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Zero to Hero journey
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Zero to Hero journey

  #31 (permalink)
Melbourne Australia
 
Trading Experience: Beginner
Platform: Jigsaw / NinjaTrader
Broker/Data: S5 / Rithmic
Favorite Futures: Various
 
Posts: 35 since Jun 2019
Thanks: 60 given, 51 received

Continuing my efforts to become conistently profitable. Over the last few days, unfortunately, I have had to revise my strategy and give CL a miss. It proved way too volatile and unpredictable in the long run. I had tried scalping CL but that was a bit of a lost cause and while my win rate was arund 50-60% I just couldn't find a way to do it consistently and subsequently ended up blowing up my demo account several times.

Nothing really appears to be working so feeling rather frustrated. On top of that, having only a very small account size appears to be extremely hard to control risk while trying to grow it. Perhaps just scalping on momentum might be a way to go for a while. Trying to pick swings and then set appropriate stops etc seems way too hard.

Surely, trading should be easier than this....


Last edited by ScurvyJoe; September 11th, 2019 at 06:04 AM.
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  #32 (permalink)
Melbourne Australia
 
Trading Experience: Beginner
Platform: Jigsaw / NinjaTrader
Broker/Data: S5 / Rithmic
Favorite Futures: Various
 
Posts: 35 since Jun 2019
Thanks: 60 given, 51 received

Does anyone have any suggections for good markets that can scalped during the UK session or maybe the US session as well?

I've been watching gold and it does tend to move a fair bit during the Asian day time but really, most of the volume trades there from midnight onwards (US Session) which makes it very hard to anyone down here.

Have also tried to look at 6E and ES. These are much thicker and move a bit slower.

Any advice would be appreciated. I'm currently only subscribed to the CME Group data feed. I could add Eurex which may be the logical answer.

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  #33 (permalink)
Melbourne Australia
 
Trading Experience: Beginner
Platform: Jigsaw / NinjaTrader
Broker/Data: S5 / Rithmic
Favorite Futures: Various
 
Posts: 35 since Jun 2019
Thanks: 60 given, 51 received


Daily Review 17/09/2019 - 18/09/2019

P&L: +$62.50

Win Rate: 44%

MaxDD: -$250

Trades: 12

Very happy with my trading in this session. Took 12 trades and was ahead around 5% of account coming into the US open, then took a couple of trades which resulted in losses but I later recovered well and ended the day still with around 5% profit. This is showing me that I am remaining calm and can recover from adverse results. The last two trading sessions, since I decided to solely focus on scalping of the US Treasuries (and specifically the 30Y note ZB) is definitely showing me a better progress. The last two months since I started this journey have been patchy and all over the place as I tried to find the sweet-spot. Things are finally starting to look up and the order flow is really making a lot of sense. So perseverance is starting to pay off.

I also joined the Jigsaw trading room and it was good to connect with other traders out there. Even though they mostly trade the ES, it was still good to hear how people are working through this for themselves. I'm still on sim, but the plan is to trasition to live trading as soon as I can show a clean month - so perhaps as a benchmark 80% green with consistent results. Overall, my plan is to transition to full-time trading on 15 April 2020. That is a commitment I have made with both myself and my wife.

Back to trading. What has really helped the last couple of days is to just follow what John Brady talks about in terms of ignoring the charts (other than for prep), only going for 3-4 ticks rather than home runs and paying attention to the correlated markets. It's actually amazing that I can now see the behaviour and was able to predict fairly accurately when the turn around points were based on order flow. One thing that is really obvious is when there are held bids or offers in the correlated markets (ZF, UB, ZN) holding the markets back. It clearly influences the behaviour of ZB in that once the correlated markets start to turn around - responding to the held bid/offer, then this is a good signal to enter a trade in ZB. I am also liking the cost/tick-value ratio in the ZB. It costs me $3 per lot round-trip against a tick-value of $31. So a 1:10 ratio so if I had to get one at 1 tick, then I would still be profitable. Makes is a lot easier to break-even or get a return for the effort. Of course, this cuts both ways as a trade going backwards will cost you more as well. This actually happend twice in this trading session. I do have a hard-stop at 4 ticks away and on those trades I let the market hit the stops while I had a good incling that it was not going my way. That is perhaps a good lesson and something watch out for. Cut the trade as soon as you know it is going against you rather than wait for it to hit the stop.

