This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
Hola folks!
I purchased eotpro’s indicators + room Friday and I should have my “package” in my email. Today (Sunday) will be Setup Day. (Friday night and Saturday was all about ski patrol at Alpental and snowboarding, nobody died but for Safty Sake get a clue and talk to those who know (Rangers, Ski Patrollers etc) before you go into the back country.)
Friday’s Results
Another day where I am up $200 and then negative. Now Add Glen’s (oufan/eotpro) Perspective..
On a scale from 1 to 10, a trader bringing in $300 a week ON ONE CONTRACT (YES THATS A WEEK) (after expenses!) is like a level 6. Isnt that crazy? That if an automated trading platform was making $300 per contract a week, that it was doing good.
Think of it.. Making $15,000 a Year, per contract is doing good and Level 6.
Now think of this.. That $30,000 a Year ($500-$600/week) (if memory serves, Richard a little help?) is like level 9 aka Amazing.
Glen’s insights were really helpful in reviewing my paper trades. It helped add a mirror to my greed. Small consistant wins starting out is OK. I do lucky and with no plan trend up over $200 and then it all goes back and then some.
The first lucky paper trading session a few weeks ago I was up over $15,000 and I let myself emotionally get swung off of an automated trading thing and give it all away. Love your Losses, period.
So no indicators, no plan and a little insight.. Take the money or my losses and stop, leave the computer, and go eat fast food [smirk :) ] or take a walk or go *gasp* snowboarding.
So a part of my plan will likely be (after consult with Bill/Shelly) shift my account +- ES$200 per day till I reach a degree of compentency of trading my plan, and in order entry and exit, review and continue.
Glen also mentioned that you should have enough in your account to handle an overnight margin call even though we’re day traders. Interesting.
On a what the hell, I hit the 1000 shares button, and traded for Break Even + a ES Tick. *Poof* over ES Paper $12,000.
Yeghods how much would you have to have in your account to buy or short 1000 shares of ES. $100,000 or $200,000 for margin? wow.
Friday RWD
Right: I got up and got my day started with a good mind set. Used my flatscreen and had the best I could do for indicators. Got my Trading in the Zone book and reading it.
Wrong: No Plan and “What the Hell” trade (one should watch Richards video that talks about the Risk of Ruin)
Different: Get eotpro indicators up, mirror Bill’s and the “Hour of Power”, paper trade their plans, research, choose, and impliment my day trading strategy.
E.
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
January 13th, 2008 at 6:04 pm
EOT Pro is interesting but they tend to go for big wins (and big losses due to the often large stops). Every time that I’ve traded for one tick on a big run I’ve made money. Every time I go for those 2-3 point wins I lose money.
You might not have margin for 100 contracts but do you have enough for 3 or 4? I use a bracket order with a six tick stop and a one tick profit target (might reduce that to 4 or 5 after additional simulator time).
Taking one tick with four contracts is $30/trade. Do that 10 times per day, one on each big market move and you’re making a lot of money each day on a $7500 account. Sure, your broker is getting well paid but it isn’t your money so why would you care?
Incidentally, this is how I have been trading for the last week. My current win percentage is 100%. I expect I’ll take a stop one of these days but so what, it’s only six ticks and I can trade for one tick dozens of times per day.
January 13th, 2008 at 6:35 pm
Michael: wow, good luck! The math is stacked up against you, my friend. You will risk $280 to win $30, which is worse than 9-to-1 risk:reward… Meaning you have to stay above 91% win rate just to beat break-even. At 91% win rate, your profit factor would be 1.08, meaning even if you made 60 trades a day, the chances of being profitable on a given day are less than 50%. So realistically to make a living you would want a 95% to 97% win-rate in the long-haul, and a string of bad luck will be psychologically difficult to handle (three losses in a row would require 28 consecutive wins just to get back where you started).
January 13th, 2008 at 7:14 pm
Richard,
I’ve made almost a million dollars on a $50k simulator account in just two weeks. lol. I added a contract every time that I had enough additional margin.
I know that it is counter-intuitive but answer this question for me: Could you devise entry criteria that have a high probability of moving one tick? If you can then your win percentage will be 100%. I have an entrance criteria that didn’t fail once in an entire week.
January 13th, 2008 at 9:28 pm
I applaud your enthusiasm, but one or two weeks doesn’t really mean much (unless you actually go for the million and make it!). All high-win% strategies look great over the short term; it’s that annoying black swan you still have to slay.
If you look at my history in stocks, you know that I have gone on stretches of like 30 or 40 days without a single loss. So, I know it can be done, but I also know that I’ve had 5 days stretches with very few wins, attempting the exact same strategy. Lucky for me, my losses were smaller than my wins.
I hope you do well with your strategy and look forward to hearing all about it. I’m just warning that probability is not on your side. Listen to what you are saying: you said if I devise criteria with a high probability of moving one tick, my win rate will be 100%. That’s not logical… high probability means high probability, NOT certainty. Mathematically, even 99.99% probability of success does not preclude failure 20 times in a row. It CAN happen. Murphy goes one better and says it WILL happen.
January 13th, 2008 at 9:30 pm
Fair enough. Thanks for the math help. :)
January 13th, 2008 at 11:49 pm
after reading eric’s post, i see another reason to recommend EOTPRO…there aren’t many places that would offer coaching along with everything else for that price…taking the time to reveiw eric’s paper trades is truly excellent service
WTG Glen!
January 14th, 2008 at 12:49 pm
This was during Glen’s hour that he usually comes on each day.
They do however take the time to help you get your plan on after trade day hours :)
So yea coaching/mentorship (dare I say accountability?) and indicators. Its like your extended family of traders.
E.