BigMike's - I noticed it used to be called that. I joined it a couple years ago, so that was before my time.
As for why my prior attempt at scalping failed: I had no one to blame but myself. At the time, I joined a reputable trading room, and I coat-tailed their trades. I did OK with those trade, though at the time, I did not understand what triggered entries/exits. They had a notification that popped up periodically saying get in ES now, or get out of X now. At the time, my goal was to hit the buy or sell button within a second of the signal. I watched all the nightly briefings where they would go over the markets (they were to prepare us for the next morning). The experience as was not a total loss, as its where I learned to enter big moves on pullbacks, essentially trading trends, but on a shorter time frame. This is something I still do to this day. I learned a bunch from those guys.
Where I went wrong was not the coat-tail trades - its when I went off the reservation and did my own trades. I then had an accident and was in the hospital overnight. I had trauma surgery under general anesthetic. Stupid, stubborn me - 2 days later, I am back on the computer, attempting to trade, while on painkillers, and all messed up from trauma. Add that to the trades I was doing on my own, and its pretty obvious I was headed for disaster. Trading is a funny business because you can't always see disaster coming yourself, yet its pretty obvious to someone observing you, or its obvious to you in hindsight. Hindsight is 20/20.
A year after the accident, I looked at things I did during the 6 month period immediately following my accident, WTF was I thinking? I was not myself. I mean, this is looking at my trading disaster, but also looking at everyday life decisions I made at that time, and paperwork I did at that time.
So, as I said, it was my own fault. I made a bad decision to trade right after having a major trauma event and while on drugs. Either the day I traded, which was only 2-3 days after my accident, or maybe the next day, I had a fairly substantial 4 figure loss. It shocked me. It was like someone threw a bucket of ice water on my head. I stopped trading that day and did not resume until 2013 (about 3.5 years). When I did start again, it was swing type trading where I held positions for days to weeks. I have not traded intraday again until recently - about 9 months ago.
As far as technicals, yes, I was looking at them back in 2010. I was unaware of level 2 and the DOM at that time. That's a much more recent thing for me that I've started incorporating into my trading. Longer term I don't think the DOM will help, but intraday, I think it helps a ton. Bear in mind that I don't know everything so I could be wrong about the DOM not helping on longer time frames. At the moment, I don't see how.
I don't recall the specific technicals I was looking at back then, but it's where I started to become a mean reversion trader, but always with-trend.
I'm fairly certain that it was more price action based for the actual signals, but technicals were looked at on the "bigger picture" - daily bars. At that time, the trading room I was with was teaching me to look at multiple time frames, and learned to understand how different traders could be trading the same market on different time frames, and their time frame affected their entry/exit timing, which in turn, created the moves we see on an intraday basis, as well as the moves we see at the longer time frames. I learned that context matters: A move on a shorter term time frame will occur within the context of the longer term time frame. I agree with your comments about being aware of other time frames.
Nowadays, I still enter trends on pullbacks (though they are intraday trends), but I am trying to add non-trend trades to my repertoire. The problem with trend trading is the trends are too infrequent, even on an intraday basis. Chop occurs most frequently. For example, in NQ, we had maybe 2 trend days in the past 2 or 3 weeks, and they occurred yesterday morning and this morning. The rest of the time would be considered chop by most people. I'm learning to profit from the chop. Note that even on my time frame, the markets can enter a chop zone where even I will stand aside. Let me clarify: The chop I can profit from is what I would consider large enough volatility, whereas a longer term guy would consider it an area he would lose money. The chop where I would stand aside is even smaller volatility, where I found I could not make money due to my costs. The longer term guy would view that chop as the market barely moving at all. I've generally found that chop with a range smaller than 10-15 ticks to not worth chasing.
So one man's chop is another's profit opportunity. It's all relative, but I recognize that there is a floor to how short of a timeframe a retail guy like me can go, mainly due to latency (lag) in my data feed and my order execution, and the slippage or "toxic fills" that go with that, and of course, commissions. At a certain small enough time frame, only the HFT guys can trade and profit. My timeframe needs to be longer than theirs, and its generally shorter than the swing traders, where I used to trade. You might ask, why have a transitioned to shorter time frames? In a word: opportunities. Specifically, there are more of them.
Learning to profit from (volatile enough) chop and being able to switch gears and go with-trend is a VERY difficult skill to master, as is switching from trend mode trading to chop mode trading. Learning when to step aside - not participate in a market because its in chop too small to profit from (as a retail guy) is a key skill as well. Pure TA fails in both ways. You can look at technicals that help you trade the trend, but you will get chopped up most of the time -known as being "whipsawed" - see Seykota's whipsaw song:
View: https://www.youtube.com/watch?v=LiE1VgWdcQM
Other technicals help you trade the chop, but like "picking up nickles in front of a steamroller", you will get destroyed when the trend arrives. But hey, you had a 70-80% win rate!
