Here we can see the details for all trades, during the 7 trading days from December 4-12. (Note, click on the chart, and then find the magnifying glass to zoom in. Then use scroll bars to focus on the 1 minute chart with entries, and the time and sales.) Actual time and sales, for real time live trading, are provided along with the entry points indicated on the charts.
Here again, we can see some “tweaking” of the trade plan, as I stretched the daily goal a bit. There were a few reasons for this change. As you can see from the video in my previous post, losses do happen. If you watched that video, you will also notice my approach is to strive for recovery to the best of my ability and the opportunities available. When losses occur, commissions add to the deficit, if the daily goal is not reached. Also, not all losing days end in a recovery as successful in that video. So there will be times when it seems advantageous to take any extra “gifts” the market might be offering.
November was a great month for trading, but it included 2 “larger” losses in a single month, for the first time this year. So I went into a “Christmas rally” mode, to finish strong for the year. The market has been most conducive to providing a few opportunities for me each day, to pad the totals a bit, after reaching my 712.50 daily goal. If you study the charts, you might see how it can be fairly easy to cherry pick some obvious setups, once you have a feel for the swings, towards the end of the morning trade, and into the early EST “lunch hour”. I just check the screen for some price extremes, during the hour or two following attainment of the daily goal, usually finding a few ticks fairly easy to come by. The results were positive, for some excellent totals during this 7 days of trading:
Dec 4: 54 contracts, no losses, + 737.50
Dec 5: 60 contracts, no losses, + 1012.50
Dec 8: 48 contracts, no losses, + 750.00
Dec 9: 84 contracts, 1 loss, + 950.00
Dec 10: 57 contracts, no losses, + 862.50
Dec 11: 42 contracts, no losses, + 787.50
Dec 12: 45 contracts, no losses, + 1012.50
During the 7 days of trading, 390 contracts were filled for total gross profit of 6,112.50.One losing trade cost 3/4 of one tick, per contract, on the scale. Net profit for the 7 trading days: 5100.00 after commissions. This approach also emerges from the “method to madness” mindset underpinning my perspective on the trading process. It might be likened to the old axiom in baseball, applying to infielders fielding grounders: don’t let the ball play you, attack it. I would strongly disagree with the notion of quitting after a loss, or psychoanalyzing performance, to conclude the “mind is not into it today”, so take the rest of the day off.
I just look at the practical parameters. If every day is a winning day, the account gets bigger every day. (Approaches which go for the big moves usually include lots of losses, and some big losses. It can be very surprising how losses add up, along with the added costs of commissions increasing the size of the losses.) I cannot think of any better structure for a steady income from trading, than high percentage quick hitting. Just do whatever must be done to make every trade a winning trade, and every day a winning day. If there are losses, I don’t want them to stick. If my best efforts leave a deficit at the end of the day, just put in a little more time the next day. Just playing it by the numbers, no complicated extraneous analysis required.
Everything in this trade plan is geared towards the straightforward goal: take the easiest, fastest, highest probability quick profit, whenever it appears to be sitting there at the moment. Much simpler than trying to project any futuristic designs for the market, and stalking it for the big moves. No forward planning or extra analysis. No complicated evaluations, or fancy exit strategy. No greed or confusion to stay in the trade longer and go for the gold.
Just act in the moment, when it seems clear for a few seconds, that the market will surely grant you a tick or two, with an occasional bonus pop in your favor. While this may seem like a “penny ante” strategy, it may be suggestive of the hare and the tortoise. Those few ticks can add up quickly, sometimes for 4 figure days on a mere 3 contracts. Don’t let the losses stick, and trade free from fear or greed, in the active attack mode. It is a very fun way to trade.
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
We have modified the trade plan due to increased volatility. For more conservative trading we have increased size to 3 lots, while increasing the daily goal to 712.50. This means less profit per contract is required, to achieve the higher daily goal. This facilitates a quicker attainment of our quota, for an earlier end to the trading session, with less time of exposure to risk.
The additional size also motivates for more cautious trading, as I am more vigilant to exit quickly if the trade does not immediately provide 2, 3 or 4 ticks profit. While this means settling for 1 tick, on 3 contracts, the profit is still 37.50. My round turn rate is 3.50 per contract, so 10.50 is the cost per completed trade. The overall net result of our modifications to the trade plan is attainment of the healthy goal of 712.50 early in the morning each day. Usually trading is finished within an hour or so, sometimes a half hour, or sometimes as long as 2 hours, or so. But we are spared the increased risk of the most radical behaviors which occur in the second half of each day. Also energy is conserved, and enthusiasm is sustained, to attack again the following morning.
