Trading the YM

[Gekko78 10]

New to futures ( not trading) and wanting to here from others that trade the YM. Not really interested in any other futures market at present as I just want to focus on the YM. I have a method that I used in the FX market that lends itself well to YM.

 

Please comment on the successes / failures that you have had in trading this contract.

 

 

Thanks !!

[zdo 20]

Gekko,

 

It ultimately boils down to refining small differences in your personal resonances between various index instruments.

I personally still get my best results using YM and cash Dow charts for analysis, signals, triggers, etc ( … shorter time frame charts look n feel more ‘charty’ / less ‘blocky’ than ES to me, etc. and the tick by tick directional correlation with ES is virtually perfect) …but I actually do trades with it less and less intraday… even though fills haven't seemed to suffer that much, volume has just gotten too low for me… etc.

[zdo 20]

more random thoughts...

 

The Russell 3000 is really the most representative index. The Dow has very ‘fishy weighting’. At first glance, the SP 500 logically ‘looks’ more comprehensive, but is as ‘narrow’ as the Dow really … you can mirror it very closely with an 'index' of `17 of its stocks, etc.

 

…

 

Also, it doesn’t get much attn. but denominating indexes in plain old nominal USD introduces some truly amazing misrepresentations in charts in longer term timeframes.

… peeps' eyes get a strange glaze over when I say things like

In the indexes, below a certain slope of ‘up’, ‘up’ is really ‘down’

[Gekko78 10]

Gekko,

 

It ultimately boils down to refining small differences in your personal resonances between various index instruments.

I personally still get my best results using YM and cash Dow charts for analysis, signals, triggers, etc ( … shorter time frame charts look n feel more ‘charty’ / less ‘blocky’ than ES to me, etc. and the tick by tick directional correlation with ES is virtually perfect) …but I actually do trades with it less and less intraday… even though fills haven't seemed to suffer that much, volume has just gotten too low for me… etc.

 

Zdo ,

 

Thanks for the response. The reason I chose the YM at first is that it has a small tick value size. I feel , since this is my first time trading futures , that a small tick size is the best for me right now. $12.50 on the ES is to much for me to handle right now. I use tick charts as well as I believe they give a better representation of price rather than time bars. I have been tweaking my method from the FX world on a demo account and so far has pretty good results , just like FX , market did.

 

The think that I am trying to figure out it how to manage the trades the best way. In FX I trades 2 mini lots , I used one for the trade target and let the other one run. In futures since the margin is different I am only starting out trading one contract , which is fine , but it doe snot lend itself well to letting winners run. I have seen many of my trades hit profit only to see them continue but I have already gotten out of the trade and I have a problem getting back in sometimes due to feeling like I am "chasing"

 

Gekko

[zdo 20]

Zdo ,

 

Thanks for the response. The reason I chose the YM at first is that it has a small tick value size. I feel , since this is my first time trading futures , that a small tick size is the best for me right now. $12.50 on the ES is to much for me to handle right now. I use tick charts as well as I believe they give a better representation of price rather than time bars. I have been tweaking my method from the FX world on a demo account and so far has pretty good results , just like FX , market did.

 

The think that I am trying to figure out it how to manage the trades the best way. In FX I trades 2 mini lots , I used one for the trade target and let the other one run. In futures since the margin is different I am only starting out trading one contract , which is fine , but it doe snot lend itself well to letting winners run. I have seen many of my trades hit profit only to see them continue but I have already gotten out of the trade and I have a problem getting back in sometimes due to feeling like I am "chasing"

 

Gekko

 

 

The gods may be with you, but the odds are not.

If you are not capitalized well enough to be ‘significantly underleveraged’ at two cars YM, then seriously consider staying with mini fx’s until such time as you are more than adequately capitalized. In your fx trading, even consider dropping below mini fx sizing until … - seriously.

For one, if your system works best with / requires a ‘target’ contract and a ‘runner’ contract and you suddenly eliminate the’ runner’ component you have in essence not just tweaked your system – you have started using a discretely, wholly new (unproven) system.

... and, btw, single lot index trading is a tough game to play / win...

