Actively Day Trading One Single Market VS Day Trading a Handful of Markets?

[MightyMouse 12]

I like you MM. I think you are not a Crank (though you are a bit cranky, which can lead to full-blown Crank). I think you are a smart human creature who has merely to replace his Jim Cramer-like definitions and understanding with that of an experienced and successful trader to break through to a level of success that is currently beyond your reach.

 

Just for fun, who is the imprudent one (and conversely, who the conservative one) - he who deploys his all for a 20% gain, or he who deploys 10% of his all for a 200% gain?

 

You need to move away from the common hoard's understanding of "speculation" as meaning "too risky", or "too much leverage," or as referring to those "evil speculators." I have done all I can to make the correct understanding accessible to you, you have only to read and think and withhold judgment until you understand what it is you have read.

 

William O'Neil turned his first 5K account into 200K in 18 months on three trades. He used 2-1 margin (a very tame level of margin by even a "conservative" futures trader's standard). His stop loss was 7% of his cost basis. Too risky? Too much leverage? An evil speculator? Hardly! Rather, it was a very sound approach to growing his capital. Is every 18 month period so good? Far from it - such periods are few and far between, which is why you must have a plan that allows you to capitalize on those situations while keeping you in the game, "ready to take the field" while waiting out those less opportune times.

 

This is true for the day trader, the short-term swing trader, and the long-term, long pull position trader alike - keeps risks small relative to your gains, protect your capital during unfavorable conditions, but have a method that gets you in at the earliest possible moment when the right conditions are potentially materializing. What is the 1-2-3 trade, after all, if not a method that allows one to attempt to get into the market just as a potentially out-sized swing is possibly getting underway? What is Darvas's box method other than a method that allows one to attempt to get into the market just as a potentially out-sized swing is possibly getting underway? What is William O'Neils's CANSLIM other than a method that allows one to attempt to get into the market just as a potentially out-sized swing is possibly getting underway? What is Loeb advising other than that one find and employ a method that allows one to attempt to get into the market just as a potentially out-sized swing is possibly getting underway? And what makes each of these speculative, in the sense I am here trying to get folks to see, is that each of these traders sought to make gains that dwarfed their initial risk, while keeping that initial risk as a reasonably small, reasonably well-controlled level.

 

MM - read Loeb's book, and then let's resume the discussion. Right now there can be no progress between us for while I understand your perspective (I shared it once upon a time many many moons ago), you do not understand mine. It would seem that you think you do; but I assure you that you do not. You have in mind the crazy rodeo clown-like trading associated with The Race, which is not at all what I am talking about here and elsewhere at TL. What I am saying, which no one seems to want to hear, is that you can trade in such a way as to take small, relatively controlled risks in order to capture extraordinarily out-sized profits. Not on every trade, of course. Losses are inevitable. But over the course of a series of trades related by time frame and with a sufficient frequency, you can make much more at this game than you presently believe possible. And if you do not believe it is possible (other than for the stray "fortunate" windfall), then you will find that for you, it is impossible.

 

As James Baldwin said, "Those who say it can't be done are usually interrupted by others doing it." You can keep on saying it can't be done, and I (and many others) will keep right on doing it anyway. If you want to do it also, or if you would at least like to learn of what it is I am speaking, then read Loeb's book, and we can begin.

 

Another way to look at it is this: Let us suppose that 95% of all folks who put money in the market lose. Personally, I think that overstates the magnitude of failure, but Cranks love to trot that line out, so let us grant the Cranks assumption to be true. So, 95% of those who deploy capital for capital gain lose some or all of their capital. Well, then, presumably they are losing it to the 5% who do succeed. The Cranks must concede that if we grant them as true the statement that 95% lose, then they must concede that 5% must be wildly successful, after all, the Cranks are fond of telling us, trading is a zero-sum game (or nearly so) after adjusting for commissions and fees and taxes, etc. So, who do you want to be MM? One of the 95% who give, or one of the 5% who take? Why is it that the Cranks want to foist failure on everyone,as though they will not be happy unless and until the failure rate reaches 100%?! No sir, 95% is enough!

 

If 95% lose, then you can be one of the 5% who beat them, or one of the drones who join them. It is a choice, however, and do not let yourself fall prey to the belief that it is not a choice, but fate, something beyond your control. It is a choice, though a choice, to be sure, that leads to agonizingly hard work, painful reflection and introspection, and a tortuous path toward self-knowledge (Recall Plato's allegory of the Cave, and the pain felt by those who were turned from the shadowy walls to the true light of the sun).

