What's Your Futures Trading Style?

Trading and Investing Helping Traders
1

I’m curious to know what style other people trade with futures? Scalping? Swing? Buying dips? other? Do you look for candlestick formations? A favorite indicator? I ask because every time I go to youtube to try and learn more, it’s a live stream or recording of people trading without really explaining their philosophy. Or it’s someone trying to claim to be a pro but trading one contract on the MES. I thought maybe I could get the opinion of people who actually trade on this forum.

I’ve been scalping with a 4 tick TP and 8 tick SL on the ES. My SL is too tight, but I’m not really comfortable yet with less risk management because my trading account isn’t very big. There are up days and down days, but I’m just not consistent enough. I’m really good at giving back all of the profits I made…

4 Likes
2

Following the major trend fits my risk tolerance, not overtrading. I only trade the given opportunities - staying away from people thoughts on social media- MACD/RSI/ SMA20/SMA50 clouded/ Volume profile/ A hit and run strategy I’d say. Whenever you get used to something you lose the consciouness of explaining it

2 Likes
3

Hi @colosean!

I love this question so thanks for posting it. It is a question that is asked a lot because it’s normal to cross check other methods and indicators to stay in the loop. At the same time it makes us question “Is my method the best for me?”

To add to this here’s a quick read:

Vic Braden has a special talent, and it’s driving him nuts. Braden, a well-known tennis coach, can tell when a player is about to double-fault before the tennis racket even meets the ball. He doesn’t know how; it just comes to him in a flash. One year he watched the tournament at Indian Wells and called 16 out of 17 double faults before they happened. This freaks him out. “What did I see?” Braden wonders. “I would lie in bed thinking, ‘How did I do this? I don’t know.’ It drove me crazy.”

I came across this in Blink by Malcolm Gladwell. An entire book dedicated to the topic of split second decision making.

In last week’s webinar, Matt said that it’s extremely difficult for a trader to verbally express his trades to someone. Just like Vic who couldn’t verbalize what he was seeing about the serve that allowed him to predict a double fault.

While this isn’t the exact case in trading because we can better describe what led us to our decision as a result of the data we have available to us.

To answer this for yourself, the first step I’d recommend is always download your trade history and data.

Note - I’m working with support to properly extract this data with P and L to see if there is a solution where I can show how to sort your trades to identify challenges and opportunities.

Here’s an example from a test I was doing with Forex trading and signal providers:

image
image1195×573 71.8 KB

This is a more visually appealing way to see your trades that can help someone understand their behaviors and patterns.

For instance, you mentioned “I’m just not consistent enough.”

When we breakdown trading data like this it can show where the inconsistencies are. On this example, it shows that the best trades were in gold on the short side.

Worst accuracy was EURUSD specifically on the short side. That tells me that those losing trades were held longer they probably should have been.

Again, I know this isn’t helpful without a solution so I’m actively working on that and will reply here when I have something.

This is an overall best practice for any trader that will really show you behind the scenes of your trades. Ideally, when I can properly export all the data we will be able to identify if someone trades best during certain times and volumes, or during high volatility or low volatility trading.

As far as what does everyone else use or do, taking bits and pieces of someone’s methods is great and should always be collaborated. However, the most successful traders I’ve worked with are the ones that came into the market knowing nothing.

No moving averages or indicators. They stared at the market all day for months before they were just break-even traders. Then they saw what worked for them and scaled up.

Imagine if every person who wanted to trade wasn’t allowed to educate themselves on the market or read strategies from other traders. They would essentially have to just watch until it started making sense to them. Like a toddler learning something new, they can’t research or collaborate, they just observe then try. Make a mistake, then try again instinctively trying to avoid pain from the previous attempt.

The strategy is so unique to each individual. When Matt asked something about how many times do you trade in a day, or what time frame you trade on, I laughed because that day I probably did 100 round turns. Not to mention that was in an hour and a half lol.

But that is my style, I am super active in the market because it helps me get a feel for it and get involved. For many, that’s WAY too much trading. For some maybe not enough.

I’d recommend analyzing what trades are working and what ones aren’t. Be really detailed in your notes and face the losers head on and note your emotions, feelings, if you were up or down, what the market was doing, etc.

