Advice for Day Trading ES Futures

[phoenix01 10]

Does anyone have any strategies which are suitable for trading the ES open and the first 2 hours of the US session? As i do not have the opportunity to trade all day.

 

Also are there any indicators or market internals i can watch to confirm/filter pullbacks?

Edited November 16, 2011 by phoenix01

[joshdance 10]

  gterps said:

well its appears you have been given the complete solution for your trading troubles - just put two charts up and watch how the market moves. wow, amazing how simple it all is!

 

which two charts? what time frames?

 

i agree it helps to watch a couple of related charts at the same time. i still compare the es and ym and look for one to diverge from the other. there are several futures and indexes you can compare to get an entry opportunity.

 

yes it is good to watch how the market moves but what is going to determine your entry?

 

You apparently don't get my point--no need to watch different markets (though some do find it helpful), no need to worry about your entry, or your exit, or anything. I suggested one thing: watch the market move ... your reply to me, and your post in this thread, are perfect examples of why people get so confused by so much crap. I didn't say it was EASY. But it doesn't have to be complex.

 

  gterps said:

watch how the market moves. wow, amazing how simple it all is!

 

This is my point, though ironically you repeated it only in your sarcasm.

[joshdance 10]

  phoenix01 said:

Does anyone have any strategies which are suitable for trading the ES open and the first 2 hours of the US session? As i do not have the opportunity to trade all day.

 

Did you see this? :

 

 

  joshdance said:

...Or maybe you are using methods which do not require you to think, and you expect some "system" to give you buy and sell arrows that you could ask a 10 year old to trade and be successful.... ...but ultimately YOU must decide how you want to trade. The knowledge of the markets may lie without, but the success must come from within you, because you must trade in a way that is congruent with YOU.

 

And if so, do you see how you fit the bill pretty well?

 

Just give it a try--open up a 1 minute chart, a 5 minute chart, and a time and sales window of your instrument of choice. On the charts show price, and a volume histogram. Sit in front of the screen as long as you can every single day without fail, and just watch. Do this for 6 months. Don't stop after a week, or a month or two, because you get bored.

 

This is not a "strategy" or a "system" -- you don't need a strategy, you need to learn and observe how markets move. If you feel you need to see more, then put it on your chart. If you don't need volume, take it off. If you need a different time frame, or a volume/tick chart, or a range chart, or any other kind of chart, then add it. But do it because you need to, because your curiosity moves you to; you'll be amazed at what you discover just by observing, and focusing on what you see, and not focusing so much on strategies, indicators, or making money, or what other people say they do to make money.

[bobcollett 10]

josh

Your continual insulting posts leave a bad taste in my mouth.

We all have our own views... right or wrong.

There is the right way and the wrong way to express that view.

 

bobc

[gterps 10]

Phoenix, this is really good advice!

 

 

Quote:

Originally Posted by joshdance »

...Or maybe you are using methods which do not require you to think, and you expect some "system" to give you buy and sell arrows that you could ask a 10 year old to trade and be successful.... ...but ultimately YOU must decide how you want to trade. The knowledge of the markets may lie without, but the success must come from within you, because you must trade in a way that is congruent with YOU.

 

 

And if so, do you see how you fit the bill pretty well?

 

Just give it a try--open up a 1 minute chart, a 5 minute chart, and a time and sales window of your instrument of choice. On the charts show price, and a volume histogram. Sit in front of the screen as long as you can every single day without fail, and just watch. Do this for 6 months. Don't stop after a week, or a month or two, because you get bored.

 

This is not a "strategy" or a "system" -- you don't need a strategy, you need to learn and observe how markets move. If you feel you need to see more, then put it on your chart. If you don't need volume, take it off. If you need a different time frame, or a volume/tick chart, or a range chart, or any other kind of chart, then add it. But do it because you need to, because your curiosity moves you to; you'll be amazed at what you discover just by observing, and focusing on what you see, and not focusing so much on strategies, indicators, or making money, or what other people say they do to make money.

[WeToddDid 10]

"I try to risk no more than 2 points"

 

Why? What is the significance of 2 points? How does the 2 point stop fit within your system?

 

You said that you use price action in your trading. Please explain a 2 point stop withing the context of a system that uses price action.

