The transition to Futures trading

[pavilion103]

Please give me feedback on this.
Friday's trade.

Target was 6700ish.
Got in 6666.

It was up 38 points at a maximum.
Ended up as a breakeven trade.

Notes on chart. My thinking during the trade and why I didn't take profit.

 

[pavilion103]

No standout volume for a reversal.

No support around this level.

Only conceivable trailing stop was 6749 (but what was the point risking this - it did fail a re-test here once anyway).

I'm not unhappy with it, but keen on thoughts.

Would others have done things differently (keeping in mind I was aiming for 6700 which it eventually hit).

 

[pavilion103]

A new setup that I'm trialling.

Maximum risk on these setups = 5 points.

1) Price needs to be at a critical level on open (and daily chart points to the potential move in this direction).

2) Big opening bar with 2 or 3 consolidation/bearish (for a short) 1 minute bars to follow.

3) Stop to BE asap


This is untried at present so really keen to get thoughts on this one in particular.

Profit target will be the main consideration I really need to work on if I go ahead with this setup in my playbook.
Often it can move 15-20 points in this direction and then a good fade in the opposite direction is on.
Friday was different because I anticipated a weak day so was happy to hold.




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NOTE: This trade is the same one that I analysed in the posts above (Friday's trade on open)

 

[pavilion103]

I've done some analysis on this for 39 trading days this year so far. These are the charts that I have saved (all are 3 minute charts).

These are the stats for taking similar type setups to my 1 min setup.

The net result is hardly worth it at a net P/L of 29 point profit (0.75 points profit per day).

However, this is simply trailing the trade at a pivot high/low (varying types).
With a profit take/entry strategy, I wonder how much this would improve the results.

I'd need to test
1) Profit taking strategy
2) Not taking signals on every day but having some sort of filter/conditions required to take it, like on Friday (near major level etc...)
3) Reversal setups in the opening bars.


Thus far I'm thinking these setups can work in selected circumstances.

This positive is that based on these 39 days there isn't money being lost.

 

[Lone Wolf]

Please give me feedback on this.
Friday's trade.

Target was 6700ish.
Got in 6666.

It was up 38 points at a maximum.
Ended up as a breakeven trade.

Notes on chart. My thinking during the trade and why I didn't take profit.

View attachment 57153

Feedback from me isn’t worth anything, but I’ll put some ideas out there.

Your entry and initial stop are aimed at catching immediate momentum. But you’re holding for a longer term move. You seem to be happy that big wins more than make up for the lost open profits on the other trades. Have you tracked any stats on this?

Have you tested using a more aggressive trail stop with a re-entry technique? At one point you were up 38 points and had 25 points to go to your TP area with your stop at BE. It certainly seems a shame to let 38 points vanish in the hope of getting 25 more.

You said a few posts ago that you were going to start trading two contracts. This is another case where one could have netted you some profit while the other stays on for a ride.

When in doubt, maybe look at it like a new trade? At the blue circle for example, are you confident enough in your analysis that you’re willing to risk 12 points to make 50?

As for an exit point, nothing jumps out at me, even in hindsight (I didn’t trade Friday). The down bar in the purple circle was a significantly higher than average volume push down with no follow through. That isn’t a reversal signal, but maybe it’s a warning?

By the time we get to the blue circle, price has made a higher high, a higher low and is heading for another HH. I guess it depends on how confident you are in your analysis, at what point do you admit that price has reversed?

 

[CanOz]

If you want trends, trade FX. You're trading an index, they run/stop/reverse/run/stop/reverse.

 

[Newt]

If you want trends, trade FX. You're trading an index, they run/stop/reverse/run/stop/reverse.

Must confess (from watching the DAX for a few months) this was the strong impression I've had. Best trades seem to be breakouts from consolidation, or first hour after open, or at news - decisive breaks through 3-4 ATR from consolidated price. Ranging days then tend to reverse (sometimes off pin bars) pretty quick. Trending days tend to keep bouncing off 20'ish period moving average. Only a few trades each day with classic set up conditions, and even then every break has some vicious fades of up to 15 pts as they push out.

I'm not sure you could reliably do this manually without sitting very patiently for many hours at a time (or being content to pick up the odd set up when you happen to be near the screen).

I guess that's why your trend trades on the FTSE have fascinated me Pav.
Certainly one thing that's become very obvious is entries and exits are obvious with the power of 20/20 hindsight, but even doing it in replay after having an idea what to expect it isn't in any way easy money.

Thanks for being honest about your P/L for the year to date too BTW...

 

[Lone Wolf]

Thanks for being honest about your P/L for the year to date too BTW...

If you're talking about this:

View attachment 57162

That's not his P/L for the year. He's talking about the backtested results of the new setup he's trying out.

 

[Trembling Hand]

I'm not unhappy with it, but keen on thoughts.

Don't trade the chart, trade the market. That what makes the difference lasting long term or spending forever trying to understand why the chart didn't do what you thought it was saying it was going to do.

 

[peter2]

OK Pav. IMO your decision to hold Friday's intraday trade for a much bigger move was a poor one and this was due to inadequate preparation. I'm assuming that you didn't know about or worse, chose to ignore the scheduled US news (NFP + employment data) later that evening. This news event is considered a high impact event and generally moves most of the major markets (indicies, CL, GC and treasury bonds).