I’ll keep working on the data side to get a solution.

My style is analyzing charts from top down, then observing the market, getting in with small size to get a feel then start identifying areas to trade from.

I typically always join the bid or offer. This does a few things for me:

  1. Forces me to trade on the fringe and be super picky about my spots. If I don’t get filled I wasn’t fast enough or didn’t see it. That’s OK.

  2. It makes me watch order flow with more focus. I like to see a price flip a few times and try to find the waves of the buyers and sellers moving the price back and forth.

  3. It significantly reduces my risk assuming I follow my exit plan accordingly. Sometimes I’ll get filled on a price and the market won’t go against my position at all. I’m risking 2 ticks to make 6.

I firmly believe that the market is changing at all times and could go any direction without notice, therefore I’m in and out of the market more often. Sometimes I’ll see something and get long only to reverse at the same price for a 2 tick win then reverse again.

Sometimes I’m in trades for 20 minutes because I can see it’s going in my direction and it’s just taking more time to develop.

I’ll send a polished video of cluster charts and how to identify entry spots tomorrow.

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results. The figures here represent an opinion. The placement of contingent orders by you or broker, or trading advisor, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders. Please conduct your own due diligence if Futures are an appropriate instrument for you.

3 Likes
4

Hi everyone,

My trading Style is pretty much conservative, I use order flow in a platform called Atas. My triggers are hammer candle sticks with the volume cluster at the bottom and also an indicator called Big Trades. Those triggers basically show the missed effort of buyers or sellers to keep a trend.

My target ratio is 1:1 and my positive trades percentage is 72% trading just crude oil and ES(mini S&P 500).

César

3 Likes
5

I just came here from Matt Z’s webinar (It was the first one I’ve seen and it was great! By the way, very solid long trade today, I wasn’t in front of my screen at the time but I wish I had caught the same move.)

@Ben_M I really enjoyed reading your perspective and completely agree on the importance of sitting down in front of a screen for months on end and learning by doing. That was what formed the bulk of my learning as well and I think it is the best way to learn in an incremental manner (Mark Douglas says something to the same effect early in Trading in the Zone as well). I will admit, there have been plenty of times when this has felt like a Sisyphean task, especially since I have been primarily learning in solitude, but overall it has been a worthwhile approach. Something that this conversation reminds me of is this article: The Cook and the Chef: Musk's Secret Sauce — Wait But Why (particularly the section that distinguishes between a cook and a chef). It is my view that by learning through trial and error and questioning why certain things tend to work and why certain things tend not to makes it possible to adapt to the market environment more effectively than seeking to have some sort of memorized, red light/green light system. Doing so also gives a deeper appreciation for the nuance that we see in the market.

Anyway, getting back on to the topic of “What’s your trading style?” I am a speculative, outright trader who relies pretty much entirely on market-generated information to make trading decisions. I use several tools in conjunction with one another because they complement one another quite well. I use price action, order flow, Market Profile and Volume Profile. I learned these tools separately before trying to integrate them together and I’m still always looking for ways to improve my understanding and execution.

Market and Volume Profile help me in assessing the two-sided auction, level of directional commitment, possible areas that the market may be working towards, general trade location, identifying asymmetrical risk/reward opportunities, structural anomalies (for example the 2/16/2021 poor high at 3945.00 is a likely magnet that the market will try to break soon), watching for expansions and contractions of volatility, and so on.

I primarily use price action to determine where the market currently is in a spectrum between extreme trading range and extreme trend in relation to the activity that came before it. This helps me see a bit more detail than I can see with the profile alone. For example, if the market is moving directionally, I want to see whether the market does so strongly or needs to continually pull back to entice with-trend activity and will trade those circumstances differently. Or as another example, if the day is more rotational in nature, being able to see the price action can help assess the buying and selling pressure in the market over time so that I can decide if I only want to trade in one direction when the market comes to prices that I believe to be a reasonable value or premium or if I can trade in both directions. Having big picture context (correlated and inversely correlated markets, higher time frame charts, etc.) helps with this as well. Basically if the market is moving with strong directional conviction I look to get into the market in that direction (and have some reasons that I wouldn’t get in as well - always trying to think of the market from both sides and assessing risk, reward, and probability). The more two-side the market is, the more I wait for the market to come back to low price to buy and high prices to sell.

