Day Trading the E-mini Futures

[karoshiman 10]

My friend wants to short the ES playing the job data in the morning. He believes the data will bad.

 

If he puts a 3 points stop whats the chances of that stop not getting filled because the price action moving so fast?

 

Thanks,

 

 

Good bet by your friend! Hope he still has his shorts... er... I mean the position...

[TheNegotiator 13]

Negotiator,

ive been a trader for 11 yrs.. most of them energy and the past few ive added SP e-minis to the mix. I am an old NYMEX floor trader who has incorporated Market Profile as my main tool since leaving the floor. I have never been much for forums but recently have found myself searching for some to follow/join.

After looking thru your posts here i admire your approach. I believe sharing a common approach is benificial to a trader's pysche for the day to day grind.

 

I look forward to following here. Thanks.

 

Good stuff Abyss! I'm not the first to use this approach and certainly won't be the last, but thanks for the compliment anyway! I hope it helps some people at least. I'm sure you'll be able to contribute to the thread with your experience so I'm looking forward to that! :beer:

[TheNegotiator 13]

Slightly bigger rotation up here so far of 3.75pts but nothing to write home about so far. Noticed though that the delta is building higher very consistently though, so will be intereseted to see what happens next.

[gosu 10]

Hope everyone is doing well so far today. Personally felt it has been quite simple to trade so far and will do a diagram to explain shortly.

 

I call mornings like today "free money."

[TheNegotiator 13]

I was beginning to think nobody was around gosu! Obviously you had a good one this am.

[gosu 10]

I was beginning to think nobody was around gosu! Obviously you had a good one this am.

 

Yes, glad to see you posting the simplicity of this AM. The difference between today's trend AM and Tuesday's is today's was telegraphed coming into the cash open. We all know the once a month report is a reliable timing event.

 

I don't take any credit for accepting money that is being handed out. I am merely a partner and my job is to get on the right side and I am not in charge of the amount of profits.

 

I call it "free money" but I know it's because to people on the wrong side it's "sure losses."

[TheNegotiator 13]

Absolutely. Align yourself with the market correctly and you can make a packet. Otherwise it's like trying to ski uphill. Not a recommended thing to try.

[TheNegotiator 13]

Anyway, I'm off for the weekend now. I hope you all did well and have a great weekend!

[roztom 10]

Y

 

I don't take any credit for accepting money that is being handed out. I am merely a partner and my job is to get on the right side and I am not in charge of the amount of profits.

 

I call it "free money" but I know it's because to people on the wrong side it's "sure losses."

 

Glad you got to pick up the "free $."

 

Days like Friday are why we are in this business...

 

However, I want to comment on something of interest... Obviously we don't know what will happen Monday - there are key elections in Greece3, France, etc which can have a significant impact on the markets.

 

We will certainly get some sense of that Sunday night and Monday, etc.

 

We have a CLVN 1360.00. We cleaned the stops under previous low of 62.75.

 

56.75 is NVPOC so we are sitting right over osme key areas..with 53.50 under there..

 

and 47.75 a major CLVN...

 

Given the lack of meaningful rotation Friday, I "suspect" we will continued early selling then... ?

 

Wish I 'knew" but that depends on Globex and then where RTH opens in relation to previous range and what kind of open we get...

 

I'm not telling anyone anything they don't know - right...

 

When I set up my trade hypothesis for Monday I will have defined the areas to do business and then will wear a helmet... :helloooo:

[gosu 10]

Glad you got to pick up the "free $."

 

Days like Friday are why we are in this business...

 

However, I want to comment on something of interest... Obviously we don't know what will happen Monday - there are key elections in Greece3, France, etc which can have a significant impact on the markets.

 

We will certainly get some sense of that Sunday night and Monday, etc.

 

We have a CLVN 1360.00. We cleaned the stops under previous low of 62.75.

 

56.75 is NVPOC so we are sitting right over osme key areas..with 53.50 under there..

 

and 47.75 a major CLVN...

 

Given the lack of meaningful rotation Friday, I "suspect" we will continued early selling then... ?

 

Wish I 'knew" but that depends on Globex and then where RTH opens in relation to previous range and what kind of open we get...