IMO you turned your 3min intraday trading setup into a gamble on the news and risked your profits in that gamble. If you really wanted to get 10pt/d (50pt/wk) then you would have taken the 12 and looked for a short after the news.

Remember the fable about the tortoise and the hare. How about focussing on the 10pt/d until you have enough to trade the bigger moves with a second contract.

[BTW: The FTSE index data might become more costly (April14) due to the acquisition of NYSE-Euronext by ICE. Check for news. ]

 

[kid hustlr]

Don't trade the chart, trade the market. That what makes the difference lasting long term or spending forever trying to understand why the chart didn't do what you thought it was saying it was going to do.

Agreed with TH + Pete

I feel like playing a pattern on a 1 min chart is grasping, realistically its probably your understanding of context + how the market generally trades which gives you an edge.


TH, if you have any other suggestions on how guys 'trade the market' apart from the stuff you've touched on in the past (time, context, ppl positioned, what are guys thinking etc)?

 

[pavilion103]

Don't trade the chart, trade the market. That what makes the difference lasting long term or spending forever trying to understand why the chart didn't do what you thought it was saying it was going to do.

In what ways does it apply to my Friday trade?

Thanks

 

[pavilion103]

OK Pav. IMO your decision to hold Friday's intraday trade for a much bigger move was a poor one and this was due to inadequate preparation. I'm assuming that you didn't know about or worse, chose to ignore the scheduled US news (NFP + employment data) later that evening. This news event is considered a high impact event and generally moves most of the major markets (indicies, CL, GC and treasury bonds). IMO you turned your 3min intraday trading setup into a gamble on the news and risked your profits in that gamble. If you really wanted to get 10pt/d (50pt/wk) then you would have taken the 12 and looked for a short after the news. Remember the fable about the tortoise and the hare. How about focussing on the 10pt/d until you have enough to trade the bigger moves with a second contract. [BTW: The FTSE index data might become more costly (April14) due to the acquisition of NYSE-Euronext by ICE. Check for news. ]

Didn't know it was that high impact.

I need to get my head around which news is the biggest in terms if potential impact.

Should have known! The chart ended up going to exactly where I thought it would later! But by then it was too late.

 

[Trembling Hand]

In what ways does it apply to my Friday trade?

Thanks

No one in their right mind was going to do any volume before that news came out. So the market was always going to die down leading into it. You were trading a high range/high volume/low occurrence outcome when there was close to zero chance of it happening in the hours before the ann.

 

[CanOz]

Didn't know it was that high impact.

I need to get my head around which news is the biggest in terms if potential impact.

Should have known! The chart ended up going to exactly where I thought it would later! But by then it was too late.

The Red Stars are generally market moving numbers, but we can start a thread on the news/economic numbers and discuss a little more as there needs to be some up to date context allowed for as well. There is also a new book out by Bloomberg on Economic Indicators....will look for it if you're interested but there is plenty around the internet anyway.

BTW, the news trade worked well the other night on the 6E, CL, Bonds, DX, ES, NQ...heaps. The news trade being to try and catch the stop run in the opposite direction as the first news thrust...

 

[pavilion103]

No one in their right mind was going to do any volume before that news came out. So the market was always going to die down leading into it. You were trading a high range/high volume/low occurrence outcome when there was close to zero chance of it happening in the hours before the ann.

Sorry TH I'm not sure what you mean.

Are you saying that because my strategy looks for high volume to determine if there was likely to be a change of direction (i.e. support) that it was ineffective in this situation because that high volume was never going to come in the hours prior to the announcement?

 

[pavilion103]

The Red Stars are generally market moving numbers, but we can start a thread on the news/economic numbers and discuss a little more as there needs to be some up to date context allowed for as well. There is also a new book out by Bloomberg on Economic Indicators....will look for it if you're interested but there is plenty around the internet anyway.

BTW, the news trade worked well the other night on the 6E, CL, Bonds, DX, ES, NQ...heaps. The news trade being to try and catch the stop run in the opposite direction as the first news thrust...

I would love any threads/books/thoughts on this.

 

[pavilion103]

BTW this FTSE chart is looking heavy.

This is why I was so keen to get on Friday on open.

I will be more aggressive tonight than usual I think.

 

[Trembling Hand]

Sorry TH I'm not sure what you mean.

Are you saying that because my strategy looks for high volume to determine if there was likely to be a change of direction (i.e. support) that it was ineffective in this situation because that high volume was never going to come in the hours prior to the announcement?

No. Forget about you. Think about the participants, the market. There was simply no way in the world that the market was going to go on with that trade as everyone was standing aside waiting. That leads to reversion to the mean...... just about every time. You either scrap for ticks or you don't trade it.

Your idea lacked foresight into what everyone else were looking at.

 

[pavilion103]

FTSE 1 month, hourly chart



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No. Forget about you. Think about the participants, the market. There was simply no way in the world that the market was going to go on with that trade as everyone was standing aside waiting. That leads to reversion to the mean...... just about every time. You either scrap for ticks or you don't trade it.

Your idea lacked foresight into what everyone else were looking at.

So it then essentially became a gamble on the news?

If it was bad I would have got my outcome.
If it was good it was going to take me out