Day Trading the E-mini Futures

[goodoboy 10]

None of the above.

 

At the risk of sounding harsh (that's the second time I've said that today), why do you set targets that you have no intention of staying in the trade long enough to reach? The trading plan is not just busywork; it is something to be followed, religiously. Therefore, write a plan that you can follow. If you can't follow it, write another one. Then another. Then another. If you're going to exit the trade at the break of a trendline or an S/D line, then make that part of your plan. If your plan is to re-enter after that break, then detail the conditions under which you'll do so. Otherwise, there's really no point in putting together a plan at all.

 

I know that's not what you wanted to hear, but there it is.

 

Db

 

Thanks Db,

 

That't not harsh at all. My exit strategy should be written in my plan and practiced and re-written until something work for me. You are right, its not defined in my plan and should be.

 

Thanks.

[DbPhoenix 42]

I didn't follow anyone's trades today, so whatever is included here is not intended as anything passive-aggressive.

 

Even if you're daytrading, you have to consider context. Note here that there is a very powerful range preceding today's activity. Yes, it was interrupted by that burp above 1404 yesterday, but the range that's outlined has a hell of a lot more muscle.

 

Note also that the midpoint of that range is where we spent the overnite, setting the pre-market conditions.

 

 

That brings the trader to this morning. Now price could go either way. The trader might say to himself that if price were going to fall, traders had all night to do it, and doing it in the middle of the night is a lot easier than in the middle of the trading day. Even so, the trader has to be prepared for a breakout from either side.

 

As it happened (and, yes, this is all hindsight, but the drill is the drill, so whether it's hindsight or not is pretty much beside the point), price broke out to the upside at the open. The drill? Go long on the first RET, though one must use no more than a 1m bar interval to see the op, which is around 1400.50.

 

But now what? 02 is a potential S/R level. It was tested once yesterday morning. But 04 is a far more solid and probable level. So is that a reasonable target? Yes. On the other hand, the probability that one can slog through all the overhead that was created from the 13th to the 14th is slim, so 08 is not a reasonable target. Why is it necessary to distinguish between reasonable and unreasonable targets? Because a reasonable target might actually be reached with little or no resistance. An unreasonable target can be reached only with difficulty, and will likely not be reached at all.

 

So the trader goes long at 1400.5 and reaches 1404. What then? He can simply exit and look for an op to re-enter on one side or the other, or he can wait for either his demand line or his trendline (in this case, the same) to be broken, at which point he exits and looks for an op to re-enter on one side or the other. Moving stops is not part of the procedure. If the trader needs to exit, he exits. And tries not to forget to cancel the stop. All of this can be and should be part of the plan.

 

As for those re-entry ops, they're there, both short and long, but they are largely unforeseeable so they're not part of the plan. The trader who's still in the learning phase, therefore, SHOULD STOP HERE and do no more than observe the rest of the morning, or day if he can stand it. He should not trade in any way or form as he has not planned for it and is not yet ready to plan on the fly. Whatever he learns from observation can be applied to the next time.

 

I realize that most beginners just can't stand not trading, but there's nothing I can do about that beyond cautioning them to resist. There's much to learn, but the degree of difficulty one has in learning it is in direct proportion to his inability to avoid jumping into unplanned trades, sim or otherwise.

 

Db

[DionysusToast 10]

DB mentioned this, but I was thinking the same thing as I read your post: who cares what it's called? Call it the "goodoboy special" ... does not matter what you call it. No need to call it anything.

 

Meant to say congrats on a couple of good trades you posted recently.

 

It may not matter much to you at this point, but you are trading ES, but looking at the cash chart. And a free, not very good one either--free is okay, but the data just doesn't look right. Attached is a 5-second updated cash chart, and what it really should look like (I have not seen an update interval less than 5s for S&P). At some point you may find it helpful to see the actual ES data. It does look and behave differently (even if for nothing else that it updates more often than 5 seconds).

 

Josh

 

Given the amount of index arb programs around - does this cash chart help much? Do you see enough of a difference between this & the ES itself?

 

Also - would you prefer this over the Tick, or the Premium?

 

How about the ETF or a correlated index (or even the 6e)?

