trading the emini snp... as a career

[aversano]

Hi, I have been DAY trading the emini snp contract for quite a while. trying to master my setup and emphasize risk/reward, money management and all other tools necessary to lower risk. (master your setup, master yourself).

I am neither looking for a guru nor an easy way to succeed in this market but am YET TO FIND ONE PERSON who does it for living and actually makes good money (300k+).

your thoughts?

 

[timsk]

Hi aversano,
Welcome to T2W.
Well, I don't know of any either, but obviously there will be some. Quite a lot in fact. That said, you've set the bar pretty high at $300k, so it's unlikely that there will be many retail traders here (who comprise the majority of T2W's membership) who achieve this target. And, of any that do - how would the rest of us know? British reserve and occasional good taste preclude most us from boasting about such things and, anyone who does, is likely to be greeted with suspicion at best and, at worst, be accused of lying or trying to scam the membership etc.

Anyway, the issue of $300k is not really relevant, IMO. Anyone who has an edge that enables them to produce consistent profits has the potential to earn this kind of money - and more - if they have sufficient capital. There are probably quite a few traders with $60k capital who consistently produce returns of, say 50%, i.e. $30k p/a. Not so many of them have $600k capital, enabling them to generate an income of $300k p/a. To achieve the latter target, traders with only $60k will either have to improve their trading results or reduce their annual income in order that they can grow their capital base to $600k. Even if they can do either or both of these things, it could take many, many years for them to build their account to this level. My guess is that both options are between the devil and the deep blue sea and are every bit as tough as coming up with a consistently profitable strategy in the first place.
Tim.

 

[aversano]

Tim,

I look at my day trading activities as a daily job. At the end of the week (actually every day) I look at how much money was made. If I set my goal to two points a day, on one contract its $100, 5 => $500. To buy 5 contracts one needs ~5k so technically on the first day the return is 10% and then will go down gradually but at the end of the day it's $500 income on a daily basis. I am overall making money trading the ES contract, almost every day but yet to see one person who does it for living and does it well...
Obviously a quick search on the internet shows that there are people who claim that it's doable.

 

[timsk]

Obviously a quick search on the internet shows that there are people who claim that it's doable.

Indeed, and, apparently you're one of 'em!
So, now you need to ask yourself the question, 'could I be the only person on the planet that's able to do this?' Obviously the answer is no, which leads us to conclude that you haven't been looking in the right places to meet them!

Tim.

 

[aversano]

Tim, I am currently not making this for a living. Waiting for that person that will tell me that he/she is making it fo r a living. and GOOD living...
we shall see

 

[timsk]

Hi aversano,
Sorry if I'm being slow on the uptake here - but what is it that you want exactly? Someone will - probably - come along and claim to be making squillions. So what, how does that help you? If you want help and guidance, then there are plenty of good traders here who will offer it (well, a few anyway!), regardless of their annual trading income. And if, as you seem to be saying, you're already making money, but perhaps not $300k p/a quite yet then, as I've already mentioned, your only problem is one of under capitalization, as opposed to being a poor trader. Whether you're trading 1 contact or 50, it makes no odds; it's that you can make a consistent profit that matters, nothing else.
Tim.

 

[aversano]

That's true. and are there people who make consistent profits? I saw that happening in swing and longer term trading but never in day trading.

 

[morgan_edge]

That's true. and are there people who make consistent profits?

You! You make consistent profits by the sound of it:

Tim,

I look at my day trading activities as a daily job. I am overall making money trading the ES contract, almost every day ...

I imagine you are not the only one, although it is suggested that the success rate is maybe around the 10% mark(?) There are traders on this site who appear to be consistently profitable, although most of them tend to trade FX it seems as opposed to the ES. There are a few traders who post their daily blotters in the PNL thread at traderslaboratory. ('subterfuge' and 'bathrobe' seem to mainly trade the ES and post profits most days).

There are people out there. It is very hard. I have been trading for about 4 years and am profitable in that I have made money in each of them 4 years and am 'UP' on my initial investment, although not yet quite at the stage where im comfortable to tell people that I am a consistently profitable trader.

 

[aversano]

Thats my point. I am at a stage of my life that to make a living from day trading I need to make around 300k. I know that might seem crazy but this is my reality. I enjoy trading just because I enjoy it. I have been pretty steady with my losses and wins only for the last 2 months.

lets talk a bit about the way it's done. I am mainly using divergences with the short(relative) trend that I identify on a time chart. I take my entries on volume charts. looking for "waves". my stops are pretty close to the last point of support or resistance. on hidden divergences I am looking for the last wave high or low. This week has been pretty bad. today I took 8 trades, 20% win ratio and lose 4 ticks(-$50).

 

[aversano]

Btw, I identify the divergences by higher highs vs lower highs for shorts and the opposite for longs.
the comparison is made between the price a stochastic.

 

[aversano]

That's true. and are there people who make consistent profits? I saw that happening in swing and longer term trading but never in day trading.

but it doesn't feel like it's consistent. maybe I lack the confidence. I am not used to a profession of making money out of thin air.

 

[BJ21]

I read post's 1-8 and thought ok ...good read !!
Then I saw post's 9-11 and thought F*****ing hell I'm confused !!!

 

[aversano]

I read post's 1-8 and thought ok ...good read !!
Then I saw post's 9-11 and thought F*****ing hell I'm confused !!!

What are you confused with?

 

[timsk]

Thats my point. I am at a stage of my life that to make a living from day trading I need to make around 300k. I know that might seem crazy but this is my reality. I enjoy trading just because I enjoy it. I have been pretty steady with my losses and wins only for the last 2 months.

lets talk a bit about the way it's done. I am mainly using divergences with the short(relative) trend that I identify on a time chart. I take my entries on volume charts. looking for "waves". my stops are pretty close to the last point of support or resistance. on hidden divergences I am looking for the last wave high or low. This week has been pretty bad. today I took 8 trades, 20% win ratio and lose 4 ticks(-$50).

