Can anyone give me some pointers on scalping the Australian Cash index.
So far I've tried that Eric Kratzer mans method of the divergence of the 7 and 15 minute EMAs.
Then I started I started looking for Resistance and Support on the minute charts, with entry being the first move beyond those points, and exit being the next sign of R/S.
I'd be happy with just a few points in the day. If some scalpers can make more than the whole days range, can someone give us some guidance on achieving just a few points? Is there a 100% foolproof way of getting at least one point?
nat
7th-August-2008, 01:52 PM
Hi dazers , your question, Is there a 100% foolproof way of getting at least one point?,,,,,,No
But plenty of people are making money on 30 to 60 % way of trading probabilities. Nothings 100% except death and taxes sothey say .
My advice is practise practise practise ,until you will eventually find a method that suits you or you give up .
Go to sfe site where you can use there buy sell simulator for free ,you obviuosly have access to charting ,and document trades each day ,c what you did right what you did wrong .
or open ib account and use there simm .
trembling hand has plenty on what it takes to do such things and others on this site , check out the trading the spi thread ,but there is no easy road im afraid or at least i havent found it ,Nathan
nat
7th-August-2008, 02:01 PM
A couple of pointers from me ,but mightnt help you ,Is put in monthly and weekly pivot points ,support and res on 1 hour chart 200 and 20ema and same on 1 min and say 5 min chart .Is marking gapping up or down for day? . How is price interacting with these things on charts at given areas ?. Candlestick chart by the way .And again observe trade observe trade maybe in months, years ,it will all come together. Nathan
korrupt_1
7th-August-2008, 02:52 PM
If you can come up with a 100% fool proof way of scalping, then you could make 1 HUGE trade and quit... cos it's 100% fool proof....
As Nat said, practice is the key... watch/study your instrument you are trading. Each one has a distinctive way of moving. Get intimiate with it... study it from all levels of magnification. If you are scalping, daily/weekly charts are useless... use 1sec to 1hr charts. By all means still use the daily charts to get an idea of overall trend and identify key levels, but scalping should be done mainly on 1sec to 5min charts.
Generally, combine good risk and capital management with proven and backtested entry/exit strategies - mostly some kind of technical indicators - like RSI, MACD, STOCHASTICS, BOLLINGER, MOVING AVERAGES, SUPPORT/RESISTANCE, ETC.... a tonne of indicators to use... Remember, different time scales also give different indicators. One chart might be oversold, but another one is nowhere near it.
The more indicators that gives a green light for entry, the higher the probability of success (but still not 100%)... However waiting for too many indicators means not many trades as well.
There's a thread on Scalping the FX... contains useful information there. Also as Nat said... look up TremblingHand's blog... a gold mine of info in there.
tech/a
7th-August-2008, 06:38 PM
Generally, combine good risk and capital management with proven and backtested entry/exit strategies - mostly some kind of technical indicators - like RSI, MACD, STOCHASTICS, BOLLINGER, MOVING AVERAGES, SUPPORT/RESISTANCE, ETC.... a tonne of indicators to use... Remember, different time scales also give different indicators. One chart might be oversold, but another one is nowhere near it.
There should be a warning with indicators.
Warning Overdose will result in DEATH.
Learn VSA.
Invest in the software.
If you cant read the tape you'll
be market fodder.
dazers
9th-August-2008, 06:03 PM
Any quick directions on where can I find volume indication for the ASX 200 as a whole? As I am scalping via IGs CFDs where there is no volume offerred. I have tried looking at volume for individual stocks to try and correlate but this wont do.
Rockon2
11th-August-2008, 02:11 PM
Hello dazers . Volume on xjo is available on Market Analyser Pro
http://www.mdsnews.com/australia/
Im not endorsing there product. Just stating the fact that its available.
I too trade/scalp the index using IG markets.
And this is my 2 bobs worth :)
For a start, there is no such thing as 100% foolproof, stop looking imo.
I agree with tech/A , I dont use any indicators.
To trade intraday i use 5 min charts, and look for patterns, IE: ascending / decending triangles, Flag breakouts etc ... You must learn S & R, nothing else matters imo.
You also must know where to exit your trade on a stop BEFORE entry, ( in other words you must know imediatly if your trade is incorrect )
When you trade intraday using breakouts, you must have 2 things in mind (1) your exit if wrong. (2) your target if right... its very easy to measure targets once a patten has completed.... This takes learning and experience... Lots of it.... But very rewarding when you get it right.
Rockon2
11th-August-2008, 02:39 PM
Oh ! and 1 more thing, you must know how to read a BAR, wether it be a candle or a OHLC bar..
:)
Andy_aus
11th-August-2008, 03:09 PM
Get loads and loads of screentime
Learn to tape read and identify a few high probability patterns
Dont get indicator heavy and stay away from market makers
Own the market
Rockon2
11th-August-2008, 04:11 PM
Agree with Andy.
A trade today that went well,, not on the index, but a pattern trade nontheless was BOL.
I had a conditional buy order placed at 0.85, which is the breakout from the pattern.. 2 Easy. :)
If you look at 0.85 price break on a 5 min chart, you will see the volume increase, ( meaning, i wasnt the only one to see it coming)
Cheers and TYMFTR :D
diliff
12th-August-2008, 06:24 AM
Agree with Andy.
A trade today that went well,, not on the index, but a pattern trade nontheless was BOL.
