Simon Maelzer's "Day Trading The Indices" Thread

[timsk]

. . . but manage risk always!

Hi Simon,
Welcome to T2W.

I like the easy to follow logic of the 'lessons' you've presented thus far and, broadly speaking, they reflect my own approach to trading the markets. I watched the video you posted and enjoyed it, but I have some issues in trying to square the stochastic/fractal coin that is the markets with Gartley butterfly patterns and such like. To my way of thinking (which I accept is different from yours), this equates to imposing what I want to see and looking for things that probably aren't really there. But, that's probably just me - each to their own.

Be that as it may, the ideas outlined in this thread and illustrated in your last two posts are much more my cup of tea. That said, the part of your post I've quoted does, as ever, go to the heart of the problem. Regardless of the methodology employed (does it really matter?), risk management is key. And the particular problem with the approach you outline - and I try to implement - is where does one place one's stop loss - assuming that is a stop loss is to be used at all? If going short, one could place a stop loss above the upper band. The problem of course is that one will be stopped out at the best possible point of short entry. So, what to do? Well, the trader could put the stop at 2 x standard deviation (assuming the bands are, say, at 1 x deviation) but, by this time, one is likely to be lagging the market to such an extent that a reversal has taken place. Anyway, hopefully, in future 'lessons', you'll address the issue of where you regard is the best area to place one's stops and to manage one's risk on each trade.
Tim.

 

[themarketblueprint]

A bit of insight to how I go about business with regards to intra-day futures trading

I try to model the market and trade like the smart algos do

I want to get on-board at the wholesale side of the market just as it has turned direction (roll over or rotate upwards)

I'm generally looking at 4-8 tick scalps or a 16 - 30 tick leg up or down - obviously this changes a bit with market volatility on the day

I only want to risk about 0.5% of account per trade

I can only add to a position when it's running in my favour so anticipated risk is still under 1%

Each trade doesn't matter (and shouldn't matter in terms of account damage if a loser) and is only one trade in a large sample of trades

I ALWAYS USE A PRE-PROGRAMMED BRACKET ORDER SO THAT MY STOP LOSS AND LIMIT ORDER FOR PROFIT-TAKE IS LIVE IN THE MARKET AS SOON AS I AM FILLED ON TRADE OPENING.
THE PRE-PROGRAMEMD STOP IS MULTIPLE POINTS ABOVE MARKET AND IS DESIGNED AS A CATASTROPHIC STOP - SO IF A SUDDEN INTEREST RATE DECISION OR A PLANE FLYS INTO A BUILDING OCCURS THEN I HAVE SOME PROTECTION - THIS DOESN'T GUARANTEE AGAINST SLIPPAGE BUT IN MOST CASES GIVES ADEQUATE PROTECTION AND ALSO IS A SAFETY NET FOR IF MY INTERNET CONNECTION GOES DOWN

I often manually stop out if I think I'm wrong or expected direction is stalling

My positive expectancy is around 60%

 

[themarketblueprint]

Tim,

Thanks for your feedback and taking the time to watch the 2013 video.

I must admit the pattern recognition work you mentioned has the "it's in the eye of the beholder" element to it. All patterns do really.

In 2015 I use them less and less, but still feel they are relevant. I don't use them for intra-day trading but do so for swing trading over days to weeks if additionally my models show drift strength or weakness.

I also don't use them in my global macro advisory work in general as the readers are not normally familiar with them. Maybe if a massive pattern was set up on a major indice and other evidence supported it.

For the presentation, I wanted to give the Society of Technical Analysts as much info on what I thought was valid in my one hour slot.

The good thing about the patterns in question though, is that you are generally trading for decent moves and you can place your stop very near where you think the pattern has completed. Thus R:R can be up in the high single digits or sometimes more.

And agreed - RISK MANAGEMENT AND PERSONAL SELF-CONTROL are the holy grail of trading the world over.

And yes, the Stop Loss placement is one of the big conundrums facing the trader, I will look to talk about this in futures posts.

Simon

 

[themarketblueprint]

US Stock closed 10 mins ago - final ES chart for the day from me - as can be seen the upper boundary/descending drift idea previously mentioned worked well.

 

[f2calv]

@themarketblueprint thanks for posting, lots of info to digest, however would you consider recording a video/screencast of your scalps "in action" + commentary of your thought process whilst these scalps are going on?

