1 or 2 points a day?

PKFFW · Nov 18, 2007

Hi All,

I remember reading Elder's book Come into my trading room a while back. In it he gives a definition for A, B and C grade traders. If memory serves, C grade traders would normally take only about 10% of a move.

This got me to thinking. Assuming one had all the "psychological" issues with trading out of the way, do you think it is possible to consistently take just 1-2 points out of the S&P 500 emini a day by day trading? Being that this has a range of about 20 points a day(from what I hear anyway, I'm not really familiar with the instrument, it's just an example).

Of course one would need a plan, the discipline to follow it, control of ones emotions etc etc etc. Assuming one had all that down do you think a consistant 1-2 points every day is achievable when day trading?

Cheers,
PKFFW

SpreadBunny · Nov 18, 2007

Obviously this is all down to the individual's strategy but whowhy trade 1-2pts per day? Unless you place a big stake, what is the point?

The day range may be 20pts but if you are spreadbetting and it depends on the movement of the day, you could profit 100pts for example.

Surely, 1-2pts per day is very achievable....

Splitlink · Nov 18, 2007

SpreadBunny said:
Obviously this is all down to the individual's strategy but whowhy trade 1-2pts per day? Unless you place a big stake, what is the point?

The day range may be 20pts but if you are spreadbetting and it depends on the movement of the day, you could profit 100pts for example.

Surely, 1-2pts per day is very achievable....

Lots of professionals do that, but they go to a broker who, probably, has half point spread, or less, I don't know. This makes a lot of new guys think that it can be done with SB and they enter at lower end of R/S area, with the intention of selling at the higher end and reversing. That could work, as long as the RS stays intact but, when the breakout occurs, (and it always does) you need to be out, if it's against you. It's dangerous, especially if he makes a profit at the start and thinks it's easy money.. Even if you break even, you'll end up losing over time with small profit targets like that because you are trying to do a professional job that takes a long apprenticeship and, also, you have to deal with a broker, like I said.

Someone else, on another thread went into that last week.

I'm fairly conservative and would advise aiming for a lot higher than ten points before entering. That way, you'll learn to look for the quality trades. You can always change your mind with a ten point profit with a stop at breakeven.

Regards Split

PKFFW · Nov 18, 2007

SpreadBunny said:
Obviously this is all down to the individual's strategy but whowhy trade 1-2pts per day? Unless you place a big stake, what is the point?

The day range may be 20pts but if you are spreadbetting and it depends on the movement of the day, you could profit 100pts for example.

Surely, 1-2pts per day is very achievable....

Why?........

Have been doing alot of soul searching and thinking about trading and why I haven't achieved the success I want etc etc. Comes down to system/style/plan suiting me.

So.....

Strengths.......
1: Discipline - Meditation, Kung Fu and army training have all instilled discipline in me, so following a well laid plan will fit naturally into my character. Never had a problem taking a stop or passing on trades that look good but break the rules.
2: Concentration - Anytime I do something I devote my entire concentration to it for however long I do it.
3: Patience - I'm not after quick profits, I'm not looking to always be in the market trading, I can wait for setups and I can build my account over time.

So I got to find/build a strategy/system/style/plan that plays to those strengths.

I don't have the capital for long term positional trading with it's necessarily larger stops so I'm focusing more on short term styles.
I don't have the time to watch the screens all day. I can either periodically check them or devote about 2 hours a day to watching them. So I'm looking at either a 4 hour system or some sort of scalping for 2 hours at a time.
A 4 hour system would require getting up in the middle of the night for me as I'm in Australia and many of the best moves occur during the London/Europe/NY sessions. This would be disruptive but I could do it.
A scalping style of system would allow me to gain a few points/pips/whatever a day whilst I devote my entire concentration to the 2 hours I can set aside. Over time this could prove to be very profitable by building up the number of lots I trade. Necessarily this would entail trading a very liquid instrument and hence my curiosity about the S&P 500 emini.

Before I made any firm decisions, I just wanted peoples thoughts on whether it is realistic to think a couple of points a day could be consistently made from the emini.