I had a conditional buy order placed at 0.85, which is the breakout from the pattern.. 2 Easy. :)
If you look at 0.85 price break on a 5 min chart, you will see the volume increase, ( meaning, i wasnt the only one to see it coming)
Cheers and TYMFTR :D
May I ask exactly what the pattern was that you spotted? It looked fairly flat to me... but I suppose by that you mean it had well defined support and resistance lines and therefore broke out of that containment?
dazers
12th-August-2008, 10:36 AM
Thanks so far.
Live volume for XJO is $157.25/ month from Market Analyser Pro though. Can I get it anywhere else for cheaper?
Does the volume for the SPI 200 correlate to the XJO? I'm considering opening up demo accounts with Futures Providers to see their tools
Rockon2
12th-August-2008, 11:04 AM
Spot on diliff :) thats exactly what im looking for.
dazers,,,, spi 200 and xjo difference... will try and explain. and hope im right.
The xjo is the index of the top 200 stocks on aust market.
The spi 200 is the futures market mirroring the xjo.
So there presumably would be a diff in price say between an OCT 08 expirery
spi future and todays xjo...
The spot month ( meaning closest month contract ) of the spi would be very close to the xjo.
p.s. I dont use volume to intraday trade the xjo.
On Equities , yes its imperative.
Rockon2
12th-August-2008, 02:18 PM
Today,, scalped 20 points from the triangle breakout :)
TYMFTR
See IG 5 min chart att
Trembling Hand
13th-August-2008, 12:19 PM
dazers,,,, spi 200 and xjo difference... will try and explain. and hope im right.
The xjo is the index of the top 200 stocks on aust market.
The spi 200 is the futures market mirroring the xjo.
So there presumably would be a diff in price say between an OCT 08 expirery
spi future and todays xjo...
The spot month ( meaning closest month contract ) of the spi would be very close to the xjo.
p.s. I dont use volume to intraday trade the xjo.
On Equities , yes its imperative.
Guys the CFD index instruments are not linked to the actual equity indexes. They carn't be for two reasons. In the case of the ASX they only quote the indexes every 30 seconds. secondly they lag the futures big time. If they linked them to the index you would just need to trade watching the Futs and have a 30 to 60 sec heads up to the xjo direction.
Trembling Hand
13th-August-2008, 12:34 PM
Can anyone give me some pointers on scalping the Australian Cash index.
I'd be happy with just a few points in the day. If some scalpers can make more than the whole days range, can someone give us some guidance on achieving just a few points? Is there a 100% foolproof way of getting at least one point?
The secret to getting just a few points out of the market each day is to aim to get 100 points out each day. ;)
Never go into business with a low aim. 99% of people never get to 50% of there target when starting out in business, especially with trading. If your aim is to average 5 points per day you will end up with a good day average of 5 points and a bad day average of -15 points.
Whats going to happen if you have 50/50 good to bad days?
BLOW UP!!
korrupt_1
17th-August-2008, 10:46 PM
secondly they lag the futures big time. If they linked them to the index you would just need to trade watching the Futs and have a 30 to 60 sec heads up to the xjo direction.
Good to see you back TH... you were gone missing for about a week... noticed you changed your avatar... is that you snowboarding? ;)
Just wondering about your comment about CFD lagging futures... if that is so,.. then if you were watching the futures, won't that give you a heads up on the CFD trade?
In other words, to negate that unfair advantage, it's in the CFD provider's best interest that they DO try to match the real Futures in real time?
druss
18th-August-2008, 09:59 AM
Forget the minute charts. Trade the tick charts. Why wait for 5minutes for a candle to appear. Minute candles give long wicks at turning points in the market.
Using tick candles the Patterns are more evident. For example at a turning point in the market you will find a double bottom/top using the tick candle. However with the 5min candles you will just find spiking wicks.
Moving Averages are a great way to scalp IMO. Especially on the 100 Tick Chart. As long as the Price remains above or below the Moving Averages you stay in the Trade.
Look for Average Daily Ranges as Turning Points in the Market. Especially when there is MACD divergence evident and Price is making higher highs or lower lows where MACD is doing the opposite. Key indicator in my book.
Nothing is more important that Support and Resistance. Fibonacci Retracements offer a great way to identify where Support and Resistance is likley to be. Using a close above or below a Moving Average at a Support or Resistance Level is important because you need confirmation that Support is actually Support and Resistance is actually Resistance.
Look for at least a 20-30 point move in one direction. Then draw your Fibonacci Retracements. Look for a pull back to the 61% and 50% levels. Then enter your trade once you get confirmation that Support or Resistance is evident.
Number one Rule. Clearly define where you will Exit. Exits are how you get Paid. Not the entries. If it goes wrong then get out. First exit when you identify it is going wrong is the cheapest.
Some thoughts
skyQuake
18th-August-2008, 12:10 PM
Good to see you back TH... you were gone missing for about a week... noticed you changed your avatar... is that you snowboarding? ;)
Just wondering about your comment about CFD lagging futures... if that is so,.. then if you were watching the futures, won't that give you a heads up on the CFD trade?
In other words, to negate that unfair advantage, it's in the CFD provider's best interest that they DO try to match the real Futures in real time?
Think TH meant that indices will lag the futures (As a rule, indices also follow futures generally). From what i've seen, CFDs never lag futures or whatever they're following...
Druss: Good to see you have a trading plan and defined setups. Keep on it.
IG is ok, but serious analysis/trading would fail there. They make their own market and charts are slightly off, ie corrupt prices, wrong ticks - all synthetic. Plus the fact that they lack volume. A major weakness.