 

We human creatures are magnificent creatures. We are capable of far more greatness than 95% of us believe to be possible.

 

Best Wishes,

 

Thales

 

Thales,

 

Thank you for categorizing me as a human. Its good to have the reassurance every so often.

 

I appreciate your enthusiasm for the Loeb material and desire to share it; however, I am in the process of shrinking what I have learned over the last 2 years so it would be pointless to add something new to the list. Take it as truth and at face value and by no means am I making a derogatory statement regarding the material or to the value of learning by reading trading books.

 

 

MM

[laurus12 10]

Hello HighStakes,

 

You have to think about how your brain evolves with a new subject. If you would like to develop a good trading methodology together with a good trading plan, you should start with only one market. You should also be aware of when you start trading it will also most likely become a rite of passage regarding your personality. Trading has a tendency to bring up all your hang ups and weaknesses. If you start trading with many markets at once you will not have the capacity to develop and explore these basic things. An important key word for development is focus.

 

I know the thought of trading many markets is attractive as in more trades equals more money and so on, but for now just stick with one that's appealing to your own feel and comfort zone regarding risk. Then later when you are ready maybe trade more markets. When you have the feel with a specific market you will also have a better foundation for comparing and quicker get the feel of how other markets behave. As an example I know of one full time professional trader which I have been watching trading live a couple of times and he only trades the E-mini S&P 500 and the EUR futures. Personally I only trade one or two at the time which is dependent of my own capacity to analyze and monitor the markets properly.

 

And remember, give your self time to develop. Don't rush things.

 

I wish you good luck and good fortune,

Laurus12

[HighStakes 10]

Hey laurus,

 

Thank you for the support.

 

Since writing this post I have decided to trade one market exclusively, but I have not yet decided which one. It will most likely be the e-mini S&P500, crude oil or possibly EUR/USD.

 

Best regards,

 

HighStakes

[laurus12 10]

You are very welcome HighStakes.

 

By the way, I think Thalestrader has some very good and important points. He's right up my alley. It is this attitude that has always helped me when I would like to accomplish something in my life. This finding the best people to teach me and doing my best performance. I love the statement "You can keep on saying it can't be done, and I (and many others) will keep right on doing it anyway."

 

Regarding the discussion of the 90-95 percent who do not make it I think this too often comes out of perspective. This is the truth about all other business startups also. Rather than stating the 90-95 percent all the time one should focus more on why and learn from it. Trading, no matter what level, is a business and should be treated as so on all points. Trading has its distinct areas as a business which one have to know about and follow and so has other businesses too. If you would like to and have not already seen it, I would recommend the "Trading As Your Business" webinar at TraderKindom.com by Brian McAboy to put things into perspective. You have to be registered to get access. As a next step I would highly recommend the book "Super Trader" by Dr. Van K. Tharp. The subtitle of the book can be misguiding I think, but it is an excellent book on trade management and psychology. Dr. Tharp is a top notch trading psychologist, NLP (Neuro Linguistic Programming/Peak Performance) modeler, and trader. He is one of those interviewed in the book "Market Wizards" by Jack D. Schwager.

 

Best regards,

Laurus12

[HighStakes 10]

You are very welcome HighStakes.

 

By the way, I think Thalestrader has some very good and important points. He's right up my alley. It is this attitude that has always helped me when I would like to accomplish something in my life. This finding the best people to teach me and doing my best performance. I love the statement "You can keep on saying it can't be done, and I (and many others) will keep right on doing it anyway."

 

Regarding the discussion of the 90-95 percent who do not make it I think this too often comes out of perspective. This is the truth about all other business startups also. Rather than stating the 90-95 percent all the time one should focus more on why and learn from it. Trading, no matter what level, is a business and should be treated as so on all points. Trading has its distinct areas as a business which one have to know about and follow and so has other businesses too. If you would like to and have not already seen it, I would recommend the "Trading As Your Business" webinar at TraderKindom.com by Brian McAboy to put things into perspective. You have to be registered to get access. As a next step I would highly recommend the book "Super Trader" by Dr. Van K. Tharp. The subtitle of the book can be misguiding I think, but it is an excellent book on trade management and psychology. Dr. Tharp is a top notch trading psychologist, NLP (Neuro Linguistic Programming/Peak Performance) modeler, and trader. He is one of those interviewed in the book "Market Wizards" by Jack D. Schwager.

