Saturday, June 28, 2014

Perfection versus effectiveness in day trading e-mini futures

Well executed trades are certainly a nice thing, but perfection is not something one should really seek when trading, be it e-mini futures or any other market.

I have talked about perfection on this blog a few times already; even very recently. I may still mention it in the future, but I also talked about ruining it, also very recently.

Perfection, the way I define it for my own day trading of YM, the Dow Jones e-mini futures market, takes place when I don't have to add to my original position (usually 2 contracts these days) and can still reach the target of at least 5 ticks. That is, when the market does not pull back in any significant manner (less then 6-9 ticks in YM) against my entry to justify adding to my position, but instead, it goes pretty much straight to the target.

Such was the case yesterday (see my tweet below) with my first 6 trades, but then, on the last 2 trades, I ended up adding to my position. That was the right thing to do, and it would be silly not to do so in order to protect the perfection of the first several trades.
While perfection is nice, it's effectiveness that makes all the difference in trading.

I made this point on my site recently and re-iterated it just yesterday. Let me repeat it here because I believe it's of paramount importance (see also the originals in the current trading results section of KING, an e-mini futures day trading course based on the methodology I use for my discretionary trading).

Speaking of perfection again, as I said a few days ago, it's more important to be effective than perfect and I believe that many wanna be traders never reach their full potential because they think too much in terms of perfection. For instance, they would rather have well defined entries and exits than be flexible enough to actually make money. The magic (well defined) resistance and support numbers cater to this need for platonic perfection, but the markets are too dynamic to respect them and unless you accept this fact and learn how to deal with it, you may never become a very good trader. Such numbers make some sense for mechanical trading, otherwise they may become your straight jacket. It's flexibility that makes you money (not perfection) in this business and I believe that can be said about many other businesses as well.

If your perfection stems from your effectiveness, that's okay and sound too, but striving for perfection while hoping to be effective is not the way to go. It's putting the cart before the horse and it's likely to make you a rigid, inflexible trader. Don't be afraid to ruin your perfection, if that improves your effectiveness. It's the results that matter and not how you arrived at them. It's nice if your trades are perfect, but that's only icing on the cake.

You want the cake, not the icing.

The tweet embedded below shows how my last trade would have worked out had I held to it for a bit longer: at least 40 points was possible, but in fact, I caught the very bottom of the market on that Friday day as you can see from the last picture showing the 5-minute chart of YM courtesy (in both cases) of Sierra Chart, my charting software of choice.

That was prefect, in a way too, but I really was not seeking any perfection. And that's a very good example of how striving for effectiveness can contribute to great trades.

I was doing what I believed was the most effective way to handle the bottom that was being formed in the market at that time. That's why I reduced my target on the last short: 5 ticks that I was aiming at turned out to be possible, but going for 5 ticks was a bit risky. That's why I also added to my position on the last trade and held it for 10 ticks, a bit more than usual, expecting a good bounce. I even wanted to go for 15 ticks, but eventually decided to grab only 10 ticks. I intended it to be my last trade that day, so I did not think it was a good idea to sweat over it too much. And it was a weekend too.

Tuesday, June 24, 2014

The trend is your friend - at least most of the time

This old trading adage ("the trend is your friend") is right on the money more often than not and it makes sense to take advantage of it. That's pretty much what I did today, as you can see from my Twitter feed.

The trend was down and pretty strong too, so I kept shorting the market. But trends eventually end and it's important to know when this may happen. As you can see from my last Twitter trading update today (above), my last trade was against the trend, anticipating a reversal. I think that was the right decision because the market moved only up from there. I could have probably taken one more trade on the long side, but I had a few other things on my mind to afford paying closer attention to the market at that point. And it was close to the end of the daily trading session too, anyway.

In fact, even the last trade was during a break in something else I was doing at that time, which I try not to do. Not a good habit, but I might deviate from it from time to time if I believe there are good odds I can handle successfully both tasks.

The results posted above are in the Dow Jones e-mini futures market, my favorite market and the one I trade almost exclusively these days using my e-mini futures day trading methodology, also offered to the public in the form of a trading course.

Monday, June 16, 2014

Perfection ruined

But still, nothing really to complain about, as you can see below.

As already mentioned on this blog on at least two occasions, I like to refer to trades that reach their target with the original number of contracts (usually 2 these days in my favorite e-mini futures market, the Dow Jones, or YM) as perfect.

