The transition to Futures trading

[pavilion103]

Added at 6752.

One stopped trade in between.

Live with 2 contracts. Both stops @ 6745.


Worst case scenario from those trades = 10 point profit.

I'm hoping this pushes up.

 

[pavilion103]

Closed out all positions.

One was a great exit at the push up to around 6770.

The second exit was a bit in no-man's land. I could have taken both off at 6770 but wanted trade under a pivot low, however this was a shallow low. I had to either have the stop at 6650ish or take profit at 6770. I sat on the fence and got punished.

Total profit around 45 points with a few other small losses in between.

Last night I didn't respect profit and it was annoying.

Prior to prior to tonight, 4 of the past 5 times I was over $400 up, I gave it back. I need to work on profit taking but am getting some real clarity around this now. Two contracts helps.


Also a lot of clarity over these trades on open: which ones to take, when to take them, when to exit them. It's coming along well.

 

[daniellindsay]

so apparently

this guy

now trades aussie bonds. price action the last few weeks has just been incredibly weird so I actually do believe it

Updated interview from Paul Rotter is here

Hope that helps.

 

[tech/a]

Closed out all positions.

One was a great exit at the push up to around 6770.

The second exit was a bit in no-man's land. I could have taken both off at 6770 but wanted trade under a pivot low, however this was a shallow low. I had to either have the stop at 6650ish or take profit at 6770. I sat on the fence and got punished.

Total profit around 45 points with a few other small losses in between.

Last night I didn't respect profit and it was annoying.

Prior to prior to tonight, 4 of the past 5 times I was over $400 up, I gave it back. I need to work on profit taking but am getting some real clarity around this now. Two contracts helps.


Also a lot of clarity over these trades on open: which ones to take, when to take them, when to exit them. It's coming along well.

View attachment 58801

PAV its going to happen.
You have to give some back to pick some up.
You'll remember with regard to the DAX emails I sent you.
I gave back a great deal more than your trades 3 X
But in the end pulled a 200 tick followed by a 90 tick trade.
The point is that capital is protected and trades are
entered into---we get on the right side and make a call as
to the longevity of the move.

You'll get it right and not so right.
Its doesn't matter that your wrong but it does matter how long you STAY WRONG!

 

[pavilion103]

PAV its going to happen.
You have to give some back to pick some up.
You'll remember with regard to the DAX emails I sent you.
I gave back a great deal more than your trades 3 X
But in the end pulled a 200 tick followed by a 90 tick trade.
The point is that capital is protected and trades are
entered into---we get on the right side and make a call as
to the longevity of the move.

You'll get it right and not so right.
Its doesn't matter that your wrong but it does matter how long you STAY WRONG!

Good point. One of the key things I have learnt from you is to eliminate risk ASAP.
Once at BE then I can let it run a bit.

I think that my issue here isn't an unwillingness to give back profit, because I know that it is a cost of being business.
The issue is a lack of clarity about what my objectives are.

Trading 2 contracts the goal is to take one off at 25-30 points. I need to be disciplined with this. If I then miss out on a bigger move, or give back profit on the second contract then bad luck.

I figure one contract is to make a wage. The other is to try and capture bigger moves (and I will give back much more on this one potentially).

 

[tech/a]

Good point. One of the key things I have learnt from you is to eliminate risk ASAP.
Once at BE then I can let it run a bit.

I think that my issue here isn't an unwillingness to give back profit, because I know that it is a cost of being business.
The issue is a lack of clarity about what my objectives are.

Trading 2 contracts the goal is to take one off at 25-30 points. I need to be disciplined with this. If I then miss out on a bigger move, or give back profit on the second contract then bad luck.

I figure one contract is to make a wage. The other is to try and capture bigger moves (and I will give back much more on this one potentially).

A topic I have dwelled upon at length.

I guess ideally we should define the average swing in our chosen instrument over X periods.
Then adapt our trade length to within that.
So while we are picking up trends --- they will differ in timeframes and then also in frequencies.
Being time strapped I go for a longer frame and cop the Regular stops at B/E and the odd stop out.

But we all know that trade frequency coupled with accurate ability to be correct in the direction of our trade
with minimising loss will bring superiors returns---If you HAVE THE TIME.

