An idea: $850 from two 1 tick trades,

[ILoveSax]

My goal is to become a successful trader as quickly as possible. Since success breeds success. Once you are successful, then it becomes easier to be successful at the next step.

So, I am trying to perfect what I thought might be the easiest trade...a 1 tick trade. Here's my idea.

Once I can see that the market has slowed down, and is trading in a very tight range, and gradually moving down: The action would be 1 tick up ($900.25), and then back down ($900.00), back and forth.

This trade assumes that I have an advantage over the market (using stochastics, etc, and higher time frame), and know which way the trade direction is going. Which I may not have. LOL

Idea 1:
Create a programmed strategy to place 50 contracts, with a target of 1 tick, and a stop loss of 1 tick. If I want to go short: When the current price is on $900.00, place the trade directly above at $900.25). Benefit, if I am in the right direction, and it fills, I have saved 1 tick. I can actually make a profit, by immediately placing a buy at $900.00, when it hits or crosses. Biggest disadvantage: I may not get filled on my entry. Also, the trade may fill, and then continue on up to hit my 1 tick stop loss at 900.50.

Idea 2:
Create a programmed strategy to place 50 contracts, with a target of 1 tick, and a stop loss of 2 ticks.
Using the same strategy. Wait til the price goes to 900.25, and then immediately place the trade at 900.00. Benefit, it will most probably fill as price hits or crosses. The market is moving in the right direction. Biggest disadvantage: I have lost a 1 tick advantage, and now have to hit or cross 999.75 to make a profit. If the market continues on up, I will have a 2 tick loss atl 900.50.

I was doing this today on CL and GBPusd. Unfortunately, sometimes, I got in on the wrong side of the trade. LOL

Which do you think would be a preferable strategy, or do you have an alternate idea?

Aloha,
Randy

[Trader.Jon]

Allowance for trading costs is needed or else you will win the battle of 'bull vs bear' and loose the 'equity war' and burn out your acount.

TJ

[raycam]

Apart from brokerage on such a trade- $250 for me, you are very unlikely to have all 50 contracts filled at your price.
Here is a cool thing that has been working for me.
Take a market and set up various charts at very different time frames with autotrendline indicator ( downloadable from indicator section) have 3 of these set to each chart with differing bar lengths. Squish the data and watch for any patterns that have shown up on the very long term charts- if you see a consistent bounce on it- keep a look out for the next time it hits- wait for price to change direction and get in with a few contracts with your stop loss being on the other side of the the auto trend line.
Also- with long term tick data chart- squish the data to se eas much as possible and play around with EMA and HMA's until you can get a good idea of "when price breaks through that moving average- it is very likely to continue for some time...

Then- if you are in say 3 contracts- you can pull one out at say 10-15 ticks and gradually bring your stop to break even. Pull out the second and eventually the third can be allowed to run for as long as you like.

This means $15 brokerage.
This means small risk to reward.
Once the bank balance is pumped - you can more confidently enter trades and gradually increase the size of your contracts in thrids.
Hope this helps.
HEY- anyone else got some secret tips?
raycam

[Mathemagician]

I'd go with the second one.

[reeseinv]

Brilliant..

Apart from brokerage on such a trade- $250 for me, you are very unlikely to have all 50 contracts filled at your price.
Here is a cool thing that has been working for me.
Take a market and set up various charts at very different time frames with autotrendline indicator ( downloadable from indicator section) have 3 of these set to each chart with differing bar lengths. Squish the data and watch for any patterns that have shown up on the very long term charts- if you see a consistent bounce on it- keep a look out for the next time it hits- wait for price to change direction and get in with a few contracts with your stop loss being on the other side of the the auto trend line.
Also- with long term tick data chart- squish the data to se eas much as possible and play around with EMA and HMA's until you can get a good idea of "when price breaks through that moving average- it is very likely to continue for some time...

Then- if you are in say 3 contracts- you can pull one out at say 10-15 ticks and gradually bring your stop to break even. Pull out the second and eventually the third can be allowed to run for as long as you like.

This means $15 brokerage.
This means small risk to reward.
Once the bank balance is pumped - you can more confidently enter trades and gradually increase the size of your contracts in thrids.
Hope this helps.
HEY- anyone else got some secret tips?
raycam

BRilliant .... Like the guiness guys.. JUST BRILLIANT..

[zacawad1]

Raycam,
Am a newbie to NT7, can you give a more detailed explaintion?
Am intrested in trying your methed.....

[raycam]

Zacawad1
It takes time to develop confidence in your own system and that is essentially what you need to do. All I am saying is start with a long term chart ( I know that means different things to different people) For me it would be a 20 range or a 2000 tick. On the bottom of the chart when the time is click and hold left mouse button and drag to right- this will "squish" data so you can see over many days or weeks. Then go to indicators and place a HMA- maybe 233 or 610 period. - after you see it on the chart you begin to get an idea of a well sited MA period that when price goes above it it is likely to continue in that direction for a while.
That can be your base line- in other words you are not trading directly from that chart but you get to the stage where you say- "I will only take LONGS if price is above that line on the long term.
Then you pull up a medium term ( or just short term chart.. maybe a 233 tick or 6 range. DO the exact same thing again until you feel confident that when price moves above that line it is likely to continue.
Now you are in a great position to enhance your probabilities.
As in my example- you wait for price to close ABOVE on the short term chart and enter long knowing that the longterm wants to go that way.
You might have a price target for the first contract, or you might wait for price to close below the line to get out.
Experiment with different indicators to refine you entry and exit.
raycam

[zacawad1]

RayCam,
thanks for the quick replie, I have a trade stradergy in place, using sma, and profit targets, and trying to automate it, but the NT7 AMT will not let me modify it. how can I copy and paste and add the items like profit targets and stop loss of 6 ticks ect without going to collage again, any thoughts?
thanks ZAC

[raycam]

I am the wrong person to ask actually.I have gone down the road of automation and become so frustrated I now only trade discretionary through the chart trader. I have a couple of contracts and then pull out one when I think the market has given me enough then try and bring up my stop and keep the other one going.
Perhaps there is another thread more appropriate for your question.
Happy trading
raycam