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Hey, new to the forum, I thought it could be a good idea to share my Topstep Combine journey to improve my discipline.
- I trade the ES and rarely the NQ only if their is a correlation trade setup.
- I have 2 plateforms, one to analyze (sierra chart) and one where I execute my trades (Tstrader)
- My setups use a lot of momentum type strategies (OrderFlow, Correlation strengh, Volume profile..)
I will explain in this threads my trade recap, why I entered, why I exit, my risk management. I think this will help me to keep my strategy clear and help you to learn from my failures and success.
I started the trading combine January 5 2021, my first 2 days of trading was not real "trade day", it was more to learn how the tstrader plateform work and the losses was caused beacause of some orders mistakes that I made
My breakout setup is always the same, I Find a level with a big seller and place a buy stop order 2 ticks above this level, it's a momentum trade, so if I'm right it should move up pretty quickly and if it dosen't i close my position without hesitation. My Take profit is at 4 ticks and my Stop Loss at 2 Ticks
Enter at 3791.00 and take my TP at 3792.00 with 15 contracts
2nd Trade : Pull Back +175$
My Pull Back Setup is more complex and discretionary. First I need a zone where price could reverse, then I need correlations charts to work in my way and same thing for the heatmap. I have a 5 ticks stop loss and a 8 ticks profit for the first 2 contracts, then I adjust the TP for the rest of my contracts
So this trade was a sell pull back on the open, I normally trade with 6 contracts but this time I was only filled on 4. So enter 2 contracts at 3792 and 2 contracts at 3792.25, take my 8 ticks profits on the first 2 and breakeven on the last 2.
This setup was valid but the thing that keep me uncertain was the big level of buy limits on the heatmap from 3789.75 to 3788.00, that's the type of thing that could keep me away from the trade
3rd Trade : Pull Back -75$
Same Setup that the second trade, here it was on the pivot point. It was a valid entry in my opinion but when I saw the price stayed too long on that level and no buyers wanting to move up I decided to scratch my poisition with a loss of 75$, wich was a good decision. A second pull back entry was possible when price retraced to the open, but unfortunately I stopped trading a 11am and this entry was at 11:05
Total : + 720$ after commission
If you have questions about my strategies, risk management or anything else don't hesitate
Sorry, but if I watch your trades, this is pure casino. Slow down a bit and trade way less contracts. With such a small account you cannot trade 15 contracts. Of course you can trade 15 contracts (it is up to )you), but on the long run you will not stay long in the game (just my thoughts
That's where you are wrong. in term of risk 15 contracts mean nothing if you don't consider the stop loss, for the breakout trade I have a stop loss of 2 ticks (12.5$*2 = 25$) and if you multiply by 15 contracts the result will be 375$, which represent 0.25% of the total Balance.
0.25% of risk per trade, that's not what I call pure casino, it's even very conservative for day trader
Risk is not about contract size, it's about relation between contract size and Stop loss
Thanks for sharing your thoughts! Interested in your journey ahead. If I may, I'd like to pick up on the risk / stop discussion. Quoting Adam Grimes (The Art and Science of Technical Analysis):
"Traders make these probability/payoff miscalculations all the time. One of the classic examples is the choice to use very tight stops because the trader wants low-risk trades, not realizing that a tight stop is often a very small but certain loss. Over a large set of trades, the risk of the those many small losses may actually be much higher than the risk associated with a larger stop, because the wide stop will be hit much less often."
I'm sure you have data that suggests your strategy is viable, but simply having a tight stop will not stop you from losing money. It could lead to death by a thousand cuts.
No problem, of course you can do whatever you want .
Because of your stop-loss: You are thinking that you are risking 2 ticks (which is nothing in the ES), but you have always think about it, that most of time you will get fills with 3 ticks (at least if you will trade on a real-account in the future).
Now to the risk: You think you are risking 0.25%, in this case you are absolute wrong, you cannot calculate your risk on the name of the account ($150k), your account-size in reality is $ 4,500.-- (= max. allowed drawdown) and your daily-loss limit is $ 3,000,--. If you would have real $ 150,000.-- the calculation would be correct, but think about it.
Believe me, I really don't want to blame or teach you, this are just my personal thoughts and experience.
I also don't want to "blame or teach" you, but I think you definitely should re-think your assumption that you are operating with a margin of $150,000. This it the formal amount that the account is labeled as having, but they will pull the plug if you lose your max drawdown, a number that trails up with you and that can, on any day, be less than the initial value of $4,500. But in real terms, this is the amount you have to work with, not the sim balance of $150,000. You will never be allowed to lose the $150,000, so it is not the equivalent of 150k of actual margin.
Not to beat on this horse too much, but in real terms this is how it's best to look at it. If you succeed in the Combine, as I hope you do, the funded account will not be opened with a balance of $150 k. It will be opened with a balance of zero (this is how TS opens the accounts, which are sub-accounts of their main account with their broker -- they just keep track of your P/L), and you will have a certain number of contracts you can trade with and a max drawdown number. This is realistically how you should be looking at your resources on this account. Think of your available balance as the amount you can lose.
I haven't followed your trading closely, and I do hope you are successful. Good luck to you.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
Probability it self is just half of the trading success, the other half is the Risk:Reward ratio. If my R:R was not equal at 1:2 you can be sure that I would never choosed a stop of 2 ticks
But thanks to the 1:2 ratio even if I'm right 33,33% of the time I'm breakeven (If you don't consider commissions)
The big reason why I choosed a stop of 2 ticks it's because I don't need a 8 ticks stop to know that I'm wrong, if it don't go in my direction in the next seconds that means I was wrong and I take my 2 ticks loss. This trade setup is based on possible stop loss above the big level, so if I'm right stop loss of others traders should be triggered to give me a small explosive move