Another good thing is that my win rate is starting to come back into the 60's. So while I didn't really consider myself a scalper, this scalping approach is actually something that is starting to resonate well with me. Putting the charts away was a good decision so far. I think, my initial two months working with a blended charts/jigsaw approach is what was causing a lot of confusion and mixed signals. It's good to tidy that up and just focus on one thing. I am also looking to add Stoxx50 into my trading day as these move a bit earlier that the ZB so just adds a bit more experience. I will only introduce this once I am more confident with ZB and only trade one market at a time, so Stoxx50 in my early evening and the ZB when it opens in my late evening.

Things to Improve

1. Cut trades as early as possible once you know they are going against you

2. Wait for higher probability setups - still trading a bit too much

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  #34 (permalink)
Melbourne Australia
 
Trading Experience: Beginner
Platform: Jigsaw / NinjaTrader
Broker/Data: S5 / Rithmic
Favorite Futures: Various
 
Posts: 35 since Jun 2019
Thanks: 60 given, 51 received

TRADING DAY: 18-19/09/2019

Daily P&L ($): +$125
Win Rate (%): 66%
MaxDD: -$125
Trades (#): 6

Daily Prep
Big Picture and Fundamentals
• FOMC to release rate decision at 2pm EDT or 4am AEST. Market is pricing in .25% cut to 1.75% overall. There is a small chance of a 0.5% cut (16%)
• The more consequential reaction may come in response to how the Fed describes its latest policy decision, the expectations it sets for possible rate cuts later this year and in 2020, and whether the central bank shifts gears and begins to again expand its asset holdings.
• A possible change in the Fed's balance sheet policy or the central bank's tools to manage interest rates only emerged as a talking point among analysts this week when overnight funding rates spiked unexpectedly and the federal funds rate hit 2.25%, the upper limit of the target range set by the Fed at its July policy meeting.
• The jump in the overnight "repo" rate, a key measure of conditions in U.S. financial markets, prompted the New York Fed to intervene with a $75 billion auction to keep the related federal funds rate in line. Some analysts said the developments in short-term funding markets indicated the Fed had gone too far in reducing the size of its balance sheet in recent months, and needed to begin buying bonds again to boost the level of reserves available to banks.
• While a highly technical issue, the Fed's balance sheet policy also has broader economic significance, and can influence rates of long-term bonds and other securities as it chooses to buy and sell securities
Intraday Technical Analysis
• ZB rose above YH and is trading through the UK session above vwap and above EMA20
• ES 3003 and 3000.25
Daily Review
Trades review:
Much better today in terms of trading. 6 trades overall (2 momo, 2 fades, one breakout and one pure scalp). Overall happy with progress today although obviously the market was basically in a gridlock today ahead of the FOMC rate announcement. Treasuries weren't moving at all so I only got one scalp in for 1 tick (still profit so it counts). My datafeed for Eurex hasn't come through yet so I had a go at ES right on the open against a key level that was called out in the Jigsaw trading room. That was actually good (6 ticks profit) before the market started tpo just go all over the place. Guess that's the benefit of a good DOM - sometimes I see opportunities in the order flow that I would otherwise miss.
Trade 1 - (+4 ticks / momo) - ZB fade back into value after I spotted what I call a held bid in all correlated markets. That was is proving the "very obvious" trade and I am starting to see this more often. Basically what happens is there will be a large bid or offer holding the market at a certain level. Then the market will basically absorb everything at that level and move forward away from that level. If this happens in all faster correlated markets (like ZF, UB, ZN) then that's proving to be an excellent signal to enter into a long trade (held bid) or short (held offer). This concept is something I picked up from SMB Capital when I did their DNA course and funnily enough it also works in futures.
Trade 2 - (-4 ticks / momo) - As soon as I got the first trade I gave it all back. Silly really. ZB looked like it was gathering momentum so I entered based on the movement, thinking that it will continue for at least 2-3 ticks. It didn't and promptly reversed course. I cut a bit too late.
Trade 3 - (+4 ticks / fade) - sold ZB off extreme high with a target of 3-4 ticks back towards value. Again, good trade and a classic during a consolidating range while the correlated markets moved in the same direction for confirmation. Nice scalp.
Trade 4 - (-3 ticks / pure OF scalp) ZB long off extreme range in volume profile and correlated markets. Didn't work so I cut that for a 3-tick loss. Was thinking that it might be a breakout as all correlated markets were at their extreme high with OF coming in strong. Turns out they were being absorbed.... cut for -3 and moved on. Perhaps need to pay more attention to context as in hindsight ZB was not going anywhere beyond that initial range today given the FOMC context.
Trade 5 - (+1 tick / breakout) ZB breakout potential off a held bid and showing correlated markets moving up as well. Unfortunately, momentum died so I exited in profit by 1 tick.
Trade 6 - Treasury markets were gridlocked today so I had a go at the ES on the open off the overnight low at 3000.25. Nice momentum trade that ended up positive for 6 ticks. First ES trade and while the movement was a lot bigger in ES than in ZB (more activity, more volatility and faster trading action) it was not as rapid and frantic than in CL (which I traded for a while few weeks back). So ES might be interesting as well (when I'm actually awake to trade the open). Normally ES is a bit late for my timeframe. Eurex would be better and in a more civilized timeframe. Still a good quick scalp for 6 ticks. Order flow was really momentum based. So jumping on this one was actually really obvious.