More generally, the challenges of trading are many, disparate, and are not subjectively very predictable. Our capacity to respond to these multi-faceted challenges is also a LOT more variable than most would ever imagine / predict about themselves. Even the exceptionally ‘Steady Eddie’s are subject to sudden and inexplicable acct killing fkups.

One of the best gifts you can give yourself in such an arena is staying power. Truly sufficient capitalization is a key component of real staying power.

[zdo 20]

More "Sizing" thoughts …Just a couple sizing ‘what if’s?

 

What if the optimum sizing ratio for your trades =~

‘target’ portion : (to your) ‘runner’ portion = 12:7 ?

So, instead of sticking with mini sizing of two 10000’s, might you not be better off with ‘target’ sizing of 12000 and ‘runner’ sizing of 7000 ?

 

next …

 

but what if, through interpolative processing, the optimal – f estimates of your ‘target’ portion averages ~8000? You’re currently running at 10000 sizing - which is significantly to the right of your optimal – f. Ideally you are looking to run near a sweet spot to the left of your estimates of optimal –f…

So instead of 12000 for ‘target’ and 7000 for ‘runner’ sizing, might you not be better off (across the long term) to currently start near a ~ 7000 ‘target’ size and a ~4080 ‘runner’ size?

…with infinitely variable fx sizing as acct net asset increases ( to 7050:4010….then …. 12000:6996 …. ... ) couldn’t you can stay very close to your sweet spot size instead of continuously operating mis/over sized and ‘suffering’ between and during the quantum sizing jumps that ‘contract sizes’ impose on you ?…

 

... and how far from your sweet spot would one (or two) size in YM take you ?

 

… just a couple off topic, (really ?) made up sizing ‘what if’s?

hth

Edited January 25, 2013 by zdo

[BlueHorseshoe 10]

…with infinitely variable fx sizing as acct net asset increases ( to 7050:4010….then …. 12000:6996 …. ... ) couldn’t you can stay very close to your sweet spot size instead of continuously operating mis/over sized and ‘suffering’ between and during the quantum sizing jumps that ‘contract sizes’ impose on you ?…

 

ZDO's advice here is all very generous, but I think the value of this particular point is massively under-emphasized.

 

One way to see exactly how it affects an equity curve for something with fixed contract sizes is to test using 1000 x equity, and then divide the trade-by-trade results by 1000. This will simulate the outcome you would get if you were able to trade fractions (thousandths) of a contract.

 

BlueHorseshoe

[zdo 20]

"fractions of a contract" = OandA

 

(not affiliated,etc. have no finacial interest, yada yada....

I don't even have much money with them these days....

just plugging OA bcse they offer infinite sizing)

[Gekko78 10]

The gods may be with you, but the odds are not.

If you are not capitalized well enough to be ‘significantly underleveraged’ at two cars YM, then seriously consider staying with mini fx’s until such time as you are more than adequately capitalized. In your fx trading, even consider dropping below mini fx sizing until … - seriously.

For one, if your system works best with / requires a ‘target’ contract and a ‘runner’ contract and you suddenly eliminate the’ runner’ component you have in essence not just tweaked your system – you have started using a discretely, wholly new (unproven) system.

... and, btw, single lot index trading is a tough game to play / win...

More generally, the challenges of trading are many, disparate, and are not subjectively very predictable. Our capacity to respond to these multi-faceted challenges is also a LOT more variable than most would ever imagine / predict about themselves. Even the exceptionally ‘Steady Eddie’s are subject to sudden and inexplicable acct killing fkups.

One of the best gifts you can give yourself in such an arena is staying power. Truly sufficient capitalization is a key component of real staying power.

 

 

Thanks Zdo and Blue ,

 

I think it depends on ones own mental state for trading whatever the amount of capital you have. For me , I actually prefer starting with a small account size. I did this when I started in the FX market. The reason being is that having a smaller account size forced me to only take the best set ups when I first started. My thoughts are having to much capital in the beginning may have an effect on the amount of risk you are willing to take. At least for me this held true. With $10,000 I would be more likely to trade more often due to feeling like "its ok" because I have $10,000 where as say, $2,000 I am forced to focus on the best set ups for the trades working out and cutting losses short. I used to have problem with cutting losses until I cut my capital way down. This forced me to protect what I had and trained my brain into preservation of capital mode.