Secondly, not sure about your timeframe but I find it hard to scalp with IG when markets are moving fast. Since you cant buy/sell at market. You gotta type in ur entry/exit (and stop), and in that time the prices have moved. You click submit, then prices can move again... "This price is no longer available."
Just my experiences anyway.
Cheers.
druss
18th-August-2008, 12:31 PM
Secondly, not sure about your timeframe but I find it hard to scalp with IG when markets are moving fast. Since you cant buy/sell at market. You gotta type in ur entry/exit (and stop), and in that time the prices have moved. You click submit, then prices can move again... "This price is no longer available."
Just my experiences anyway.
Cheers.
Not sure what you mean by typing your price in and your exit.
They have tear off tickets, so you can have the ticket on top of your chart. You just click the buy/sell button. Then have another tear off ticket right next to the price aciton. Auto Stops only for locking in profits.
druss
18th-August-2008, 12:54 PM
One Very Important thing to remember.
Only Trade in the Direction of the Moving Averages. If they are all pointing in the one direction. Trade that Direction. If they are not all Pointing in the one Direction you are just guessing... :banghead:
MRC & Co
18th-August-2008, 01:09 PM
One Very Important thing to remember.
Only Trade in the Direction of the Moving Averages. If they are all pointing in the one direction. Trade that Direction. If they are not all Pointing in the one Direction you are just guessing... :banghead:
What about fade plays?
prawn_86
18th-August-2008, 01:11 PM
What about fade plays?
And short term scalping where you take a contrarian view...
MRC & Co
18th-August-2008, 01:12 PM
And short term scalping where you take a contrarian view...
Exactly. These are fade plays.
prawn_86
18th-August-2008, 01:13 PM
Exactly. These are fade plays.
LOL sorry. Im obviously not up with the lingo... :o
skyQuake
18th-August-2008, 01:16 PM
Not sure what you mean by typing your price in and your exit.
They have tear off tickets, so you can have the ticket on top of your chart. You just click the buy/sell button. Then have another tear off ticket right next to the price aciton. Auto Stops only for locking in profits.
Yes, but they lag the charts and update only every second or so. Charts can be ticking wildly so ur order doesnt get filled cause of some crappy price difference.
Also, care with MA. By definition they lag prices. Ok in trends, bad in chop.
imo if they're not pointing in direction then its choppy or consolidating.
druss
18th-August-2008, 01:18 PM
And short term scalping where you take a contrarian view...
Good Luck with that mate.
:sly:
MRC & Co
18th-August-2008, 01:19 PM
LOL sorry. Im obviously not up with the lingo... :o
lol.
High volume reversal candles are used often by scalpers I know of, I use them myself when they come up. Especially if the tail can hit a support/resistance or close a previous gap.
Others fade extreme tick readings. Or wait for a shift in tick momentum after a large move.
Look up pipe bottom reversal also, another good play.
No luck needed there, it is a positive expectency methodology for those who use them correctly.
I'm pretty sure TH fades quite often himself.
druss
18th-August-2008, 01:21 PM
The only time I would consider going against Trend is when there is MACD Divergence where Price is making a higher high or lower low where MACD is doing the opposite.
That is it.
MRC & Co
18th-August-2008, 01:25 PM
Many use the same divergence indicator with RSI.
However, it is generally just that, an indicator.
Price and volume are the key IMHO.
skyQuake
18th-August-2008, 01:27 PM
Others fade extreme tick readings.
Mastering the Trade by Brett Steenbarger?
Pity Aus doesnt really have Tick readings though. Works ok on US markets but its too late for me... too often have i sat up till 2am and find no extreme ticks to fade :p:
Andy_aus
18th-August-2008, 01:27 PM
... just follow the price waves.
Its just like surfing.. but a bit more profirtable :D
druss
18th-August-2008, 01:27 PM
Water Levels rising, jump in the pool.
Water Levels dropping, jump out of the pool....
;)
druss
18th-August-2008, 01:40 PM
Getting into a Trade is easy. Knowing when to get out is the hard bit.
Practice taking losses. The easier it is to take a loss the easier it is to be successful.
Those that don't know when to take a loss are those that will let the losses run and cut the winners too early.
You want to cut the losses early when they go wrong and let the winners run.
Moving Averages are a great way to let the winners run.
Mastering the Trade by Brett Steenbarger?
Pity Aus doesnt really have Tick readings though. Works ok on US markets but its too late for me... too often have i sat up till 2am and find no extreme ticks to fade :p:
By John Carter you mean? Never read a Mastering the Trade by a Brett Steenbarger.
Linda Bradford Raschke also keeps a firm eye on the ticks from my understanding.
I only trade in US times, but don't use ticks ATM. TS is great for such internals.
As far as the losses part Druss, I'm sure every trader still around knows well and good how to take a loss by now, if not, then watch out!
The fact is, a lot of scalpers use fade plays. You may not and that is fine, whatever works for you. But they can and do make money without relying on luck.
skyQuake
18th-August-2008, 01:50 PM
Ahh thats right Carter. Was advertised on Brett's site.
Druss, today's price action was nice and trending. MA's were fine. A trendline with targets at R1, then R2 would have also worked well. Not saying what you do is wrong, but MA's will seriously hurt in choppy markets (70%) of the time.
Cheers.
MRC & Co
18th-August-2008, 01:54 PM
Not saying what you do is wrong, but MA's will seriously hurt in choppy markets (70%) of the time.