Things to improve?
• Not sure if trading Treasuries during the Eurex session is a good idea. I seem to be getting patchy results there.
• Continue with scalping - seem to be working and patterns are now getting ingrained in my brain so recognition of setups is becoming a lot easier.

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  #35 (permalink)
Denver Colorado/USA
 
Trading Experience: Intermediate
Platform: SierraChart, ThinkorSwim
Favorite Futures: ES,ZN,6E,CL,GC
 
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Posts: 85 since May 2017
Thanks: 78 given, 79 received

Hey I'm liking your analysis. The Fed's shenanigans definitely get the bonds moving and can create a lot of opportunity.

I am focusing only on T-Bonds at the moment so I will be keeping an eye on this thread.

I just wanted to mention that for scalping purposes, I think the bond markets are hottest from 12-13:00gmt. This is the 1st hour of pre-market trading. I like this time for scalps because you have a lot of volume trading, but the influence of the NYSE isn't there yet. When you don't have stock market insanity influencing bond price movement but you still have a lot of volume to read, trading is easier. Also, you often have econ news coming out at this time that can give you plenty of volatility.

Personally, I'm trading bonds at the moment because I think it's easier to estimate the swings and the price action seems to be more tame and predictable than popular thinner markets like GC, CL, ES, etc. I'm working on short-term swing tactics though.

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  #36 (permalink)
Melbourne Australia
 
Trading Experience: Beginner
Platform: Jigsaw / NinjaTrader
Broker/Data: S5 / Rithmic
Favorite Futures: Various
 
Posts: 35 since Jun 2019
Thanks: 60 given, 51 received


LittleFinger View Post
Hey I'm liking your analysis. The Fed's shenanigans definitely get the bonds moving and can create a lot of opportunity.

I am focusing only on T-Bonds at the moment so I will be keeping an eye on this thread.

I just wanted to mention that for scalping purposes, I think the bond markets are hottest from 12-13:00gmt. This is the 1st hour of pre-market trading. I like this time for scalps because you have a lot of volume trading, but the influence of the NYSE isn't there yet. When you don't have stock market insanity influencing bond price movement but you still have a lot of volume to read, trading is easier. Also, you often have econ news coming out at this time that can give you plenty of volatility.

Personally, I'm trading bonds at the moment because I think it's easier to estimate the swings and the price action seems to be more tame and predictable than popular thinner markets like GC, CL, ES, etc. I'm working on short-term swing tactics though.

12-13:00 GMT is 8-9:00ET and 22-23:00 AEST so that makes sense. 8:30ET is when the bond market opens in US and yes, I have the best results from around 8:00 to 10:00 ET (according to my log analysis).