I like to talk about perfect scalping in such situations because my trading style is that of quick scalping using my e-mini day trading methodology.

Today, I had 6 such trades in a row, but the 7th one ruined the perfection.

Probably not surprisingly at all, because while 6 is a perfect number, 7 is just another ugly prime, I am afraid. That, of course, is largely a matter of taste, and while I understand that some people may dig primes, I am more into perfect numbers.

Tuesday, June 10, 2014

Perfect e-mini futures scalping in a tight range

The range I was trading in today was only 14 ticks, while the profits from my scalps (all 6 of them) were 30 ticks. That's more than twice the range, a pretty good ratio indeed.

I was lucky to catch a 10-pointer on my first trade. The market seemed to be poised for a stronger move and I did capitalize on it quite nicely. See my last Twitter trading update today for all the trades.

They are in YM, the e-mini futures of Dow Jones, the market I trade these days very much exclusively. It pays off to specialize. I also use the same trading methodology (KING) and I have been doing so for years, over 6 by now. Sticking to one methodology is also an important element of trading success.

I call this scalping perfect because I did not have to add to my position even once. It's not that easy to do so if you trade in a small range, anyway.

Thursday, June 05, 2014

Less tweeting ...

In the next few weeks, I will mostly be busy working on a trading forum (primarily for KING's students) and even if I intend to trade during this time, I may not be posting my trading updates to Twitter. I doubt I will be posting them on my site either.

I have been tweeting them for over a year now, so a break, even a longer one, may just be in order. I have been posting the trading results on my site for much longer, so even if I were to quit doing so, there is already a formidable body of evidence of how powerful KING is if used by a dedicated trader.

And I don't want to get distracted, either. That's actually the primary reason behind my decision to cut on tweeting and other things that should now be of lesser importance and can be curtailed. The more tasks you try to handle, even small ones, the more prone to distraction you are. I need to make some things top priorities and stick to them if I am to finish my work on this forum. That's really important for me and, I have good reasons to believe, for the KING students as well.

However, I will still keep you informed about George IV results via Twitter and my site, where I keep its current track record, and about my progress on the forum in question, as well as about impending hike in KING's e-mini futures trading course. Or about things of related nature that may be more important at this point than yet another screenshot with my trading results. Those I have delivered already aplenty, so now it's really time to focus on delivering other things.

Having said so, my Twitter feed is likely to remain busy, if somewhat less, but with different contents. You may as well keep an eye on it, especially if you are a KING student or someone considering to become one.

Here is my last Twitter trading update, as of June 5th, for those who might not know what I mean by that. One of about 600+ such updates posted there in near real-time as explained on my site.

Monday, June 02, 2014

KING's price is set to rise

It has been artificially low for a while, anyway.

That's right. The current price of $1,200 (and a hundred bucks more for the KING Plus version that includes George IV, an e-mini futures trading system, that can be useful when used with KING, but not closely related to it) is off by $300 relative to the last regular price.

I am not much of a marketer, so I don't charge as much as others, and I can easily make and do make my living trading, so I can afford being more generous than my competitors in this field, but that does not mean that the price will stay at this level forever.

It will not and I plan to raise it by the end of this month. Just as I plan to open a forum for the KING students in July. These two things are actually related. The more you get, the more I need to charge for that, as that means more work on my part. There is really nothing wrong with being compensated for one's work. I am sure most people will agree with that. Like, at least 90% of them.

But I still intend to keep the price competitive. It should be, even at $1,800, because many trading courses like that cost at least $2,000 and some much more than that. Here is an article that compares KING to other products of similar nature on the market. It focuses on the prices, some of which I find quite exorbitant and hardly justifiable. Like 9,000 bucks for some wonder product with virtually no evidence that it has made anyone money! I intend to update this piece soon.

In any case, if you want to save some money, the time to buy KING is now. I intend to support it for at least 6-12 months after the forum is launched, and I hope that the forum will stay open for much longer. In future, I may offer something similar to KING but with a higher price tag. KING is really a bargain product and I like to keep it that way until its last days.

KING is an e-mini futures day trading course for discretionary traders. It has been around for about 6 years and it comes with an unparalleled amount of evidence that its ideas work and can make you money. See my site dedicated to trading e-mini futures for more.