eminifuturesblog
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Hi all, following on from the last article I wrote about trading hours, I thought I'd do a follow up on my blog and post it here, partly to respond to some of the comments I got and partly because I had more to say! This one is a bit longer but I'd like to think it's all of value, I'd apppreciate any comments you've got, positive or negative 
!
An article I wrote recently about limiting your time trading during the day seems to have attracted a lot of opinion and on the whole people have been positive. I had one or two negative comments which is fine, we’re all entitled to an opinion but it seems that those who were positive seemed to relate to what I was saying in some shape or form.
I had one comment which suggested if you’re trading a system which has good odds of success you should continue trading with it even after you’ve reached your daily goal. I understand and respect this opinion but I ask myself what’s the point of having a daily goal if you keep trading? Yes there are days when it seems you have the Midas touch and you’ve suddenly been given a license to print money so every time you get the signal to buy or sell it’s a winner. These are generally days when there are some great trends. However, from experience I would have to sit through 8 days to get 1 may be 2 like that. Of course, you don’t know in advance whether a signal will result in a trend but you have to take it nonetheless and it’s on the choppy days when no matter how experienced you are or how bullet proof your system is that your account gets ground down to zero.
I know from my journal, having noted the times of entry for my trades the most profitable period for me is the first 30 minutes of the open (9.30 ET to 10.00 ET). I also know from experience that after this, if my PnL isn’t positive the longer I sit there the less chance I have of turning it positive or put it another way, there’s a greater chance I make a minor loss on the day to a much bigger one. Why? A combination of the market conditions (there’s usually a good trend after the open, then after 10.00 it becomes choppy then perhaps you see another trend in the afternoon) my concentration going but most significantly I genuinely don’t want to sit in front of my screen for that amount of time.
Many futures markets are open 24 hours or nearly 24 hours a day which essentially means that if your attitude is that if you have a profitable system you should trade it all the way through the day, well if that’s the case, why not for 24 hours? Of course that’s impossible we need to sleep, eat, do errands and for me, most importantly, live my life away from trading in other words, balance it. It’s not healthy sitting in front of the screen for even 8 hours a day, yes people do it, but that doesn’t mean they’re profitable. Many traders at prop firms, hedge fund or investment banks won’t be sitting for 8 hours a day, why should I?
I also realise the importance of time Vs money earned and today is a good example of what I mean. I logged into the trading room I belong to (and where I post my trades) at 9.00 ET (2pm GMT) and did my pre-market analysis. I knew the key zones for the day on the ES and was ready for the open. Just after the open I got a signal to go long and within 10 minutes I made nearly 3 points (I actually trade the NQ using the ES charts). For me, that’s one winning trade and I’m done, PC off. Now, that’s nearly $150, which is about £100 for, in all 40 minutes work. If you pro-rata that, it’s £24,000 gross which is about the average salary someone in the UK receives a year and again, that was based on 40 minutes work. I’m not telling you this figure to boast or even moan about how little it is, I’m doing it because I know most people slog their guts out to earn that for a day’s work. When I was working in a pub, I got paid £20 for a four hour shift in other words, to earn what I made earlier I would have to pull pints for 5 shifts. No thanks, been there done that.
I’m not naive in believing that just because I have experience trading futures the emotion of greed (or fear or anger or any of the other emotions from a broad spectrum traders get exposed to during the day) disappear. They don’t they’re always there. What gives me my edge is that I know it and I also know that although it’s not easy to switch off the PC when I’ve just done a good trade and the temptation is there to carry on, I do know it’s easier to do so than try and suppress all those other emotions if I chose to carry on trading.
My opinion is that if you make your money and you do it quickly, be grateful and turn the computer off. The sun was shining outside earlier so I went out and enjoyed it. I know that I can become my own worst enemy if I to carry on trading and yes I could have double or tripled that money but I also know I could have lost it and ended the day down having given the markets another 6,7 or 8 hours of my life. This is what my experience tells me, I’ve been through too much pain in the past to ignore the lessons I’ve been given, you get given them for a reason, carrying on while you know what experience tells you, verges on stupidity and with trading puts you into the category of a gambler. That though is a different subject, and I think I might cover that next.