 

I'm not telling anyone anything they don't know - right...

 

When I set up my trade hypothesis for Monday I will have defined the areas to do business and then will wear a helmet... :helloooo:

 

You say days like Friday are why we are in business. No doubt it is sweet getting a big range trend day to close the week. But it does present a kind of test for the uninitiated. As I stated, "free money" also means "sure losses" for those on the wrong side. So I would add that days like Friday are why some go out of business.

 

Regarding not knowing what will happen on Monday: I have no concern about Monday until Monday arrives. I don't know if on Sunday night the market will open with a gap up, gap down, or near Friday's close.

 

What I do KNOW is the position of the market as of NOW (Friday's close), and from the current position I KNOW there are but two possibilities. I do not buy into the favored mantra of this thread that "anything can happen." A person who thinks that anything can happen at any time in the market is a beginner teetering on the fence that separates the "good enough" from the "not good enough." What it means is that the person has not made the differentiation to see days like Friday coming and KNOW them when they're here. They are missing the deja vu feeling that guides the experienced.

 

I have no pre-market trade hypothesis or trading plan for Monday. I come from the Mike Tyson school of trading and rely on my experience to avoid walking into a punch to the face.

 

The current position of the market is that it is on its way to p2 after which there will be a retrace to p3 and a resumption. The two possibilities from the current position is that the market either HAS or HAS NOT reached p2.

 

Enjoy your weekend.

[roztom 10]

Gosu: Interesting coming from the Mike Tyson school of trading...be in the moment, etc...

 

I have to say that I have traded from both sides.. However, most of the trader wannabee's fail because they become shooters or impulse traders with no plan. Usually this leads to over-trading, trading in poor locations and a short career towards becoming a sad statistic.

 

As you know, I have over 30 years at this and when I started I did plan but only as far as reviewing charts. Monthly, Weekly, Daily with channels and Trendlines... yes, I did use them once upon a time... I learned trading with classical bar charting... that was all there really was...

 

Realtime data and charting was just becoming available and was very expensive.

 

Over my career I have seen many traders and trading advisers come and go.. other than the guys on the floor most upstairs traders like me did not survive.. I also had my bad times... Back in the day there were no computers and if you wanted to test an idea you had to do it by hand... a nightmare..

 

As far as a plan goes, not everyone has to write a plan out everyday..I have done it on and off but the last years I do write out a plan... Mostly to get the sense of the market but also to do my thinking in a non-distracted environment, stress free environment. If you're going to war, you don't make your plan on the field of battle - you execute it.

 

I think of trading in many ways like executing a sport or having a flight plan. I don't want to make it up as I go, I want to focus on execution.

 

While variables come into play all the time and we must respond to it, even Mike Tyson has a plan for the next fight, he reviews tapes, he spars and formulates a strategy before he steps into the ring. I doubt anyone would be Champ if they didn't.

 

Having a plan has helped me. One of the things that it does is help me have the discipline to wait for the market to get to a key area.. I like to trade on the edges and I also like to align with a higher time-frame participant..like we saw on Friday...

 

My plan outlines where they should potentially be active or if not that their perception of value or fair pricing has changed..

 

I don't think there is any one right way to do this..only the way that works for the individual.. the problem is most do get a chance to go through the learning curve and discard all the crap that doesn't work for them.

 

I have found that many traders who move size do homework... It might only take a few minutes to a half hour but they do it... Of course, once you have it as an ongoing process it doesn't change much..only the levels change..

 

I know what I will do on Monday but I do not know what the market will do... I have gotten out of the "prediction" business a long, long time ago. Predicting creates attachment to being right. I don't care about being right. All I care about is properly executing when my edge appears.. that's all I have to do... to make consistent profits.. When I stray from that, my numbers go down..

 

Glad to hear you're cleaning up but I would never encourage a trader wannabee to not have a plan.. If they don't have one or can't put a functional plan together then they have no business trading since they will be on their way out of business...

Edited May 5, 2012 by roztom

[gosu 10]

Gosu: Interesting coming from the Mike Tyson school...be in the moment, etc...