I also like the Treasuries for much the same reason as you and additing to it the cost to tick value ratio is very good as well. From what I can see, you can safely manage trades with minimal risk when being selective. That's my aim actually. Get my win ratio into 80-90% range and then scale up while keeping the same techniques going.

One thing that really resonated with me when I did the SMB DNA training recently is that understanding the big picture context gives you a clear advantage. It provides a good context to what might happen on the day. This has been working for me well. Everything else is patience and mechanics as I see it and for someone who is trying to build a small account ($5k) scalping is certainly proving to be a good way to go.

I used to swing trade a larger account but my method required to hold a bigger drawdown at times. So I recently switched to scalping as a way to deliver better risk/reward trading approach while also generate long term, consistent profits.

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  #37 (permalink)
Denver Colorado/USA
 
Trading Experience: Intermediate
Platform: SierraChart, ThinkorSwim
Favorite Futures: ES,ZN,6E,CL,GC
 
LittleFinger's Avatar
 
Posts: 85 since May 2017
Thanks: 78 given, 79 received


ScurvyJoe View Post
One thing that really resonated with me when I did the SMB DNA training recently is that understanding the big picture context gives you a clear advantage. It provides a good context to what might happen on the day. This has been working for me well. Everything else is patience and mechanics as I see it and for someone who is trying to build a small account ($5k) scalping is certainly proving to be a good way to go.

I used to swing trade a larger account but my method required to hold a bigger drawdown at times. So I recently switched to scalping as a way to deliver better risk/reward trading approach while also generate long term, consistent profits.

100% agree on the bigger picture comment. I am big on fundamentals and like to go back in history to remind myself how different instruments reacted in similar situations to what the present is offering. There is always a context to be analyzed and it makes a huge difference. This is my biggest problem with a purely mechanical/automated approach.

I am going in the opposite direction as you regarding scalping vs swing trading, but I think it's necessary to try trading from a variety of time frames to find what suits you best. I think bonds are probably the best instrument to scalp, but I've decided scalping isn't for me unless it's a very specific situation. I can take 5x the risk per trade with my new swing trade approach and still have lower average drawdowns. I think I just found a stronger edge, but I was a bad scalper and didn't like doing it enough to want to improve at it anyways. I was on the John Grady/Peter Davies track when I was giving it an honest try. I did find it interesting to get into the really low-level analysis and think about the games that individual market participants are playing, however I lack the mental stamina to monitor the market in that way.

There are a lot of "free looks" (as Grady says) available in the bond market. I think automating a scalping strategy that can get you in at these free look points would be very possible. Maybe you could determine the average speed of market depth drop off before a price level is taken out and the minimum depth left at a level that allows you to get filled before it is taken out. From there you can break even or ride it for a few ticks. I know volume based stops are possible on Jigsaw and Sierra, I'm not sure about volume based entry though.

Wish I had an army of programmers to test this stuff for me

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  #38 (permalink)
Melbourne Australia
 
Trading Experience: Beginner
Platform: Jigsaw / NinjaTrader
Broker/Data: S5 / Rithmic
Favorite Futures: Various
 
Posts: 35 since Jun 2019
Thanks: 60 given, 51 received


LittleFinger View Post
100% agree on the bigger picture comment. I am big on fundamentals and like to go back in history to remind myself how different instruments reacted in similar situations to what the present is offering. There is always a context to be analyzed and it makes a huge difference. This is my biggest problem with a purely mechanical/automated approach.

I am going in the opposite direction as you regarding scalping vs swing trading, but I think it's necessary to try trading from a variety of time frames to find what suits you best. I think bonds are probably the best instrument to scalp, but I've decided scalping isn't for me unless it's a very specific situation. I can take 5x the risk per trade with my new swing trade approach and still have lower average drawdowns. I think I just found a stronger edge, but I was a bad scalper and didn't like doing it enough to want to improve at it anyways. I was on the John Grady/Peter Davies track when I was giving it an honest try. I did find it interesting to get into the really low-level analysis and think about the games that individual market participants are playing, however I lack the mental stamina to monitor the market in that way.

