The transition to Futures trading

[Newt]

Dean

Your right--few people realize this!



A very important question.
What's happening to you is a universal phenomenon. I'm teaching Kris discretionary trading now and he is doing exactly as you are!

How do you get out of the cycle.

Its all about timing and not taking a trade on a hunch.
(1) Don't take a trade in NO MANS LAND. (Between Support or Resistance.)
(2) Learn how to analyse a consolidation
(3) Learn how to recognise a continuation micro pattern.
(4)Look at the charts above where you should take a trade be sure you are at an area where you'll know really quickly if your wrong.
(5) Understand volume in these patterns.
(6) Recognise individual reversal and continuation bars.
(7) Understand to get set you may need a couple of bites.
e.g. for me a 5 tick loss x 3 is fine for a 45 tick gain.
(8) Don't develop a bias!
(9) Exit when you can see a clear change of sentiment---in your timeframe. (Wont be just one bar).
(10) Learn how to combine time frames to stay on the right side of a trade.
(11) Smaller time frame S&R will only be minor.

Keep at it one day its like looking at a familiar face. That's when you know your there!

Definitely priceless info.
Heck, would be happy to be able to manage just half of this reliably.
One thing that gives me hope is each year being able to list another few things now understood and insisted on before an entry (reading/learning versus really believing takes time for most of us!).

If that forces a sit on the sidelines until RULE 1 is fulfilled, then so be it!

Reading "Trading in the Zone" of late, one concept that's personally been very helpful is thinking of Risk/Reward as "how much risk am I will to buy, just to see how this trade will play out". Buying in halfway between support and resistance or trend lines is like accepting you'll buy risk at a greater cost with less chance of success. Doesn't make sense.

(then why the hell did I keep doing it so often )


One great thing about learning futures at the moment - the falling Aussie dollar is at least leaving a bit of upside as we newbies struggle to just break even.

 

[PinguPingu]

(then why the hell did I keep doing it so often )

I feel your pain, man. I think as well we often miss the big liquid moves just because we are in the wrong damn timezone, and also take no mans land trades because thats when we're awake. The Asian trading period seems to usually have the lowest liquidity and lesser volatility, unless you want to trade the Nikkei or Shanghai Index of course

 

[pavilion103]

FTSE has pre open trading again I see?

Looks like the last 2 nights it has held well. Looks set for an up move.

 

[pavilion103]

Pre open different to before.
Doesn't close 10 mins before the actual open

 

[pavilion103]

Long 6864 x 1

 

[tech/a]

Long 6864 x 1

No trend in the FTSE and no signs of one. Only good for short term (5-10 ticks at a time.)
In my view.
If at all!--at the moment

 

[pavilion103]

No trend in the FTSE and no signs of one. Only good for short term (5-10 ticks at a time.)
In my view.
If at all!--at the moment

Tough going.
This just does not want to do anything!

 

[pavilion103]

I've been thinking long and hard about my strategy and also my mindset.

I've created this checklist to look at before and during my trades to focus my mind on what I need to do.

 

[pavilion103]

Got on this entry.
Not heaps confident in this market but a re-test at resistance level, if managed well is worth it.

Only the 1 contract.

6810 is the target if it can get anywhere near there.

 

[tech/a]

Find momentum in a time frame and hop on.
Find a culmination to momentum and hop off.

 

[pavilion103]

It's challenging Tech.
Right now it's around 6830. Looks like some slowing of momentum but not usually where I would take off and not at any sort of support level.
So I am confused as to the right decision here. No huge volume indicators.

Safe option is to get out I guess. But is it also the premature option?

Now price is up around 6835 -- only 10 points from my entry.


It's an interesting one because if momentum slows at a critical level with the right volume characteristics I will jump off. But when in no man's land, I tend to want to hold.

Not a whole lot at stake here, but price does look to be holding up SO FAR. Do I need more confirmation?
My plan is to hold. So I will here.
If this sort of action was occurring at 6810 I would be out without hesitation.

 

[tech/a]

PAV watch for these

PARTICULARLY coming into support or resistance.
Very reliable.

 

[pavilion103]

I like to monitor the RR of the trade as it goes also.

IF unclear and 10 points up with a target of 35 then hold.

IF unclear and 30 points up with a target of 35 then EXIT.


The 25-40 point profits are the ones that I really need to work on not giving back.

 

[pavilion103]

PAV watch for these

PARTICULARLY coming into support or resistance.
Very reliable.

View attachment 61637

You're right.

It just isn't falling so I'm taking 10 points.

Not my usual play but this my usual market. Not moving at all.

I've given it a chance to see how it settles and it isn't pushing lower.

I need to read what is there not what I want to project.

 

[tech/a]

Here is the DAX NOW.

 

[pavilion103]

That DAX one looks very clear to me. That bar was enormous and it looked like an accumulation base I'd see in a stock.

The killer for me with the FTSE was the lack of a clear support level. Even a minor one would have given me more confidence to exit. But you are right, price action clearly pointed to it holding. For me, probably around 6830 would have been my best exit in that instance. It was the first place that I considered exiting.

As I said clear S/R level and I'm definitely out of that one and then looking to reverse it for low risk of 5-6 points. That was my intention if it got to 6810.

 

[tech/a]

That DAX one looks very clear to me. That bar was enormous and it looked like an accumulation base I'd see in a stock.

The FACE.
And you recognized it!

Here is how it panned out and a hint on what we are working on.
Oh and it did test the high i noted on the chart!

 

[pavilion103]

Thanks.
That was some really good consolidation on the DAX.

Tbh there are the ones I'd feel comfortable taking on that beast. The very clear ones.


There were 3 (I think) consolidation bars on the FTSE following the fall and slight push up. Once the third one formed I thought that it just will not go down now. I was too busy worrying about my exit to get the long.


The truth is the support level threw me off big time.
Usually it is such a big clue (as you posted last week on the charts).

 

[pavilion103]

I'm happy.

The goal for me is get on between 5-6 point risk most times. Manage risk at the start. Make regular 25-35 point moves. Rinse and repeat.

With 2 contracts losses should never be more than around 12ish.
And I could have regular wins of 50-60 (2-3 times in a lot of weeks).

Simple and boring.
I need to enjoy boring.

Nothing like repeating something with an edge.
As cosbsitently grows increase more contracts.

No need to try and smack huge 80 point wins.

Then when in a good spot maybe hold one for a position trade every now and then.


I feel so much clarity right now.

Simple. Simple. Simple.


Great charts too Tech. Brilliant.
I'm back taking more interest of volume too.

 

[tech/a]

Some important Price action on the DAX as it un folds





Back later when it pans out.
(I'm short) Risk 11 ticks)