I also make heavy use order flow. I learned primarily by watching just DOMs, taking LOTS of SIM trades, doing some drills, and so on. The key things that I watch for are ease of movement, prices that trade a lot versus prices that don’t bring in much activity, holds on the bid or offer, auctioning velocity and changes in auctioning velocity, etc. I generally have a few order flow tools on my screen because I can usually notice certain things more easily on one tool than another. I still find the time and sales to be very useful at times and it can present some great risk/reward opportunities. Footprint charts can be very helpful as well, especially because they’re not as tiring to watch as the tape. All order flow tools operate by the same principles so it’s fine to have a few up on the screen and just looking at certain tools at certain moments. The main reason why I’m watching the order flow is because it provides the most granular view of the market participants’ interaction and changes in that interaction at the current moment.

I’ll give an example of a trade that I took today (2/18/2021) where order flow, in conjunction with the other tools, was helpful in order to illustrate how I use these things together: At approximately 1:25 in the ES the market broke above the initial balance high. The market had been rotational early in the day (forming a triangle, in price action terms, which is a type of contracting trading range that is likely to breakout to one side or the other the more contracted it becomes). Once the market broke above the IB high, I figured that it was likely that the market would either revert back down towards the middle of range as the sellers who had been active earlier returned into the market or for the market to continue directionally with greater conviction. You’ll notice that this is two competing hypotheses and so continual assessment was required as more information became available.

The IB low was broken in C period on the Market Profile so with the break above the IB high, it was now likely that the market was either going to form a neutral day or a neutral extreme day. In a neutral day, the expectation is that the market closes roughly in the middle of the profile. In a neutral extreme day, the expectation is that the market initiates out of the range and closes near the extreme. Since there were two different possibilities and both offered reasonable risk/reward profiles based on the visual targets in the market (2/17 POC above and today’s POC below), order flow was used to help decide what would be more likely. I was initially short at 3907.25 because the auctioning velocity was fairly lethargic at these prices and it provided a good trade location relative to how the market was rotating at the time. The lethargic auctioning velocity potentially meant that higher prices were shutting off buying rather than bringing in more business, which could lead to a successful reversion to the mean. Additionally, the bid was easily dropping away throughout I period.

My initial stop was at 3909.75 because this was a small LVN on the overnight session volume profile, but I didn’t intend on letting that get hit since a change in the interaction could get me out of my short sooner. My target was aggressive, trying to hold until the end of the day for a push back approximately to the day’s POC near the middle of the range. At that point in the day, VPOC was also near the middle of the range at 3894.00 (If it had migrated upward with the breakout above the IB high, then I would not have taken the short). In this case, my risk/reward of the situation was very good, however after such a strong bull breakout out of the triangle, the probability of success was not particularly high. As a result, it was extremely important to continue to monitor the order flow to see if there were any changes in participant behavior to let me know to exit the short. The market drifted down to 3904.50 in I period, but sellers were starting to lift the offer a bit more easily. I could have gotten out at that point, but I wanted to see if the higher prices would be rejected again, leading to a further move back into the value area. Once J period opened at the same price as the I period open, I reduced my stop to 3908.25 and knew that I would reverse if the auctioning velocity picked up significantly to the upside. When J period couldn’t take out the I period low and sellers started lifting very easily, I closed my position for a 2-3 tick loss when the auctioning velocity accelerated through 3907.25 area and reversed to a long position (I wasn’t aggressive enough with my reversal and entered passively on a limit order at 3909.25 rather than immediately hitting into the market). At this point, the context was favoring a neutral extreme day rather than a neutral day. I targeted the prior session’s point of control at 3916.00 and held to that point. I leaned on the velocity of the buyers to keep the market up. If they had dropped away or a seller came back in and started holding down the offer, I would have looked to get out. The main point is that the order flow helped with assessing the probabilities of two opposing hypotheses playing out and allowed me to get positioned based on what I was seeing. Having bigger picture context by using the Profile and price action was helpful for finding two asymmetric risk/reward opportunities, one to the downside and one to the upside.

