The transition to Futures trading

What I find fascinating about your FTSE analyses Pav is how you dissect S and R, wait for the right bounce off either, then sit for very decent moves. The equivalent tonight on the DAX would probably have been making 100 pts off the upwards move which is now tailing off rather than short trades over a few minutes. Considering how volatile the DAX is I just don't have the confidence to sit on trades medium term. Can't stand to sit through the 10 pt reversals here and there that can sometimes turn into 50 pts reversal in the blink of an eye! Maybe I could manage that on the somewhat tamer FTSE if I get the time to start dissecting it. Heck, I don't know enough to be calling the FTSE tame anyhow.

(I'm jealous of all the time you sound like you spend nagging with John too BTW )

pavilion103 said:

I was having a think about the fact that there are some watching this thread who may not be posting. A few of these people have made comments here and there.

What I would really love is to hear a bit more about anyone in that position.

I'm curious to know things like:
- Where you are in your development
- What are you currently trading (even sim)
- What you are looking at trading down the track
- Where you hope to be in 6 months, 12 months, 3 year etc
- What are your overall goal with futures

Whatever questions people feel like answering.
I think it would be great to get some discussion going.

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Were you interested in our trading in general or specifically futures? I'll assume futures for now or this will get really long.

I spent a long time looking into systems trading. A couple years ago I started trading futures on a live account with an auto trading system. I stopped when I ran into issues with the data feed. Long story short, the system behaved differently on live data compared to the same period when downloaded historically. Therefore the backtested results couldn't be trusted.

Discretionary trading - with so many different ways to go about it I was a little lost where to focus. I've been a subscriber to Radge and TradeGuider, recently I've been looking into Al Brooks. Part of me thinks the real story is told in the order book, but without proper guidance I'm lost looking at that thing. Tech and yourself have shown that the order book isn't absolutely necessary to turn a profit. So I'm focusing on that now.

So my method is price action with a little VSA. My style is to focus on limiting the amount lost on each losing trade. I know I'm not going to get a high win rate, but the more often I can get in the market with low to no risk, the greater the chance of me catching a ride in the right direction. Keeping in mind to avoid death by a thousand cuts.

I’ve sim traded sporadically for a long time, sporadically for various reasons I won’t go into. But I’ve been solidly into it this year. I sim trade FTSE every night (best market for my timezone with a reasonable tick size). I was also speed sim trading with NT but I have a software glitch at the moment.

I want to focus on one market right now, but in the future I'll branch out to other markets, maybe DAX and currency futures. Then pick only the best setups from each market.

Right now I need more screen time to identify the best setups. Psychology wise, I need to trade more. Even on sim I don’t trade often because I can always see the opposite side of the trade and think it’s too risky. So on one hand I need to practice taking only the best setups, but on the other hand I think I need to just enter more often (in sim) and practice managing the trade. Don’t miss a nice trade for fear of taking a small loss.

Where I hope to be in x months time? It takes as long as it takes. But first I have to prove profitable on sim. Then prove profitable on 1 contract. The short term goal is supplementary income to my full time job. And also that warm fuzzy feeling I’ll get from realizing that I didn’t waste countless hours of my spare time researching trading over the last 5 or so years. Ultimately, like most, the goal is to make enough income that I only work because I want to.

I’m quiet on here because I have little to offer whose who are profitable.

As an example. Last night I only took 10 points out of that massive move we had. My first attempt short was terrible and was stopped out. Then I became too cautious and missed the good entry for the big move down.

Entered the exact same trade as your second one Pav, but I closed mine out at +10 points because I wasn't sure it had much room to go and I was happy to be in the green for the day.

Today I was determined to not sit on my hands, so I made two terrible failed attempts to short before realizing that we were in a range. Then traded the range to make back my previous losses. Then one more short that I closed out at break even because it had no momentum. So four trades later and I think I made $3 AUD. But I'll take it.

pavilion103 said:

I was having a think about the fact that there are some watching this thread who may not be posting. A few of these people have made comments here and there.

What I would really love is to hear a bit more about anyone in that position.