I use technicals as a guide or a suggestion rather than an absolute set of rules. Seykota's last rule of trading is "know when to break the rules".
As for why my prior attempt at scalping failed: I had no one to blame but myself. At the time, I joined a reputable trading room, and I coat-tailed their trades. I did OK with those trade, though at the time, I did not understand what triggered entries/exits. They had a notification that popped up periodically saying get in ES now, or get out of X now. At the time, my goal was to hit the buy or sell button within a second of the signal. I watched all the nightly briefings where they would go over the markets (they were to prepare us for the next morning). The experience as was not a total loss, as its where I learned to enter big moves on pullbacks, essentially trading trends, but on a shorter time frame. This is something I still do to this day. I learned a bunch from those guys.
Where I went wrong was not the coat-tail trades - its when I went off the reservation and did my own trades. I then had an accident and was in the hospital overnight. I had trauma surgery under general anesthetic. Stupid, stubborn me - 2 days later, I am back on the computer, attempting to trade, while on painkillers, and all messed up from trauma. Add that to the trades I was doing on my own, and its pretty obvious I was headed for disaster. Trading is a funny business because you can't always see disaster coming yourself, yet its pretty obvious to someone observing you, or its obvious to you in hindsight. Hindsight is 20/20.
A year after the accident, I looked at things I did during the 6 month period immediately following my accident, WTF was I thinking? I was not myself. I mean, this is looking at my trading disaster, but also looking at everyday life decisions I made at that time, and paperwork I did at that time.
So, as I said, it was my own fault. I made a bad decision to trade right after having a major trauma event and while on drugs. Either the day I traded, which was only 2-3 days after my accident, or maybe the next day, I had a fairly substantial 4 figure loss. It shocked me. It was like someone threw a bucket of ice water on my head. I stopped trading that day and did not resume until 2013 (about 3.5 years). When I did start again, it was swing type trading where I held positions for days to weeks. I have not traded intraday again until recently - about 9 months ago.
As far as technicals, yes, I was looking at them back in 2010. I was unaware of level 2 and the DOM at that time. That's a much more recent thing for me that I've started incorporating into my trading. Longer term I don't think the DOM will help, but intraday, I think it helps a ton. Bear in mind that I don't know everything so I could be wrong about the DOM not helping on longer time frames. At the moment, I don't see how.
I don't recall the specific technicals I was looking at back then, but it's where I started to become a mean reversion trader, but always with-trend.
I'm fairly certain that it was more price action based for the actual signals, but technicals were looked at on the "bigger picture" - daily bars. At that time, the trading room I was with was teaching me to look at multiple time frames, and learned to understand how different traders could be trading the same market on different time frames, and their time frame affected their entry/exit timing, which in turn, created the moves we see on an intraday basis, as well as the moves we see at the longer time frames. I learned that context matters: A move on a shorter term time frame will occur within the context of the longer term time frame. I agree with your comments about being aware of other time frames.
Nowadays, I still enter trends on pullbacks (though they are intraday trends), but I am trying to add non-trend trades to my repertoire. The problem with trend trading is the trends are too infrequent, even on an intraday basis. Chop occurs most frequently. For example, in NQ, we had maybe 2 trend days in the past 2 or 3 weeks, and they occurred yesterday morning and this morning. The rest of the time would be considered chop by most people. I'm learning to profit from the chop. Note that even on my time frame, the markets can enter a chop zone where even I will stand aside. Let me clarify: The chop I can profit from is what I would consider large enough volatility, whereas a longer term guy would consider it an area he would lose money. The chop where I would stand aside is even smaller volatility, where I found I could not make money due to my costs. The longer term guy would view that chop as the market barely moving at all. I've generally found that chop with a range smaller than 10-15 ticks to not worth chasing.
So one man's chop is another's profit opportunity. It's all relative, but I recognize that there is a floor to how short of a timeframe a retail guy like me can go, mainly due to latency (lag) in my data feed and my order execution, and the slippage or "toxic fills" that go with that, and of course, commissions. At a certain small enough time frame, only the HFT guys can trade and profit. My timeframe needs to be longer than theirs, and its generally shorter than the swing traders, where I used to trade. You might ask, why have a transitioned to shorter time frames? In a word: opportunities. Specifically, there are more of them.
Learning to profit from (volatile enough) chop and being able to switch gears and go with-trend is a VERY difficult skill to master, as is switching from trend mode trading to chop mode trading. Learning when to step aside - not participate in a market because its in chop too small to profit from (as a retail guy) is a key skill as well. Pure TA fails in both ways. You can look at technicals that help you trade the trend, but you will get chopped up most of the time -known as being "whipsawed" - see Seykota's whipsaw song:
Other technicals help you trade the chop, but like "picking up nickles in front of a steamroller", you will get destroyed when the trend arrives. But hey, you had a 70-80% win rate!
I use technicals as a guide or a suggestion rather than an absolute set of rules. Seykota's last rule of trading is "know when to break the rules".
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