the protective stop to breakeven. Take one-half to one-third off at one dollar profit and maybe take another quarter off at two dollars. However, always let at least a quarter of your position run with a breakeven stop or until there is a clear and strong opposite signal because trends last much further than you would ever think possible."
So, he thinks that Failed Breakouts and Breakout Pullbacks from yesterday are the easiest to spot and follow. Would you add anything else? If not, I'll proceed with these two.
Also, as I go and circle each instance on the graph, what else would be helpful to note? Should I, for example, put theoretical trades in a spreadsheet and track expectancy?
The 90 minute period from the open at 9:30 US Eastern to 11:00 ET is the most active in ES. The first half hour is usually more so. I couldn't say what trades you should be trying; if you understand these, OK, then they may be what to do. But you should realize the market may not accommodate you with some nice failed breakouts; what do you do then? For example, what if the breakout doesn't fail at all, but becomes a trend?
Honestly, it does not matter that much. Get into the market fray and start doing something -- something that you understand and can do consistently. Use what works, fix your mistakes, ditch what isn't working.
At this point, let me suggest less reliance on your book, and on all these forum posts (and posters ), and more on getting your hands dirty in trading. All this is too theoretical, not enough current reality.
Also, I assume you're using the NT Sim101 account, so you at least have a simulation of trading. I can't see the trade markers on your charts, so I can't tell if you are doing that or not. If not, you should, and showing the trade markers (little arrows and triangles) is helpful in marking off your trades for when you review them.
On another point: If you want your journal to really help you, I would ditch the practice of selecting one or two trades to show. I suggest putting up one chart of the day's trading, with the trade markers showing. Number the trades on the chart and write your commentary/analysis in the text of the post below the chart. Draw any lines or levels on the chart that you think are helpful, but talk about each trade down below. Things like why you took it, what happened, profit/loss, what you think about it now, etc -- but short comments on each one. Then something to sum up the day. I'm not saying to follow this exactly, but something like this that reflects what you are doing and what is working and what is not, and a review of what the whole day showed you. Something like that, anyway....
The major thing I can say right now is put the book down and start applying what you have read.
By all means ask questions and ask for help if you need it, but your focus needs to be on what the market is serving you up today, each day.
If you can indentify your failed breakouts and breakout pullbacks then go back and mark 90 days worth these trades on previous charts track them on a spreadsheet. This will give you an idea if these are profitable over the long run and then you can start fine tuning targets and stops. When posting here....just mark up the chart with all your trades that you have taken throughout the day....and we can attempt to comment and offer assistance.
So @Calming, the paradox situation is that the best strategy is actually to do the exact opposite of whatever you are going to be doing. And that is because more than 95% of all beginners lose money. Futures trading is nothing more than ensuring that the money of other participating traders flows into my account and not theirs.
So you bought a book and studied it hard (a very good book, I have to say!). The book gives you are recipe and you're going to be making the cake by following the recipe. Well, unfortunately, trading is not cooking and you'll find yourself most probably wondering why things aren't working the way you thought they would. Most of that is because of trading psychology. The emotions that come along with discretionary trading for a beginner are immense and very unexpected.
Before you know it, you go all-in because you're angry at the market and want to win every back with this next big trade you think will work.... and all gone...
Don't get me wrong, I want you to be successful and I learned and practice Price Action trading as learned from Al every day and I have benefited greatly from it. However, that's not done by picking a setup, running it, and expecting profits from day 1. I think also that is what @bobwest is trying to say here and I know him as a great person here at FIO.
I'd say, take some screen time. Serious screen time. And if you have money that you don't care about, take a trade but make sure it's very small. You want to be able to trade again tomorrow. I'm not sure if you have an account large enough, but otherwise look at Forex in which you can trade very very small, risking only 1-2%. It doesn't matter, the goal is to experience yourself to the emotions, fear, anger, disappointment, joy, adrenaline and all other emotions that come along with trading. And indeed, as @Babool mentions, post your results here to learn from yourself (maybe an elite membership to see more trading journals in the elite section will help) and get feedback from others. Never use money for this that you cannot afford to lose.