[RicoX 10]

Phoenix01,

 

There are things you're still missing so don't beat yourself up too much just yet. Just a few things to consider :

 

1. If you don't get a personal mentor (forget internet salesmen) to point out your mistakes and help you correct them, you will spend 5-10 yrs doing that on your own. Mentor can get you going in about a year. Do you have enough mental strength to see this through on your own?

 

2. Trading can be infinite complex or inherently simple. It all depends on you. You have to explore to find your style. Try different techniques and time frames. Try what ever comes along.

 

3. You do well one day and lose on the other because market condition (volatility) changes all the time. Until you'll be able to spot that change you will get caught. Do you know which conditions you prefer when trading? Are you trying to trade all day using the same method?

 

4. Start logging your trades. ALL successful traders do that. When you'll review your logs you'll quickly see why some days you're hot and some days you're not. It'll be a pattern. You won't progress without a detailed log. How can you repair mistakes if you don't even know what they are.

 

5. If you're already a break even trader you're on your way. Don't give up. Just isolate mistakes and correct them. It will take time to be a complete trader. But until then you can still make some money. First thing you do is to set daily goal. When you reach it that's it. Shut down your computer and go do something else. You can of course switch to demo account and practice but no real trading. If you keep trading through the day you will usually give money back. Yes, I know.. daily goals... that's for suckers, right? Well, I'd rather be a sucker with money in my account then a trading hero with a hole in his pocket. Think about this.

 

6. Al Brooks methods are fine but will take time to master. If you need more confirmation use indicators. No shame in using indicators. Only losers bash indicators in general. If using an indicator or two helps you make money it's all that matters.

 

 

I could go on ... but it's enough for now.

 

Rico

[RicoX 10]

DO NOT TRADE THE LAST HOUR OF THE DAY IN THE S&P 500 FUTURES MARKET. The probabilities of a successful trade diminish in this timeframe due to the impulsive and reckless buying and selling by institutions just because they didn’t get their trading done earlier.

 

IF YOU DON’T LIKE THE TRADE YOU’RE HOLDING, GET OUT.

 

AFTER TWO HOURS OF TRADING, ASK YOURSELF: DO I FEEL GOOD ABOUT MY TRADING TODAY? Once two hours have passed, a day trader should have made at least two, or perhaps more, trades, but enough to reviewuate what you have done. If the trader feels good about the day’s trading, continue. If not, stop trading that day.

 

ALL CYLINDERS OF THE ENGINE MUST BE RUNNING EFFICIENTLY. Day-trading is a job, and your paycheck is determined by your ability. You can only maximize your ability if you have all the information you need to make trading decisions. If a piece of equipment that one uses for trading is not working, stop trading.

 

HAVE COMPLETE FAITH IN YOUR INDICATORS. Many times your indicators give you a buy or sell signal, and you don’t follow it because you don’t have the confidence the signal is right this time. Successful day traders believe in their indicators, but also are aware that nothing is 100% foolproof.

 

TO ANYONE WHO ASPIRES TO BECOME A DAY TRADER, OBSERVE THOSE WHO ARE SUCCESSFUL. Any information you can procure on the trading philosophies, mechanics and techniques is well worth your while.

 

DAY-TRADING IS A LONG-TERM COMMITMENT. It takes several years to become a true professional.

 

M.Cook

[MightyMouse 12]

  RicoX said:

DO NOT TRADE THE LAST HOUR OF THE DAY IN THE S&P 500 FUTURES MARKET. The probabilities of a successful trade diminish in this timeframe due to the impulsive and reckless buying and selling by institutions just because they didn’t get their trading done earlier.

M.Cook

 

The last hour is the best hour of the day If your trading requires volatility.

[TheNegotiator 13]

The information you receive is fact. However, how you interpret it is not, especially when you are interpreting a great deal of info on the fly in the heat of battle! So whatever you think might happen has a certain probability of being correct. The market tells you this if you listen.

 

I like the point about being on your game. Sometimes for whatever reason we just can't get on our game. It happens to everyone and there's no shame in it. The key is to recognise it quickly and step off the gas. That's the difference between guys who make it and keep it and those who make it and give it all back in short bursts. If you're not 'on it' frequently, then you need to change something about how you prepare perhaps in order to maximise your chances.

 

Last point re last hour. Everyone has a different style. When someone says something like this it's important to recognise that this is their opinion as to how it fits in with their style. Think about the point and if you feel it could help you, take a look at your trading data and if it looks promising, trial it.