Cheers,
PKFFW

eudamonia · Nov 19, 2007

PKFFW,

Yes this is doable. I trade the ES and I make 1-2 points about 60% of all days. More importantly I'm net positive in 85% of all weeks. I typically take about 10 trades during the first 2 hours of the day and 7 trades in the last 2 hours. My average net expectancy is about 1 tick per trade. With this type of method it is crucial how you enter and exit trades. I limit in and limit out in 90-95% of all trades.

As far as whether it is worth this effort, I would say that it is. With small targets you are always winning a little something (about a 70% win ratio) which means draw downs are smaller than even other types of day trading. This means that even with a fairly small account you could ramp up the number of contracts you trade much more quickly than other methods.

Edward

PKFFW · Nov 19, 2007

eudamonia said:
PKFFW,

Yes this is doable. I trade the ES and I make 1-2 points about 60% of all days. More importantly I'm net positive in 85% of all weeks. I typically take about 10 trades during the first 2 hours of the day and 7 trades in the last 2 hours. My average net expectancy is about 1 tick per trade. With this type of method it is crucial how you enter and exit trades. I limit in and limit out in 90-95% of all trades.

As far as whether it is worth this effort, I would say that it is. With small targets you are always winning a little something (about a 70% win ratio) which means draw downs are smaller than even other types of day trading. This means that even with a fairly small account you could ramp up the number of contracts you trade much more quickly than other methods.

Edward

Well it's nice to know someone out there is doing it. That means I'm not totally off base with my thinking!

Care to share you methods?

Cheers,
PKFFW

grantx · Nov 19, 2007

Eudamonia,

With that success rate that’s an impressive strategy. I’m currently developing a similar approach.

I’m concentrating on the bond markets for simple reason they display significantly less, but not totally void of, short-term volatility. But there is still sufficient short-term movement to be exploited.

Have you looked at bonds with regard to your method?

Grant.

eudamonia · Nov 20, 2007

Grantx,

I haven't looked at the bond markets although I know a couple guys who trade it. I'll have to check it out.

Edward

tradermoe · Dec 15, 2007

PKFFW, not only is it doable it is being done on a daily basis. I am witnessing and myself achieveing this using a certain method. Take a look at a link below...I just joined them a few weeks ago. They make atleast 10 pointers daily and they have a live demo room thats FREE for you to check out. That way you can see foryourself b4 deciding on any methods or systems. Take a look, they have helped me tremendously. Good luck and Cheers

Welcome to The Trading Zone

iono · Jan 13, 2008

Hey PKFFW, aren't you on another message board? What about DTFI, seems to work if you get over all the psychological and personal issues (I'm still trying to discipline myself and stop at one point)?

DaxDestroyer · Jan 13, 2008

PKFFW said:
Why?........

Have been doing alot of soul searching and thinking about trading and why I haven't achieved the success I want etc etc. Comes down to system/style/plan suiting me.

So.....

Strengths.......
1: Discipline - Meditation, Kung Fu and army training have all instilled discipline in me, so following a well laid plan will fit naturally into my character. Never had a problem taking a stop or passing on trades that look good but break the rules.
2: Concentration - Anytime I do something I devote my entire concentration to it for however long I do it.
3: Patience - I'm not after quick profits, I'm not looking to always be in the market trading, I can wait for setups and I can build my account over time.

So I got to find/build a strategy/system/style/plan that plays to those strengths.

I don't have the capital for long term positional trading with it's necessarily larger stops so I'm focusing more on short term styles.
I don't have the time to watch the screens all day. I can either periodically check them or devote about 2 hours a day to watching them. So I'm looking at either a 4 hour system or some sort of scalping for 2 hours at a time.
A 4 hour system would require getting up in the middle of the night for me as I'm in Australia and many of the best moves occur during the London/Europe/NY sessions. This would be disruptive but I could do it.
A scalping style of system would allow me to gain a few points/pips/whatever a day whilst I devote my entire concentration to the 2 hours I can set aside. Over time this could prove to be very profitable by building up the number of lots I trade. Necessarily this would entail trading a very liquid instrument and hence my curiosity about the S&P 500 emini.

Before I made any firm decisions, I just wanted peoples thoughts on whether it is realistic to think a couple of points a day could be consistently made from the emini.

Cheers,
PKFFW

If your strenghth are really as you describe them

EASY for you, but only for you as THIS is exactly what 90% of all people who trade is missing.

1 or 2 points a day?

PKFFW

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