 

I have to say that I have traded from both sides.. However, most of the trader wannabee's fail because they become shooters or impulse traders with no plan. Usually this leads to over-trading, trading in poor locations and a short career towards becoming a sad statistic.

 

As you know I have over 30 years at this and when I started I did plan but only as far as reviewing charts, Weekly, Daily with channels and Trendlines... yes I did use them once upon a time... I learned trading with classical bar charting... that was all there really was...

 

Realtime data and charting was just becoming available and was very expensive.

 

Over my career I have seen "most" traders and even trading advisors come and go.. other than the guys on the floor most upstairs traders like me did not survive.. I also had my bad times... Back in the day there were no compputers and if you wanted to test an idea you had to do it by hand... a nightmare..

 

As far as a plan goes, not everyone has to write a plan out everyday..I have done it on and off but the last years I do write out a plan... Mostly to get the sense of the market but also to do my thinking in a non-distracted environment.

 

I think of trading in many ways like executing a sport or having a flight plan. I don't want to make it up as I go, I want to focus on execution.

 

While variables come into play all the time and we must respond to it, even Mike Tyson has a plan for the next fight, he reviews tapes, he spars and formulates a strategy before he steps into the ring. I doubt anyone would be Champ if they didn't.

 

Having a plan has helped me. One of the things that it does is help me have the discipline to wait for the market to get to a key area.. I like to trade on the edges and I also like to align with a higher time-frame participant..like we saw on Friday...

 

My plan outlines where they will potential be active or if not that their perception of value or fair pricing has changed..

 

I don't think there is any one right way to do this..only the way that works for the individual.. the problem is most do get a chance to go through the learning curve and discard all the crap that doesn't work for them.

 

I have found that many traders who move size do homework... It might only take a few minutes to a half hour but they do it... Of course once you have it as an ongoing process it doesn't change much..only the levels change..

 

I know what I will do on Monday but I do not know what the market will do... I have gotten out of the "prediction" business a long, long time ago. Predicting creates attachment to being right. I don't care about being right. All I care about is properly executing when my edge appears.. that's all I have to do... to make consistent profits.. When I stray from that, my numbers go down..

 

Glad to hear you're cleaning up but I would never encourage a trader wannabee to not have a plan.. If they don't have one or can't put a functional plan together then they have no business trading sine they will be on their way out of business...

 

Hi Tom,

 

Thanks for the thoughtful post. I don't want my post to imply that you are doing it wrong by having a hypothesis or a plan. As always I'm speaking for myself based on my own experience and I'm fond of saying that there is more than one way to skin a cat. Also I never go into a trading day "blind." Every night there is homework and then there is the up-to-the-minute "housekeeping" into the cash open.

 

I describe what I do as "defensive" trading. I think you stated in an earlier post that you are focused on minimizing your risk rather than maximizing your profits, and that is my approach in a nutshell. I use Mike Tyson's quote as mostly humor (a bad attempt, I admit), but if I were to extend the boxing analogy I would say that I'm not looking to throw punches and always protecting myself. Trading is a game of not losing, which is not the same as being afraid to lose as TL's resident therapist keeps asserting in his articles.

 

In line with my focus on defense, I do not make any specific plans of "attack" at any specific prices before the day begins. It is enough for me to have all the annotations done and the market will give me additional data when or if the lines come into play. I am just a little guy in a huge game and my "edge" (I don't like using that word much) is that I can take liquidity at will and it doesn't take much volatility to fill my cup. Most days I'm done trading by 9 a.m. What level of specificity in a premarket plan or hypothesis does that require? For me, none.

[MightyMouse 12]

 

I have no pre-market trade hypothesis or trading plan for Monday. I come from the Mike Tyson school of trading and rely on my experience to avoid walking into a punch to the face.

 

 

I laughed when I heard the Tyson quote in his interview; however, I did take it to mean that he fights without a plan. Instead, I thought it was more a comment on the dynamics of a plan.

[karoshiman 10]

 

...not the same as being afraid to lose as TL's resident therapist keeps asserting in his articles.

 

...