Cheers.
Exactly Sky.
And then comes the period of MAs you are using........
I gather a lot of traders also use an MA flipper.
Then you have things like Cyrox, which is based around MAs from my understanding. So Andy can probably shed a bit more light on that.
druss
18th-August-2008, 01:55 PM
Ahh thats right Carter. Was advertised on Brett's site.
Druss, today's price action was nice and trending. MA's were fine. A trendline with targets at R1, then R2 would have also worked well. Not saying what you do is wrong, but MA's will seriously hurt in choppy markets (70%) of the time.
Cheers.
Yes in choppy whipsawing markets you will get hurt, no doubt.
Chart Patterns are Critical IMO. Support and Resistance is the only real indicator you need. All indicators just follow price. Moving Averages smooth the price. Do not rely on Moving Averages as entry points. Previous Swing Highs and Lows/Fibonacci Retracements.
Moving Averages to stay with the Trend until it bends.
Average Daily Range is also a good way to pinpoint likely reversal points. Previous days highs lows open closes also are key levels.
prawn_86
18th-August-2008, 03:28 PM
Then you have things like Cyrox, which is based around MAs from my understanding. So Andy can probably shed a bit more light on that.
Cyrox is based on EMA's, but it is very subjective and up to the user, as with most scalping.
There are also the indicators (which i dont use) and im not sure what they are based on.
Realistically Cyrox is just about getting to know how a pair moves, and then the EMAs aid in a decison.
Andy_aus
18th-August-2008, 10:56 PM
Cyrox is discretionary pattern based trading.
it uses multiple WMAs on 1 sec charts
Check out the thread by Tayser if u want more details.
Andy_aus
18th-August-2008, 10:58 PM
Oh and did i mention u need heaps and heaps of screentime and hard work to master it.
No short cuts here
The creator of cyrox calls it modern day tape reading. :D
Trembling Hand
19th-August-2008, 09:21 AM
Good to see you back TH... you were gone missing for about a week... noticed you changed your avatar... is that you snowboarding? ;)
Just wondering about your comment about CFD lagging futures... if that is so,.. then if you were watching the futures, won't that give you a heads up on the CFD trade?
yeah Korrupt been away for three weeks snowboarding in NZ & Hotham....V.nice.
The CFDs ARE linked tick for tick to the Futures not the indexes.
One Very Important thing to remember.
Only Trade in the Direction of the Moving Averages. If they are all pointing in the one direction. Trade that Direction. If they are not all Pointing in the one Direction you are just guessing... :banghead:
The only time I would consider going against Trend is when there is MACD Divergence where Price is making a higher high or lower low where MACD is doing the opposite.
That is it.
Druss I trade all day long against the trend. Picking tops and bottoms off 1 min candle chats without indicators. I would do it hundreds of times per week, have for years.
Who's right?? you or me?
druss
19th-August-2008, 12:44 PM
Druss I trade all day long against the trend. Picking tops and bottoms off 1 min candle chats without indicators. I would do it hundreds of times per week, have for years.
Who's right?? you or me?
For someone who is starting out along the index trading path, would you recommend a 1 min chart and trade against the trend??
Tell me mate, how many trades do you execute in one trading day on the index? I'm presuming that by using no indicators you are just using swing highs and lows? Previous days lows/highs? Breakouts? Trading Ranges?
korrupt_1
19th-August-2008, 01:07 PM
druss,
I think TH is trying say that neither is wrong or right... we all have our own ways of doing things...
People like us, like to use technicals to justify an entry... Then there are people (like TH?) who just feels the market and knows the moves it (will) make...
Personally, I think the Australian index is almost reliably predictable. If you spend enough time just watching the price action, you'll won't need technicals... it plays out the same way time and time again...
On a heavily trending days, you can bet your knickers, that there will be a counter move towards the end of the day. A savvy trader would catch both the trend and the counter trend - do you need technicals to know that?
Scalping is not just technical, but a feely/touchy thing too...
professor_frink
19th-August-2008, 01:27 PM
For someone who is starting out along the index trading path, would you recommend a 1 min chart and trade against the trend??
TH(and quite a few others on this site) would probably agree with me when I say that a newbie should do some research before they start trading. If they have come to this conclusion via some analysis on historical static charts and proven it by executing it live on a sim, then yes, they should start off trading a 1 minute chart, and by trading against the dominant trend.:2twocents
Trembling Hand
19th-August-2008, 02:10 PM
For someone who is starting out along the index trading path, would you recommend a 1 min chart and trade against the trend??
Like Professor & Korrupt have already stated it doesn't matter the set up its just what works for you. That was my point in the question who is right/wrong.
As a starting point for someone I would recommend looking at the non-conventional setups. After all most traders try the breakout/trend trades and it just so happens that most traders lose money. are they linked?
maybe not - maybe yes! Then again as you touched on with taking losses early and which is always my point, its probably got nothing to do with entry/chart set up.
I'm presuming that by using no indicators you are just using swing highs and lows? Previous days lows/highs? Breakouts? Trading Ranges? No, not at all. DOM mostly.
Tell me mate, how many trades do you execute in one trading day on the index? 100 to 300 round trips. ;)
druss
19th-August-2008, 02:38 PM
I've been reading some stuff on your Blog/Site TH, some really good stuff on there.
I've been into the Cash Index with IG for about 6months now. Like you say there are distinct patterns that are very obvious.