By bringing in frequent B/E stops the end plot of return will show a far greater return on risk than simply letting each trade fall back to an initial stop.

I don't know about you but I've found that with few exceptions if I haven't honoured my B/E stop my initial stop would have been taken out as well!---so Id have copped a loss AS WELL as a brokerage fee!

 

[pavilion103]

A topic I have dwelled upon at length.

I guess ideally we should define the average swing in our chosen instrument over X periods.
Then adapt our trade length to within that.
So while we are picking up trends --- they will differ in timeframes and then also in frequencies.
Being time strapped I go for a longer frame and cop the Regular stops at B/E and the odd stop out.

But we all know that trade frequency coupled with accurate ability to be correct in the direction of our trade
with minimising loss will bring superiors returns---If you HAVE THE TIME.

By bringing in frequent B/E stops the end plot of return will show a far greater return on risk than simply letting each trade fall back to an initial stop.

I don't know about you but I've found that with few exceptions if I haven't honoured my B/E stop my initial stop would have been taken out as well!---so Id have copped a loss AS WELL as a brokerage fee!

Exactly.

The way I trade, if it doesn't take off immediately then my analysis has not been validated.

Pretty much all my profitable trades take off from the get-go and often fairly strongly.

That is the advantage of getting on in good, high RR, spots; it often moves quickly initially and gives the opportunity to get the stop to BE.

Most times I will have my stop at BE in 10-15 minutes at the most and I walk away from the screen when I choose to.


It's interesting when analysing RR also.
If you take a 5 point risk and have a profit target (or without profit target) expect around 30 points.
That means you only need to get 1 in 7 right to break even (plus commission). That is 14%.
If you have even a reasonable setup, you will achieve far higher than 14%, even well above 50% for some.
Now that 1 in 7 assumes the other 6 trades are all 5 point losses, with the initial stop being taken out.
This will not happen however, trailing stop to BE asap.
For every 6 trades taken out at initial stop, you might have 10 that are taken out at BE (I think the ratio will be even greater).
So all of a sudden it's only 1 in 17 trades (plus commissions) or 6% accuracy needed to BE.
If trading your good setups in a disciplined way the positive expectancy is HUGE if you follow rules.

An interesting way to look at it.

 

[pavilion103]

Commission on those 17 trades will be approximately:
17*0.3*2 = 10.2 points.

Which means rather than 1 in 7 wins needed, 1 in 5 with 12 BE trades.

Slippage the other consideration.

Whatever way we look at it, the accuraccy needed is well under 20% if the ratio of wins to losses to BE is approximately something like:
1:5:10

 

[lindsayf]

Thks tech, pav
I find that type of analysis/discussion very useful.
Not currently trading futures but am likely to get back to it in the next 12 months or so.

 

[tech/a]

If it doesn't take off immediately then my analysis has not been validated.

Pretty much all my profitable trades take off from the get-go and often fairly strongly.

If your a technical trader this should be etched into your PSYCHE.

Validation is the key.
We can come up with all sorts of ways to identify setups but both you and I want validation NOW!
We may even be right but without corresponding validation we need to at least get to B/E ASAP.
I never give a setup wriggle room.
In my mind its not the setup I want.
If anyone here has traded the DAX it makes it super clear that its bolting---Up OR Down---if it doesn't go then generally it---errr doesn't go!

 

[pavilion103]

Tech, an interesting observation that I've found with the FTSE.

If you have analysed context well, the open is a very good time to trade. Kid and I have been discussing this.

Most time price either:
1) Sets off in the direction of the trend of the day and the low of the first few bars isn't taken out for the day.

2) Price pushes up to a good resistance level (or down to a good support level) for a 15-25 point move. Once again, the first few bars don't get taken out in this initial move.


I have personally found that for the risk of 5 or 6 points, the reward is far greater.

I've begun using the 1min and 2 min chart to accompany the 3 min chart for setups in the first 15 minutes.


This method particularly appeals to me if the market is trending and I take 2 contracts.
Some days I can literally get in in the first 5-10 minutes and do nothing except move me stops to BE and maybe set an alert if price reaches a certain level.

This also ties in with my very strong belief about the ease it creates if you can take a trade at the intra-day high/low in the first hour (whether it be the open or the first resistance/support reversal).

