What turned your daytrading from mediocre to worthwhile?

[robster970]

I'm ok at swing trading but like a moth to the flame I get drawn to trying daytrading every now and again. I've had 3 stints at it and the current bout of it is showing signs of breaking even/making a very slight profit. I can put this down predominantly to cutting losers very quickly and ruthlessly. Also having a vague plan for the day about how it may be structured has helped enormously (I only use price, no indicators and am trying to become discretionary).

Having analysed stats for this period I can also see that trade selection needs tightening up with better confluence of factors to support the trade selection as well as letting winners run longer more consistently. I have a suspicion that I'm not far off being able to turn a modest profit in this area.

I am curious (and this is specifically aimed at retailers that day trade) what it was that really made you turn the corner and whether the difference was as marginal as the things I've identified? I ask the retailers specifically as strats are likely to be directional only and facilities limited by comparisson to an institutional outfit.

 

[shadowninja]

For me, similarly I was swing trading but that meant only taking maybe 1 trade a fortnight or even a month, but then I started taking trades that were more risky but using tighter stops (from 50 down to 20). Obviously, it depends on the reasons for your entry...

 

[robster970]

I would say that trades I take off the M5 are opening gap, reversals off obvious levels or breakouts. On ES key times to watch for changes are around 3.00pm and 3.30pm then 7.00pm and the volume comes back in from 8.00pm to 9.00pm. I rarely do trend pullbacks. ES has a structure that can be quite obvious at times and then other time completely baffling.

 

[spy74]

i think getting too caught up in the choppiness of the market, or that awful feeling when you miss a decent move, or the other awful feeling of sitting there for hours while nothing happens, can lead to over-trading which results in paying away too much in comms, and dragging your win rate and expectancy through the floor - along with your account. hence, your idea of confluence is a good one i think...finding set-ups which yield maybe 3-5 trades a day, and patiently waiting for the right time for you to get involved is very important

 

[robster970]

I seem to be in the 1-4 trades per day category now whereas the last time I tried I was chasing things around. It's very different this time however I'll give you an example of how it cocks up.

Yesterday. ES opens and at 2.38pm I decide to go long once the day befores low shows support. This also supports my pre-market premise that the sell-off because of China, AAPL, IBM was overdone. It moves then fails and I cut the loser quickly. Nothing wrong with this trade.

I then look at how the momentum is driving price down and choose to take a breakout short on that level. What I didn't do was check that this was driving into a multi-day zone of support 2 pts below that has shown incredibly strong support over the last week or so. No guesses that this one works out as a loser but had I not rushed into the trade, I would probably not have taken it.

I then go long and it runs in my direction. It stalls at about 4pts and I set a stop a breakeven instead of just below 50% for the move. I get taken out all because I use a MM based stop instead of a technical stop - I NEVER USE MM BASED STOPS!! WHY DID I DO THAT TODAY? BECAUSE I HAD 2 LOSERS ON THE TROT.

Final trade of the day 4pts bagged on a calm breakout of the low that provided support earlier. Watched the low getting hammered from 7.00pm to 7.30pm and watched it retrace back. Waitied for the volume at 8pm+ and saw there was no appetite to push it further down so took 4pts on PA based exit. A well entered, well managed and well exited trade.

EoD - 4pts down. Had I been level headed, probably would have been a scratch day or maybe 1-2pts up.

Summary of ****-ups (i) taking the first B/O trade, just should not have and (ii) not using a technical based stop and then trailing to lock in some profit whilst it was trending. Estimate 5-6pts there.

Can you see what I mean about the disjointed element to it that is making the difference between scratch and profit?

I'm also learning about the grinding results out mentality required to do intraday.

 

[spy74]

yep i can. and i know exactly what you mean. i tend to trade off S&R levels that i've worked out before the market has opened, hence my charts already have a few horizontal lines on them before I start, which i will have marked up on the TF i trade off, but have checked them against higher TF's as well, therefore, once we open (i trade FGBL) I try to have a rough idea about what i'll try to do if/when price trades up or down to those levels. of course as the day progresses anything can happen and you have to be able to change you mind - but i do find that this helps.

i also think that spending a decent amount of time on a Sim really does help improve your reaction time and help get you used to trading moves which are "typical" for your market

 

[robster970]

How long on Sim? I never seem to be able to sustain sim for more than 2 weeks. This isn't a discipline thing btw, it's because I know my reactions change as soon as I go live and it's value feels limited to me now. Ironically I become more disciplined live than I am on sim. I see what your're saying though.

 

[spy74]

How long on Sim? I never seem to be able to sustain sim for more than 2 weeks. This isn't a discipline thing btw, it's because I know my reactions change as soon as I go live and it's value feels limited to me now. Ironically I become more disciplined live than I am on sim. I see what your're saying though.

yeah, it's more getting familiar with how your market moves, and the change of pace, without chewing up your cash (and confidence!) in the process. Trying out different set-ups that you've used before and seeing which ones work out more often etc etc, working out the big S&R levels pre-mkt and getting used to how the mkt trades around them...may only need to be a week or two, maybe a month...just until you are comfy and are clocking up ticks on a regular basis

 

[robster970]

So I'm not bonkers then. The transition from scratch to +ve is largely to do with refinement of execution, trade selection and speed of decision making?

