Posts tagged ‘emini chart’

Learning to Trade the Emini through Experience and Discipline

By , 9 July, 2009, No Comment

Something has been bothering me lately, and I feel the need to express my opinion on the topic.  As many experienced, and unexeperienced traders know, trading is not an exact science.  Still, the impulse to trade on one’s “gut feeling” is one of the worst strategies a trader can have.  Remember the axiom:

The market is always right, you are always wrong

I also add a few axioms of my own:

1.  Never let a winning trade become a losing trade, ever.

2.  Never trade without well thought out stops and limits.

3.  When you are clearly on the wrong side of the trade, get out and move on.  Emotional attachment to any trade is the kiss of death.

4.  Trade markets you know, don’t bounce willy-nilly from market to market.  Learn one and trade it well, then you may be ready to move to another market.

5.  Trade the market on paper in a demo account until you can consistently string together five days of winning trades.

6.  Avoid counter-trend trades at all costs.

However, there have been a plethora of one size fits all trading programs that promise fantastic profits.  These programs, or systems, usually sell for thousands of dollars and are usually not nearly as fantastic as the seller promised.  Learn to trade through experience.  Once you have seen a set up two or three hundred times, you will recognize the pattern….then understand that even the most perfect setup may not result in a winning trade.  There is a randomness to the market that makes fools of all of us.  Just don’t compound your foolishness by riding the trade into the ground.

I love trading, and I truly enjoy traders.   Traders are a maverick bunch.   I prefer to scalp, which means I am making very short trades try to earn 2-3 point on a trade.  It is simply my preference, as I have no tolerance for sleeping while I have an active trade.  That’s just me.

Find your trading style, whether it be scalping, swing trading or any other trading style and be the best you can be, because it is a wonderful lifestyle to live.

All the best, and learn to love this wonderful thing called trading.

Todays Pivots for ES emini contract

By , 9 July, 2009, No Comment

ESU9
For 07/09/2009
Symbol R1 R2 Pivot S1 S2
ESU9 883.08 892.42 874.17 864.83 855.92

Get Yourself a Free Demo Account

By , 9 July, 2009, No Comment

Chad at AMP futures has been very gracious and is offering a free demo account using the state of the art platform, Ninja Trader.  Ninja Trader uses the Zen Fire feed and is lightening fast and accurate.  Readers of this blog can get this free of charge for thirty days.  It is a great way to practice some of the things we have been discussing and actually trade on a live feed.  Charts courtesy of AMP Trading.

Note:  I have no financial relationship with AMP Trading, but like using Ninja Trader and Zen Fire

ES Emini Trading for 7-8-09

By , 8 July, 2009, No Comment

emini chart for 7-9-09

emini chart for 7-9-09

Charts courtesy of AMP Trading

I didn’t get a chance to trade much today because of some prior commitments, but made one trade I limited out.   Most of my trading buddies said they tore it up staying short, short, and more short.

Looks like there was a nice countertrend trade toward the end of the day, which is often the case as speculators take profits.  Of course, I cannot be sure that was the case.  Anyway, have a good look at the chart and notice the nice entries at the 100 and -100 lines on the CCI.

Good luck trading, and have a great day tomorrow.

The emini Trade you Don’t Take

By , 8 July, 2009, No Comment

Trading is a funny thing, especially after you have stared at an emini chart for four or five hours.  A trader can see possibilities in every price move, and usually these potential trades are losers.  Learning to control your emotions and stay disciplined in your trading is one of the most difficult aspects of trading.  To be sure, it is, in my opinion, the MOST important aspect of trading.   In my opinion most traders fritter away their money by making emotional trades they should never have taken.

Emini trading is the process of discerning proper set ups and taking those set ups in a disciplined way.  In past posts have described a number of filtering mechanisms I use to keep me out of bad trades.

1. I try to never take counter trend trades

2. I strike an 89 period SMA and usually take short trades when the price action is significantly below the 89 period average.   When the price action is significantly above the 89 period SMA I concentrate on long trades.

3.  I use DecisionBar, with it’s dynamic support and resistance lines, to get a read on the market range and breadth.

4.  I set specific stops and limits with my trades using the Absolute Range Indicator.

But here is the problem most emini traders experience, they become emotionally attached to their trade. Sometimes the very best looking set up will result in a loss, and there is nothing you can do, as a trader, to change this besides exit the trade and look for a trade.  The problem many traders have is an emotional attachment to their trade…since the trade looked so well in the set up stage, surely it will eventually result in a nice gain.  This is not true.

A good trader learns to cut his losses and lock in his gains in a disciplined manner.  A good trader has no emotional involvement in any trade he makes.  It is akin to a math equation, when it’s time to exit a trade….it’s time to exit a trade.   On the other hand, I have witnesses hundreds of traders hang on to bad trades and ride them right in the ground.

Why?

The have invested their emotions in the trade and are convinced that it should be a good trade.  The market is always right, you are always wrong.  It’s a simple axiom, yet one of the hardest to conquer when trading the emini contracts.  Or any other contract, for that matter.

This is no simple skill to master, as it requires you to think akin to a computer.  After all, we all have emotions, and we all want out trades to succeed.   But a certain percentage of trades are not going to profitable.  That is a fact of trading, so cut your losses when it’s time and find a new trade.

Todays Charts and some observations

By , 11 June, 2009, No Comment
ESU9

ESU9

I am sure everyone remembered to roll to the Sept. contract today. The market roller coastered around the chart and various economic entities debated the validity of the economic data the government has released of late.

Over at Financial Armageddon, there is an interesting article from a fellow who claims the nation’s books are grossly understating the current unemployment figures, money supply…just about everything, once you get reading the article. His claim goes something like…”the country would be flat on it’s belly if we weren’t using doctored numbers…”

I’ve never been much of a conspiracy theory kind of guy, so I find his declaration of “all things government” to be a bit hard to swallow. On the other hand, another study showed the government subsequent revisions to economic data were usually negative, that is, the revisions usually put the economy in a less positive position than the initial release. Of course, you could argue coincidence. But I’ve never been too big on consistent coincidences, either.

So I suppose the truth lies somewhere between these extreme views. The government has changed the methodology it uses to measure the countries unemployment and GDP, and by in large, the new formulations tend to understate the seriousness of the current problems.

Sheesh, sometimes the entire business wears me out.

As an aside, I have been wondering what the difference in Bernie Madoff’s Ponzi scheme and the credit default Ponzi scheme AIG has saddled us with. Think about it….AIG did not have the assets to repay, nor was it even close, the entirety of the credit default swaps it issued….kinda of like Madoff, when you think about it. Only we gave AIG billions of dollars to straighten things out, we gonna give Madoff lots of years to straighten things out…in the pokey.

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