 

[tech/a]

Tech, an interesting observation that I've found with the FTSE.

If you have analysed context well, the open is a very good time to trade. Kid and I have been discussing this.

Most time price either:
1) Sets off in the direction of the trend of the day and the low of the first few bars isn't taken out for the day.

2) Price pushes up to a good resistance level (or down to a good support level) for a 15-25 point move. Once again, the first few bars don't get taken out in this initial move.


I have personally found that for the risk of 5 or 6 points, the reward is far greater.

I've begun using the 1min and 2 min chart to accompany the 3 min chart for setups in the first 15 minutes.


This method particularly appeals to me if the market is trending and I take 2 contracts.
Some days I can literally get in in the first 5-10 minutes and do nothing except move me stops to BE and maybe set an alert if price reaches a certain level.

This also ties in with my very strong belief about the ease it creates if you can take a trade at the intra-day high/low in the first hour (whether it be the open or the first resistance/support reversal).

DAX is similar.
But don't fall for the trap that the two are correlated!

I'm in a better position to trade these once daylight saving is in.
A lot of the time I get home and on line after the action.
Still better to trade the DAX than watch Home and Away!

 

[subterfuge]

They're beating me up again today.
4 trades, 4 losers.

1 Dropped after open. Took an Al brooks H2 short entry. stopped
2 Took a short on the break of the trendline. Sopped.
3 2 failed shorts and looking more bullish now. Long on the break of the prior high. stopped
4 sticking with bullish bias - long at previous support - stopped.

Negative 51 pips so far, gonna be hard to recover from today, lol

 

[cynic]

...
Still better to trade the DAX than watch Home and Away!

Some DAX traders (particularly those on the opposite side of your trades) will likely disagree.

Although it's been just a little more friendly with my goose of late, that DAX is still one despicably demonic son of a bourse.

 

[tech/a]

They're beating me up again today.
4 trades, 4 losers.

1 Dropped after open. Took an Al brooks H2 short entry. stopped
2 Took a short on the break of the trendline. Sopped.
3 2 failed shorts and looking more bullish now. Long on the break of the prior high. stopped
4 sticking with bullish bias - long at previous support - stopped.

Negative 51 pips so far, gonna be hard to recover from today, lol

Why aren't you using support and resistance.
It's been classic tonight.

 

[Wysiwyg]

Most time price either:
1) Sets off in the direction of the trend of the day and the low of the first few bars isn't taken out for the day.

They're beating me up again today.
4 trades, 4 losers.

1 Dropped after open. Took an Al brooks H2 short entry. stopped
2 Took a short on the break of the trendline. Sopped.
3 2 failed shorts and looking more bullish now. Long on the break of the prior high. stopped
4 sticking with bullish bias - long at previous support - stopped.

Negative 51 pips so far, gonna be hard to recover from today, lol

See the first observation by Pavillion103 is true for FTSE today.

 

[kid hustlr]

Why aren't you using support and resistance.
It's been classic tonight.

Could you expand? my questions/thoughts on the chart.

apologies for the candles

30m then 5m chart

 

[pavilion103]

Will comment on charts this arvo.

I took 1 contract on the initial up move @ 59 for about 20 points.
Lost 4 points trying to hedge in between that (silly trade).

I took 2 contracts @ 78. Took them off early this morning around 55.
Approx 45 points.


I didn't think last night required a whole lot of thinking apart from waiting for that selling at the top. Tried to pre-empt it a bit but as usual it appeared clearly and provided a good entry.

A good 2 days.

 

[pavilion103]

OK I'll comment now instead.

Clear S/R - I think Tech was talking about the DAX if I'm not mistaken.

FTSE uthprust. To me this is a very clear short trade. As soon as it appeared followed by a consolidation bar I put in my pending order, it then consolidated further and fell.

1) Resistance is a ZONE not a specific number (as you know).
2) On the 30 minute chart this represents a triple top with the previous high at 82 I think.
3) Price slightly breached that to 86 and the thrust down on high volume.
4) Because we are at a triple top and have seen weakness this week my default bias at this level is short.
5) After the upthrust we see a lack of demand as price pushes up on narrow bars with low volume.
6) The risk is only about 8 points at a VERY clear resistance level on the 30 minute chart.

My thoughts

 

[kid hustlr]

all good ta bud