I would check out the chapter Marcel Link has in his book High Probability Trading. It is 20 pages long and covers the ins and outs of backtesting, especially the pros, cons, and potential pitfalls. It is a decent place to start and at the least gives one the vocabulary to adequately research the subject.
Personally, I don't do it yet since I don't have what one seems to need to do it, ie an algo or something of the sort. I trade reliable set ups (set ups that have net positive results) discretionary in the moment surrounded by context (which can also be called aptly situational awareness).
I too studied Brooks for a few months and am glad I did, but I don't trade that way exclusively. However, I do look at charts each morning and his analysis influences my thinking positively, usually. Also, you might want to consider getting an elite membership and offsetting the cost with the elite membership benefit of one month of his trade room for free, with he purchase of the BTC - which is a fundamental trading education experience imho.
Brooks interprets a failed failed breakout as an opportunity for breakout pullback. That's one of the reasons why I've shosen a couple of figures as opposed to just one - failure of one may lead to the other. I'm not sure how often a failed failed breakout leads to a breakout pullback. If there is a statistics somewhere, I'd be happy to take a look. Also, if there is a better fiture that couples with failed breakouts, I am open to consider it.
The tactic with a failed breakout is to place a Stop Limit order one tick beyond it (in a bull, if breakout fails down, then buy above; in a bear, breakout up fails, then sell below). If failed breakout fails (becomes a trend), then wait for pullback and buy in the direction of the new trend. Makes sense?
I ask here because the input from you guys has been helpful. If there is a more common, or easier to spot, figure than failed breakout/breakout pullback, feel free to point in a direction. I value your advice.
NT has been less than satisfying when it comes to tracing and displaying one's trades. The markers are there. The default color makes them very hard to see. Is there a way to change that color? I've simply drawn blue lines to point to entry and exit points. If there is a better way, I am open to suggestions.
That makes sense. I like the idea of short comments below. So far, I've been using joxi. Is there a better tool to create a printscreen in a way that you describe it?
As I go over 90 days worth of charts, what would be good to post here? My thoughts/observations/lessons, like I do with real trades? Or just keep it to myself?
Thanks for the input. As a beginner, I would rather read about something that you have been using because it has significantly helped you to grow as a trader. Perhaps, you can even explain in details how your trades have changed because of what you had learnt.
- Markers: there is something weird about the markers in your charts. They are so tiny that I didn't see them without expanding the screen shot and then looking very carefully for them. I think you may have the price bars so large that the markers can hardly be seen. You can set the color, but not the size, of the markers in Data Series > Trades > Color for executions.
They should look more like this:
You can fiddle with the bar size in Data Series also. This is set to 3, which I think is the default. There's also a keyboard shortcut somewhere. Check Help for that.
Now for the not-so-easy ones:
You often ask about this or that Brooks setup. A lot of people have read some Brooks, but very few trade his way. This is not to say there's anything wrong with it, and many people use some sort of price action, but there are just a whole lot of trading methods and styles out there. The only trader I know on FIO who consistently uses only pure Brooks is @Pa Dax, and you may recall his suggestion to you:
My point is not about Brooks one way or another. It's simply:
1) Most people who read your posts will not have much to say, in detail, about the Brooks setups or what is in the book.
2) As I said once before, putting the book down and working with the market is going to teach you a lot. If and when you see something you recognize from Brooks, by all means see how it works out, and of course you have to work with something.... But none of the questions about what you should do are really answerable by anyone else.
I like Brooks, although I don't remember all that much from him any more, and I think it's fine to use him as a guide as you get going. But at last count, there were about 50 billion ways to trade the market (that may be a slight exaggeration: probably it's only 5 billion), and there are people who make each of them work.
Pick literally anything you like from the book -- all of them or some subset -- and see what you can do with them, and experience trading the market, profiting and losing. You won't learn any other way, no kidding.
), and more on getting your hands dirty in trading. All this is too theoretical, not enough current reality.