There are a lot of "free looks" (as Grady says) available in the bond market. I think automating a scalping strategy that can get you in at these free look points would be very possible. Maybe you could determine the average speed of market depth drop off before a price level is taken out and the minimum depth left at a level that allows you to get filled before it is taken out. From there you can break even or ride it for a few ticks. I know volume based stops are possible on Jigsaw and Sierra, I'm not sure about volume based entry though.

Wish I had an army of programmers to test this stuff for me

Interesting and totally understandable. I am finding working with a small account is actually really, really difficult. I traded CFDs for 3 years with a much larger account and you can take greater risks at that point. That worked well but wasn't consistent to the point that I was happy with it. Hence my scalping approach now. Looking at my stats, I can see the light at the end of the tunnel.

That said, it's still critical to manage your risk and protect capital. I have now gotten to a point where if I pick my spots well, I enter a trade and go immediately into a break-even situation. So as a result, I usually get away with a 2-3 tick stops. And yes, I do use volume based stops which actually work extremely well. I'm not sure if volume based entries are possible - but with my approach that probably would mean assuming greater risks as the market may not move your way until it's too late.

I'm a programmer from my earlye career days so I spent the last 3 years trying to find an edge using AmiBroker. I do have a bunch of tested algos which showed good backtest results but when I ran them forward, they didn't really work. Hence I decided that having a human running the show is probably the faster way home. I do believe in semi-automated approaches - perhaps custom coding an indicator that shows a pre-tested entry/exit or managing stops, scaling etc but I have come to believe that to succeed with a fully automated approach you really need a portfolio of approaches that exploit small edges and then you need the team and infrastructure to run these things at scale. So for the average retail trader, that's a big ask that only maybe 0.5% of population can exploit or use. Not saying it's impossible, just too difficult nd time consuming to get reasonable results. I was even involved with a group of people, quantitative science guys trying to build a quant hedge fund. They are still at it with no real progress.

I think either swing or scalping approch is probably the best way home. I just really like scalping as it gives me loads of opportunities to learn and to gain experience without taking huge risks. Meaning that in my mind it's a more sustainable approach if you're working with a small account.

Hope this make sense. I'd be keen to understand how you identify the swings.

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  #39 (permalink)
Melbourne Australia
 
Trading Experience: Beginner
Platform: Jigsaw / NinjaTrader
Broker/Data: S5 / Rithmic
Favorite Futures: Various
 
Posts: 35 since Jun 2019
Thanks: 60 given, 51 received

TRADING DAY: 19-20/09/2019


Daily P&L ($): +$375

Win Rate (%): 50%

Trades (#): 14



Daily Prep

Big Picture and Fundamentals

Today's analysis is curtesy of Reuters and Chris Weston at Pepperstone
  • U.S. Treasury yields slipped after remarks by Federal Reserve Chair Jerome Powell tempered the market's initial reaction to the U.S. central bank's policy statement.
  • All three major U.S. stock indexes fell in choppy trading, and the spread between 2-year and 10-year U.S. Treasuries flattened to 3 basis points.
  • The U.S. central bank, on a 7-3 vote, lowered the Fed funds target rate to a range of 1.75% to 2.00% "in light of the implications of global developments for the economic outlook as well as muted inflation pressures," although it said the U.S. economy continues to grow at a "moderate" pace and the labor market "remains strong."
  • While there are several areas of consideration, I feel there are two standout points. The first being the clear divergence within the Fed's ranks, although we can take that out further and see an equally impressive divergence between the Fed's median estimate on the future rate setting and market pricing (seen in the swaps or the fed fund futures curve).
  • Consider, that in 2020 there is a 62bp differential between where the market sees the fed funds rate and the median forecast from the Fed. While we see one member calling for the fed funds at 2.37% and another 1.62%. The mismatch between the market and the Fed blows out to 92bp in 2021, a near four cut differential
  • The second issue centres on liquidity. There had been some disappointment that we didn't hear of a Permanent Open Market Operation (POMO), which would have essentially seen the Fed supporting the repo market and keeping the money markets in check. This would have implications for the Fed's balance sheet, but the Fed feel the current temporary operations will suffice
  • The moves in the market tell you how they felt, with initial disappointment being offset by talk of growth in the Fed's balance sheet. Are we back to square one, and looking at economic data, inflation expectations, financial conditions, narrative around trade and Brexit? ...Absolutely.
  • I think this basically indicates a return to normal trading conditions and certainly the ZB has had a good range day both in Asian session and at the UK open with a healthy volume trading in three distinct zones. 160'06-160'12, 159'27-159'31 and 159'19-159'22
  • Feels like a RiskOn environment. USD steady (RiskOn), Yen steady at +0.4% (RiskOn), Crude Oil down by 2.07% (better for US equities so RiskOn), Gold dropped by 0.8% (RiskOn)

