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ES - developing 5:1 plan


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ES - developing 5:1 plan

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  #11 (permalink)
New York City + NY/United States
 
Experience: Advanced
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Trading: Emini ES
 
Posts: 116 since Sep 2018
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Anyone read the book "The Hour Between Dog and Wolf"?

I had 2 wins in a row the last 2 days, and already feel myself becoming irrational. Could barely fall asleep last night, rolled around for hours thinking about trading and how rich I'll be... funny because I had just finished that book on audible, yet could not resist the urge... and of course I was exhausted getting up this morning and had to skip my morning workout routine.

Predictably today was a different type of open than the previous 2 days. By spending all night thinking about trading today, I feel I put alot of pressure on myself to take trades.

I managed to resist the urge to trade this morning, but I still feel like a loser today, mainly because I believe I had already internalized that I was going to make winning trades today. And partly because the market is moving and I feel left out. With hindsight, there are some obvious trade entries.

What can I learn from today to reduce feeling like a loser?


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  #12 (permalink)
New York City + NY/United States
 
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Anyone use footprint charts in their trading?
I can't find it now, but someone recently posted in a different journal about using footprint charts for entry confirmation.

I tried using the volumetric chart from NT8 today as a supplement to what I'm already looking at, but found it difficult to focus on both charts at the same time. Information overload.

Wondering if the key data from a footprint volume chart can be distilled into a summary indicator for faster decision making on the fly.

For example, this website describes in basic detail a way to use footprint charts in trading. Here is a chart they use as an example for entries: https://www.jumpstarttrading.com/wp-content/uploads/2019/08/Bearish-and-Bullish-Volume-Profiles.png

Well today's opening bar at 9:30am EST looks to be a textbook example from the above link. Of course in live trading this all happened in a few seconds so could not act on it, but perhaps a custom summary indicator + bloodhound can automate these entries?

See the screenshot below, specifically the bar highlighted in yellow. This was the exact opening bar at 9:30am EST.



Now compare that bar to the bearish reversal bar from https://www.jumpstarttrading.com/wp-content/uploads/2019/08/Bearish-and-Bullish-Volume-Profiles.png

It checks all of the boxes:
-Majority of volume at the high of bar
-Multiple sell imbalances, no buy imbalance
-No unfinished auction
-Stacked sell imbalance resistance from a couple bars earlier

With hindsight we also see that this opening bar was the high of today's session 9:30-4.
Feels like footprint volume charts may have predictive power, especially for this type of trend day open.

But this entire 2000 tick bar only took 6 seconds, and nearly impossible to trade it live. I guess can wait until the 2nd down bar for additional confirmation, but that is still only 13 seconds to spot the entry, analyze the opportunity, and execute the trade.


With this post, I feel less like a loser today because I think I'm learning something...

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  #13 (permalink)
Hillsboro, OR, USA
 
 
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planetkill View Post
Initially starting this journal, I was hoping someone would look at my charts and tell me they've already tried it or tweaking something in the ATM would be the secret to becoming profitable. Obviously that is not going to happen. Thus I don't think there is much value in documenting the daily PnL or showing the chart. Perhaps if there is something special to show, or ask a specific question then there could be value in showing the chart.

Thanks for sharing your strategy. I enjoyed reading through it and find your commentary entertaining. I've been interested in strategies in the 10 point target range as opposed to scalping since it seems easier to get better R/R. When I've tested it I also found it difficult to wait for the trade to hit the price target without manually closing out. I squirm in my chair whenever it starts to reverse, at all.

Recommend checking out Gorilla Futures on YouTube, he typically shoots for these ~10 point trades and adjusts his target off higher time frame support/resistance with some buffer as opposed to setting an arbitrary 10 point ATM for each trade.

Disclaimer: I'm new to futures and this forum but thought I'd share a source of info I've found interesting, feel free take it with a boulder of salt.

Snap

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  #14 (permalink)
New York City + NY/United States
 
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Thanks for the suggestion. I was very skeptical at first because searching "Gorilla Futures" on google brings back scammy looking results.

However I had spare time to kill so i watched one of the videos anyway. And I actually did get something out of it! He has a tick counter displayed next to the current bar, instead of in the bottom right. This is something that I've always been meaning to do, and it motivated me to do the same. I found the indicator i needed in the download section of this website!

Tick Counter Located At The Current Bar:


So thank you!




SnapCall7Deuce View Post
Thanks for sharing your strategy. I enjoyed reading through it and find your commentary entertaining. I've been interested in strategies in the 10 point target range as opposed to scalping since it seems easier to get better R/R. When I've tested it I also found it difficult to wait for the trade to hit the price target without manually closing out. I squirm in my chair whenever it starts to reverse, at all.

Recommend checking out Gorilla Futures on YouTube, he typically shoots for these ~10 point trades and adjusts his target off higher time frame support/resistance with some buffer as opposed to setting an arbitrary 10 point ATM for each trade.

Disclaimer: I'm new to futures and this forum but thought I'd share a source of info I've found interesting, feel free take it with a boulder of salt.

Snap


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  #15 (permalink)
New York City + NY/United States
 
Experience: Advanced
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Posts: 116 since Sep 2018
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Anyone else feel like they are guessing with their entries?

I think my biggest weakness right now is managing a profitable trade.
I've read on this forum that people like Big Mike will scale out of their position based on price action. What exactly does this mean? I feel like I'm always making the wrong decision, i.e. selling early instead of holding out. Perhaps it is just the psychological pain of blowing up previous accounts that has me closing out early now?