Times of the Day are something I consider to be very important. We cannot predict the market that is impossible.
We as Humans are creatures of habit however.
We always go to lunch at about the same time everyday. What happens when we go to lunch? We close our positions. What do you normally see happening at about lunch time?
Short or Long Covering.... Closing of positions. In my experiences 11.30am is a good pivot point and so is 9.30am.
What's your favourite Set Up TH?
;)
Trembling Hand
19th-August-2008, 02:56 PM
What's your favourite Set Up TH?;)
A long entry on the Bid and a short entry on the Ask. Something you cannot do with CFDs. :p::D
The_Snowman
19th-August-2008, 04:51 PM
dazers,
some absolutely great advice given so far in the replies, here are some pictures to help you out - always trade with the trend, be patient, wait for your setup and confirmation, get out quick if it doesn't behave :)
Trembling Hand
19th-August-2008, 05:52 PM
dazers,
- always trade with the trend, be patient, wait for your setup and confirmation, get out quick if it doesn't behave :)
Snowman you take these trades today?
If you are trading with the trend (whatever that is) why wait for confirmation?
today is the perfect example. A reasonable guess that the day is a down day so you look for shorts on confirmation of new lows?? but whenever it made new lows it then bounced back to the middle of the range. so what is this confirmation you talk of.
that 1st trade you have pointed out as an entry was not confirmation of new lows for the day yet. So what is your confirmation signal.
And the second signal where was the confirmation you are saying that you waited patiently for. As the price you indicated you traded at was still in the first bar :confused:.
Trembling Hand
19th-August-2008, 06:32 PM
In fact lets look at that 1st trade. because to me the risk to reward looks very bad. even after the fact. especially with a CFD trade giving away 2 points on every entry & exit.
So you enter on the break of 4895 lets say 4893. Which really is not yet confirmation as the bar has not yet completed, but lets take that as your entry.
Where is your stop. The logical place is above the last high? the last high was 4903. So say 2 ticks above that 4905 + the spread of 2 points that would make your stop 14 points! :eek: You would need a 30 point move in your favour to make this a good 1:2 R:R trade. (remember that chart is a bid chart you will get the ask price which is 2 points higher)
So you tighten your stop to 5 points. With CFDs that is actually only 3 points because you are paying 2 points on your crappy CFD "free" trade.
just cannot see how you could trade this way in real time without a hugely favourable win:loss ratio or unless they are done in hindsight. Trying for 10 points with CFDs I would like to see it done over 50 trades. Because I know you have to be very lucky playing break out/downs with a stop loss less than 10 CFD points.
The_Snowman
19th-August-2008, 07:41 PM
you mean like this? hey, I'm just showing the guy how to grab a few points, not teaching trading here.......:)
mazzatelli1000
19th-August-2008, 07:46 PM
you mean like this? hey, I'm just showing the guy how to grab a few points, not teaching trading here.......:)
Mate,
Some people would frown on that and say insufficient evidence........ :)
Also to grab a few points, he needs to learn about trading
Trembling Hand
19th-August-2008, 07:55 PM
you mean like this? hey, I'm just showing the guy how to grab a few points, not teaching trading here.......:)
So where was your stop dude?
If you want to spew out the cliches "always trade with the trend, be patient, wait for your setup and confirmation" at least put them with good R:R examples.
By the way how did you get 4881 buy on that close?? your chart shows 4880 as the lowest tick on that leg down (if its a bid chart?). Which means that the ABSOLUTE low for that leg down you could of got was 4882 :confused::confused::confused:
James Austin
19th-August-2008, 07:58 PM
:):):)
druss
19th-August-2008, 08:11 PM
Using your chart snowman this is the kind of thing I'm looking at when I trade.
How can you possibly apply Risk vs Reward when Trading Small time frames TH?
Just as you were wrong your with insistence that your method is the only way so is the idea that its all about getting more winners than losers.
I have a low win rate. Maybe 1/3 winners 1/3 losers 1/3 BE And true I don't know which trade will be the big winner but I never have a max target that is smaller than my stop.
And at the end of trading I have an average winner that is larger than my average loss. Over 100s of trades. I achieve that by having very tight stops. I achieve the tight stops by having non conventional entries.
I would like to see someone scalping CFDs with a target that is the same as the stop over say 50 or 100 trades. Very willing to post 100 of my trades.
And the 2% rule is rubbish when day trading. If you take just 5 trades a day what happens when you have 5 in a row go bad. Minimum thats 10% of your account in one day. :eek:
druss
19th-August-2008, 09:46 PM
And the 2% rule is rubbish when day trading. If you take just 5 trades a day what happens when you have 5 in a row go bad. Minimum thats 10% of your account in one day. :eek:
I never said use the 2% Rule when day trading. You would have to be an idiot to do that.....
Would you mind letting me know what a Non Conventional Entry is??
Ill have a crack
Everyone sees a common level of support
As you say people will place buy orders near that level and stop orders under support (except you of course cause only exits matter :))
This is conventional - as it is taught by many books and practitioners. Pro traders (not me) often fish out those stops before the real moves begin
Unconventional --- well its TH's own entry
Trembling Hand
19th-August-2008, 10:15 PM
Non Conventional Entries......???
An entry is an entry. Anyone can enter a trade. That's the easy bit....
It's knowing when to exit. That's the hard bit.
Would you mind letting me know what a Non Conventional Entry is??