I’m not a systems based trader, these are the sorts of assessments I’m always trying to make and these various tools just help with the decision making process. All this being said, the main thing is to find tools that help each individual make consistently good decisions. There are profitable order flow traders, price action traders, Market Profile traders, fundamental traders, swing traders, and so on. Figure out what appeals to you, experiment for many months in SIM before gradually scaling up in a real account. I am still in the process of scaling up personally and as I do so I am finding more ways to improve my overall process.

3 Likes
6

I like this line a lot. It encompasses the informatin that the market provides as oppose to predcting what should happen. Good Going!

Matt Z
Optimus Futures

3 Likes
7

Great responses to a great question.

I want to engage with other traders , share my opinions and perspectives , my experiences and ideas , to learn and grow and possibly help. So here goes…

I remember asking the same question to anyone and everyone that I thought would have a relevant answer. Every answer was different. Some were very complicated and others quite simple. But always different and always aimed at the same results, consistent outcomes of both wins and losses. Arguably that is the goal, maintaining small losses with proportionality larger gains ,consistently, is the foundation of a profitable trader.

All of this information created a new question ,“Which one is best for me ?”. My complicated answer included , some of Tom’s method, some aspects of Dick’s approach, and Harry’s was very interesting but I didn’t quite understand it all.

I came to realize I didn’t need to “chase” ideas but create ideas. I stopped looking at what other traders were doing and started to learn about the markets. What is there purpose ? How do they operate ? Who participates and why ?

Using a sports analogy, I needed to understand the field that I would be playing on. The rules of the game. The equipment needed and the players involved. With this knowledge I am able to decide what position I would play, that best suits me and my ability.

I strongly believe that traders should create their own “style” based on their own interpretation and understanding of market information. I don’t think that my approach to trading would help you be more profitable or consistent. But I will share my experience with what you are describing.

Deeply analyzing each trade is extremely helpful. This is easily done by taking notes before, during and after the trade.

I basically want to know…
-What I saw or the reason for entering.
-Thoughts while in the trade.
-What I saw or the reason for exiting.

When I go back through the trade with my notes and the chart I am able to critique my performance. I can see if I am executing early or late. In time I can see patterns in myself and patterns in the market.
When reviewing my notes/trades if I question an action, I know I need more detail in my notes.
Thoughts while in the trade is just that, What am I thinking while I am in the market.
Taking notes while trading is a very powerful tool and you will likely learn a few things about yourself along the way.

Best of luck

4 Likes
8

Thanks to those above for the interesting posts. I am currently trading MES with a 7/4 tick reversal candle for my MAIN chart. I have 5000-trade volume profile candles for a LARGER timeframe (with the daily VP on the chart as well), and I use another chart with 7/4 tick reversal footprints for watching order flow and working ENTRIES. I take lots of scalps using the footprints; I keep an eye on proximate levels on the MAIN chart; and I make sure I don’t l forget about the larger structure of the day by looking at the 5000-trade chart. I also use the NQ for context. In short, I trade order flow within the market structure from the current and prior day; and trade those structures using order flow. All of that said, I’m still very much a work in progress and I am eager to learn from the community. Best of luck to all. GH

3 Likes
9

Thanks @Mod-MattZ!

@colosean Based on your target and stop parameters it sounds like you may be using Mack’s ideas from Price Action Trading System. I don’t personally use his method, but I am familiar with it and he recommends adapting the stop and target size to the market’s volatility. So if you’re using a stop that is on the other side of your signal bar you’d add the same number of ticks that your increased stop required to your profit target. For example, if the signal bar requires a 20 tick stop and the bars are generally larger than usual, you’d add the same number of additional ticks from the usual stop (8 ticks) to the usual target (4 ticks). In this example, that would be a 16 tick target (20 tick stop - 8 tick usual stop = 12 ticks greater than usual stop, 12 ticks + 4 tick normal target = 16 tick target). Since the distance to the stop is greater than usual you’d also want to decrease the position size so that the risk on the trade isn’t greater than usual. Assuming the win rate remains sufficiently large (likely need 70%+ since the risk is greater than the reward) it could be a profitable method.