Here is today's trade. It was for 2 contracts, and I sold each contract at the first signs of reversing. But i feel like I'm not looking at the correct signs. I tried looking at footprint volume, but I'm not seeing it as helpful for scaling out. Maybe I'm just not reading it correctly.

Anyone can share their thoughts? What would you have looked at today to stay in the position instead of closing out early like I did? Or is it just a guessing game and hopefully over the long run holding out produces more gains than closing early?


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  #16 (permalink)
New York City + NY/United States
 
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I think I figured out a way forward with scaling out of profitable positions. Here's my line of thinking:

-I'm mostly guessing whether to close out early, and am constantly feeling like a loser because I'm leaving a lot on the table when I close early, or I take a full loss if I just walk away.
-As mentioned by others, static ATM targets are problematic.

So here is my solution:

Increase to 3 total contracts!

-The 1st target is at 5pts, or whenever price begins to reverse, whichever comes 1st.
-2nd target at 10pts, or whenever price begins to reverse, whichever comes 1st.
-Last contract does not have a target, and instead use the SuperTrend U11 (amaSuperTrendU11) indicator from the downloads section of this website as a trailing stop loss.




Currently I have a little over 2:1 risk/reward. With 2 contracts the avg loser is around $300, and the avg winner around $700.

By adding a 3rd contract, the avg loser would be $450 but the avg winner should be $1250, or more if the runner really runs. This would bring my risk/reward to 3:1, a step closer to my goal of 5:1. In times when the stop loss is only 8 ticks, then the avg loser is $300, or 4:1 risk/reward. Currently setting stop loss 1 tick below previous bar, which typically is 8-12 ticks.

I don't know how to set the parameters for amaSuperTrendU11, (what's a good ATR multiplier?) but using the default values on a day like today looks really good for the runner!


I feel like a loser today because of the nagging feeling of leaving so much money on the table. My goal today is to understand amaSuperTrendU11, and learn how to use Bloodhound to automatically move the stop loss with amaSuperTrendU11

Here's the ATM for tomorrow (may god have mercy on my soul):

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  #17 (permalink)
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I think the answers I've been searching for came to me in last night's dreams, like divine intervention. My Aha! moment.

There is No indicator for exits, just like there is no holy grail indicator for entries. It's pretty much just educated guessing. The secret key to scaling out is adding more contracts. I can never feel like a loser by closing out early if I still have more contracts in the game. Increasing additional contracts increases risk reward in scaling out. Less risk, higher returns. This is it!

Embrace your monkey brain! Instead of constantly fighting your emotions and being preoccupied with stupid-ass rules, use your monkey brain to lock in profits and scale out. There is never a wrong time to close out as long as there's more contracts left over and the stop losses are moved up.

Practice practice practice scaling out.

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  #18 (permalink)
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Terrible day! 1 step forward, 2 steps backwards.
Every single time I increase # of contracts, I have a losing day.

Took 2 losers in a row.... bad entry guessing today.

But the good news is that I used my monkey brain to aggressively manage the stop losses. With 3 contracts in each trade, I was able to limit my total losses from both trades to just a few ticks, for a total day's loss of 11 ticks + 6 r/t commission.

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  #19 (permalink)
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planetkill View Post
I think the answers I've been searching for came to me in last night's dreams, like divine intervention. My Aha! moment.

There is No indicator for exits, just like there is no holy grail indicator for entries. It's pretty much just educated guessing. The secret key to scaling out is adding more contracts. I can never feel like a loser by closing out early if I still have more contracts in the game. Increasing additional contracts increases risk reward in scaling out. Less risk, higher returns. This is it!

Embrace your monkey brain! Instead of constantly fighting your emotions and being preoccupied with stupid-ass rules, use your monkey brain to lock in profits and scale out. There is never a wrong time to close out as long as there's more contracts left over and the stop losses are moved up.

Practice practice practice scaling out.

Sent using the futures.io mobile app

Suggestion, Market Structure for entries and exits:
Vol Pro prices. Obvious, localized/longer term, turning points/areas to conduct business in.
Want a good "deal". Either buy your desired object at a fantastic (low) price or sell your prized possession because you just cannot believe how much you are able to get for it.

Ron

...My calamity is My providence, outwardly it is fire and vengeance, but inwardly it is light and mercy...
The steed of this Valley is pain; and if there be no pain this journey will never end.
Buy Low And Sell High (read left to right or right to left....lol)
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  #20 (permalink)
New York City + NY/United States
 
Experience: Advanced
Platform: NinjaTrader
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Posts: 116 since Sep 2018
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Irony rules above all else... beyond frustrating today.

I entered the short at the high, but moved the stops too close. Ironically, immediately after that the price moved 20+ points. With my ATM and plan for scaling out, this would have been +$1750 with 3 contracts, but instead was -$175. Without moving the stops, it would have been a max risk of -24 ticks, or $-300. So either -$300, or +$1750, more than 5:1 risk reward!

It's now 2 losing days in a row since increasing up to 3 contracts. Perhaps the reason my gut wants to aggressively move the stops is because I am not ready to comfortably risk the full stop loss of 3 contracts. I'm going back down to 2 contracts until I get out of this losing streak.

Or maybe I should continue managing the stop losses aggressively, and just hop back in if the conditions for entry are true again.

Look at the footprint volume chart on the right. After the stop losses are hit, the next down bar is pretty much another textbook strong sell entry bar, similar to the other screenshots I've shared.


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