 

Again everyone is different but this is what worked(s) for me. :thumbs up:

[Patuca 13]

why don't you trade the nq with one contract? i find it to be more directional than say the ES and that it also leads the ES directionally much of the time.

[Gekko78 10]

why don't you trade the nq with one contract? i find it to be more directional than say the ES and that it also leads the ES directionally much of the time.

 

 

I had not really considered the NQ , I will research it over the weekend and see if my method fits it.

 

 

Thanks for suggesting

[nkune 10]

Hello all,

 

Do you use Market Breath for YM trading? And how to apply to trade YM?Thank you!

 

I use Think or Swim plattform for Market Breath watching! Does have any correlation YM with: NYSE Index, NASDAQ index, SP500 index, SP100 index, USA index, Russell index ... and what's best correlation! Thank you ! And sorry my English!

[Gekko78 10]

why don't you trade the nq with one contract? i find it to be more directional than say the ES and that it also leads the ES directionally much of the time.

 

So I have to thank you for suggesting this....I was up last night and today back testing my trading strategy on the NQ. Not only does it apply well to it , it looks like it actually works much better on NQ.

 

The only thing that I am going to have to adjust is the speed of the NQ is much faster than that of the YM. I use tick charts and the setting that I use on the charts creates a new candle about once a minute , sometimes just seconds, so I will need to adjust to that and get used to the speed.

[Gekko78 10]

Hello all,

 

Do you use Market Breath for YM trading? And how to apply to trade YM?Thank you!

 

I use Think or Swim plattform for Market Breath watching! Does have any correlation YM with: NYSE Index, NASDAQ index, SP500 index, SP100 index, USA index, Russell index ... and what's best correlation! Thank you ! And sorry my English!

 

Nkune,

 

Sorry my friend I am afraid I will not be much help here as I do not use that ,or any other kind of stuff like it. I trade "almost" naked. I only have 1 MA on there and price......I find all the other stuff gets in the way of the only true leading indicator..........price.

 

Hopefully someone else may be able to answer for you.

[DbPhoenix 42]

Hello all,

 

Do you use Market Breath for YM trading? And how to apply to trade YM?Thank you!

 

I use Think or Swim plattform for Market Breath watching! Does have any correlation YM with: NYSE Index, NASDAQ index, SP500 index, SP100 index, USA index, Russell index ... and what's best correlation! Thank you ! And sorry my English!

 

You're probably looking for the $TICK (or, for the Nasdaq, the $TICKQ). Vols of advancers and decliners aren't going to do you much good if you're daytrading.

 

The following explains how to use the $TICKQ, but it all applies to the $TICK as well. Click here.

[Patuca 13]

So I have to thank you for suggesting this....I was up last night and today back testing my trading strategy on the NQ. Not only does it apply well to it , it looks like it actually works much better on NQ.

 

The only thing that I am going to have to adjust is the speed of the NQ is much faster than that of the YM. I use tick charts and the setting that I use on the charts creates a new candle about once a minute , sometimes just seconds, so I will need to adjust to that and get used to the speed.

your welcome. hope it all works out well for you.

[zdo 20]

Thanks Zdo and Blue ,

 

I think it depends on ones own mental state for trading whatever the amount of capital you have. For me , I actually prefer starting with a small account size. I did this when I started in the FX market. The reason being is that having a smaller account size forced me to only take the best set ups when I first started. My thoughts are having to much capital in the beginning may have an effect on the amount of risk you are willing to take. At least for me this held true. With $10,000 I would be more likely to trade more often due to feeling like "its ok" because I have $10,000 where as say, $2,000 I am forced to focus on the best set ups for the trades working out and cutting losses short. I used to have problem with cutting losses until I cut my capital way down. This forced me to protect what I had and trained my brain into preservation of capital mode.