On a swing trade I can take hours/days to make all these decisions. Intraday it's seconds and you're constantly analysing and evaluating the landscape. Is that where it's at then?

 

[spy74]

So I'm not bonkers then. The transition from scratch to +ve is largely to do with refinement of execution, trade selection and speed of decision making?

On a swing trade I can take hours/days to make all these decisions. Intraday it's seconds and you're constantly analysing and evaluating the landscape. Is that where it's at then?

yes...i think what you've said above is a big contributing factor in moving from scratch to +ve. i think you've got to be very proactive in constantly evaluating the market's movement, and anticipating what you will do if A) or B) happens, and being very specific about your course of action in each case.

 

[barjon]

I seem to be in the 1-4 trades per day category now whereas the last time I tried I was chasing things around. It's very different this time however I'll give you an example of how it cocks up.

Yesterday. ES opens and at 2.38pm I decide to go long once the day befores low shows support. This also supports my pre-market premise that the sell-off because of China, AAPL, IBM was overdone. It moves then fails and I cut the loser quickly. Nothing wrong with this trade.

I then look at how the momentum is driving price down and choose to take a breakout short on that level. What I didn't do was check that this was driving into a multi-day zone of support 2 pts below that has shown incredibly strong support over the last week or so. No guesses that this one works out as a loser but had I not rushed into the trade, I would probably not have taken it.

I then go long and it runs in my direction. It stalls at about 4pts and I set a stop a breakeven instead of just below 50% for the move. I get taken out all because I use a MM based stop instead of a technical stop - I NEVER USE MM BASED STOPS!! WHY DID I DO THAT TODAY? BECAUSE I HAD 2 LOSERS ON THE TROT.

Final trade of the day 4pts bagged on a calm breakout of the low that provided support earlier. Watched the low getting hammered from 7.00pm to 7.30pm and watched it retrace back. Waitied for the volume at 8pm+ and saw there was no appetite to push it further down so took 4pts on PA based exit. A well entered, well managed and well exited trade.

EoD - 4pts down. Had I been level headed, probably would have been a scratch day or maybe 1-2pts up.

Summary of ****-ups (i) taking the first B/O trade, just should not have and (ii) not using a technical based stop and then trailing to lock in some profit whilst it was trending. Estimate 5-6pts there.

Can you see what I mean about the disjointed element to it that is making the difference between scratch and profit?

I'm also learning about the grinding results out mentality required to do intraday.

rob

Seems to me you had a worked out premise that led you to favour long until proved wrong. From there you would be looking to see where long opportunities might arise (which maybe would have pointed up that zone of support) and where you would take it that you'd been proved wrong (maybe that same zone of support would feature).

So you took your first long opportunity and it failed - nice discipline - but was that enough to prove you wrong to the extent of switching to short? Maybe enough to shift you to the sidelines and maybe an element of "revenge" trade here.

Assuming you had thought is was not yet enough to prove you wrong then you would still be looking for long opportunity. Maybe your third trade would have been your second and you would have then followed your stop rules without question.

All easy-peasy in hindsight of course

good trading

jon

 

[robster970]

It's a really interesting point Jon. I can remember what I felt when I took the 2nd trade short and it felt like a 'been proved wrong and switch' rather than any sense of revenge. I had a bias long but I've learnt not to hold that bias if something proves otherwise. Yesterday was an odd day as I wasn't too sure whether the chinese news would actually manifest in a more far-reaching way over the day. Remember, equities are up on Fed POMO acitivity and fumes so I think something like China or Foreclosuregate might come from leftfield and start the swing down.

It's a thin line sometimes isn't it trying to listen to your gut and ignoring other more destructive behaviours..............

In hindsight, trade 2 was just amateurish in the sense that I didn't bother to zoom out for context before taking the trade,

 

[tim3]

I would say that trades I take off the M5 are opening gap, reversals off obvious levels or breakouts. On ES key times to watch for changes are around 3.00pm and 3.30pm then 7.00pm and the volume comes back in from 8.00pm to 9.00pm. I rarely do trend pullbacks. ES has a structure that can be quite obvious at times and then other time completely baffling.

Your point about times a good one.

You often see markets turn at the same time (ish)

I particularly like trading the last hour as you often seem to get a fake in the opposite direction and then a move back in the direction of the day,as if to catch people out.

 

[robster970]

Your point about times a good one.

You often see markets turn at the same time (ish)

I particularly like trading the last hour as you often seem to get a fake in the opposite direction and then a move back in the direction of the day,as if to catch people out.

I see that one sometimes too - between about 8 and 8.30ish - lol

 

[BlackBison]

analysing trades, sticking to the winners and removing the losers

 

[malaspina]

Once thing helped me a lot, I focus, I only day trade the emini nasdaq 100. I now feel how the market is behaving just to look at price action and volume. This is a plus. It have worked for me.

 

[Ambrose Ackroyd]

When I realised it wasn't good to be greedy and it wasn't necessary to hit 3 or 4 home runs every day.

Quiet, methodical accumulation of pips with sensible compounding is the way to go.