 

DT

[bakrob99 11]

Question for Db (well anyone can answer I notice Josh and Bakrob99 were in similar sitiuation today)

 

For me the consolidation pattern at the resistance point you are discussing is a short - so if I were long I would definitely take profit. But it is unlikely I'd be in a long at that point having exited on the prior exhaustion bar. In fact, I was in the trade which was entered with a 4 tick stop and got 14 ticks of MFE for a 12 tick exit giving a 3:1 RR.

[TheNegotiator 13]

Question for Db (well anyone can answer I notice Josh and Bakrob99 were in similar sitiuation today)

 

Lets say for instance, I went long at 1402 around 13:10 today. My target would be a break of 1408, but of course have to break the 1404.50 HOD (RTH).

 

My question pertains to exiting the trade.

Would it make sense to exit the trade once the line is broken as drawn? Or wait for a retrace back to 1404? I am thinking like Josh said to just manually move stop with the line.

 

Thanks

 

goodoboy, to start with you should be charting ES imo. As for the issue of exiting early, well Db is right of course. You must stick to your plan. Discipline in this game is of utmost importance. Even when at the time it might seem like you have a better idea, the point is that you're likely not at your most objective. Anyway, I think that it is important to have an early exit plan. Lots and lots and lots of paper profits are squandered by not having a proper plan to exit if you see certain things happen. Like for example in this case. My view is that the quick (relative to the preceding action) pop above the IB and reversal from the prior RTH session VAH which was inside the IB extension level I personally use to gauge whether I think there's much more in the attempt, would have had me on alert for potential reversal back towards the VPOC at least (bearing in mind that the range was very tight even with the extension to 5.75). The failure to retake the IB quickly would have then made it even more likely in my mind. So how would I have chosen to exit? I know that you're not looking at the IB (as far as I'm aware) and I'm not suggesting you have to. This is just to show thought process. Because I want to see a quick move back above the IBH if I'm long, there's one first option. That is exit as soon as I see signs on a retest from below at the IBH that buyers are not stepping in (or that sellers are). The issue here is that there was no distinct swing as such. Either way it's an option. The other option is to wait for a new swing low. Yet another option is to wait to see if support can be held at either VPOC, VWAP or midpoint. These are all pretty bunched up though and if you are long from 1402.00 without having taken any scales, the sense in holding all that time after having seen good paper p/l and having to wait for it to come back to pretty much your entry, is not great. But you see the multiple options there and that you have to act in some way or another really. Personally, I'd have taken a decent amount off when it couldn't follow through on the move and get back above the IBH. So ~ 04.50. But that is hindsight too as I wasn't trading it.

 

Edited August 16, 2012 by TheNegotiator

[goodoboy 10]

goodoboy, to start with you should be charting ES imo. As for the issue of exiting early, well Db is right of course. You must stick to your plan. Discipline in this game is of utmost importance. Even when at the time it might seem like you have a better idea, the point is that you're likely not at your most objective. Anyway, I think that it is important to have an early exit plan. Lots and lots and lots of paper profits are squandered by not having a proper plan to exit if you see certain things happen. Like for example in this case. My view is that the quick (relative to the preceding action) pop above the IB and reversal from the prior RTH session VAH which was inside the IB extension level I personally use to gauge whether I think there's much more in the attempt, would have had me on alert for potential reversal back towards the VPOC at least (bearing in mind that the range was very tight even with the extension to 5.75). The failure to retake the IB quickly would have then made it even more likely in my mind. So how would I have chosen to exit? I know that you're not looking at the IB (as far as I'm aware) and I'm not suggesting you have to. This is just to show thought process. Because I want to see a quick move back above the IBH if I'm long, there's one first option. That is exit as soon as I see signs on a retest from below at the IBH that buyers are not stepping in (or that sellers are). The issue here is that there was no distinct swing as such. Either way it's an option. The other option is to wait for a new swing low. Yet another option is to wait to see if support can be held at either VPOC, VWAP or midpoint. These are all pretty bunched up though and if you are long from 1402.00 without having taken any scales, the sense in holding all that time after having seen good paper p/l and having to wait for it to come back to pretty much your entry, is not great. But you see the multiple options there and that you have to act in some way or another really. Personally, I'd have taken a decent amount off when it couldn't follow through on the move and get back above the IBH. So ~ 04.50. But that is hindsight too as I wasn't trading it.

 

 

Thank you kindly for the explanation. I can't read in detail now, but I will shortly. I am charting the ES chart only, the screen capture just shows SPX up there for some reason. Thank you.