 

Best regards,

Laurus12

 

Thanks, Laurus

 

I will check out that presentation and look at Tharp`s new book. His book, "Trade Your Way To Financial Freedom" is probably among my top 10 books, so I`m already familiar with some of his work.

 

Best regards,

 

HighStakes

[brownsfan019 17]

Hey laurus,

 

Thank you for the support.

 

Since writing this post I have decided to trade one market exclusively, but I have not yet decided which one. It will most likely be the e-mini S&P500, crude oil or possibly EUR/USD.

 

Best regards,

 

HighStakes

 

I think you've chosen 3 good markets to choose from - but also three very unique markets so make sure you study each very closely before making your choice on which to focus on.

 

For example....

 

ES

: Highly liquid, esp during EST trading hours, can get very range bound / choppy at times but when it catches a trend it will go.

 

CL

: My personal favorite as I think you get great moves every single day. Even the range bound moves here can be substantial when compared on a dollar to dollar basis to other markets.

 

6E

: Personally I have a love/hate with this thing as many times the substantial moves occur while I am fast asleep so I awake to trading a tight, range bound market. When you do catch a trend here it can be substantial.

IMO you've got 3 very different markets there and it will come down to your risk tolerance and what types of moves you are looking for. I would not choose the ES purely based on total volume traded there daily as that will not be an issue for a very long time for you starting out so don't use that as the basis for your decision. I get tired of reading how new traders focus on the ES purely b/c of the liquidity there even though they will be trading 1 contract to start.

[MadMarketScientist 11]

I think Brownsfan has done a great job categorizing your three potential market choices.

 

And, I think it's important to recognize his point that they are really going to trade differently. It's one thing to be deciding between the Nasdaq e-Mini and the Dow e-Mini - you know they will move similar, trade the same times and have the same general feel.

 

What I can say is I think CL is a better daytrader than the 6E. You'll have virtually every session, let's say from 9am - 11am where you can get off 3 to 5 trades consistently. Not that you should or want to trade that frequently (nothing wrong with one and done) but you'll have that opportunity. I stay away from trading it the morning of the Crude Oil report and wait until 2 minutes after that report is released for some of my best trading of any market.

 

The 6E I think you approach more from a swing trading basis - or if that's not your thing, think of it as a market you might want to try and capture bigger intraday swings (40 - 60 pips, etc...) -- and you will not have that multiple trade opportunity everyday -- unless of course you could be up at all hours for the Euro and US session.

 

ES not my cup of tea but there are certainly others who would disagree.

 

 

 

 

I think you've chosen 3 good markets to choose from - but also three very unique markets so make sure you study each very closely before making your choice on which to focus on.

 

For example....

 

ES

: Highly liquid, esp during EST trading hours, can get very range bound / choppy at times but when it catches a trend it will go.

 

CL

: My personal favorite as I think you get great moves every single day. Even the range bound moves here can be substantial when compared on a dollar to dollar basis to other markets.

 

6E

: Personally I have a love/hate with this thing as many times the substantial moves occur while I am fast asleep so I awake to trading a tight, range bound market. When you do catch a trend here it can be substantial.

IMO you've got 3 very different markets there and it will come down to your risk tolerance and what types of moves you are looking for. I would not choose the ES purely based on total volume traded there daily as that will not be an issue for a very long time for you starting out so don't use that as the basis for your decision. I get tired of reading how new traders focus on the ES purely b/c of the liquidity there even though they will be trading 1 contract to start.

[HighStakes 10]

I think you've chosen 3 good markets to choose from - but also three very unique markets so make sure you study each very closely before making your choice on which to focus on.

 

For example....

 

ES

: Highly liquid, esp during EST trading hours, can get very range bound / choppy at times but when it catches a trend it will go.

 

CL

: My personal favorite as I think you get great moves every single day. Even the range bound moves here can be substantial when compared on a dollar to dollar basis to other markets.

 

6E

: Personally I have a love/hate with this thing as many times the substantial moves occur while I am fast asleep so I awake to trading a tight, range bound market. When you do catch a trend here it can be substantial.

IMO you've got 3 very different markets there and it will come down to your risk tolerance and what types of moves you are looking for. I would not choose the ES purely based on total volume traded there daily as that will not be an issue for a very long time for you starting out so don't use that as the basis for your decision. I get tired of reading how new traders focus on the ES purely b/c of the liquidity there even though they will be trading 1 contract to start.

 

Interesting analysis. Thank you!

 

I live in Europe and do not have the opportunity to trade the market open. My personal trading session would be limited to approximately the last 4 hours of the US session.