4 Likes
10

@Ben_M - lots of great info in your post! I appreciate your analytical approach. I agree the strategy is up to the individual, but I think there is a value to at least knowing what’s out there or what possibilities people have figured out. I’m sure I’ll come to my own style, preferably a hybrid of all of the things I’ve learned from other styles. For example, in a past life, I was a jazz musician. I learned improvisation solos from a lot of great masters. I never strived to play like any of them, more so, I tried to take what they had discovered and incorporate it into my own playing and to make my own voice. In jazz people say the same thing, “create your own voice” and I always found it really challenging when I don’t know how to speak. I’m not sure if this is the best perspective, but it gives some reference to the motivation for my question.

I dig what I understand of your style. I’m not sure I want to mimic it, but I think it is really valuable to try and understand. That way I can acquire more knowledge and put another tool in my tool belt!

2 Likes
11

@JDFtrader - I think you hit on a good point with this by saying, “understanding the market information.” Personally, I think that’s what I’m trying to better understand. We don’t know what the market is always going to do, but a better understanding of what’s going on could help traders make better-informed decisions. Maybe I’m over-thinking this, but the more I understand, the less I feel like I’m rolling the dice. Which in turn, helps me analyze the trade and understand more.

3 Likes
12

@Trader - Super interesting, I’m actually not familiar with Mack’s Price Action Trading System. however, I will be soon :+1: Over the past year, I’ve watched WAY too many YouTube videos and I got the concept from a guy named Micheal Chin - who may have gotten it from Mack. I could understand the strategy and it resonated with me. It worked out really well when I was paper trading but fell apart for me in real-world application. But I will check it out further and see if I can expand my knowledge - thanks!

3 Likes
13

@colosean I think about the market and use analogies all the time, so I totally understand where you’re coming from.

I agree that have to see what’s out there, best practice, what works and doesn’t, etc.

For me a good analogy is when you first learn to ride a bike. You see other people doing it, what to do and so on. But you don’t really get it until you try and develop the muscle memory.

I also have been diving into the personal journey of what trading means to me, what I need to be successful and identifying the time I trade best and also worst.

2 Likes
14

Sure thing! Ah cool, yep Michael Chin learned from Mack (he wrote a post about it at some point on his website.

I’ve had that experience in the past too where I’ve tried to implement a specific system that worked fine when I was paper trading but didn’t work well in a live market. Part of that may have to do with making executional errors in the live market and part of it could be that the method was working during the period that I tested it in SIM but the market behavior changed enough for it to not work as well when I traded it live. For example, I tested Bob Volman’s scalping techniques at one point and they worked well when the market was making wide enough swings for breakout trades to work (his focus is primarily on trading breakouts that have significant build-up). However, as soon as the market became more range bound it wasn’t working as well. It’s worth noting that his ideas and overall approach were still worth reading about. It could be that I wasn’t trading Volman’s system properly, missing contextual elements that would have prevented him from taking the trades that I did, but it could’ve also been attributable to the inflexible nature that is inherent to many memorized systems.

Systems are a bit too stagnant unless they’re implemented in the manner that quant firms do where they have teams of people who are constantly tweaking the system to fit the current environment. My view is that the most significant edge in discretionary trading is in an ability to make consistently good decisions based on an understanding of market behavior. This behavior is best learned through direct observation, but, as you also noted in your great jazz analogy, it is helpful to get some starting points by looking at what people are already doing. Ultimately though, as I’m sure you’re well aware, the market is the final arbiter on the validity of an idea over a large sample size and so time is better spent directly interacting with the market in some capacity.

A large part of why I prefer using a principles-based approach to trading is because it is much more adaptable to current market conditions. Making assessments like where the market is in relation to prior session activity, how one-sided or two-sided the activity is, quality of the follow-through, and so on allows a greater degree of accuracy with trades since it’s based on what’s happening at the current moment in relation to the overall context of the market environment. For example, let’s say the market is trending down, but every time it pushes to a new low it is bought back up, then that’s a good clue that institutions may be covering shorts at those lower prices, some may be scaling into long positions, and shorts are only willing to become aggressive again when there’s a sufficient pullback. By observing and understanding the behavior of the participants, I can aim to mirror their activity and only take shorts when the market pulls back. Additionally, by continuing to assess the strength of the bulls in relation to the bears, I can determine whether I should stop taking shorts, exit shorts, potentially look for long trades, etc. Of course, we can never know with certainty who is doing what, but observing these sorts of things is enough for sound, probabilistic thinking and decision making.