I'm curious to know things like:
- Where you are in your development
- What are you currently trading (even sim)
- What you are looking at trading down the track
- Where you hope to be in 6 months, 12 months, 3 year etc
- What are your overall goal with futures

Whatever questions people feel like answering.
I think it would be great to get some discussion going.

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I find it an interesting read but dont comment as your method is completely different to what I do and I'm not really sure where you are at with it. Cynic has inspired me to play with the DAX, which I will probably regret after swearing to never short term trade again, but so far so good.

Haven't had the chance to get on today.

This is a short from last night. I managed to get on one.

Stop to BE as it fell lower. Stopped at BE.
Happy with the trade.
Sometimes it will work, sometimes it wont.

Followed by a poor trade for 6 point loss.

See notes on chart.

The 6800 level looks important.

So interested to see whether it breaks higher or this forms the top once again.

Really waiting to see what the bigger move will be now.

Newt said:

What I find fascinating about your FTSE analyses Pav is how you dissect S and R, wait for the right bounce off either, then sit for very decent moves. The equivalent tonight on the DAX would probably have been making 100 pts off the upwards move which is now tailing off rather than short trades over a few minutes. Considering how volatile the DAX is I just don't have the confidence to sit on trades medium term. Can't stand to sit through the 10 pt reversals here and there that can sometimes turn into 50 pts reversal in the blink of an eye! Maybe I could manage that on the somewhat tamer FTSE if I get the time to start dissecting it. Heck, I don't know enough to be calling the FTSE tame anyhow.

(I'm jealous of all the time you sound like you spend nagging with John too BTW )

View attachment 57088

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Keen to get on the DAX at some point.
No hurry yet, but no doubt I will.

Probably some time this year.
Then I will be keen to hear what the DAX traders on here have to say.

pavilion103 said:

Haven't had the chance to get on today.

This is a short from last night. I managed to get on one.

Stop to BE as it fell lower. Stopped at BE.
Happy with the trade.
Sometimes it will work, sometimes it wont.

View attachment 57098

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This is the same trade as I took last night that I closed out for +10 because I thought it was in a range.

pavilion103 said:

Followed by a poor trade for 6 point loss.

See notes on chart.

View attachment 57099

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Again, I took the same trade. But what do you look for in a decent test? I saw the first high vol push up, then the second push up on half that volume with the bar closing in the middle. This was then followed by a series of bars that got smaller as price failed to push higher. May not be a perfect test but it did seem very weak.

Today's blunder.

Second push up to the high of the day, which was also the close of the previous day, which was also very near long term (weeks) resistance. I shorted at 6793 and in some moment of mental failure I moved the stop to break even when price had hardly moved in my favor. Stopped me out before heading south for the rest of the night.

Lone Wolf said:

Again, I took the same trade. But what do you look for in a decent test? I saw the first high vol push up, then the second push up on half that volume with the bar closing in the middle. This was then followed by a series of bars that got smaller as price failed to push higher. May not be a perfect test but it did seem very weak.

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I've been caught in this spot as well before. I'm sure there are examples in this thread Honestly it's not that bad.

A couple of things to consider though:

- Fade trades work really well in the initial 30-90 mins, then in my experience you want a really really clean set up in order to take on a fade.
- There's is still plenty of volume in that second push up. We are looking for price to fail and demand to dry up. we want those upthrusts to be on low volume.
- What is the risk reward for a short here? You would expect that 6765 level or so to provide some support (resistance becomes support and all that) so I'm not sure if there is really that much downside to be had right now.

Just food for thought, as I look at it ITS NOT THAT BAD but there are some things to consider

Lone Wolf said:

Today's blunder.

Second push up to the high of the day, which was also the close of the previous day, which was also very near long term (weeks) resistance. I shorted at 6793 and in some moment of mental failure I moved the stop to break even when price had hardly moved in my favor. Stopped me out before heading south for the rest of the night.

View attachment 57103

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Ouch! Those are the ones that hurt me more than anything, leaving money on the table....

Thanks for sharing LW.