 

 

lol

 

But reading your last two posts, in my book, you have also a plan, even when this does not mean waiting for the market to reach a certain price at which you then execute. Your approach is more flexible if I understood it correctly. You wait for the market to reach p2. Then you wait for (or trade) p3 and the resumption of the move. That's also a plan, only a different one.

 

And regarding "ACH", if I understood you correctly, you do not predict where p2 will be. You wait for the market to establish p2, i.e. you recognize it when it happened. So, you also say in certain circumstances that Anything Can Happen (p2 can be "anywhere"). Of course, and I think that's what you mean, when you saw p2 being established, you "know" what happens next.

 

I don't know how the "inventor" of ACH interprets it, but I think "ACH" is more of a reminder that markets can always react different than one expects. So, it is more of a mental help rather than then expectation that it's 50/50 game.

 

I think my approach to trading is in ways similar to yours. I wait for certain things to happen (call it "setup" or whatever) and "expect" price to move into a certain direction from there. I don't like to say "know" as I want to stay flexible, if - for whatever reason - price reacts differently afterwards... but maybe I am not long enough in this business to say "know"... certainly, you are longer in this business than I am. Maybe I will say "know" too when I've traded my method long enough.

 

Please correct me, if I did not understood your approach.

[gosu 10]

lol

 

But reading your last two posts, in my book, you have also a plan, even when this does not mean waiting for the market to reach a certain price at which you then execute. Your approach is more flexible if I understood it correctly. You wait for the market to reach p2. Then you wait for (or trade) p3 and the resumption of the move. That's also a plan, only a different one.

 

And regarding "ACH", if I understood you correctly, you do not predict where p2 will be. You wait for the market to establish p2, i.e. you recognize it when it happened. So, you also say in certain circumstances that Anything Can Happen (p2 can be "anywhere"). Of course, and I think that's what you mean, when you saw p2 being established, you "know" what happens next.

 

I don't know how the "inventor" of ACH interprets it, but I think "ACH" is more of a reminder that markets can always react different than one expects. So, it is more of a mental help rather than then expectation that it's 50/50 game.

 

I think my approach to trading is in ways similar to yours. I wait for certain things to happen (call it "setup" or whatever) and "expect" price to move into a certain direction from there. I don't like to say "know" as I want to stay flexible, if - for whatever reason - price reacts differently afterwards... but maybe I am not long enough in this business to say "know"... certainly, you are longer in this business than I am. Maybe I will say "know" too when I've traded my method long enough.

 

Please correct me, if I did not understood your approach.

 

Hi karoshiman,

 

My everyday intention is to extract a few bucks before breakfast. The way I do that is to get on the right side for a leg or two and that requires me to know the position of the market on several levels. If you want to call that a plan, I don't object to that at all.

 

However, I think what Tom meant by his trade hypothesis was something more specific, an "if price reaches x, then he will do y" kind of thing. As you say, my "plan" is flexible, and I will just slightly correct your understanding by saying I do not wait for the market to reach anything.

 

Regarding "anything can happen" and p2 being "anywhere": the fact that I don't know whether or not p2 is in place as of Friday's close doesn't equate to "anything can happen." To me it is not a matter of semantics. The market transitions from operating point to operating point and does not arbitrarily jump around. What this means is that for any given operating point, the possibilities to where the market can transition to are limited, even down to just one possibility at times. Moreover, when I say that the current possibilities are that the market either HAS or HAS NOT put in the p2, it does not follow that I have an "expectation that it's a 50/50 game." As an analogy, the fact that I can either WIN or NOT WIN the LOTTO does not make it a 50/50 game.

 

Thank for the comments.

[roztom 10]

Hi karoshiman,

 

My everyday intention is to extract a few bucks before breakfast. The way I do that is to get on the right side for a leg or two and that requires me to know the position of the market on several levels. If you want to call that a plan, I don't object to that at all.

 

However, I think what Tom meant by his trade hypothesis was something more specific, an "if price reaches x, then he will do y" kind of thing. As you say, my "plan" is flexible, and I will just slightly correct your understanding by saying I do not wait for the market to reach anything.

 

As an analogy, the fact that I can either WIN or NOT WIN the LOTTO does not make it a 50/50 game.