The results seen here attest to the viability of the trade plan:
Nov 5: 48 contracts, no losses, 712.50
Nov 6, 48 contracts, no losses, 750.00
Nov 7, 45 contracts, no losses, 712.50
Nov 10, 48 contracts, no losses, 712.50
Nov 11, 51 contracts, no losses, 712.50
Nov 12, 33 contracts, no losses, 712.50
Nov 13, 33 contracts, no losses, 750.00
Nov 14, 36 contracts, no losses, 712.50
For the 8 days, 342 contracts were filled on 106 trades, with 8 scales. There were no losses, and the average time per trade was somewhere in the vicinity of 10-20 seconds. This approach to trading is emphasizing income and maintenance of the mindset for consistent profitable performance 5 days per week. Thorough study of the material on this blog should reveal most of the “secrets” of this trading method. But trading of course is all in the mind, so there is always more to it. (For example, 712 was my address during my youth, with fond memories, so I chose that number.) Any questions, let me know.
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Now we have posted actual trades and results for the past 5 days this week, February 11 through February 16. The results attest to the premise stated at the outset of formulation of this blog. We have presented the outline of a very simple trading method, structured in a format which emphasizes ease of execution, with facilitation of perception of the overall context of the trading day. Utilizing a very conservative strategy with priority given to “never letting a winner turn into a loser”, we are showing examples of actual real time trading, with an extremely high degree of accuracy (long term, in the 98-99% range), and the capability for attaining a 6 figure income, trading only 2 contracts per trade, on a very small account. We approach this goal with a plan based on a realistic and conservative framework, capping our trading each day when the modest goal of 600.00 is attained. This allows for some sessions to end early, completing our “work day” sometimes within the first 2 or 3 hours of trading. All aspects of the plan and trading strategy are designed to expend minimum effort, on each trade, and on each day, and over the long term. This framework is employed to make the annual goal more realistically attainable.
The 6 figure income is shown to be feasible without adding to risk size at any time. The same 2 contract strategy is employed, with the very attainable target of only 600.00 gross per day. After commissions, we expect approximately 480.00 to 500.00 per day, for a net of approximately 2500.00 per week. (Note, some days, profits will exceed 600.00, as the last trade may result in a “bonus” profit.) Factoring in holidays, 47 trading weeks add up to 117,500.00 annually. Or 240 trading days add up to 120,000.00. Or some mistakes, leading to more trades, and commissions, might lower the net to 110,000.00. All these things are variable, depending on personal objectives, but the method offers the realistic outstanding outcome. It does so with an ease and absence of stress, in contrast to many other approaches to trading. These claims and possibilities are supported by our real time results, as demonstrated in the charts with all executed orders, posted here each day this week, after trading.
Monday: 14 trades on 28 contracts, no losers, 600.00
Tuesday: 16 trades on 32 contracts, no losers, 750.00 (Last trade, exited for excess profit.)
Wednesday: 12 trades on 24 contracts, no losers, 600.00
Thursday: 14 trades on 28 contracts, no losers, 650.00 (Note added trade after post.)
Friday: 13 trades on 26 contracts, no losers, 600.00
Results for the week:
69 trades, on 138 contracts, with no losers.
Gross profits total: 3200.00
Net after commissions: 2609.36 (4.28 per round turn) (Note, typical example of how the 2500..00 target can be exceeded)
Some further clarification of our method. An examination of the trade by trade order execution will reveal the entries and exits each day. An astute observer will notice some orders with consecutive trades on the same side at different price levels. A small part of this trading strategy allows for “scaling” into some entry zones. This might occur on average once every day or so. This means the exit will be at a point which ensures profit on the entire averaged position, which may include 2 or 3 entries of 2 contracts each. We consider that to be one trade, as the strategy incorporates that as an entry with an intended objective. (This also means the earliest contracts may be exited at a deficit, but the overall trade will be profitable.) This also can be construed as aggressive money management, if the account is only 10,000.00. Even though most firms will allow 20 contracts on day trade margin, for a 10,000.00 account, 6 contracts can be considered quite aggressive by conservative standards. If one feels that way, starting with 20,000.00 should ease that concern. If so, then you have to settle for a 6 figure income on a 20,000.00 account, still not so bad. (But again, this entry strategy is employed with less frequency, and time in trades is usually very brief. The bottom line is evaluated based on 1000’s of real time trades, giving me personal confidence in the method. Everyone should backtest and possibly simulate trades for that same confidence.)
