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My 20 months long project for ES scalp trading methodology
This is the only futures related site that I have ever joined a few weeks ago and this my first post. I’ll first introduce myself.
I’m retired, live in California but currently I’m in India. There is an almost 24 hour time difference between CDT and IST (Indian Standard Time). So PRE or overnight session in the US is daytime here and European market open at 1:30pm. Whereas regular market session is from 8pm to 2:30am here.
I’ve over 30 years experience trading futures. I only day trade and I’ve only traded S&P500 futures. Earlier, before GLOBEX came along in 1996, I traded full or big S&P500 contract when futures were traded by open cry in the Pit in Chicago. During all these year I have tried variety of strategies and my performance has been Ok but not great.
I’ve been intrigued by scalp trading for some time and have experimented on an off and on basis. Last year I decided to do this in a systematic and disciplined manner for an extended period of time. So starting in April of last year I started a project to develop a successful strategy for this purpose. For this I set up a simulation account and started day trading using real live data feed (not simulated data feed) and regular commissions. I start each day with a balance of $10k. I log each trade with key data and a brief comment as to my reason or thinking for entry and exit. I have been doing this for almost all trading days for the past 20 months.
I use 5 minute candles chart. All trades are based ONLY on price action. No indicators or studies. Actually they’ll be of no use as a vast majority of my trades are less than 5 minutes long. All orders are market orders.
Here are some of the key results & observations (From April 19, 2021 to December 09, 2022):
1. Number of trading days = 387
2. Number of trades = 4,572
3. About 75% of the trades are less than 5 minutes long. Of these 15% are 1 minute or less.
4. The fastest trade was 6 seconds and the longest was 51 minutes
5. Average # of trades/day were about 9 in the first few months and is 14 in recent months
6. Win % was around 70% in the beginning and is now 80+%
7. Average gain per trade (including losers) was about 1. 4 and recent months is about 2.5+
8. My estimate is that 75% of my trades are short trades and only 25% are long.
9. Biggest trade was a 26 second trade with 64.77 points gain on October 28 this year on CPI
data release. The second biggest was a 45 second trade with 46.80 points gain on
December 09 last Friday and is shown in the attached trading log.
10. Pre Market or overnight session requires quite a different approach compared to the Market
session.
11. I don’t have a trading set-up and actually trade from my laptop keeping an eye on the
chart and listen to podcasts or watch recorded NFL games. I’m a big NFL fan and Game
Pass subscriber. My team is Forty-niners and they are doing quite well this year.
I’m attaching two trading logs as examples. One shows first few trading days in April 2021 and the other is the log from November 21 through December 9 last Friday. There are embedded pdf charts in the trading logs showing all the trades during that day. There may be a problem if chart does not open when you click. Do it again and it should work.
I’ve become very adept at trading major economic data releases and news using my unique technique refined during the past 20 months. See the attached “Economic News Trades” showing my performance. They have been my biggest winners. I’m looking forward to today's release of CPI data and market reaction. Also, Wednesday for Fed’s rate decision and Powell’s press conference which should provide good trading opportunities.
I believe stock market is going to be quite volatile during the next 2+ years and provide great trading opportunities using a scalping approach.
Looking forward to your comments and questions. I’m a very slow typist and very busy so won’t be replying to each individually but will respond in one post during the weekends.
1. When will you start trading with real money? I would think even 1 MES would be a good place to start. I'm sure you know SIM trading is a world different than real money trading.
In January I plan to start trading my real account and it will be trading ES. Even though MES is highly corelated to ES, I've noticed that that as my trading is for very short durations and in my opinion, ES reacts to Economic and other news and Algos more quickly. My guess is that MES trading is mostly by those who are new to futures trading. In earlier months (April - Sept 2021) I used to carry my EOD balance to the next day. But then I decided to start each trading day with the same balance i.e. $10k so I may analyze my trading performance better.