Edited August 16, 2012 by goodoboy

[goodoboy 10]

All of this can be and should be part of the plan.

 

As for those re-entry ops, they're there, both short and long, but they are largely unforeseeable so they're not part of the plan. The trader who's still in the learning phase, therefore, SHOULD STOP HERE and do no more than observe the rest of the morning, or day if he can stand it. He should not trade in any way or form as he has not planned for it and is not yet ready to plan on the fly. Whatever he learns from observation can be applied to the next time.

 

I realize that most beginners just can't stand not trading, but there's nothing I can do about that beyond cautioning them to resist. There's much to learn, but the degree of difficulty one has in learning it is in direct proportion to his inability to avoid jumping into unplanned trades, sim or otherwise.

 

Db

 

Db,

 

Thanks for the posting. Your comments was read twice (last night and just now). Maybe again later as well. Observation is key and I would like that add that reviewing the chart after market close for missed op and trades taken is what I do alot as well. Also, taking notes and re-read over night. But overall, and most important what I am learning that plan and discipline to follow plan is crucial. I am still working on plan by section (ie, entry, risk, exit management).

[goodoboy 10]

got 14 ticks of MFE for a 12 tick

 

What does MFE means?

[goodoboy 10]

Man o man. Look at this ES just taking off today.

[bakrob99 11]

What does MFE means?

 

MFE maximum favourable excursion ( I keep track of them in ticks)

MAE maximum adverse excursion

 

track these for every trade and setup you do.

 

This provides a basis for determining the most efficient exit and stop loss

[bakrob99 11]

Man o man. Look at this ES just taking off today.

 

Sometimes you have to just bite the bullet and get in.

 

Here are some entry choices using a consolidation that I worked with today.

 

 

The think to remember is when the market takes off with lots of momentum then getting in even after a small retrace if usually productive. The smaller the retrace - the more bullish the mood of the market.

[goodoboy 10]

Sometimes you have to just bite the bullet and get in.

 

Here are some entry choices using a consolidation that I worked with today.

 

 

The think to remember is when the market takes off with lots of momentum then getting in even after a small retrace if usually productive. The smaller the retrace - the more bullish the mood of the market.

 

Thanks Bakrob.

 

The very first retracement I missed at 1402.50, after move from 1401.75. This was because I wanted 1404 to break and then backtest, then I was going to enter long there. But as I look, now that first retrace after touching. Then 1407, broke back test and still didnt get on.

 

I see what people mean when they say emotions play a part. A hugh role and you don't know what you doing.

 

I just missed it, missed alot of retracements. :crap:I really need to take some time this weekend and write me a plan to begin with. The old thinking "it can't go up any more" got me again. And I know you mention this to me before about this thinking.

 

 

 

Even a nice demand line would have kept me in the trade to atleast 1411.50.

[DbPhoenix 42]

I see what people mean when they say emotions play a part. A hugh role and you don't know what you doing.

 

I just missed it, missed alot of retracements. :crap:I really need to take some time this weekend and write me a plan to begin with.

 

Once you have a plan, emotions will no longer play a "huge role". In fact, they may not play a role at all.

 

Db

[goodoboy 10]

Once you have a plan, emotions will no longer play a "huge role". In fact, they may not play a role at all.

 

Db

 

Db, I believe it will as well.

[goodoboy 10]

Yet another option is to wait to see if support can be held at either VPOC, VWAP or midpoint. These are all pretty bunched up though and if you are long from 1402.00 without having taken]

 

Thanks,

 

I am curious what VAH, VAL, and VPOC did your volume profile show for yesterday?

Edited August 16, 2012 by goodoboy

[DbPhoenix 42]

For the benefit of those who read this thread but don't have a whole lot of experience in trading, the following may be of interest.

 

The hourly shows what had been resistance at 1404 and the first two failed efforts to break through it. These attempts created a lot of "overhead resistance" between 1404 and 1408. For price to make any progress, it had to work its way through all this.

 

The 1m shows how price hit 1408 today, banged against it for a full half hour before breaking through 1408, then bouncing against that from the upside for another 20m before resuming its advance. These are called "springboards", preparations for a further advance, and they are very reliable. And if there's any doubt as to whether or not the supposed overhead resistance was in fact resistance, note how effortlessly price rises once it leaves this OR behind.