 

Again everyone is different but this is what worked(s) for me. :thumbs up:

 

Do you realize how many of your peers are running that same

‘I try to stay in an underdog mindset and capitalization to keep me from fkn up’

script?

… and how few of them see any underlying issues and dynamics with such a tactic either?

… that across time it is certainly no way to consistently bring forth your ideal performance self on a day to day basis...

… that no consistent winners across all the performance games ( in poker, pro sports, trading, etc.) turn to it to keep them in a “preservation of capital mode”...

 

But let’s just ignore all that and look at it in the initial way one more time.

What if your size running one (or two ) NQ is to the right of your optimal – s(ize)?

Worse, what if it is to the right of your optimal – f ?

Edited January 28, 2013 by zdo
spling gramer fomat

[Gekko78 10]

Do you realize how many of your peers are running that same

‘I try to stay in an underdog mindset and capitalization to keep me from fkn up’

script?

… and how few of them see any underlying issues and dynamics with such a tactic either?

… that across time it is certainly no way to consistently bring forth your ideal performance self on a day to day basis...

… that no consistent winners across all the performance games ( in poker, pro sports, trading, etc.) turn to it to keep them in a “preservation of capital mode”...

 

But let’s just ignore all that and look at it in the initial way one more time.

What if your size running one (or two ) NQ is to the right of your optimal – s(ize)?

Worse, what if it is to the right of your optimal – f ?

 

All I can tell you is , like I stated on my other post, this is what has worked for me . As I build my account it also builds my confidence in said trading method which then also builds the emotional side as well. In my experience statistics are fine and dandy but I have seem many people be statistically right on paper but be dead wrong in reality.

 

Like I said this is just me . If all the math and the calculations behind it help then by all means utilize it. But , for me I know it does not matter. I do look at odds and such but in reality a trade can only go 1 of 3 the ways.......Win , Loss or BE so 33% is fine for me ... really I think its more like 50/50 its either going to work out or its not....what other option is there?

 

You mention poker .......if you look at the best players who have won the most money over time , they are also NOT the players that have won the most hands. In fact many of them will tell you that learning when to give up and only play when the opportunity presents itself which allows them to stay in the game longer is how you win. That is what I do when I trade , the way I trade I have certain rules that have to be met before I take a trade. If ALL those rules are not met ( there is only 3) then no trade for me. Sometimes it does not work but Most times it does and that's all the edge I need. I don't look for 90% accuracy ......I have losses that are small......5-10 ticks but my winners are much greater than that ........that is all it takes ............you know cut losses short and let winners run ...it works if you know how to use it. properly.

[zdo 20]

gekko78, I mentioned poker in quite a different way than you mentioned poker ... anyways ...

 

... glad to hear you've got it together...

please just ignore my posts ... consider that this 'repeated' quote is directed at one of the 'peers' I mentioned earlier

"But let’s just ignore all that and look at it in the initial way one more time.

What if your size running one (or two ) NQ is to the right of your optimal – s(ize)?

Worse, what if it is to the right of your optimal – f ?"

 

... hope I haven't messed up your thread.

 

All the best,

 

zdo

[Gekko78 10]

gekko78, I mentioned poker in quite a different way than you mentioned poker ... anyways ...

 

... glad to hear you've got it together...

please just ignore my posts ... consider that this 'repeated' quote is directed at one of the 'peers' I mentioned earlier

"But let’s just ignore all that and look at it in the initial way one more time.

What if your size running one (or two ) NQ is to the right of your optimal – s(ize)?

Worse, what if it is to the right of your optimal – f ?"

 

... hope I haven't messed up your thread.

 

All the best,

 

zdo

 

I would be happy to answer this but I am afraid I do not quite understand what you are asking here.

 

Thanks

[DbPhoenix 42]

All I can tell you is , like I stated on my other post, this is what has worked for me . As I build my account it also builds my confidence in said trading method which then also builds the emotional side as well. In my experience statistics are fine and dandy but I have seem many people be statistically right on paper but be dead wrong in reality.