[RicoX 10]

  MightyMouse said:

The last hour is the best hour of the day If your trading requires volatility.

 

Heh,heh,heh... saying something should be avoided, not used, etc, never fails to rattle the cages. If you do need that kind of volatility last hour or last half hour might be your playing field. No arguments there. Thing is these rules were meant for thread starter not you. He still needs to learn how to earn and even more importantly keep the money. Trader that is not completely confident in his/hers abilities will give money back in the last hour. More often than not and that is a fact.

 

Last hour (or half hour) represents institutional playing field and because of size traded volatility expands. Doubt anyone here moves the size that would matter in these conditions, so we all fall in to the retail traders category. What we retailers count on to make trading decisions is technical analysis. We usually don't have more to go on. Technical analysis is a study of the past that tries to predict the future.

 

What happens in the last hour is that technicals start to break down because of the sudden added volatility and size traded. Stops need to be widened, support/resistances do not hold anymore, price starts to move erratically with programs running amok... If you're looking for directional trades in these conditions you're in a world of hurt. Since the thread starter is looking to make Al Brooks methods work, this was a good practical advice for him. Or anyone else for that matter. Why would any day trader willingly walk in to the last hour algo ran shit storm,risking hard earned money, is beyond me. If you're a day trader and not done before noon reexamine your trading methods. All day trail trades are exempt from this rule but you will want to be out before algos take over just as well.. Unless you like your stops tested.

 

But as always.. just my

[MightyMouse 12]

  RicoX said:

Heh,heh,heh... saying something should be avoided, not used, etc, never fails to rattle the cages. If you do need that kind of volatility last hour or last half hour might be your playing field. No arguments there. Thing is these rules were meant for thread starter not you. He still needs to learn how to earn and even more importantly keep the money. Trader that is not completely confident in his/hers abilities will give money back in the last hour. More often than not and that is a fact.

 

Last hour (or half hour) represents institutional playing field and because of size traded volatility expands. Doubt anyone here moves the size that would matter in these conditions, so we all fall in to the retail traders category. What we retailers count on to make trading decisions is technical analysis. We usually don't have more to go on. Technical analysis is a study of the past that tries to predict the future.

 

What happens in the last hour is that technicals start to break down because of the sudden added volatility and size traded. Stops need to be widened, support/resistances do not hold anymore, price starts to move erratically with programs running amok... If you're looking for directional trades in these conditions you're in a world of hurt. Since the thread starter is looking to make Al Brooks methods work, this was a good practical advice for him. Or anyone else for that matter. Why would any day trader willingly walk in to the last hour algo ran shit storm,risking hard earned money, is beyond me. If you're a day trader and not done before noon reexamine your trading methods. All day trail trades are exempt from this rule but you will want to be out before algos take over just as well.. Unless you like your stops tested.

 

But as always.. just my

 

I agree about the advice to the new guy.

 

But maybe you mean that with your style of trading it is best to stay away from the last hour.

[biegea 10]

I agree with others who questioned the wisdom of sitting out the last hour. Oftentimes, some of the best trades of the day occur in this time -- especially between 3-3:30/3:40 or so. I do agree to be extra, EXTRA careful in the final HALF hour, however. I don't believe in many absolutes about what is ok or not ok with regard to trade ideas as various contexts make almost any trade idea viable in the right conditions, but one of the few hard rules I do believe in is to NEVER fade price in the final 30 mins. It absolutely will cause you to miss some winners, but overall it is a highly low-probability trade for all but the very quickest and most skilled traders IMO.

[estrader21 10]

Regarding the earlier posts about changing markets, I would have to agree. However, yes, you do need to have some strategies in place. For example, ES moves very differently from EC, CL, and ZN/TY. Pick something that moves in a way you can relate to. This takes screen time and $, in most cases. Yeah, this is very much like being a professional athlete. You can be a top trader and still have losing days. I do know a couple of people who trade ES well, but it takes several years at a minimum to make that happen. Once again, I would say pick the market that suits you. I no longer trade ES :o

[RicoX 10]

Not denying that done correctly, last hour or half hour can't be very profitable but in my book it's not worth the trouble.

 

Yes, there are no absolutes in trading and since we're all different there are no simple answers as well. Therefore, all we can do here is voice our opinions based on hopefully personal experience.

 

My goal was just to put these rules out in the open so anyone not aware of them could go and research them further. We all had/have to do our own homework. Personal experience is everything in trading.

