My response (sanitized to protect ME) to Propriety Trader (a great trader who has given me some very sound advice on trading...great guy who started his blog for the purpose of helping his friends who wanted to learn how to trade)'s email to thank me for inspiring his most recent blog entry :
You're most welcome :-)
I agree with most of what you said.
But I question the rationale of buying and selling based on news and data that can be interpreted in a myriad of ways. It doesn't help too that they have to be digested in minutes, if not seconds.
During the short period that i traded with live news on (briefing.com), I went in and out of my trades confused and frustrated. The additional input distracted me. When I did without it, I traded much better.
Unlike a typical daytrader, I hardly stay in a trade for more than 5 minutes. I'm usually in and out before the candle is completed. Because of my style of trading, I can't be choosy about my position. All I know is if I'm selling, I don't want price to go up. And I wait for the moment that I feel that price is going to CONTINUE to go down, and I take a point - if I can - out of a typical 3-point move. Sometimes I exit after a few ticks when there's hesitation. I don't like it when buyers and sellers pause to think. When they do that, the next move is sometimes drastic and will kill me if it's against my direction (losing money makes me lose sleep for days - happened only once but I'll always remember it).
I don't totally ignore fundamentals. I'm a news junkie. I read all kinds of things. So, i do know what's going on everyday. And what I know gives me a view about the market.
But I don't know how that helps me in scalping. When I scalp, I can buy in a downtrend and sell in an uptrend. To take a few ticks out of every retracement regardless of how shallow it is is surprisingly fairly easy once you know the chart of a specific time-frame intimately. For instance, I use only 5-min chart to scalp. I can't scalp with a 3 min or 10min chart coz I haven't studied their patterns.
ER2 is a very predictable instrument. Even the moves have specific ranges. I know that the first move is always 6 points on a normal day, retracement is 4 poitnts. The next move is 5 points and retracement is 3 points. On a trending day, you have 3 continuous moves and retracement is almost always 3 points. i don't even need to use Fib levels. The benefit of knowing this is that I can be late in my entry and still get 1 point. And I just noticed yesterday that the charts (for any timeframe) are divided into just 4 main "levels". An accidental discovery when I was drawing on paper the moves on different days.
I gather your style of daytrading is the kind that professional traders adopt - you sit tight and wait for a decent profit. I don't. Not for scalping. For me, scalp means "grab whatever's on the table and run".
But I'm really tired of doing that and I really don't want to have to do it forever. Swing trading works for me. Afterall, I've been looking at monthly and weekly charts for detailed study. But I have no use of them when I scalp. I have no use of daily charts for that matter when I scalp. So, I really appreciate your inspiring me to just hold a contract for as long as it should be held. That will also give me time to trade all the other things I've been wanting to trade, and also time to SLEEP (no more staying up til market closes!).
:-D
No comments:
Post a Comment