 

Like I said this is just me . If all the math and the calculations behind it help then by all means utilize it. But , for me I know it does not matter. I do look at odds and such but in reality a trade can only go 1 of 3 the ways.......Win , Loss or BE so 33% is fine for me ... really I think its more like 50/50 its either going to work out or its not....what other option is there?

 

You mention poker .......if you look at the best players who have won the most money over time , they are also NOT the players that have won the most hands. In fact many of them will tell you that learning when to give up and only play when the opportunity presents itself which allows them to stay in the game longer is how you win. That is what I do when I trade , the way I trade I have certain rules that have to be met before I take a trade. If ALL those rules are not met ( there is only 3) then no trade for me. Sometimes it does not work but Most times it does and that's all the edge I need. I don't look for 90% accuracy ......I have losses that are small......5-10 ticks but my winners are much greater than that ........that is all it takes ............you know cut losses short and let winners run ...it works if you know how to use it. properly.

 

You're on the right track, Gekko. Congratulations for knowing yourself.

[Gekko78 10]

You're on the right track, Gekko. Congratulations for knowing yourself.

 

Thanks ........an old friend of my dads told me a long time ago ... " Trading can is hard for everyone, but it does not have to be . People like to over complicate things when the think something appears to easy. Don not make that mistake. Simple is better"

 

 

I ignored this advice when I first started trading. I was sucked into the "best indicator" or "best system" trap like so many others. It was only after I remembered hearing this that I thought about trying it out. I am here to tell you that it is sound advice.

 

I took a step back , stripped my charts of everything and focused on what he taught me about the market when I was a teenager. Now I use 2 things on my chart in addition to price that's it. No fancy indicators , no heat maps or anything like that ......Everything I use comes standard with every charting package I have ever seen including MT4 and the free websites like stockcharts.com and the like.

 

I follow 3 simple rules and ALL of them are not met , then I don't trade period. I wait for the next set up.

 

Today , as an example , I have had a total of 15 set ups on the YM producing 15 wins an 0 losses for a total of 34 ticks. . Now this is NOT typical I usually have at least 1 or 2 losses.... but those are usually 3-4 ticks. I am very tight with MM in order to not blow up my account which I have done in the past.

 

Yes I could have had more ticks than 34 but my method has a set number of ticks that it must reach and then I am out. When I start trading more contracts then I will have more ticks but , to me , $170 is not bad for 3 hrs work. My goals is usually about $50 a day.

 

There is a "holy grail" It is the system you design for yourself and trust in ......it is not 100% correct on paper but it is 100% in your mind and you do not question it.

 

I have found my own holy grail ......yours awaits also ....just take the time to develop it , learn it and TRUST it.

 

You do not need 25 indicators telling you things ....

 

Simpler is better.

[Gekko78 10]

gekko78, I mentioned poker in quite a different way than you mentioned poker ... anyways ...

 

... glad to hear you've got it together...

please just ignore my posts ... consider that this 'repeated' quote is directed at one of the 'peers' I mentioned earlier

"But let’s just ignore all that and look at it in the initial way one more time.

What if your size running one (or two ) NQ is to the right of your optimal – s(ize)?

Worse, what if it is to the right of your optimal – f ?"

 

... hope I haven't messed up your thread.

 

All the best,

 

zdo

 

Since I am not a statistician I cannot really comment on this ....I am but a simple trader who just tries to buy low and sell high or sell high and buy low........sometimes it works and sometimes it doesn't ......... I judge my trading method and skills by the number I see in my excel sheet at the end of the week hopefully its a + but if it is a - then thats ok to......As long as I have more +'s than -'s I'm good.

[Gekko78 10]

Great Day on the YM. ....that puppy was trending nicely. Hope others got on it to~

[domer03 10]

Having enough trading capital is extremely important to long-term success. As part of the 3 cardinal rules of trading:

1> Go with the trend

2> Cut losses short

3> Let profits run

 

It's going to be a challenge maintaining consistent profitablility if there isn't at least 1 YM contract that can go with the trend as you move the stop price in the direction of the trade.

 

To be successful with only 1 contract, you'd have to have at least a 2:1 risk/reward ratio along with a high probability setup.