Intraday Technical Analysis & Key Levels (where are the stops positioned?)
  • ZB initially dipped below yesterday's open but pivoted upwards as HKEX started trading and proceeded above vwap and EMA20
  • Into the UK open pivot downwards into the yesterday's open and again a bounce upwards above vwap and EMA20
  • Yesterday's High: 160'24
  • Yesterday's Low: 159'10
  • 160'11 and 160'16 appear to be defended with large offers on the DOM

Daily Review

A bit of a lopsided day for me. I am not sure what happened in the early part of my trading session but essentially I knew it was a RiskOn environment and clearly volatility has returned so I had probably a strong bias to the upside which probably contributed to nearly every trade early in the day being a loss. So I was faced with a 15 tick drawdown. Not at that point my plan calls for a stop to trading activities on such a day. I actually had a long thinnk about this and I walked away from my terminal while I considered what to do.

I decided to continue trading but alter my approach. I did this because I know that to achieve consistency I have to be able to recover from drawdown, this is going to happen. So it was a considered action and if I didn't see a way out of it, the default "stop trading" action would have been the right choice.

a) Pre-conditions: this only works for short periods of time because the concentration required is enormous, so I don't really use it often. I call this "Opening Drive". Most large indices show this behaviour from what I can tell. At least the ES, the FTSE100 and Stoxx50 have this from what I've seen. But basically at the open, you wait for 2-3min for the instrument to determine what it wants to do and watch for the initial surge of order flow. Once the surge comes you simply jump on the train and ride until it eshausts itself. On the FTSE100 that is often 20-30 ticks, on the ES I've see this go for 10-15.

b) The trade is a 3x your normal size but it's essentially extremely short lived so you need to have key mappings to fire orders at the market rapidly without worrying about the mouse etc. So market orders to get in and out depending on how the order flow is reposnding.

That's effectively my emergency get out of jail approach and in the past (I traded CFDs for a long time) and now on Jigsaw it certaily have a proven result. So only use this if you can concentrate on the action (almost tunnel vision with absolutely no distractions etc). Your environment needs to be silent. You focus total and it's literally pure price action in it's most raw form. When I get into that mode, I feel I'm in slipstream - I know it's wierd but it works almost every single time. I wish I could sustain this level of conctration for a long time.

So before the bond market opened I was -$730 on a $5k account. So drawdown was substantial. After I got into the slipsteam and traded my way out of it, I ended with +$375 (or +$210 after fees). So all in all I did suceed in repairing the damage from the earlier session time. Although it's not my preferred way of doing it.