Why don't you post 100 trades with your 1:1 risk to reward and I will do the same. Then all will be clear.
druss
19th-August-2008, 10:25 PM
Why don't you post 100 trades with your 1:1 risk to reward and I will do the same. Then all will be clear.
Is that a My Penis is Bigger than yours Request. Show me yours and I'll show you mine sort of thing.
:confused:
Trembling Hand
19th-August-2008, 10:43 PM
Is that a My Penis is Bigger than yours Request. Show me yours and I'll show you mine sort of thing.
Call it what you want. But the internet is full of 6 month experts without any proof of their expertise.
Wouldn't you like to prove me wrong and show that you can trade with a 1:1 ratio? I reckon anyone looking for pointers to index trading, which this thread is about, is looking in the wrong direction with anything near a 1:1 ratio. especially with expensive CFDs
Thats all. But I could be wrong. Just have never seen it. And suspect I will not.
Am I reading that right. On the 14/5/08 you had a position of 49 SPI contracts (unbelievable madness trading CFD with that size), I am assuming they were all one trade as they were spewed out at the same price. Which is $2450 just for the spread. Thats 2% of your account. For god sake!
Either that is a demo account :( or the reason that the trades are from 3 months ago is because you have blown up.
I hope you can learn something, re-capitalize and trade again one day.
By the way, Great Blog TH. I plan on visiting frequently now with my new found freedom.
Cheers,
CanOz
Broadway
20th-August-2008, 01:01 AM
Short or Long Covering.... Closing of positions. In my experiences 11.30am is a good pivot point and so is 9.30am.
;)
I noticed the changes in mood at these times as well.
For 930 am I put it down to the bidding for the sgxnk opens up. (for trading 15 mins later)
And for 1130 I thought it was the bidding for the HSI opens.(to prepare for trading 15 mins later at 1145am)
But im just guessing.
You can also notice changes in the SPI at 1145 when the HSI opens, and at 12 midday, when the Hang seng stocks start trading. I thought the spi died at lunch because most went to trade the HSI.
4pm is when Dax, estx50 and cac opens, the spi then mirrors these on some days.
410pm is when the avo aussie stock auction closes, and it gets confusing to me at that point. I imagine the pros get some info about the closing ticks up verse the closing ticks down. It gets busy, and seems like people are unloading, and some are loading up to hold for the night. Large numbers in the dom pushing people around. Im yet to figure this out.
Maybe one day.:rolleyes:
MRC & Co
20th-August-2008, 01:02 AM
LOL, I hope that was sarcasm by druss. Otherwise, what a waste of time!
I gather THs 'unconventional' methods are simply large volume fade plays, or at least fade plays at that. Generally they provide a very tight stop.
That chart discussed shows a nice bearish flag followed by a double bottom, followed by a double top. I think volume is needed on those charts though, which can ultimately make all the difference.
I like your favourite play TH, ha ha.
he he, a few placements around those levels and we will start calling you "the flipper"! Will watch for you in the order book on the SPI tomorrow! ;)
BTW, are all your 100-300 round trips generally on more than one index? I still don't get how somebody could do that many on one index in one day, I just don't find nearly the set-ups. I am extremelly interested to learn these things a lot more in-depth soon. Guess if you are scalping a few ticks here and there it is possible, but you really must be going mainly by the order book for that quantity of round trips on one index I would gather. :confused:
skyQuake
20th-August-2008, 01:22 AM
Also lol@ the 100 contract AUD/USD. Druss, if you're still around, look up 'Risk of Ruin'. Its basically the concept of how raw bad luck can blow ur account.
Safe trading mate.
druss
20th-August-2008, 03:07 AM
I didn't really blow my account..... :D
The_Snowman
20th-August-2008, 06:03 AM
Sometimes, by the time you figure out you're wrong you've lost your money...ever watched the Hang Seng Move???
No also, but this is not the Hang Seng we are talking about - it is the AUS 200 - on a day the DOW was down triple digits, more bad financial news, every top 30 stock was in the red, and it was already going down - which way do you think is best to take trades?
Of course, there are days the All Ords goes opposite, maybe today will be one of those?
mazzatelli1000
20th-August-2008, 07:15 AM
Of course, there are days the All Ords goes opposite, maybe today will be one of those?
Which only reiterates the point that many posters were making that stops should be used, while a significant other suggested only exits matter.
Cheers
tech/a
20th-August-2008, 07:23 AM
Which only reiterates the point that many posters were making that stops should be used, while a significant other suggested only exits matter.
Cheers
Stops minimise risk
Exits maximise profit.
Both are important.
Trembling Hand
20th-August-2008, 08:31 AM
on a day the DOW was down triple digits, more bad financial news, every top 30 stock was in the red, and it was already going down - which way do you think is best to take trades?
Of course, there are days the All Ords goes opposite, maybe today will be one of those?
There is little to no significant correlation between the opening gap and the "trend" for the day on the SPI.
I didn't really blow my account..... :D
Because you never had one.
Guys this "expert" is trading a Demo account. And cannot even do that with a correct approach. He is taking trades that would never be executed in the real market and certainly not one carried by a bucket shop. And size that Blows wildly away proper position sizing.
How deluded would you have to be to post demo account balances and still think you are a gun. :screwy:
The_Snowman
20th-August-2008, 08:35 AM
who says you can't pick the bottom? even though it is probably temporary.... :banghead:
mazzatelli1000
20th-August-2008, 09:47 AM
who says you can't pick the bottom? even though it is probably temporary.... :banghead:
Maybe im paranoid
But Snowman, are you and druss related?? :D
druss
20th-August-2008, 10:21 AM
Hey TH,
Let's see your 100+ Trades per day on the index. I really doubt it....