 

Thank for the comments.

 

I understand that "meaning of statements written" can lose a lot in translation or be shaded by the preconceptions of an individual.

 

I would like to comment on your statements. Just so you understand I am not taking exception to them but rather am observing the context and your interpretation of my meaning - obviously a deficiency on my part or the medium..

 

I do not have a rigid plan at all but I do have hypothesis that is laid out beforehand. This is part of my pre-trade preparation. I trade context so I want to know where we are, where are we trying to go and how well are we doing it...

 

Currently we are moving to new level lower in the market. The underlying product (ES) is being revalued based on new information... no big deal.. I am prepared for opportunities from both sides. I also know where important areas of the market are and how trade into those levels can present opportunity for substantial moves..

 

I would suspect that when RTH opens Monday morning we will potentially see heavy selling... While there may be opportunity on the short side initially with the late sellers, I will be watching for an extreme for at least rotation (retracement) to squeeze the late sellers and potentially for the market to rebalance... The news, however, may beperceived as extreme ... that is where ACH comes from... my plan allows for ACH.

 

As far as 50/50. The next trade is 50/50.. it doesn't matter what your expectancy is...over a sample size hopefully there is a distribution or edge for a trader but the next trade is 50/50.. In any sample of trades the distribution is random..you will not know where the positive skew will show up.

 

Hope this clarifies a bit..

[cma6 10]

Roztom:

Thaks for the very interesting perspective.

I was a member of the CBOT from 1986-88. Peter Steidlmayer's assistant gave a weekly class on Market Profile for interested CBOT members. Very occasionally, Steidlmayer himself would give a class, which would draw a big crowd.

One of the surprising takeaways, for me at least, from one of his presentations, was that markets rarely fully discount new information all at once; that markets ususally underdiscount new information at first; and then take time to fully incorporate the information into pricing.

The other-time-frame (off-floor) participant would collectively take days, if not weeks, to fully discount major new bullish or bearish developments.

I realize my comment is not directly related to tomorrow's day trade in ES, but Steidlmayer had an powerful insight on the issue of the market's discounting of news.

[gosu 10]

I understand that "meaning of statements written" can lose a lot in translation or be shaded by the preconceptions of an individual.

 

I would like to comment on your statements. Just so you understand I am not taking exception to them but rather am observing the context and your interpretation of my meaning - obviously a deficiency on my part or the medium..

 

I do not have a rigid plan at all but I do have hypothesis that is laid out beforehand. This is part of my pre-trade preparation. I trade context so I want to know where we are, where are we trying to go and how well are we doing it...

 

Currently we are moving to new level lower in the market. The underlying product (ES) is being revalued based on new information... no big deal.. I am prepared for opportunities from both sides. I also know where important areas of the market are and how trade into those levels can present opportunity for substantial moves..

 

I would suspect that when RTH opens Monday morning we will potentially see heavy selling... While there may be opportunity on the short side initially with the late sellers, I will be watching for an extreme for at least rotation (retracement) to squeeze the late sellers and potentially for the market to rebalance... The news, however, may beperceived as extreme ... that is where ACH comes from... my plan allows for ACH.

 

As far as 50/50. The next trade is 50/50.. it doesn't matter what your expectancy is...over a sample size hopefully there is a distribution or edge for a trader but the next trade is 50/50.. In any sample of trades the distribution is random..you will not know where the positive skew will show up.

 

Hope this clarifies a bit..

 

Hi Tom,

 

I see the goal of your preparation (I want to know where we are, where are we trying to go and how well are we doing it...) is essentially the same as what I want to know: Where is the position of the market in its cycle? What's coming up next? How fast is it getting there?

 

Regarding the next trade being 50/50, our viewpoints are not aligned. My response to karoshiman was in reference to his reading my "p2 or NOT p2" as a 50/50 proposition which was not my intended meaning. Since I do not trade based on distributions or sample sizes I cannot relate to that part your approach. In any case, thanks for clarifying.

[roztom 10]

Roztom:

Thaks for the very interesting perspective.