Hi aversano,
It sounds to me as if you've got confidence issues. I don't say that in a pejorative sense at all, as anyone and everyone would struggle with the idea of having to rake in $300k p/a! Psychologically, that's a tough ask. Way too big for most people. I assume that the $300k is roughly your current income and the figure you need to match if you're to give up your current work? If this is the case, then stick with the job and trade around it and steadily grow your account. As you're in the U.S., this may mean switching instruments - or even markets - to something that doesn't conflict with your current work practice. From the trading you've done so far, you'll be able to work out your return on a monthly percentage basis. This will tell you the size that your trading account needs to be to achieve the $300k you need. (I'm assuming you're using appropriate risk and money management techniques - which is a big assumption as it seems to me that most traders don't.)

Moving on, you mentioned divergences. A chart illustrating your set up would be helpful. In the meantime, here's mine:

I'm using divergence on the MACD histogram as there are many more signals and they are much faster than the normal lines themselves. The two charts are approximations for one another but, as they are both tick charts, time doesn't really feature. I use the 3x1 P&F chart to time my entry with a limit order 1 tick above the high of the first column of red 'O's - once the histogram divergence is confirmed by the faster (red line) average crossing the slower (green line) average. (See the vertical bloo line on the chart.) This is confirmed by the Slow Stochastic doing the same thing (circled in the left chart). Stop is 5 ticks with an exit target of 11 ticks. Entry should be as close to the Bolly band as possible which I use as a rough confirmation of overbought / oversold. Their main use is to highlight the BB 'squeeze' - an example of which can be seen in the first quarter of the chart. Never fade a strong move coming out of a BB squeeze, no matter how strong the divergence signals may be. The outer BBs are set to 3 std deviations and, if price hits these and you have a divergence pattern, then that really is the holy grail and a license to print money. Needless to say, this confluence of signals is rare.This is just an example chart from yesterday, but I didn't actually trade it (still in sim' mode at the moment anyway) as I was tied up with T2W work!
Tim.

 

[aversano]

are you only using the 144 tick chart? do you change it based on a condition?

 

[timsk]

are you only using the 144 tick chart? do you change it based on a condition?

Hi aversano,
So far I've not found the need to change. however, if I moved on to trading the ES, because of the increase in liquidity, that might be necessary. In that case, I'd have a faster chart for the market open and then move to a slower one after 10.30 EST as the market settled down a bit. Having said that, a 100, 300 or 742! tick chart isn't especially important. You can select the chart that generates the number of opportunities you require to trade in the style that suits you best. I only really use the tick chart to plot the Stochastic, as you can't (satisfactorily IMO) plot the indicator on a P&F chart. As I said in my previous post, the 144 tick is a reasonable proxy for the 3x1 P&F chart; 100 would be just as good, as would 200.
So - what are you using?
Tim.

 

[D70]

Hi Aversano,
Just a generalisation, but I think that those who make a profit (living), tend not to post on forums. There is little or no upside for them. Hence that might be why you cant find them.

Regards,.

 

[robster970]

I did some math's on your OP the other night but then decided not to post.

I have decided to post because I suspect your confidence issues come from this problem - the problem being that you are probably seriously undercapitalised to generate the return you want. The consequence of this is that you are taking on huge risk which in turn is making you nervous, and rightly so. You are probably seeing this on the single contract you trade.

There is a commonly quoted number of 1 contract per $10k of capital is a 'safe' amount to trade.

You say three thing:

1. You are generating 2 pts per day profit on average per 1 contract.
2. $5k allows you to trade 5 contracts.
3. You want to generate $300k profit per annum.

To generate $300k profit per annum, say you need to generate $30k per month for 10 months of the year for a good living.

@$50 per pt this works out at 600pts per month. @20 days per month this is 30pts per day. @2pt/contract per day this is 15 contracts.

At your current assumption of 1 contract per $1k you could trade with $15k capital.

To trade 15 contracts safely using the 1 contract per $10k , you would need at least $150k capital based upon your current rate of return.

If you trade $15k expecting $300k per annum then expect to see your $15k evaporate very quickly as your capital at risk per trade is extraordinarily high.

If your method is sound, then you need to do some maths for your money mgmt to preseve your capital and build up over time.

There are no quick wins in this game.

Good luck.

 

[jaspertrademaster]

Is anyone ever comfortable saying they are successful? No one wants to jinx themselves!

 

[aversano]

Tim,

I am currently using a volume chart (1597) and a time chart(1 min, 3 min)

On the volume chart I have a stochastic and I am looking for a divergence with the price.
in addition to that I am looking for a price range of at least 2.25 points. on the time chart I look at volume and on the volume chart
I look at bid vs ask hits.

when the market is moving in a direction, I want to see volume pushing it and increasing.

during the morning session I am looking for a pullback of the current trend with low volume then volume in the other direction,
trying to stay out of huge spikes.

during the day, I draw trend lines and looking for a pullback + continuation of a short term trend near support/resistance.

most of my entries are around divergences.

try to keep the stop loss at not more than 3,4 ticks. and profit target of at least 4 ticks.
when I reach more than 4 ticks I move the stop loss to break even.

No trade is a guarantee of a winning trade, I just hope to get to a chance to move my stop loss to break even.
when I am in a trade I try to not think about the entry.
regarding the morning session, if I get 2 losses one after the other, I am out.

I feel that as a trader, I keep "Developing the Discipline" and tend to blame myself when something isn't working out. have some serious belief issues with this profession.