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Hello TaoOfDow,
thanks. interesting slant. it seems in addition that if you could
scalp out 2 points on 70% of your trades, could "simply" increase the
number of contracts and be a very successful traders.
what kind of trading method do you use in this mode?
Best regards,
Jim Johnson mailto:jejohn@xxxxxxxxxxx
--
Monday, August 26, 2002, 8:16:15 PM, you wrote:
T> Dear Group,
T> I replied privately to a member and since have received several follow
T> ups from others. To simplify, I'll post on the list a modified version
T> of my reply, as follows:
T> I see many advantages to day-trading the E-mini (now, specifically ES)
T> during the day session if what I want to do is simply to trade:
T> efficient + liquid market, outstanding and prompt executions, low costs
T> (fixed & slippage), tradeable probably 35-50% of the day session,
T> immediate feedback, etc.
T> Another, simpler idea: Forget altogether about making profit for a while
T> and concentrate solely on execution --- use a 2 pt stop and a 2 pt
T> profit objective (no matter what). (Or another alternative, for later,
T> to follow a Joe Ross idea: Trade 2 cars at once, pull one off at 2 pts
T> profit and let the other ride, using a trailing stop or other
T> profit-exit technique.) Trying to make $100 (2 pts) with fixed expenses
T> of around $10-15/trade and slippage of a tick = $12.50 on market
T> orders. So the idea is simply to crank off say 2 trades daily for each
T> of 10 days, the results of each such trade will be either
T> (approximately) a 2 pt stop loss or a 2 pt limit profit, and the
T> question will be: How good can I get in identifying that potential,
T> answered by my % of total winning trades. I'd hope to see something
T> like 60-70%, and at least staying roughly even in equity (profits paying
T> for expenses and slippage etc.), particularly if I'm shooting for only 2
T> trades a day, so I can really exercise my discretion in looking for that
T> needle in the haystack. In that case, I'd likely simply wait for a move
T> to develop, wait for a pullback, and go with the trend --- ES usually
T> has a couple of those 10-20 pt moves per day, and all I'm looking for is
T> 2. And I would certainly forget about any desire to play Godzilla and
T> buy bottoms or sell tops --- I'd look to buy high and sell higher or
T> vice versa. If I really get on with it, maintain my patience and
T> attention, know what I'm looking for, and take it when it comes, the 4
T> points in 2 trades should be possible in a span of 15-30 minutes --- the
T> problem is: Just which 15-30 minutes? And when it comes: Can I identify
T> & execute on it? Now, we're getting into serious trading. And, hey,
T> once that comes, and I learn how to walk without tripping all over my
T> feet, maybe I can turn my attention to exit techniques and sizing, and
T> who says I gotta limit my trading to 2 pts and a single car?
T> I mentioned that ES is tradeable for perhaps 50% of the day session, and
T> by that I mean within the first and last couple of hours, the interim
T> between which is usually pretty choppy and unpredictable as the bigmoney
T> (where the money is and whose coat-tails I want to ride) is already in
T> and holding, maybe to see how bonds will or have closed. My bet is that
T> by doing this for say 4 successive weeks, I'd have a pretty good idea
T> about the game and myself as a player in it (not necessarily as a money
T> maker --- simply as a guy who can play the game and keep on playing, and
T> in my book that's a major hurdle and significant mark of success in
T> itself --- it's just a whole lot easier to concentrate on increasing my
T> profit after I have already proved to myself that I can play and keep on
T> playing and survive --- no matter what I'm fed).
T> Divide and conquer --- semper fi.
T> In my book, trading is really not all that hard, I just make it so --- I
T> am truly my own worst trading enemy. It's not the market, the guys on
T> the floor, or anybody or anything else --- it's the guy in my mirror,
T> trying to make things far more complicated than they really are. To be
T> successful in my opinion requires mastering a lot of little steps, just
T> like a baby learning how to crawl, stand up, & eventually walk, and then
T> run, and maybe even become a sprinter/hurdler/etc. The problem is that
T> unless I've got the great majority of those little steps down pretty
T> cold, I'm not much use to myself as a trader, as evidenced by the notion
T> that 90% of the $ is made by 10% of the traders. What this means to me
T> is that learning 50% of what one needs to learn to be a successful
T> trader hardly leaves me among the top 50% of traders. I'd be interested
T> in hearing others' thoughts on this or any of the above.
T> OK, OK, I'll hang up my soapbox now. Thanks for your indulgence.
T> My best to all of you.
T> Sincerely,
T> Richard
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