By the way you are right. Those screen shots are a demo account.
Just wanted to prove something to myself that it was possible to trade 100K into 200K on a demo account in a week.
Now TH can you please explain something to me.
How do you possibly calculate a position size based on a Tight Stop when trading on the Index? What is your amount that you "RISK PER TRADE" because that is what position sizing is all about. "RISK PER TRADE"
Number of shares/contracts to buy = Risk per Trade / Stop loss size.
For Example say your Maximum Risk per Trade is $100 and you set a "Tight Stop" of say what is a good example in your case mate? 4pts plus spread? so 6 points? So you are trading on average 3, $5 mini Contracts on the Australia 200 Cash Markets?
Now please tell me what is your Risk Per Trade when Trading the Index. Do you calculate it based on a percentage of your float? If you are making 100 plus trades per day on the index I'm curious to know how you calculate your Risk Per Trade?
If you have an average of 3 Trades 1 winner, 1 loser and 1 Break Even, then you must be a millionaire by now?
Come now do you expect us to believe that you trade 100 trades per day on the index??
kennas
20th-August-2008, 10:25 AM
By the way you are right. Those screen shots are a demo account.
Ouch.
Nice to admit it but geeesh!!
:eek7:
prawn_86
20th-August-2008, 10:39 AM
If you have an average of 3 Trades 1 winner, 1 loser and 1 Break Even, then you must be a millionaire by now?
Come now do you expect us to believe that you trade 100 trades per day on the index??
Druss its obvious that you are new here and have not done your research. I would suggest a bit of background reading might help you save face in the future
To save TH the time, why dont you check out this thread:
http://www.aussiestockforums.com/forums/showthread.php?t=10405&page=3
skyQuake
20th-August-2008, 11:03 AM
Its all about expectancy, I have no doubt that TH can do 100 round trips a day scalping. Thats what scalpers do. They make their edge work for them
Expectancy is the expected value of your next trade
E = (Win%)*(AvgWin) + (Loss%)*(AvgLoss)
Say you have a 30% win ratio as a positional trend trader, catching big moves. Your wins are big (say $100) when you catch the moves and your losses small thanks to good risk management (say $10)
E = 30%*100 + 70%*(-10) = $23
Google up position sizing to find out whats best for you. Theres percentage risk, fixed, and more dynamic methods like R multiples (using targets) and Risk of Ruin models.
Finally, I see its good that you can double your acct in a month. Put in $10k to trade and in 2years you'll have over a hundred billion (or a fair bit less when you pay CGT).
You've been 'lucky' so far, but without solid risk management you'll blow your acct. I doubt there are any here on ASR that have not blown their acct at some point in their early years cause they traded like a maniac and didnt know what risk was.
Trembling Hand
20th-August-2008, 11:09 AM
thanks Prawan.
druss as the saying goes... You don't even know what you don't know!!!
It just so happens that I am having a little tickle today with CFDs as well as the real market. Here is a screen shot of the first hours trades.
1 hour --96 trades. just in that one REAL account. thats not including the 40 odd round trips on the SPI. and the day has just started. Wait till the HSI opens.
gotta go ...lots more trading to do today with real money... not pretend stuff that by the way is useless if you are ignoring position sizing... You kidding yourself if you think these results you have posted mean anything!!
prawn_86
20th-August-2008, 11:14 AM
LOL, you are an absolute gun TH :D
Keep it up and then you can take over the world! ;)
druss
20th-August-2008, 11:18 AM
I'm a skeptic at heart, can't help it :mad: :banghead:
What's you Trading Platform TH?
Trembling Hand
20th-August-2008, 11:25 AM
I'm a skeptic at heart,
Shame you cannot apply your skepticism to your own crap.
You would look less foolish. :bricks1:
korrupt_1
20th-August-2008, 12:30 PM
From my experience... and many would agree... messing around with demo accounts NO WAY COMPARES TO TRADING WITH YOUR OWN REAL MONEY.... hands down... full stop... end of argument...
Its a completely different game...
Any jack or jill can take a $100K demo a/c and do ludicrously large trades and not feel the slightest worry... cos it's only monopoly money if you lose it...
Try doing large trades with YOUR OWN REAL $100k... then we'll see if you are an action or talk kind of person...
barney
20th-August-2008, 09:04 PM
From my experience... and many would agree... messing around with demo accounts NO WAY COMPARES TO TRADING WITH YOUR OWN REAL MONEY.... hands down... full stop... end of argument...
Its a completely different game...
Any jack or jill can take a $100K demo a/c and do ludicrously large trades and not feel the slightest worry... cos it's only monopoly money if you lose it...
Try doing large trades with YOUR OWN REAL $100k... then we'll see if you are an action or talk kind of person...
'Aint that the truth ...... I traded my $100,000 (real money) account and ended up with about 15% of that left ............... I had the ballz, but no brains .............. after much soul searching and self realisation, I now am getting closer to having the (some) brains, but am now struggling with having "the ballz" part .............
Demo accounts are basically useless unless you can treat them like they are your own cash ............... who can do that ??? ............. well I lost a crapload, and still have trouble feeling the "pain" on a demo account ........... nothing quite like stuffing up with your hard earned to teach you a lesson!! ..........