Through my experience I’ve come to believe that there’s three major areas of skill development for a trader: 1. Analytical. 2. Trade management. 3. Mental management. The first two components can and, in my view, should be learned in a SIM environment. Mental management is better learned in a live environment. All of the skills can be enhanced through reflecting on experiences and good quality resources. I think it’s vital for a trader to be able to distinguish why a trade worked or didn’t work in order to learn from it in a deliberate manner and without being able to separate out these different components that is quite difficult to assess. It’s important to trade market behaviors so that I can assess whether a trade didn’t work because the behavior didn’t play out as expected or due to executional errors on my part.

4 Likes
15

@Trader, well said!

I completely agree. You also mentioned observing how the market moves.

It’s interesting to watch a market long enough to notice when it’s trading different. Today for instance the ES mini was slowly grinding on down moves and it tricked me many times into thinking the short move was done. Once I realized this and reviewed the price action for the day I was able to get on board, but it took a few losses to wake me up to that.

I caught myself thinking “Why is it doing this!? It shouldn’t be trading like this on the downside.”

Lol, who am I to say how the market SHOULD be moving? That’s the mental management you listed. If I wasn’t aware of my own internal dialogue I wouldn’t have caught myself saying that.

2 Likes
16

Thanks @Ben_M!

Great job cutting and reversing your trade! It’s incredible how quickly the market can change the way in which it’s auctioning. This morning, during the first hour or so of the session, I was just focused on taking scalps because of how fast the market was moving and how easily the market was trading back and forth. After taking some trades I took a break and when I came back the market was slowly grinding higher in a small pullback bull trend. Completely different feel to the market at that point.

Hahah I’ve certainly experienced the same thing with thinking the market “should” or “shouldn’t” do something. On occasion my mental game starts running poorly because I’ve had a string of winning trades then I take a losing trade and arrogantly feel as though the market was “wrong” in giving me a loss. Just think about how bizarre it is that I’ve tried to rationalize that lol. That’s a bit like a surfer blaming the ocean for causing him to fall into the water and wanting to control the waves instead of just riding them. This exact behavioral pattern actually happened just the other day. I was profitable with a high win-rate in a few sessions leading up to this trade so I was starting to experience a strange mix of feeling as though everything I do works and having a bit of fear that the next trade could end the streak of winning trades. I put on a long trade, took a quick loss on the position and then re-entered 3 ticks below my previous entry… not because the premise of a long trade was still valid but because I wanted to be “correct” in that location and in that direction (funnily enough, I think Matt Z mentioned that phenomenon in the webinar last Thursday… oops!). Unsurprisingly, I took another small loss on that position haha

I’ve been learning over time that one of the most critical components of mental management is to just not take anything personally. I still slip up every now and then, like on the trade I described above, but overall just being as objective with the information as possible and doing what needs to be done has helped a lot. With every trade I seek to assess whether a loss was due to poor execution on my part or the behavior not playing out as it usually does due to normal variance. In the same manner, I aim to assess whether a win was due to skill or luck.

Trading is an interesting beast because you need to have enough of an ego to be confident in what you’re doing so that you can execute without hesitation, but if it becomes inflated or deflated due to results then that can become problematic. It’s a delicate balance and staying process-oriented helps with maintaining composure, but mental management is the primary area of development that I’m focusing on at this point. I am confident in my analytical and trade management skills and I want to be as confident in my mental management skills so that I can trade larger. Anyway, I’m getting quite off topic in this thread so I’ll stop rambling on haha

