I've been trying to write a good trading plan and find a methodology that suits.. I think im close, its the risk thing, like you say, its amazing how just $75 kills you. I can take the stop its kinda the reasoning behind the trade and trade management. I tend to see way to many trading opportunities. try a few, get stopped then miss the bigger run.. Hopefully i can sort out this issue before to long...
Your right in closing your DOM after a few failed trades.. I've started doing the same thing. 3 attempts and out for the night.
Stoxx follows ES pretty well, though watching ES and Stoxx together either warned me of a stop out before it happened or faked me out of a good trade.
Paper trading some ideas at the moment and researching more, tough to find a method to trade by that suits me I have to say.
Russ,
paper trading is like playing paintball, and trading with real money is like somebody shooting real bullets at you. It has it's place but the real learning starts with with real money.
The biggest thing that got me back on the horse was not so much papertrading but market replay. I searched high and low for a good program that would let me replay the market with historical data. Then I was able to watch my setups unfold, and if actually increase the speed of the replay 3, 4, 5, 10 times, instead of watching thorough hours of consolidation.
On the subject of stopouts, and then the market running in your direction, I am convinced that you have to be a multiple lot trader. (but I'm months away from there). Precise entry is almost a skill as difficult as picking tops and bottoms. With a larger stop, you give yourself an opportunity to add to defend the position. But it is sooo dangerous if you are not confident with your setups. I have got caught with a intraday reversal, and been out the equivalent of many just regular stopouts.
So the pursuit for me in the last few months has been trying to understand the reversals. Which is what lead me to the daily and weekly pivots. Another area that I spend a lot of time on was on "tape reading", watching the order flow. On an instrument like the ES, it is too difficult to watch the time and sales window, so I spend a lot of time trying the MarketDelta.com software, which tracks the ask vs the bid trades. To sum that up, I just found a great site of a guy that watches the cumulative total of the asks and bids for the day, and this is how he is able to read large reversals. Go to youtube and watch some of his videos. Fulcrum Trader. I actually joined his room today, and set my software up to mimic the cumulative delta indicator, it was very very good.
In summary, the leading indicators, DAX, Stoxx, Pivots for the overnight markets has been great. I wake up at 3am locally and trade a much calmer market until 9:30, and then watch the grownups play with the fireworks during the day. I want to grow up and do what they do.
I am using the $tick, trin, breadth, vix, advancing/declining issues to monitor the market direction during the day. This is a skill that I was able to hone with replaying the market over and over again.
I am really hopeful that I can learn about the bid and ask (volume) effectively from Fulcrum Trader. Then next I want to learn about COT data, and hopefully I will be able to do some larger swing trades. Have you read reminisces of a stock operator? The real wages are earned with the big moves. Going in and out is great, but it keeps you from realizing the 50-100-150 point moves made over a large period.
Thanks for listening and letting me spill my guts out here! I don't use im, but I have a chat feature on my gmail, would that let us communicate?