Two trades today on the Z, one loss and one win.

kid hustlr said:

I've been caught in this spot as well before. I'm sure there are examples in this thread Honestly it's not that bad.

A couple of things to consider though:

- Fade trades work really well in the initial 30-90 mins, then in my experience you want a really really clean set up in order to take on a fade.
- There's is still plenty of volume in that second push up. We are looking for price to fail and demand to dry up. we want those upthrusts to be on low volume.
- What is the risk reward for a short here? You would expect that 6765 level or so to provide some support (resistance becomes support and all that) so I'm not sure if there is really that much downside to be had right now.

Just food for thought, as I look at it ITS NOT THAT BAD but there are some things to consider

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Good points, I appreciate the input.

CanOz said:

Two trades today on the Z, one loss and one win.

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Sorry if I missed it Can, but what are you trading these days? I thought I remember you saying that you've given up on the intraday directional plays? Or did you just stop focusing so much on watching the order book?

PS. Nice trade.

Lone Wolf said:

Sorry if I missed it Can, but what are you trading these days? I thought I remember you saying that you've given up on the intraday directional plays? Or did you just stop focusing so much on watching the order book?

PS. Nice trade.

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Nah, still got two AMP accounts active so I try and be disciplined, not over trade...but I'm not going to make a career of it...still trading spreads.

Oh yeah, still using the DOM...

Lone Wolf said:

Today's blunder.

Second push up to the high of the day, which was also the close of the previous day, which was also very near long term (weeks) resistance. I shorted at 6793 and in some moment of mental failure I moved the stop to break even when price had hardly moved in my favor. Stopped me out before heading south for the rest of the night.

View attachment 57103

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My take, not trying to be a smart ****, but an interesting chart ....

Caveroute said:

, but an interesting chart ....

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In hind site. You don't really trade like that in real time on such a short time frame do you?

Trembling Hand said:

In hind site. You don't really trade like that in real time on such a short time frame do you?

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Its a tick chart, the number of bars will vary - ideally around the same number as a 3-5m chart. And I look for specific set ups so the variations in speed is ok most of the time.

I'm only ~2500 hrs into the 10,000 required to gain a full license, but yes I do trade like that, although its still wip for the most part.

Did I take that trade, no, it was a tough chart to read and I missed the bear channel until I started playing around with the trend lines later in the piece. Which, to be honest is pretty poor on my part. The tcl line is an obvious feature that is likely to play a further role.

Once I saw it the rest of the pieces came together.

There is nothing I have annotated that is not derivable in real time, if your good enough. It's really quite surprising how once you have a handle of whats going on the pieces of the jig saw fall together, looking at the chart this morning I see that channel was still in play through the night.

The best way to improve at this game is to spend as much time looking back over what you have just tried to trade and figuring out what worked and what didn't, whats good and what's bad, what did I miss and so on ...

Th are a few ES commentators, and I believe their legit, that follow and commentate on this style [brooks price action] very effectively. For me, I use a stripped down simplified version, but it has the same principles.

Lone Wolf said:

This is the same trade as I took last night that I closed out for +10 because I thought it was in a range. Again, I took the same trade. But what do you look for in a decent test? I saw the first high vol push up, then the second push up on half that volume with the bar closing in the middle. This was then followed by a series of bars that got smaller as price failed to push higher. May not be a perfect test but it did seem very weak.

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In hindsight it doesn't look as bad as I thought.
Reasonable trade. Not one of the absolute best.

Lone Wolf said:

Today's blunder. Second push up to the high of the day, which was also the close of the previous day, which was also very near long term (weeks) resistance. I shorted at 6793 and in some moment of mental failure I moved the stop to break even when price had hardly moved in my favor. Stopped me out before heading south for the rest of the night. <img src="https://www.aussiestockforums.com/forums/attachment.php?attachmentid=57103"/>

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Never move stop to BE in that point to save two lousy points (if your strategy is to hold for the larger move).

Stop just above 95 was the obvious one. LEAVE it. Stuffing around with 2 or so points at the high of the day is a recipe for regret! (I've been there!!)