 

One important qualifier then would be that the market of my choice need to be active during that time window. My superficial impression (have not done much research here yet) is that the best moves in crude oil usually happens during the market open, while the ES usually have good moves during the close as well.

 

Any opinions here?

[Kiwi 16]

The 6E I think you approach more from a swing trading basis - or if that's not your thing, think of it as a market you might want to try and capture bigger intraday swings (40 - 60 pips, etc...) -- and you will not have that multiple trade opportunity everyday -- unless of course you could be up at all hours for the Euro and US session.

 

If you do decide that a slower style might suit you then you can mix the forex pairs (whether as forex or futures) to achieve a higher rate of trade per week. The most liquid pairs (and thus, those with smallest spreads and least slippage) are the majors:

 

EU, UJ, GU, AU, UCHF, and CADU with some of the crosses like EJ, EA and GJ are also pretty liquid.

 

Once you get to hourly or 4 hourly timeframes though the spread/slippage isn't so important as a percentage of your total trade so you add to the possibilities. An important element of a slower trading style is that costs become less important; another is that its easier to trade a plan if the time to make your decisions and recover from events is longer.

 

Forex is prone to solid trending moves so look carefully at Thales and Brownsfan's material here - they provide good opportunities for profiting in these markets.

[MightyMouse 12]

Interesting analysis. Thank you!

 

I live in Europe and do not have the opportunity to trade the market open. My personal trading session would be limited to approximately the last 4 hours of the US session.

 

One important qualifier then would be that the market of my choice need to be active during that time window. My superficial impression (have not done much research here yet) is that the best moves in crude oil usually happens during the market open, while the ES usually have good moves during the close as well.

 

Any opinions here?

 

Highstakes,

 

I would suggest that you start watching a lot of markets. Sim them and then narrow down the list to the ones that you feel most comfortable trading. You may be the next greatest Orange Juice or Cocoa trader and you will miss out because none of us suggested it to you.

 

 

MM

[Misha851 10]

Hi,

I will be happy to be advised.

How can we arrange that?

 

Misha

[Chippy 10]

I trade for a living but I follow a few advisory services to do it haha.

 

Pick the trades I agree with and go with it. Also have a few automated programs that do the work for me.

 

I can't imagine going back to a regular job. Even if I had to make $200 a day trading the ES I could do it. Simple easy life...and I love it

 

Now, the advisors I follow better not die or anything hahaha

[MightyMouse 12]

I trade for a living but I follow a few advisory services to do it haha.

 

Pick the trades I agree with and go with it. Also have a few automated programs that do the work for me.

 

I can't imagine going back to a regular job. Even if I had to make $200 a day trading the ES I could do it. Simple easy life...and I love it

 

Now, the advisors I follow better not die or anything hahaha

 

You should teach the advisory service how to trade their advice.

[Chippy 10]

You should teach the advisory service how to trade their advice.

 

lol, there are a couple I have that are horrible at their own trades. One of them is pretty decent and is actually honest about it. I think if you find a way to trade that you like and then take other advice it can work to your advantage. However, a lot of people can't trade like that and just go strictly off what people tell them to do.

 

Works for me, so i'm not changing anything until I start losing some money. By no means am I rich, but a few hundred dollars a day keeps me from having a 9-5 job :missy:

[MightyMouse 12]

lol, there are a couple I have that are horrible at their own trades. One of them is pretty decent and is actually honest about it. I think if you find a way to trade that you like and then take other advice it can work to your advantage. However, a lot of people can't trade like that and just go strictly off what people tell them to do.

 

Works for me, so i'm not changing anything until I start losing some money. By no means am I rich, but a few hundred dollars a day keeps me from having a 9-5 job :missy:

 

Sure, just because you can forecast a market, doesn't mean you can trade it.

[Misha851 10]

Thanks!

 

I am not experience enough trader.

Please share with me the names odf the programs you are using.

I will appreciate any usefuk advise given to me.

 

I like you, DO NOT WANT BACK TO REGULAR JOB.

 

tHANKS AGAIN,

 

Misha

[nakachalet 10]

Thanks!

 

I am not experience enough trader.

Please share with me the names odf the programs you are using.

I will appreciate any usefuk advise given to me.

 

I like you, DO NOT WANT BACK TO REGULAR JOB.

 

tHANKS AGAIN,

 

Misha

 

i did not read the entire thread....

 

did you or did you not quit your job as yet....?

