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Feeling way down this morning and went back to sleep. Might be getting a cold so in and out quick and back to bed. market is moving way to fast. Better safe than sorry.
As a momentum trader you are looking to get in after the trend starts and before it stops.
Pure momentum trading gets crushed when the market is sideways and kills when trending so stay out of the sideways motion.
Look for breakouts but WAIT until the market trends.
Get in the 2nd, 3rd or 4th consecutive candle in a trend and jump in and out. I get in the second by plan.
I have several plays in my book and my high percentage winner goes like this.
1. Market is sideways(3 or more 5 min candles) and has established a range. Happens all day long.
2. Market breaks out to the upside or downside and candle closes above established resistance or below established support.
3. Very next candle reverses for the beginning part of the candle, say under 2 minutes, and then reverses back. In an uptrend move the second I see 2 green tics, I'm in play for 1 tic, currently with 5 contracts. That's great momentum.
4. check the time as you need about 2 minutes to get in and out for a single tic of profit. You want to be out of the trade before the candle closes as they can reverse severely just as the next candle opens.
So, if the market has broken resistance(stay away from from session high and low) and then turned down after closing and then turned back up after 2-3 minutes, get in on any pullback as long as the candle is currently green.
This is the 1 tic play that originally got me close to break even. I still use it but have also grown as a trader.
My math is better than my English. Follow with more questions if you'd like.
TY
EX
PS I trade off a 55" TV screen and sit about 18' from it. My volume bars are 20" tall. Over time(weeks), I can now see things about acceleration of volume(HFT?) and use that information to enter. When you stretch it out you can see it pulsate. Jumping on huge acceleration of volume closes 1 tic trades in less than a second. Last week I had set for 1 tic profit with a bracket and was so fast I got 2. That is my edge.
I am now working on getting more than one tic profit per trade. Only been at it for a few weeks.
Volatility destroys limit orders and eats them for breakfast. Stops are directly related to volatility.
In my perfect ES world, the final volume for the session is 1.125m, and I used a 5 tic trailing stop all day. I participated in the largest volume candles while they were accelerating.
Since we are in huge volume uncharted territory, I'm using my margin account as a stop. Not a proven or probably prudent method but I need something.
From above, the more volume the session will have the more volatility is expected. Widen when higher volumes exist because wider swings are expected(opposite is true). Some days we've had may be better to stay out.
ES offers great liquidity for scalping and that price of that liquidity is volatility.
I found my rhythm by going back to my completed trades for the day and seeing how i could have done better. I found on those 1.125m volume days that if my model was off by 4-5 tics it usually went really against me and that's how I found that particular piece to the puzzle.
It's all about the scientific method. Data collection, analysis...