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Bfbusa

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Beautiful. I think Walter has captured the essence of it, at least for me.

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Brown : you must take into acct that the first hour of trading is diferent to the rest of the session... if you are scalper your first hour its like a session itself... IF IF the market shows a momentum day in front ( very unusual ) then you may consider leaving some runners.... but for the seasoned scalper, his session is normally the first hour and goodby, lets play golf, take a dip on the pool, make love... if he keeps trading ( happens to me ) normally as he is on a diferent allien context he will give back his first hour gains... there is no point in staying on such diferent market context if you made good money on your normal habitat.... cheers Walter.

 

If your analysis has shown that your trading is best suited for the first hour and the first hour only, then I would just trade the first hour as well. I have no idea how a seasoned scalper operates as I am not trading for ticks myself.

 

For example - the ES got a really nice drop today around 11am EST. If you just trade the first hour and the first hour only, you just missed out on a ton of available cash... For me, that's not worth missing by limiting myself to either a $ gain and/or a time limit.

 

In the end, we have NO IDEA when the best movements will show up. No idea. I've heard the first hour and done, no lunch, only morning and/or afternoon, etc. etc. And if your trading does not survive during these times b/c you have proven to yourself this is the case, great. If you are just saying only trade the 1st hour b/c some website or book said to, I would suggest that until you perform your own analysis, that suggestion means nothing.

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If your analysis has shown that your trading is best suited for the first hour and the first hour only, then I would just trade the first hour as well. I have no idea how a seasoned scalper operates as I am not trading for ticks myself.

 

For example - the ES got a really nice drop today around 11am EST. If you just trade the first hour and the first hour only, you just missed out on a ton of available cash... For me, that's not worth missing by limiting myself to either a $ gain and/or a time limit.

 

In the end, we have NO IDEA when the best movements will show up. No idea. I've heard the first hour and done, no lunch, only morning and/or afternoon, etc. etc. And if your trading does not survive during these times b/c you have proven to yourself this is the case, great. If you are just saying only trade the 1st hour b/c some website or book said to, I would suggest that until you perform your own analysis, that suggestion means nothing.

 

 

Brown : I have 11 years of my own experience to say that... lol

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Brown : I have 11 years of my own experience to say that... lol

 

Walter - sounds like you have proven to yourself that the first 1 hour of trading is best for the way you trade. And the fact is that most traders will never reach the point to be able to say with 100% confidence what you are saying here. Anyone can say don't trade during lunch, the AM session, the PM session, etc. but until you actually do it yourself for the way you trade, it doesn't mean much. I mean, you said the first hour is best. I've read over and over that staying out of the first half hour is the best way to get the 'unprofessional' money out of the way. Is either 'right'? Well, only the end user can decide that. Like you, I love the first hour usually. On a day like today however, the move I am looking to jump on did not show till about 11am EST.

 

But in reference to my above mentioned ES down move from earlier, this thing is still cooking for me. Initial short was around 11am EST and 1/3 of my contracts are still out there short. I have no idea if this will continue down more or not, but the only way to win is to be in the game.

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The only way to win is to be in the game

 

 

 

 

:cool:

 

Just in case anyone missed that...

 

 

jejejej good Mr Paul ¡¡¡ and yes Brown, normally on my type of play the game happens on the first hour... after that usually its over... dont forget I am a scalper, not a day trader... cheers Walter.

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Good discussion here, even if it digressed a bit. ;)

 

Hopefully any new traders reading this are realizing a couple things...

 

1) You can't just take what you read in a book, message board, etc. and assume that way of trading will work for you. Here, in this thread, I've tried to explain that in order for me to execute my plan, I need to be in any and all trades that appear, regardless of time. Walter has shared that his way of trading best produces in the first hour of trading. No one is 'right' here as each of us operate differently and have different ideal conditions.

 

2) Once you prove to yourself that particular setup(s) at particular time(s) work, trade it like there's no tomorrow. Again, you MUST be confident in your setups due to your hours and hours of work that prove your analysis is solid.

 

3) In order to win the game, you must be a participant. You cannot win watching from the sidelines.

 

And today was a great example... I had 3 setups today. The first two netted out a gain, but nothing to be exited about. Then the move of the day occurred and with a short around 11am, I literally rode 1/3 of my contracts till the close of the day. This is the kind of trade that I am talking about... First, you have to be in it to have a chance at catching this. Second, if you set a firm goal of $XXX/day, I would have exited this short LONG before it was even close to being done. That's some serious money left on the table.

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Good discussion here, even if it digressed a bit. ;)

 

Hopefully any new traders reading this are realizing a couple things...

 

1) You can't just take what you read in a book, message board, etc. and assume that way of trading will work for you. Here, in this thread, I've tried to explain that in order for me to execute my plan, I need to be in any and all trades that appear, regardless of time. Walter has shared that his way of trading best produces in the first hour of trading. No one is 'right' here as each of us operate differently and have different ideal conditions.

 

2) Once you prove to yourself that particular setup(s) at particular time(s) work, trade it like there's no tomorrow. Again, you MUST be confident in your setups due to your hours and hours of work that prove your analysis is solid.

 

3) In order to win the game, you must be a participant. You cannot win watching from the sidelines.

 

And today was a great example... I had 3 setups today. The first two netted out a gain, but nothing to be exited about. Then the move of the day occurred and with a short around 11am, I literally rode 1/3 of my contracts till the close of the day. This is the kind of trade that I am talking about... First, you have to be in it to have a chance at catching this. Second, if you set a firm goal of $XXX/day, I would have exited this short LONG before it was even close to being done. That's some serious money left on the table.