Trading is like life in a lot of ways ................ those who have lost, and then learn how to win/or even simply not lose anymore (with humility) are the real winners .......... Those who have never lost, are either a) very clever (or liars) , or b) in for a rude surprise .....................
My current aim with trading, is to eliminate the "rude surprises" ....... :o:D
My hat goes off to TH for his obvious "experience" ............. that experience would not have come cheap I know !! .............
Trembling Hand
21st-August-2008, 08:27 AM
Demo accounts are basically useless unless you can treat them like they are your own cash ............... who can do that ??? ............. well I lost a crapload, and still have trouble feeling the "pain" on a demo account ........... nothing quite like stuffing up with your hard earned to teach you a lesson!! ..........
Sim are very valuable if used right. The $$'s should never be the aim. It should always be on process.... position sizing ...taking stops....learning to hit the odd ripper.... Learning how to read the market....learning a plan that works and most importantly learning how the plan actually acts. So as soon as you hit a bad patch you know what is going on and don't lose your head and control. As you already have seen a rough patch in sim mode you know that if you continue with correct process you will get back on track.
Doing what druss has done is so damaging that I would think he has no hope. When he starts with real money he has in the back of his head that he went from $100,000 to $200,000 of pretend money by throwing all position sizing and risk management out the door. He has not only wasted his first 6 months training but most certainly set a thought process up that will undermine his trading for a long time.
Practise is very very important. Have a look at the Olympics. Most athletes spend 40- 60 hours practising a week for 10 years or more to get to that level of performance. I believe trading is no different.
Perfect practise makes perfect performance.
Druss denial makes great fodder for the zero sum game. When you coming over to the SPI with real money :p::D
skyQuake
21st-August-2008, 10:03 AM
When he starts with real money he has in the back of his head that he went from $100,000 to $200,000 of pretend money by throwing all position sizing and risk management out the door.
I did something similar when i started traded with real money - ie basically made ****loads in the first few months and became arrogant as hell - I was the smartest guy in the world, physical manifestation of awesomeness, god's gift to women etc... Talking to someone in that state of mind is a waste of time as I can attest to ;)
He'll come back when hes blown his first account and ready to learn.
Timmy
21st-August-2008, 11:37 AM
OK so I am thinking of becoming a commercial pilot ... is there some forum I can go to where I can get sage advice from those who have extensive experience on flight simulator games on their pc but don't actually fly any aeroplanes? Geez....
:D
Trembling Hand
21st-August-2008, 02:06 PM
I gather THs 'unconventional' methods are simply large volume fade plays, or at least fade plays at that. Generally they provide a very tight stop.
BTW, are all your 100-300 round trips generally on more than one index? I still don't get how somebody could do that many on one index in one day, I just don't find nearly the set-ups. I am extremelly interested to learn these things a lot more in-depth soon. Guess if you are scalping a few ticks here and there it is possible, but you really must be going mainly by the order book for that quantity of round trips on one index I would gather. :confused:
Sorry with all the excitment I missed this.
Thats what I meant by unconventional set-ups/entries. Everyone (most?) are looking to take trades that equal the average range etc. Most of my entries have little to do with traditional chart set-ups and more to do with having others pay the spread for me. Then I just run a O-4 tick (mostly 1 tick) stop behind my entry and move it for every tick my way. Until its well into the money then I give it a little wiggle room.
Non-conventional, maybe even random :o but it works. Something I have not been able to prove with "tradition" chart patterns without large stops.
julius
21st-August-2008, 07:13 PM
Hi All,
I find simulated trading invaluable for practising intraday trading skills.
I switch over to the paper trading a/c around lunch time on the SPI - my mind tends to wander 2-3 hours after the open. :rolleyes:
Of course if you are dishonest or undisciplined then paper trading can't save you...
IMO if you can't turn a consistent profit on a trading sim then you have no hope when it comes to real $dollars.
alwaysLearning
21st-August-2008, 08:38 PM
Sim are very valuable if used right. The $$'s should never be the aim. It should always be on process.... position sizing ...taking stops....learning to hit the odd ripper.... Learning how to read the market....learning a plan that works and most importantly learning how the plan actually acts. So as soon as you hit a bad patch you know what is going on and don't lose your head and control. As you already have seen a rough patch in sim mode you know that if you continue with correct process you will get back on track.
Doing what druss has done is so damaging that I would think he has no hope. When he starts with real money he has in the back of his head that he went from $100,000 to $200,000 of pretend money by throwing all position sizing and risk management out the door. He has not only wasted his first 6 months training but most certainly set a thought process up that will undermine his trading for a long time.
Practise is very very important. Have a look at the Olympics. Most athletes spend 40- 60 hours practising a week for 10 years or more to get to that level of performance. I believe trading is no different.
Perfect practise makes perfect performance.
Druss denial makes great fodder for the zero sum game. When you coming over to the SPI with real money :p::D
hi TH, great post.
I've been demo trading for the last few months using Oanda (Forex trading). At first I thought I'd stuff around doing any ol thing but then I read some stuff at traderfeed and the guy said basically that simulation was very very important as was going through the learning curve in the right way.
I opened a $1000 oanda demo account and trade with 1% risk per trade. I am struggling with stops and reward to risk ratio though--it isn't easy but I am aware of it and trying to get it right.
In April, I saw that CFD post where you went from 1k to 50k in one week and I couldn't beleive it at first but then it gradually sunk in that that type of thing is possible and in a twisted way, that's what hooked me into researching trading. Glad I stumbled on that thread :D