 

trading for a living is a very tough, very very tough career.... pls do not quit your regular job as yet, ok?

 

in order to be partially successful and minimally breakeven.... it will take up to a year or more of sitting up day in and day out, rain or shine or snow, it does not matter one bit.... sitting quietly all by yourself in front of one, two, three, four or more monitors....

 

are you gamed for such rigid regimentation all on your own and all on your own impetus....?

 

if you answer affirmatively to the above, then perhaps, there is a very slim chance that you could learn to trade.... just on sim.... before graduating to live signal and another three to six months of accumulating stats of your own, on the time-frame of your own, and on the risk/reward stats of your own....

 

even if you pass these stages already with flying colors and all.... the deal-makers and specialists at any trading pits will be more than happy to oblige you.... and take your money away as fast as you can place them....

 

yes, of course, i am speaking from personal experiences.... have been there and done that and kicked myself for being so dumb to assume that i could be smarter than them....

 

many of those in the pits whom i know, they trade with 3 or 4 tics stoploss.... and earn high six figure each month....

 

i am not saying all successful and profitable traders trade with such unusually tight stoploss.... however they are exactly some of those whom we trade against each and every session.... my own stoploss looms 100% larger than their.... the very best i could do is.... 9 tics.... L O L ....:missy:

 

for whatever it is worth.... :crap:

[sdoma 10]

Interesting analysis. Thank you!

 

I live in Europe and do not have the opportunity to trade the market open. My personal trading session would be limited to approximately the last 4 hours of the US session.

 

One important qualifier then would be that the market of my choice need to be active during that time window. My superficial impression (have not done much research here yet) is that the best moves in crude oil usually happens during the market open, while the ES usually have good moves during the close as well.

 

Any opinions here?

 

How do you trade? You don't have to give away all your secrets, if you feel you have any, but your trading style is going to be the most important thing here, followed by the hours you can trade.

 

The wrong market for your trading style not only can, it will break you. If you trade mean-reversion, I'd lean towards ES for you. If you trade for range expansion, crude would be my choice, depending on the amount of capital you have. Crude usually puts in a good range, but that means you will lose more when you make a bad trade as well as make more when you make a good one.

 

Forgive me if you've already explained this, I just didn't see it.

[sdoma 10]

many of those in the pits whom i know, they trade with 3 or 4 tics stoploss.... and earn high six figure each month.... my own stoploss looms 100% larger than their.... the very best i could do is.... 9 tics.... L O L ....

 

What pit traders? Pit trading is dead, and most pit traders have been forced into retirement because they were unwilling or unable to adapt to the screen. Hell, the CME and CBOT consolidated their floors into one space.

[bigchido 10]

I'm willing to help out those who ask me. I don't sell anything and I ask for nothing in return. I've been trading over 20 years and find the "I don't give out my secrets" line to be a pile of crap. Trading is mostly about money management more than some "secrets of the pros".

 

Now, with all that said, It is possible to make a good return on your capital. If you still think you can become rich trading full time then good luck. But, if you want to learn some trading reality I'm happy to help.

 

Really, JohnnySDG I'm ready for some 'reality' mentoring. Seriously.

[BlueHorseshoe 10]

I would recommend that you research various trading methodoligies and find the style that suits you best. Assuming you then want to trade a single market, find the market for which this type of approach is most suitable.

 

For instance, I would be asking myself, do I want to trade breakouts (perhaps the Yen would be good), intraday trends (maybe the British Pound is your market), mean reversion (works well in many places, but none beats the S&P), momentum (perhaps the Euro), buy pullbacks (what about bonds)?

 

Many people seem to become attached to a particular market for no sensible reason. Or because they like the glamour of it (some Forex and Gold traders). I trade the S&Ps. I hate the S&Ps - five hundred faceless stocks in some some country on the other side of the world - but this is the market that facilitates my outlook as a trader, and in which (historically) I would have been most profitable. In other words, you would do well to keep ego out of the equation when you choose a market and think only about your potential to profit in it.

 

As for whther to trade multiple markets, that's down to you. I know that I would struggle to do this,as I tend to suffer from 'tunnel vision' in whatever I do, and can't juggle multiple processes well in my head. But many traders thrive on this challenge, and I suspect that most off-the-floor institutional traders probably trade multiple markets.

 

Hope that's useful to you.

[sabbir 10]

I am metals trader, I make good money by using financial and technical analysis but I struggle to find time for this, am looking to explore automated system in gold. I have searched the following 2 sites