 

 

[goodoboy 10]

 

The 1m shows how price hit 1408 today, banged against it for a full half hour before breaking through 1408, then bouncing against that from the upside for another 20m before resuming its advance.

 

Thanks for comments

My plan today (after reversal from economic data dismorning) was to buy 1404 on a break out or buy 1408 on a break out. But since I watch the 5min price action, I didn't get a retrace back to 1404 after breakout. What happen was when price reached 1408, a mental thinking of what happen the past few days (range bound) could happen again today. And that thought took my eyes and focus off the price action and thinking of the breakout.

I can't do that again.

 

But since you pointed out 1 min chart on this message and the other message from last night and me now reviewing, I see all the miss op of how 1408 clearly broke and retested. Good risk vs reward playing the breakout as well. I add to my notes and plan.

Edited August 17, 2012 by goodoboy

[TheNegotiator 13]

Thanks,

 

I am curious what VAH, VAL, and VPOC did your volume profile show for yesterday?

 

for 8/15:-

 

[Manihi 10]

Hi here,

 

I still have a short trade from yesterday 141100 .My profit goal is 140350 with a stop at 141850.

 

The basic strategy is taking tradesc from daily Fib 1.618 . Only get about 7 signals a month but has been very profitable....this may jinx it:helloooo:

 

Manihi

[TheNegotiator 13]

Hi here,

 

I still have a short trade from yesterday 141100 .My profit goal is 140350 with a stop at 141850.

 

The basic strategy is taking tradesc from daily Fib 1.618 . Only get about 7 signals a month but has been very profitable....this may jinx it:helloooo:

 

Manihi

 

Fair enough but, you have a 1:1 R:R. Not that this is a bad thing necessarily if your win rate is high enough, but if you are only getting a few signals per month then I'd question whether you have enough data to verify this. Also and I'd like to point out here that I'm absolutely not advising you to do one thing or another, the market has come out of a pretty decent balance yesterday to even get to your entry. IF it were to fail and reverse back, then is 1403.50 all you might hope to get (I know it was the prior RTH balance high area though)? Lastly, is this a trade you'd normally do overnight? If it is, I'd just ask you to read the title of the thread

[TheNegotiator 13]

So yesterday we really pushed convincingly out of the recent range. As I put it in the last post, if we were to reverse back into the range and hold it, there could be some decent downside to come. Above, I am looking at 1422.50 as the main target to test as this was a major past volume development (back adjusted of course). Overnight has been stale to say the least with currently just 4.25pts of range and under 200k volume. If Friday is the new Monday then we could see that today. Summer trading but out of balance. Hmm. One/two move day or just float up? We'll just have to see. :missy: Michigan and Leading indicators later could move the market but then again maybe not.

 

Here's the chart:-

 

[Manihi 10]

Fair enough but, you have a 1:1 R:R. Not that this is a bad thing necessarily if your win rate is high enough, but if you are only getting a few signals per month then I'd question whether you have enough data to verify this. Also and I'd like to point out here that I'm absolutely not advising you to do one thing or another, the market has come out of a pretty decent balance yesterday to even get to your entry. IF it were to fail and reverse back, then is 1403.50 all you might hope to get (I know it was the prior RTH balance high area though)? Lastly, is this a trade you'd normally do overnight? If it is, I'd just ask you to read the title of the thread

 

Majority of the time is completed in the same day. It is an OCO.

 

Like everything else,Fib is not perfect as everything is just "lines in the sand" and all I am seeking out with these trades is an extensive "reach' in price based on previous days action.

 

Currently running 83.7%.

 

This trade overrides and action I might get in my other strategy which is a net 2 point trade.Running 59.5%.Same day trades.

 

Thanks for your comments though.

 

Manihi

[bakrob99 11]

Here's the chart:-

 

 

Thanks for the chart. 1426.50 is the key reference for me right now ... but with today being OEX day I'm looking more to trade the NQ and stay out of the potential slop and algo in the ES. Will be interesting if we can get some momentum again today. Overnight trading is thin but still pointing higher.

[TheNegotiator 13]

Lol. Looks like there's a few traders wanting to get their business done early.

[goodoboy 10]

long 1413.75 stop 1411.75 Target 1419.75 (high of the year )

 

if the overhead trendline doesn't hold (and the demand line), I will manually exit the trade.

Edited August 17, 2012 by goodoboy