I was a member of the CBOT from 1986-88. Peter Steidlmayer's assistant gave a weekly class on Market Profile for interested CBOT members. Very occasionally, Steidlmayer himself would give a class, which would draw a big crowd.

One of the surprising takeaways, for me at least, from one of his presentations, was that markets rarely fully discount new information all at once; that markets ususally underdiscount new information at first; and then take time to fully incorporate the information into pricing.

The other-time-frame (off-floor) participant would collectively take days, if not weeks, to fully discount major new bullish or bearish developments.

I realize my comment is not directly related to tomorrow's day trade in ES, but Steidlmayer had an powerful insight on the issue of the market's discounting of news.

 

Yes he did. I took a class from him right at the beginning at his Market Logic School.. The handouts were crudely drawn Zerox TPO's. His assistant was a Brit named Peter Moon..was that the guy you met?

 

It was the first seminar I paid for and it wasn't inexpensive back then either... I could not trade with it at the time and I spent a year trying. Also when the CBOT LDB came along I thought that would help but it didn't help me. I was trading T-Bonds with it back then - or trying... :crap:

 

He clarified for me the concept of auction theory..which I had mostly put together from my own observations watching extremes get tested and stops get cleaned but not in a organized manner... the description of a Dutch auction was new to me. That was the eye opener - the auction ..and how the market would go to each side to attract buyers and sellers, etc.

 

BTW back at that time I had started trading the book for a FCM and then became a CTA in the mid 80's... from there a crash test dummy.. :rofl:

Edited May 7, 2012 by roztom

[roztom 10]

Hi Tom,

 

I see the goal of your preparation (I want to know where we are, where are we trying to go and how well are we doing it...) is essentially the same as what I want to know: Where is the position of the market in its cycle? What's coming up next? How fast is it getting there?

 

Regarding the next trade being 50/50, our viewpoints are not aligned. My response to karoshiman was in reference to his reading my "p2 or NOT p2" as a 50/50 proposition which was not my intended meaning. Since I do not trade based on distributions or sample sizes I cannot relate to that part your approach. In any case, thanks for clarifying.

 

The 50/50 is specifically related to the next trade. Otherwise we wouldn't have days with multiple sequential loses... if you have a 60% expectancy then does that mean 6 in 10 will win? When will that 6 show up? Is it possible to have 6 losers and then 4 winners and then 4 losers and then 8 winners or some "random" distribution of data?

 

The 50/50 is to my way of thinking 1. letting go of the need to be right and 2. acknowledging that the same trade with the same setup will have different outcomes at different times depending on what the participants in the market do at any given time. There are many things we can tell but we can't tell when an OTF will drop a 500 lot on the market or a HFT will diddle around and negate our edge.. Hence 50/50 for the unseen variables that can bust a trade.

[TheNegotiator 13]

Tom, I know (as I'm sure others do too) where this idea comes from of the next trade being 50/50 probability of outcomes. Although I agree whole-heartedly with the implications, I disagree entirely with the idea.

 

The very next trade and I know to some this will be purely semantics, has very specific odds of being one outcome - in fact 100% odds. But the thing is we do not know all the factors which make up what is going to happen before the event (or even after), whereas afterwards a dataset can be analysed and probabilities artificially assigned. The truth is, when people talk about historical probabilities, they are really just talking about historical occurrences unless they truly understand the exact nature of why the market traded in such a way. This in my mind is why so many 'systems' fail. Think about a simple stat over the period of 2010. I haven't done this btw but if you said buy on rth open and sell on rth close then I'm sure the stat would be at the very least a favourable one. Yet try to carry that forward and without a deeper understanding of trend mechanics and fundamentally why one is occurring, a trader could have used this probability and lost a great amount of money.

 

Just to be clear, I feel market statistics are a very useful part of trading and if used as a guide or a yardstick for market activity, they can really help in decision making. But ultimately, it is my point that we never really fully understand (well maybe some guys do) why something has previously occurred at specific points in time and so can't reasonably be expected to predict when these certain behaviours will recur.

 

The next trade is not 50/50, but it may as well be because we don't know what the odds of the very next trade being a winner or a loser are.