Trades review:
  • Trade 1 (-7 ticks / fade) - Was going short leaning against a key level that looked like it was being defended. Got absolutely run over and then made a mistake by shifting my stop out and hoping for a turn-around. Should not do that again, rather I should wait for a confirmation to see if that level actually holds instead of setting the trade ahead of time. This was a classic level smash. Just got punded.
  • Trade 2 - (-3 ticks / fade) - Well I was directionally correct but still got the volatility wrong and got wipped out of the trade. I entered mid-range thinking that ZB was going back towards value but failed to account for the whipsaw effect which then took me out at 3 ticks. Technically at this point I should stop for the day as my $300 daily loss limit was hit. I will monitor the market for any obvious momentum trades to see if I can recover from the drawdown. But my stance for the rest of today is very conservative. Actually, this is probably a good drill to do to see if I can recover from a bad situation. I know some prop shops look for evidence of this skill to achieve consistency.
  • Trade 3 (scratch)
  • Trade 4 (+1 tick / AsSheGoes) - minor breakout which unfortunately got absorbed prematurely.
  • Trade 5 - (-1 tick / fade) - was trying to trade highs back towards value which typically works fairly well. However ZB was a lot more volatile so got whipped out.
  • Trade 6 - (-4 ticks / AsSheGoes) - I misread the action on this one. I though there was a key level being defended so went for a fade, but turned out the market just accelerated in the other direction and smashed through that level. This would have been an excellent AsSheGoes trade.
  • At this point I was down $730 and decided to switch to my slipstream mode.
  • Trade 7 - (+3 ticks / momo) - momentum trade on clear evidence of momentum.
  • Trade 8 - (+2 ticks / fade) - those Jigsaw drills have paid off here. It was acut and reverse from the previous trade so technically a fade.
  • Trade 9 - (+2 ticks / momo) - again cut and reverse from trade 7 as the order flow stalled and went the other way.
  • Trade 10 - (+1 tick / fade) - again cut and reverse for 1 tick as the ZB simply got exhausted at a key level and offers came in to absorb the buy side
  • Trade 11 - (-2 ticks / fade) - misread the action here. I thought the ZB was going to retrace but it was whipsawing a bit. This was also the last ZB trade and ES was about to open. So at this point I switch to ES and was looking for my Open Drive scenario
  • Trade 12 - (+9 ticks / open drive) - Classic surge entering the market right at the 3 min past open mark. Massisve volume, momentum and ES moving like a train. Jumped onboard and rode it with 5 contracts until exhaustion. Then flatten out and watch.
  • Trade 13 - (+2 ticks / open drive) - Rejoin the opening drive for a quick scalp.
  • Trade 14 - (+3 ticks / open drive) - Final rejoin the opening drive for another 3 ticks and into profitability for the day. I was just exhausted after that so then decided to stop although the adrenaline was pumping. I felt more awake and alive than in a long time. That surge of awareness is quite empowering.

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  #40 (permalink)
Denver Colorado/USA
 
Trading Experience: Intermediate
Platform: SierraChart, ThinkorSwim
Favorite Futures: ES,ZN,6E,CL,GC
 
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Posts: 85 since May 2017
Thanks: 78 given, 79 received



ScurvyJoe View Post
I do believe in semi-automated approaches - perhaps custom coding an indicator that shows a pre-tested entry/exit or managing stops, scaling etc but I have come to believe that to succeed with a fully automated approach you really need a portfolio of approaches that exploit small edges and then you need the team and infrastructure to run these things at scale. So for the average retail trader, that's a big ask that only maybe 0.5% of population can exploit or use. Not saying it's impossible, just too difficult nd time consuming to get reasonable results. I was even involved with a group of people, quantitative science guys trying to build a quant hedge fund. They are still at it with no real progress.

I think that the multiple small edges approach is a good one but it's a long journey to find all the small edges going solo. Also, if they are small edges they may not last long, so there's a lot of work to continuously find new ones. I think Kevin Davey mentioned in one of his webinars that it takes around 100 ideas to find a decent edge to automate. That was kind of shocking to me, but I think this is the mentality you need when searching for a strong edge. I've been working on strategies for years and am only recently finding things that I feel have a strong edge. It's funny, because I was just listening to a John Grady video recently and he was saying how he doesn't believe anyone can tell you what is going to happen in the next few hours in any given market, but that the next few seconds or minutes are predictable. While I know what he means about the short term given his style of analysis, I think he is way off base on the longer time frame. I think short term swings are the sweet spot. Trades held for a short enough duration that there is low risk of major news disrupting the course of the trade, but long enough that you can better avoid the fake outs that plague scalping strategies. I don't wanna harp on swing trading though. That would be rude given the nature of this thread. I will say that I am too stoked on my new methods to give them away though. I've been working on something original with a high success rate for a long time and I think I'm there, so I'm gonna hoard this treasure for a while before I decide if I'll let anyone in the vault. I will say that zooming out on my charts a bit more and reducing the indicators only to the basics that I need helped tremendously.

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