I think smaller targets and a runner is the way to go. 2 contracts is sufficient. You satisfy your ego when you hit T1 of say 4 ticks...and then let your runner take it the rest of the way. I am struggling with the stop on the runner. I have been going to BE+1 after T1 and it works ok on the 6E which is a bit slower and trendier. The CL is a little harder ..but ..the best trades never look back and you can get a nice runner. The rest give you 4 ticks and then back to be+1 on the second. But hey...$50(CL)and $62.50(6E) in a few seconds is not that tough to swallow.
I am using 7 Range bar charts by the way. Price action and momentum usually gets you the 4 ticks without too much struggle. Its the runner that needs managing.....but again....once you have the 4 ticks...the rest is all gravy.
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For the several people here that really tried to help me, I thought I'd post an update. I'm still alive and have been working at this full time.
Here's a quick summary of my activity:
Joined a couple of rooms, spent thousands.
Bought some indicators, spent thousands.
Bought and read many books, spent hundreds.
It's hard to believe I've spent so much time chasing my tail. I've been in sim and study mode, so besides my snake oil purchases, I haven't lost anything besides opportunity and 2 years of my life. Perhaps I'm a little wiser. One can hope.
What I decided to do was some serious back testing. I picked a single signal, a single market, a single chart, some consistent trading hours, defined some money management rules, and just started going backwards, filling up a spreadsheet.
I've been recording the entry, exit by MM rules, MFE and MAE for every occurrence of the signal, regardless of the market condition or context. If the market was clearly going up and I got a signal to go short, I recorded it as a trade.
It's very slow going, and I only have a few hundred trades recorded, but I've noticed something kind of exciting. Even though the strategy is only (so far) 52% profitable, it has averaged 17.4 ticks per day on 8.3 trades. The average MFE and MAE are such that I could increase my targets and tighten my stops to squeeze more out, but for now I'm going to continue recording the strategy as is. My goal is to accumulate 6 months of data, and this will take several weeks.
After this, I hope to write a real trading plan and achieve mechanical proficiency in execution. One of the major problems I've had has been mixing in elements of discretion without any means of measuring whether or not these tweaks to the plan helped or hurt.
I recognize that this is advice I received a long time ago, and why I didn't take it then is beyond me.
Just wanted to say thanks to the people that showed an interest in me, and let them know that their advice is finally being used, albeit a year later.
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The higher your winning pct, the lower your avg gain per trade will be. Around 50% winners, you can expect to have a 1.4 to 1.8 payoff ratio (i.e., avg gain / avg loss) after you factor in slippage. If you were in the low 40's, that can rise up to 2.5. In other words, systems which win 60%+ of the time don't have high payoff ratios.
Mathematically, you're better off going all in / all out on multiple contracts or adding as the trade goes your way. Adding to a winning position has the effect of lowering your winning pct but your payoff ratios can easily be > 2.0 once you get past the 20 tick mark (from the initial entry) on, say, the CL.
So feel good about your 52% winning pct. High winning pct systems demand a high degree of execution precision because the losers are either the same or greater amount than the winners. The pressure is much higher to perform well on a regular basis.
I wish it were possible to get 2x, 3x or 4x the gains with a 60% winning system but it is not. Anyone who would post those kinds of winners to a forum or in a service enticement, whether it be the futures or options market, is showing misleading results. Now, anyone can have a winning streak but all they've shown is that there are brief windows of opportunity where such results appear to defy the long term probabilities. [They most likely won't show you the windows of underperformance which take back those grand results.]
What I'm trying to say is that you have very little to tweak in what you've stated. Instead, work on the consistency and precision of the execution of taking your signals. 52% winners is excellent if your net payoff ratio can maintain an average of 1.5.
Some advice on scalping the CL. You don't want to take sub-10 tick trades unless you can win a long-term 7 or 8 times out of 10. Your avg stop-out is most likely to be 5 ticks plus slippage.
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Favorite Futures: index and currency futures, stocks, options, warrants
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great example of traders on wrong side of market
a bunch of traders enter the market short at 1.26 because it's a previous high in a market that's been trending down. However, the trend down is well extended, so new shorts entering "now" are very late to the game.
The cluster of action at 1.26 entices short traders as they are of the opinion the market is failing to move higher.
The fast push in price upwards is fueled by the most recent shorts having to cover.