It's one thing to see charts with pretty [obvious] circles drawn all over them and yet another thing to see someone doing it in real life whilst the market is moving before their eyes and not knowing what direction the next bar will be!

 

[themarketblueprint]

f2calv,

Thanks for your message.

Yes, this sounds like a good idea. One can certainly provide a lot more context with vidoe than simple posts.

I have not got specific recording software on my system at present and will have to look around and install something to facilitate. If anybody has any experience in this area, please feel free to advise me thus. Easy to use package etc

I have very much benefited in the past by Don Miller doing this with Trading After Dark https://www.youtube.com/watch?v=57t-e-qYimA

Will look to do in next couple of weeks.

Simon

 

[themarketblueprint]

Just had a thought, I do have a HD camcorder though that I might be able to rig something up here in my office. Will have to source a tripod though.

Brannigan at Futex (where I was back in 2008) has been doing similar recently with some very nice images/trading action

Simon

https://www.youtube.com/watch?v=ATc4nf0fkIM

 

[timsk]

. . . If anybody has any experience in this area, please feel free to advise me thus. Easy to use package etc.

Hi Simon,
I don't, although I have used the 'Snagit' still screen capture facility provided by TechSmith and really liked it - and I know lots of people use their Camtasia software to do precisely what you / f2calv propose: TechSmith Camtasia. May be worth a look?
Tim.

 

[f2calv]

Cool thanks.
If you have a Google account you can use Google+ Hangouts to record for free and post directly to your YouTube account, works pretty well after a practise or two!

 

[themarketblueprint]

HI Tim,

Thanks for the pointers. Will look at techsmith website.

Tks,

Simon

 

[themarketblueprint]

f2cal,

Tks also - yes I have a google account - will look into over w/e.

Tks,

Simon

 

[hereward the wake]

f2cal,

Tks also - yes I have a google account - will look into over w/e.

Tks,

Simon[/QUO


Register as a teacher at Udemy and you should get a 50% voucher off Camtasia.

 

[themarketblueprint]

Thanks for that hereward the wake!

Simon

 

[themarketblueprint]

Very busy today, writing a start of the month Global Macro report... 60 or so pages.
Traded once just after figures were released. Small scalp +11 ticks. Will post trade on chart later when I get a chance.

Simon's Tip of the day:

We are playing in a VUCA ENVIRONMENT

Volatility
Uncertainty
Complex
Ambiguity

The term was coined by a US Military big cheese for war environments, but captures what markets are beautifully as well.

 

[themarketblueprint]

Today's only trade - a high probability scalp a few minutes after the figures were released and the market had calmed down a bit - all my data pointed to a downwards bias and drift. 11 ticks profit. Stop level was similar so was an equal R:R. Had I been stopped out, I would have probably traded again. But made a nice return, so got back to my report writing with profit banked.

Over the weekend I am going to look into video possibilities of recording future trading sessions and hope to bring to this thread very soon - stay tuned.

Have a god weekend all,

Simon

ps my charts are set for CET as I'm based in France most of the time

 

[postman]

I like the no nonsense approach and clear ideas behind your trading.
I have popcorn ready and await some real time trades. :clover:

 

[hereward the wake]

I like the no nonsense approach and clear ideas behind your trading.
I have popcorn ready and await some real time trades. :clover:

Budge up Postie I'll watch the show with you.

 

[themarketblueprint]

Morning gang,

Hope you all had a good weekend. Between writing a 65page report that you can view on my twitter for free (this month only) and guests taking over my house, I've had very little time to do any research on screen cast software. But I might try a a HD camcorder intro video to get things started off. Will look to take it to a more professional level at a later data. At least you should be able to get some idea what I'm upto with a shaky handycam!

Simon

 

[hereward the wake]

Morning gang,

Hope you all had a good weekend. Between writing a 65page report that you can view on my twitter for free (this month only) and guests taking over my house, I've had very little time to do any research on screen cast software. But I might try a a HD camcorder intro video to get things started off. Will look to take it to a more professional level at a later data. At least you should be able to get some idea what I'm upto with a shaky handycam!

Simon

Postie has a shakey handcam but best not to go into that.

 

[postman]

Simon did you work with "The Hound of Hounslow"?