1 Like
17

This is a great question and there have been some great replies already.
For me as a new trader I am looking to see what other people do to have success. Just recently as of this weekend I actually started a spreadsheet that I posted in another thread on here. Looking at it was very helpful. I got to see exactly how good or bad a trader I really am. Overall I am a losing trader since I started. I know why and have been making adjustment.
For the month of Feb I win about 78% of the days I trade. Thats before commissions. After commissions that got down to about 70%. It sounds really good and it is. The main problem is not using stops to limit my losses. I already knew in my mind that that was my main problem. Putting it on paper and seeing the real data was a huge benefit to me this weekend.
I’ve already blown most of my initial deposit. In the future I will look back on it as a blessing and a main driver of what is going to make me a better trader.
Mostly I am a scalper on the MNQ. I watch the action and when I see a big push in either direction I will jump in and grab what I can. I am also studying charts on a daily basis looking for what kind of strategy would work in order to get in on some of the major runs.
For instance, there are many days where the NQ will run up or down anywhere from 100-300 points. It does this over a 1-3 hour period in many cases. It rises above the SMA indicator that I use and will run up and then back down to the upward trending sea line. Usually it touches that small line and just bounces and keeps going up. Never breaking trend.
I would probably never be ale to get in or out right at the bottom or top but I should be able to capture at least a 3rd of that action.
There are other times when I am just watching the action trying to predict what will happen… I need to start taking notes when I am doing that. In my mind I feel like I am right about 80% of the time. Right now I seldom pull the trigger on those moves. If I document that and find that I am indeed correct more often than not then I will start taking more of that action.
Thanks to everyone thats opened up a bit about ow they do things. It’s very interesting to read for sure.

1 Like
18

@Trader the quote below is so true and it happens to all of us, many times even subconsciously. The fact you are even aware of that dialog or association is the biggest part of the battle.

It’s so easy to take a loss and even win personally. That is something that is maybe built into us or associated with natural emotions.

You mentioned got up to take a break, breaks are so much more important when it comes to trading or any game theory participation. We see it we say “they jammed it down on me” or “they front ran my orders”. Even that context is personal in nature, so how do we change that?

Self-reflection is key in this area and what better way to monitor that than recording your session but ALSO yourself. This way you can observe things like facial expressions, emotions, whether or not you were focusing on the market, etc.

While these things alone won’t necessarily completely change how you trade, it can provide good insight into why you perceived the market to be one way and it wasn’t, or was.

Note:

Here is something I caught the other day while I was trading. I changed the setup on my charts and I had the “order history” up on the account panel. Whenever I entered a trade, bid, offer, etc, it records that and puts it on the highest line while bumping everything down.

What struck me about this was when I noticed it I was in a short position, as soon as I put in the order I saw the order history move down. At first, I thought something in the market was down ticking and I noticed myself feeling “good” that I entered a short trade and it moved immediately in my favor.

However, it obviously didn’t it was just the order history recording a new filled order.

It seems small but it totally threw me off and I quickly changed tabs on that panel so I wouldn’t be triggered to think short, going down, moving down, etc. That association could make someone overconfident on the short side and weary on the long side even though it’s completely irrelevant to the market moving.

Here’s a quick video of that for reference:

When I input any trade or bid/offer, I see the lines moving down.

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results. The figures here represent an opinion. The placement of contingent orders by you or broker, or trading advisor, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders. Please conduct your own due diligence if Futures are an appropriate instrument for you.

1 Like
19

@colosean I wanted to follow up on this regarding your risk/reward.

Have you been able to input your trade data to analyze this?

You mentioned your SL is too tight and I am curious about your entry process and what you look for.

Here’s the way I look at it, if I’m going to have an 8 tick stop loss and the trade GOES my way, I obviously want more than 4 ticks, but putting my needs aside I have to look at what the market is doing.

Let’s say it’s trading in a range of 2-3 points. You buy the highs and it goes against you but you don’t get stopped out, trades in the range for a bit then breaks out.

This is very subjective, but usually when I see a range forming of 2-3 points, the overall breakout should be 2-3 points also (assuming a valid breakout).

Instead of moving your SL further away, could you go back and look at the trades that won and see how far they actually went? You may find that 80% of those trades actually went 8-12 ticks and all that needs to change is holding on to winners longer.

Again, this would be backed by data so it removes all bias and emotional ties.

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results. The figures here represent an opinion. The placement of contingent orders by you or broker, or trading advisor, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders. Please conduct your own due diligence if Futures are an appropriate instrument for you.

20

I know what you mean, I used to take things so much more personally than I do now. Then I realized that all the money I have and all the money everyone I know has isn’t enough for the market to actually care about. It’s the institutions against institutions, sharks against sharks, all we are is the little remoras tagging along for the ride. Taking calculated risks and being able to accept the results is vital.

I really like this idea!

2 Likes