 

 

Well said Brownsfan.

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Well, this is pretty much what I will end up doing.

 

This whole week I contemplated going large size to help me pick the only the best entries. Well, sitting there with a teen number of contracts on the launch pad with the mindset of really pulling the trigger certainly did make me wait for only the textbook setup. I decided that it was just too risky. I was also becoming " comfortable " with the possibility of taking a loss. I guess I thought about it too long, ( Part of my risk management, consider your losses before taking the trade), and that essentially put me back to square one, being too comfortable in taking a loss.

 

This whole exercise did help me bring to focus on sharpening my rules. I will actually trade smaller size in certain situations and gradually increase my size in others.

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... I guess I thought about it too long...

 

Welcome to the club Bf!! It's always good to review your mechanics and fine tune as needed, but as we all know, your mind can be your own worst enemy at times. It's good to be able to share on a forum like this to get some constructive feedback.

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Along the lines of a fixed daily goal and walking away... today I had a long setup on the ES at 10AM EST. I currently have 1/3 of my contracts still running out there. Entry was 1502.25. Current price is 1508. I have no idea if this will continue all day, like yesterday, but if I limited myself to making a certain amount of dollars and quitting, I would be out of this trade already. That would make 2 days in a row of nice running trades that would have been exited prematurely.

 

So, setting a daily goal and then walking away may sound good in the textbooks, but I would be hard pressed to see the practical use of such a method.

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Along the lines of a fixed daily goal and walking away... today I had a long setup on the ES at 10AM EST. I currently have 1/3 of my contracts still running out there. Entry was 1502.25. Current price is 1508. I have no idea if this will continue all day, like yesterday, but if I limited myself to making a certain amount of dollars and quitting, I would be out of this trade already. That would make 2 days in a row of nice running trades that would have been exited prematurely.

 

So, setting a daily goal and then walking away may sound good in the textbooks, but I would be hard pressed to see the practical use of such a method.

 

 

Brown : I asume your trading style is "daytrading".... if that is the case you need more than one hour of session to get a decent trade completed...

 

For a "scalper" as I am, a trade may be 2 or 3 min long and your targets for the day may be met... so 1 hour gives you plenty trade oportunities.

 

So the 1 hour strategy I think is more suited for scalping.... and would not be proper on a day trading style... cheers Walter.

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Brown : I asume your trading style is "daytrading".... if that is the case you need more than one hour of session to get a decent trade completed...

 

For a "scalper" as I am, a trade may be 2 or 3 min long and your targets for the day may be met... so 1 hour gives you plenty trade oportunities.

 

So the 1 hour strategy I think is more suited for scalping.... and would not be proper on a day trading style... cheers Walter.

 

I agree Walter. I am a 'daytrader' but not a scalper, that's for sure. All positions are exited by 4:15pm EST.

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A couple of random but related thoughts. I think there are very few 'regular' businesses that operate like this (finish at monetary target). I don't know of any that give there sales people the remainder of the month of when they have made there monthly goal!

 

I think it is valuable to set your 'normal' hours of work. Of course one of the great attractions of trading is the freedom and flexibility it affords. Despite this it appears a good idea to have some core guidelines to when you are going to do business, an important part of your trading plan.

 

It strikes me having a trade working at the close of play is quite similar to a normal business having a 'rush' on or taking an order that needs filling quickly - whatever. Work an extra hour or two and give the staff (you) a bonus or some time off in lieu!

 

With most of the trade management platforms out there its easy enough to leave a working order with a trailing stop and target. Though that might not suit some peoples style of trade management.

 

Cheers.

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Interesting thread here, I'll ad my .02

 

 

"Think to yourself, if you had twice or three times your normal size, I bet you would be darn well sure that the setup you take is the highest probability in your arsenal. You may find yourself not over trading and being alot more disciplined. (Of course you must have a solid trading plan and good setups first.)"

 

From my experience I have found that it completely depends on the trader. Typically, a trader has some range of contract sizes in which he/she is comfortable trading, ie one guy might trade between 1 and 5 contracts, and another guy might trade between 5 and 50 contracts.

 

An even more interesting question to pose is, what does your P/L look like when you trade x number of contracts in relation to what it looks like when you trade y number of contracts? Why do you trade the size you trade when you trade it? What makes you want to trade a 10 lot instead of a 5. What is the difference in times when you trade 6 lots and 8 lots, etc... Is it tied to confidence, and are you taking the exact same signals for each size incrememt, or are you rather assigning different lot sizes to different types of trades or market situations?

 

Have a look at the attached document. I've included examples of 3 different traders. Each trader is a unique story and each shows varying results with different-sized trades.

 

The left column represents the number of trades he did at that contract size and the right column represents his P/L per contract traded in the designated increment.

 

The last example shows in addition, the average shape of his trade in each contract size. This graphic shows a view values: profit opportunity (in $), risk taken in the trade (in $), avg. P/L, avg. time in trade.

 

If I am these traders, I want to find out as much about the instances in which I trade different sized contracts so that I can avoid trading sizes that have traditionally caused losses. For instance, if I have poor performance trading 5-lots, I want to find out as much as possible about my 5-lot trades (why i trade 5's, when i trade 5's, etc...)

Quantity Examples.doc

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Guest BigWallStreet

To answer all the Q's...

 

There's a time to go big, and time to go small.

 

BigWallStreet

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