On another positive note, examination of the trade by trade order execution will reveal no losses, and also only 2 or 3 break evens, for the week. On average the method only incurs about 1 or 2 break even trades per week. That means very few “wasted” trades, with attendant expense of commissions. Many trades are exited with 2 ticks profit, 50.00 on 2 contracts, minus 8.56 commission. Most days will also include trades exited with 4-8 ticks profit, in the 100.00- 200.00 range. When those occur, the trading day ends quickly. Again, the method is designed for ease of every phase of the plan, trade by trade and day by day. Time in trades, exposure to market risk, is very brief, with the decision making process minimal, very focused, and free of stress. All in the context of a perception of the day as a whole, guiding the specific entries and exits.
Finally, we started the blog last week, with Friday’s trades. As you can see, it was more of the same, so don’t think this week is some fluke. Part of the motivation to put up this blog is just a reaction against the constant inundation of marketing stuff, I get in my email box each day. They say things like, “follow the trend”, “you have to learn to take lots of losses”, “be willing to take lots of losses, but let your profits run”, “even a losing percentage system can be quite profitable”, “compound your trade size for the real secret of trading riches”, etc. All kinds of things that I could never do. All the system vendors, trading mentors, forecasters, and all other assorted experts make so many claims and pronouncements about what is the “right way to trade”.
I disagree with so much of what I see out there, I became motivated to put up some real time substance to get in my own two cents worth. I like trading to be fun, not stressful. I don’t like having lots of losses, and steeling my will to persevere for the grand overall outcome. I don’t like to be up in a trade and have it turn around and run against me. Especially i don’t like to watch this happen frequently, so I can ride the rare long runners. I don’t like to enter on stop, get filled , and watch my fill be the exact place the market turns. I don’t like to have to figure out what is the trend in the constantly gyrating indexes. In fact, I don’t like to have to be a genius, use complex indicators, and figure out where the market is going all the time. I do like to just plug in, make money almost every trade, and every day, with new equity highs each day, with minimal anxiety and stress. It doesn’t have to be so hard. Just use a plan which eliminates fear and greed, and emphasizes the most obvious variables identifiable, and settle for very modest objectives on every trade, and on every day. Before you know it, high accuracy, low risk, with new equity highs each day, add up to a great way to make a living.
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
(click on chart to enlarge)
Unlike the past two days, trading was much more challenging. Volume was very low, leading to numerous trades missed, as limit orders were not filled. But the end result was still perfect. We met our 600.00 objective, on 13 trades, 2 contracts each, with 13 Wins. This capped off a perfect week for the method, 69 trades, on 138 contracts, without a single losing trade, every day reaching the 600.00 profit target. The results are based on 2 contracts per trade, suitable for a small trading account, with minimal stress and risk.
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
(Click on image to Zoom)
Our 600.00 quota (13 Trades, all winners) was hit by 10:45 CST. So Valentine’s Day with my wife is mostly available for the rest of the day.When you reflect on the freedom to enjoy other things in life, this strategy makes more sense. If you are more inclined to seek status goals, keep in mind approximately 500.00, net after commissions, is more than 200.0 per hour, when it is accumulated in 2 1/4 hours. And no brutal too early mornings, driving to work, fighting traffic or blizzards or whatever, with expenses for gas, etc. Most of all this kind of trading is easy and a lot of fun. Read more…
(Click on image to zoom)
The 600.00 profit objective was met by 11:05 CST. 12 Trades, 2 contracts each, all winners, no break evens, and only 1 trade was settled for a one tick take. (Those are the ones that bring remorse.) A day like this can inspire second thoughts on the strategy. It is so easy to collect on the constant opportunities. There are so many trades which are taken for 2 ticks profit, which appear obvious to bring much bigger rewards. It seems obvious that another 1000.00 or 2000.00 would have been easily attainable. But it is all about the mindset. Bigger winners are great, but every gain from the markets brings a tradeoff, in terms of risk, psychological damage, fear, greed, etc.
When we stay within a simple structure, it is very easy to see the simplicity of clearing 500.00, (net, after commissions) every single day, for 3 or 4 hours of focus (or 2 1/2 hours, like today). An efortless way to a 6 figure annual income, starting from a small account, trading with very little risk, only 2 contracts exposure. Less fatigue, less emotional roller coaster, less stress from exposure to various risk factors, etc. This approach allows for a very enjoyable consistent experience, like checking in with the money machine every day. It is much more fun to have almost every trade be a winner, whether it is 50.00, or 200.00, or whatever. In my book, much better than 50%- 75% winners, with a few huge winners, and some big drawdowns, and demoralizing losing streaks, which we are supposed to be “disciplined” about and keep on suffering for the heroic ultimate triumph. Any way, to each his or her own.
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
What was available in the afternoon, if the objective had not been met earlier? (Can’t help checking it out.) Actually, lots of prime opportunities—no surprise. (Click on the chart and use magnifying glass to enlarge.)
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Esminidaytrader 