 

[SunTrader 10]

I have my own "rules" which I wouldn't presume would be applicable to someone else.

[koganam 10]

  RicoX said:

Heh,heh,heh... saying something should be avoided, not used, etc, never fails to rattle the cages. If you do need that kind of volatility last hour or last half hour might be your playing field. No arguments there. Thing is these rules were meant for thread starter not you. He still needs to learn how to earn and even more importantly keep the money. Trader that is not completely confident in his/hers abilities will give money back in the last hour. More often than not and that is a fact.

 

Last hour (or half hour) represents institutional playing field and because of size traded volatility expands. Doubt anyone here moves the size that would matter in these conditions, so we all fall in to the retail traders category. What we retailers count on to make trading decisions is technical analysis. We usually don't have more to go on. Technical analysis is a study of the past that tries to predict the future.

 

What happens in the last hour is that technicals start to break down because of the sudden added volatility and size traded. Stops need to be widened, support/resistances do not hold anymore, price starts to move erratically with programs running amok... If you're looking for directional trades in these conditions you're in a world of hurt. Since the thread starter is looking to make Al Brooks methods work, this was a good practical advice for him. Or anyone else for that matter. Why would any day trader willingly walk in to the last hour algo ran shit storm,risking hard earned money, is beyond me. If you're a day trader and not done before noon reexamine your trading methods. All day trail trades are exempt from this rule but you will want to be out before algos take over just as well.. Unless you like your stops tested.

 

But as always.. just my

 

I could not agree with you more.

 

When I took a good look at my Trading Journal, I was not really surprised how many times I gave back a whole lot, if not all and more, of my gains, in that last half-hour. That was when I set an alarm to go off at 1540 EST. When that alarm goes off, unless my trade is making money in a fevered rush, I hit the "Flatten" button without a second thought.

 

The funny thing though is that when I switch to Sim for that last hour, I always lose money when I actually take Sim trades, and it always seems as if I would have made money on those days that I take no trades. Go figure. :rofl:

[pat15 10]

  Quote

I do know a couple of people who trade ES well, but it takes several years at a minimum to make that happen. Once again, I would say pick the market that suits you. I no longer trade ES

 

Good advice. I trade ES and it can be tuff to trade but since it moves slow moast of the times, I can get out quick if I see it is not going in the direction I was looking for. I never add to losers so a small loss is ok with me.

 

estrader Could you pl espouse your thots on the reason for not trading ES and what did you move to in terms of trading.

 

Thank you

 

Pat

[estrader21 10]

Pat, what you said about ES being slow is exactly why I stopped trading it. ES also does not trend with enough profit for me. 10 ticks on a normal day seems to be a decent trade for ES. This does not excite me in the least Don Miller has a great scalping strategy but it requires more than 1 contract, is very active (read: a lot of work) and maybe his average is around 3 ticks of profit / ct, including losing trades (or expenses as he calls it). For a 1 lot trader (for now, at least), I think this style is very difficult. Trading short timeframes for a few ticks over the long run doesn't work me.

 

What I trade now mostly are NQ, TF and CL with some ZN thrown in. EC and GC are also movers but they do not suit me personally, nor may trading style. Many people I know like to actively trade EC so you just have to watch, put on a few trades and see what suits you. Note that ZN is not really a mover usually but there are times when it trends for several hours and is safer for overnight holds. I have it on the screen as the bond market is important for me to watch so I may as well trade it Anyways, it's up to the trader to decide what types of markets suit his/her psychology as well as what stats are suitable (risk reward ratio, % winners, average $win vs $stop size). I think the longer a 1 lot trader trades, the longer he can ride the winner and cut out at better levels. Once again, this takes time to learn and may not be the goal of that trader in the first place.

 

  pat15 said:

Good advice. I trade ES and it can be tuff to trade but since it moves slow moast of the times, I can get out quick if I see it is not going in the direction I was looking for. I never add to losers so a small loss is ok with me.

 

estrader Could you pl espouse your thots on the reason for not trading ES and what did you move to in terms of trading.

 

Thank you

 

Pat

[pat15 10]

Thanks estrader...i do watch NQ TF and sometimes oil. TF can be deadly if entry is not good stops can be taken out in a hurry. NQ may be a good choice and I will look at it this coming week. CL is good and does trend well..again it is not for the faint hearted.

 

Regards

 

 

Pat