Tim, www.eminifuturesblog.com
!An article I wrote recently about limiting your time trading during the day seems to have attracted a lot of opinion and on the whole people have been positive. I had one or two negative comments which is fine, we’re all entitled to an opinion but it seems that those who were positive seemed to relate to what I was saying in some shape or form.
I had one comment which suggested if you’re trading a system which has good odds of success you should continue trading with it even after you’ve reached your daily goal. I understand and respect this opinion but I ask myself what’s the point of having a daily goal if you keep trading? Yes there are days when it seems you have the Midas touch and you’ve suddenly been given a license to print money so every time you get the signal to buy or sell it’s a winner. These are generally days when there are some great trends. However, from experience I would have to sit through 8 days to get 1 may be 2 like that. Of course, you don’t know in advance whether a signal will result in a trend but you have to take it nonetheless and it’s on the choppy days when no matter how experienced you are or how bullet proof your system is that your account gets ground down to zero.
I know from my journal, having noted the times of entry for my trades the most profitable period for me is the first 30 minutes of the open (9.30 ET to 10.00 ET). I also know from experience that after this, if my PnL isn’t positive the longer I sit there the less chance I have of turning it positive or put it another way, there’s a greater chance I make a minor loss on the day to a much bigger one. Why? A combination of the market conditions (there’s usually a good trend after the open, then after 10.00 it becomes choppy then perhaps you see another trend in the afternoon) my concentration going but most significantly I genuinely don’t want to sit in front of my screen for that amount of time.
Many futures markets are open 24 hours or nearly 24 hours a day which essentially means that if your attitude is that if you have a profitable system you should trade it all the way through the day, well if that’s the case, why not for 24 hours? Of course that’s impossible we need to sleep, eat, do errands and for me, most importantly, live my life away from trading in other words, balance it. It’s not healthy sitting in front of the screen for even 8 hours a day, yes people do it, but that doesn’t mean they’re profitable. Many traders at prop firms, hedge fund or investment banks won’t be sitting for 8 hours a day, why should I?
I also realise the importance of time Vs money earned and today is a good example of what I mean. I logged into the trading room I belong to (and where I post my trades) at 9.00 ET (2pm GMT) and did my pre-market analysis. I knew the key zones for the day on the ES and was ready for the open. Just after the open I got a signal to go long and within 10 minutes I made nearly 3 points (I actually trade the NQ using the ES charts). For me, that’s one winning trade and I’m done, PC off. Now, that’s nearly $150, which is about £100 for, in all 40 minutes work. If you pro-rata that, it’s £24,000 gross which is about the average salary someone in the UK receives a year and again, that was based on 40 minutes work. I’m not telling you this figure to boast or even moan about how little it is, I’m doing it because I know most people slog their guts out to earn that for a day’s work. When I was working in a pub, I got paid £20 for a four hour shift in other words, to earn what I made earlier I would have to pull pints for 5 shifts. No thanks, been there done that.
I’m not naive in believing that just because I have experience trading futures the emotion of greed (or fear or anger or any of the other emotions from a broad spectrum traders get exposed to during the day) disappear. They don’t they’re always there. What gives me my edge is that I know it and I also know that although it’s not easy to switch off the PC when I’ve just done a good trade and the temptation is there to carry on, I do know it’s easier to do so than try and suppress all those other emotions if I chose to carry on trading.
My opinion is that if you make your money and you do it quickly, be grateful and turn the computer off. The sun was shining outside earlier so I went out and enjoyed it. I know that I can become my own worst enemy if I to carry on trading and yes I could have double or tripled that money but I also know I could have lost it and ended the day down having given the markets another 6,7 or 8 hours of my life. This is what my experience tells me, I’ve been through too much pain in the past to ignore the lessons I’ve been given, you get given them for a reason, carrying on while you know what experience tells you, verges on stupidity and with trading puts you into the category of a gambler. That though is a different subject, and I think I might cover that next.
Tim, www.eminifuturesblog.com
