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I got a private e-mail from someone on the list asking what advice I could
give a newer trader of SP's. What follows is my top of head response. I'm
sharing it here not because it is the best or only advice but to stimulate
some other thoughts along these lines, especially from those more
experienced than me.
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First let me say I'm no greart expert. I've been trading SP's for two years
and still feel like I have a long way to go. I am trying to make a living
as a full time trader, mainly in the SP's. I love it and the workstyle
suits me fine. My background is in psychology of organizations and I had
very good statistical training. Both helped me because they are very
"probablistic" in orientation. Nothing works all the time and somethings
work some of the time. aAny other mindset in trading will get you in
trouble.
Here are a few conclusions that I wish I had come to sooner.
Research all your own systems even if you have seen others performance data.
Buy first quality tick data to do your own backtesting. I believe Tick Data
Corporation is one of the best butnot the cheapest. But a good database
will serve you for years to come.
Test systems on as far back as you can. Many systems perform well in
certain periods.
Avoid the simplicity of using dollar based stops when backtesting. Daily
range in the SP's have increased faster than price over the last decade
making dollar stops meaningless.
Be aware than in most SP systems, larger stops lead to better overall
performance (net profit).
Omega's 2000i products are not good enough for real time, intraday trading.
I use my copy only for backttesting and on a separate machine.
Have total redundancy--two machines, two ways to get quotes, two ways to get
on the net, two charting programs (the second low tech), two mice-keyboards,
etc. battery backup is also good.
If you can, go right to a datafeed--software combo that minimizes data
maintenance. You want to spend your time trading, researching,
studying--not downloading missed ticks, cleaning out bad ticks etc.
I now use TS4 and FutureSource satellite. My backup right now is
Quote.com's QFeed which I can run into QCharts or TS2000ki using
DynastoreLight.
I use BestDirect from Peregrine Financial for online trading. I trade
e-mini's usually because their software goes directly into Globex. I have
fills on my screen in 2-3 seconds. Trading the big contract is OK for
position trades but the fills are not nearly as good. Mini's also allow
most smaller traders to scale in/out.
Focus on SP's only at least for a while. Daytrading them is a full time
job. Let your stocks go into funds or cash. Focus on a particular style
of trading/type of system--breakout, swing, patterns, etc. and master that
before moving onto others. There is a toystore of stuff out there and it
can distract you easily.
Don't monitor IRC rooms during the trading day. SP futures is a solatary
endeavor. I don't want anybody's opinion or bragging or lamenting to affect
my assessment. I do read several morning commentaries (Chis Cadbury,
TradeHard.com's Landry and Borsellino, Jeff Walkers RBI letter).
I hope this gives some food for thought.
Regards,
Jim Johnson
jejohn@xxxxxxxxx
----- Original Message -----
From:
Sent: Tuesday, June 06, 2000 4:34 PM
Subject: S&P DayTrading
> Hi,
>
> I see that you day trade S&P.
>
> I am also day trading S&P. I am working towards being successful at it, at
> present am not.
>
> Do you have any suggestions for a new comer into this game.
>
> Regards.
>
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