trading the emini snp... as a career

[aversano]

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,.

maybe they dont exist....

 

[gc1]

maybe they dont exist....

If that were the case I'm sure exchange membership leases would be even cheaper than they are at the moment (leasers are overwhelmingly likely to be trading for their own account, not filling orders for others).

 

[aversano]

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.

Tim, I responded to your post, scroll up and you will see it.

 

[aversano]

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.

Thank you for posting. I agree. My current goal isn't 300k a year. this is my ultimate goal on which I am currently working by trading one contract and following my plan.

 

[robster970]

Thank you for posting. I agree. My current goal isn't 300k a year. this is my ultimate goal on which I am currently working by trading one contract and following my plan.

Trading $1k per contract is seriously undercapitalised. You need to increase your capital to even trade 1 contract in a less risky way.

Your annual return is 2400% based upon what you have said. You're taking excessive risk which is likely to blow your money. That's the point I'm trying to make.

 

[aversano]

Trading $1k per contract is seriously undercapitalised. You need to increase your capital to even trade 1 contract in a less risky way.

Your annual return is 2400% based upon what you have said. You're taking excessive risk which is likely to blow your money. That's the point I'm trying to make.

where did you get that from? I am trading 1 contract with 4k

 

[robster970]

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.

This. 5 contracts, 5k, 1k per contract.

 

[aversano]

This. 5 contracts, 5k, 1k per contract.

I was basing it on some margin requirements. that's all.

 

[robster970]

OK. Even on $4k per contract at 2pts per day/contract you're still doing just shy of 1000% per annum. Still think you're undercapitalised for the risk if that's the case.

Each to their own as they say. I'm certainly more conservative than you.

 

[BJ21]

"Trading $1k per contract is seriously undercapitalised"​

:clap:

I started trading with a $*** ........ scrap that ...... It didnt work (long usual story)!!!
If your broker offers you $500 margin on your account of 5K (ie: you can sell/buy 10cars at once) Dont do it ...just because it avaliable !!! Its over leverage ... i have a 30K CC ... and i really want a Holbut watch .... but I'm not gna get it !!!!

I trade 3K/car on the ES and have done for the last year with (lets say i'm happy with ...or want to still keep on doing it ) ..>Success
every 3K I make in my account I add another car ... I did try more contracts but i was not comfortable or happy with it.


If your just starting out .... use the minimum amount of money you can and try and make the most of it.

(if your trading and Index ..for money manegment reasons .......it would be stupid to just use just 1 contract it cant be done ...where would you set your target ??? )

and 300k ... daaammn


I've been trading ....(not in a straight line) but i've found my feet and i earn about just above the average analyst in a IB at the moment !!
I have mates that did the same degree / Masters as me ... and went to an IB on a "FIXED" salary ...
In the past and sometimes now I do still wish i went down that road too ....but overall i'm happy with where i am right now

Sorry if i went a little off topic .. but 300K/year /// YEH its possible but not for every1 !!! and its Stupid to think before you even start that ...IT is possible !!

BTW .... If anyone wants to get my view on any question realated or otherwise then please ask .... Its a kinda time pass !!! better than playin pass words on facebook.

 

[PualoP]

If I show you a consistently profitable trader on the S&P emini, what will it do for you?

 

[srganesh]

Can you guys tell me what does 1597 volume chart mean?

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.

 

[srganesh]

Hi Tim,

Does this convergence/divergence of MACD with price work on long term charts too
(ex: Daily charts).

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:
View attachment 69712
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.

 

[D70]

Hi Tim,

Does this convergence/divergence of MACD with price work on long term charts too
(ex: Daily charts).

More so on long term charts (less "noise").
Please correct me otherwise Tim.

 

[timsk]

More so on long term charts (less "noise").
Please correct me otherwise Tim.

Hi srganesh,
The short answer is yes but, having said that, my view and that of D70's isn't relevant to you and your trading (no offense D70!). Look at a 'long term chart' - see what you can see and decide for yourself. If you've not yet viewed them, the three videos I posted in the video section explain this very well.
Enjoy.
Tim.

 

[Traduk]

Can you guys tell me what does 1597 volume chart mean?

With some analytical software you can create a new bar every time a certain volume is exceeded. These in my software are called "Constant Volume Bars".

The poster chooses to use 1597 and a new bar will be created with every volume count that exceeds that level. Different horses for different courses but I use 10000 on the E-mini which gives around 150 to 200 bars per day. He will see over 5X the number I see.

There are also Tick number designated charts which really only act off the flip\flop between bid and ask ie trades done irrespective of size. I find those far less useful because IMO only volume moves price and a thousand little guys can hammer all day at the order book and never move it

 

[srganesh]

Thanks TiM, Can you point me to the video section i have trouble finding it.
Also how do we calculate the Stop loss on a Daily charts once we enter into trade, I am having trouble with stop loss setup and most of the time i get whisawed with a false break out.
BTW i trade futures looking for a breakout on support and resistance levels i usally trade 3 min,5 min charts, On short time interval charts its easy to setup the stoploss based on ATR but with daily charts the ATR is large and i dont want to loose too much money to see i am whipsawed.

Hi srganesh,
The short answer is yes but, having said that, my view and that of D70's isn't relevant to you and your trading (no offense D70!). Look at a 'long term chart' - see what you can see and decide for yourself. If you've not yet viewed them, the three videos I posted in the video section explain this very well.
Enjoy.
Tim.

 

[robster970]

Thanks TiM, Can you point me to the video section i have trouble finding it.
Also how do we calculate the Stop loss on a Daily charts once we enter into trade, I am having trouble with stop loss setup and most of the time i get whisawed with a false break out.
BTW i trade futures looking for a breakout on support and resistance levels i usally trade 3 min,5 min charts, On short time interval charts its easy to setup the stoploss based on ATR but with daily charts the ATR is large and i dont want to loose too much money to see i am whipsawed.

Set your S+R on the 1d timeframe and then time entry on those levels with your 3m or 5m chart and set you SL based upon your max risk for the trade.

If you're drawing lines on a 3m or 5m chart, you're probably trading noise.

 

[timsk]

Thanks TiM, Can you point me to the video section i have trouble finding it.
Also how do we calculate the Stop loss on a Daily charts once we enter into trade, I am having trouble with stop loss setup and most of the time i get whisawed with a false break out.
BTW i trade futures looking for a breakout on support and resistance levels i usally trade 3 min,5 min charts, On short time interval charts its easy to setup the stoploss based on ATR but with daily charts the ATR is large and i dont want to loose too much money to see i am whipsawed.

Hi srganesh,
Re. videos, here you go . . .

This thread in the Forex discussion forum is an active thread where MACD divergence is used to good effect and is worth a look.

Re. your question about stop losses, ATR tends not to be very useful (in my experience) on a daily TF. I'm not clear from your question if you're wanting to set SLs based on a daily chart or an intra-day TF? I suggest you post a chart of a trade you've been stopped out of, clearly annotating it to show where you entered and where you placed your SL. From that, subscribers to the thread may be able to offer some suggestions. robster970's idea of establishing your S&R levels in a higher TF and then drilling down is very sound, IMO. If you've not seen it, Captain Currency's '3 Ducks' thread is loosely based around the same idea and is also worth a read. Check it out here.
HTH.
Tim.

 

[aversano]

Well... I am back to this thread with a fresh mind... almost 2 weeks ago I decided to remove any technical indicators and start trading market depth... it has been working pretty well for me. Tim, any thoughts?