[clmacdougall 11]

Hi Tom,

 

I see the goal of your preparation (I want to know where we are, where are we trying to go and how well are we doing it...) is essentially the same as what I want to know: Where is the position of the market in its cycle? What's coming up next? How fast is it getting there?

 

Regarding the next trade being 50/50, our viewpoints are not aligned. My response to karoshiman was in reference to his reading my "p2 or NOT p2" as a 50/50 proposition which was not my intended meaning. Since I do not trade based on distributions or sample sizes I cannot relate to that part your approach. In any case, thanks for clarifying.

 

gosu,

 

Tom's method of using MP seems to discount the idea of a setup or entry that holds predictive or high probability qualities. But I doubt that's true. His entries are not merely based upon low volume nodes that offer a chance of rotation back into a high volume node. They seem to also include the use of delta and price structure confirmation. So in effect although he may be psychologically protecting himself by calling each trade a 50/50 coin toss, I hardly believe it's true.

[roztom 10]

The next trade is not 50/50, but it may as well be because we don't know what the odds of the very next trade being a winner or a loser are.

 

If I believe in a random distribution of outcomes, which I do might just be my therapy, it allows me not to "invest" an expectation beyond my desire to have properly executed my plan. While my results are substantially better than 50/50 I certianly do not know what the next trade will bring. I always believe the next trade will win until it fails but I expect 50/50 for that trade.

 

If I have 4 trades for the day and 3 are winners or all are winners then why would the next day bring 3 losers ? Same criteria and same set ups and same execution..putting aside the markets variables from a distribution point of view I see it as 50/50. It is the way I allow myself to let go of the need to be right and embrace the need to execute and not change things or bring random behavior into my process.

 

This may be semantic and it does not deserve any more discussion IMHO. It is a way at least for me to keep my mental state where it needs to be - detached from any specific trades outcome..

[TheNegotiator 13]

Okay, my first take on weekend of european elections is that it shouldn't be positive for markets at all. Indeed, @PIMCO tweeted yesterday:-

 

"Gross: #Greek elections in addition to #French should be watched closely. Fiscal #austerity as policy thrust may weaken."

 

Sunday gbx trade saw a low of 42.50! But then what? On open, the DAX briefly looked lower but didn't find sellers. Really? Say again? No sellers huh? Does that mean RTH won't see selling to 'properly' test the lower levels for buyers or sellers? No. But the fact is we are much higher right now. So, either we can accept back into Friday's range and create a substantial 'Electronic Tail' or participants can view the retrace as a temporary misprice and hammer it in RTH.

 

To take into account, we are nfp week +1 which I usually find a bit lame. Nothing as far as releases out really of any note although german factory orders was better than expected. There are a host of earnings out. It's a UK bank holiday. Lot's of other potential problems ongoing in europe. blah, blah, blah. Overall, news flow and volatility is potentially high because of weekend events and price movement. I don't know what will happen, but often when these types of scenarios present themselves, we either see big price movement (sometimes both ways) or nothing happens at all. I guess we'll see soon enough

[clmacdougall 11]

If I believe in a random distribution of outcomes, which I do might just be my therapy, it allows me not to "invest" an expectation beyond my desire to have properly executed my plan. While my results are substantially better than 50/50 I certianly do not know what the next trade will bring. I always believe the next trade will win until it fails but I expect 50/50 for that trade.

 

If I have 4 trades for the day and 3 are winners or all are winners then why would the next day bring 3 losers ? Same criteria and same set ups and same execution..putting aside the markets variables from a distribution point of view I see it as 50/50. It is the way I allow myself to let go of the need to be right and embrace the need to execute and not change things or bring random behavior into my process.

 

This may be semantic and it does not deserve any more discussion IMHO. It is a way at least for me to keep my mental state where it needs to be - detached from any specific trades outcome..

 

Hi Tom,

 

A great post. "A protected expectancy". You've put a wonderful shield around yourself mentally by having nothing more than a placid desired outcome. Attaching no ego or self to a trade even though you've invested plenty of time into understanding why you've entered. I disagree with only one part of your post, "This may be semantic and it does not deserve any more discussion IMHO.", in truth it deserves a whole lot more discussion!! Thanks Tom.