Thursday, April 30, 2009

Thursday 04/30/09 - Caught up in the DOM

I'm still waiting for that one day when I'll have no distractions or technical problems throughout the trading day, and I'll be able to focus on just the market. I got up pretty early this morning to head to the condo (as mentioned in yesterday's post), and a few minutes after I left, I got a call from my contractor saying he will need to reschedule due to weather (did I mention how glad I am to NOT be in the construction business). I was actually glad since I could now spend the day trading. I was at the screens at 8:15 AM, and started placing trades around 8:40 AM. Unfortunately, TradeStation started having problems right from the open. Charts froze for a few minutes at the open. Then later on, I lost my tick-bar charts altogether. After that, the NYSE TICK data froze up. Then I lost data on XLF, the financial ETF. In the middle of all this, I received 7-8 phone calls regarding a property I'm selling, which is a good thing for the property sale, but a huge distraction for trading. So basically just problem after problem, and an extremely frustrating day. I was trading just off the 1 and 3 minute charts, and was up +$187.50 in the morning; missed a lot of trades, and took some bad ones since I didn't have the 610 tick chart, which is my primary execution chart. I kicked up the size a bit in the PM session and began trading 1-3 contracts. Ended the day up +$1,100 but I'm not really counting it since it wasn't on my typical 1-lot trade size. For the record, I hate trading 1-lots but I have to prove I can be profitable on 1 contract before I increase size (have traded up to 12 contracts in my real $ account in the past, but want to "earn" the size this time around).

As the title suggests, I lost discipline and got caught up in the action on the DOM (depth of market), and began scalping for quick 1-2 pt profits; at times just 2-3 ticks of profits. Perhaps this was because my charts were barely functioning today, or maybe I just got caught up in price moving so quickly on the price ladder (Infinity's platform is super fast!), and started going for quick momentum trades. I don't know. Whatever the reason, it's not how I normally trade, and despite the gain today, I would grade my trading as a "C-" since I didn't stick to my plan in the afternoon, cut too many winners short, and scalped way too much (40+ trades today).

As of now, looks like I'll be at the condo tomorrow morning at 8:30 AM, unless it rains again, so no trading for tomorrow. A one-day break is probably a good thing on this end.

ES/$TICK (3-Min) - Negative $TICK divergence into the push up to 885.75. Gap filled by 12:14 PM (central).


  1. If +1.1k is a C-, I'd like to see what your A+ is. ;)

  2. You kicked ass regardless man. It wasn't a perfect day but i've been in search of that for 4 years now and i'm starting to realize it doesn't exist.

    We do the best we can and make as few mistakes per day as possible and roll with whatever technical problems we have as they come.

    You did just that and made money too boot.

    Great day as far as i'm concerned!

  3. I had the same tech problems since I use TS too. Did 6 trades (mini-dow) in the morning BEFORE the big lunchtime drop and was mentally tired by then from all the intense focusing a scalper needs. Thus I missed out on the "easy" stuff (HaHa on me). In my book, any day that produces a profit is good. Staying focused and mentally "in the game" is now my biggest goal. I know the points will follow. Today (Friday) was another example of losing focus later in the day and missing out on "what the market was giving". Sounds like you are doing better than you think. Although I will say that we all need a certain measure of self-criticism if we are to continue improving. A little "inner yelling" is a good thing. I don't agree with some people who will say crap like "Don't be so hard on yourself". OK, I'm rambling. To sum it up E-Mini Player, you did good....but dang it you'd better do better next time (I say this to myself all the time).

  4. Good point Chuck! That's why Don Miller has the following quote on his blog:

    I will not allow yesterday's success to lull me into today's complacency, for this is the greatest foundation of failure. -- Og Mandino

  5. I am new to this... Why would you consider scalping on a multitude of trades to be a bad thing? It sounds like it helped you come out on top. I am just trading paper money at the moment on think or swim.

    I have been trading the ES S&P E-Mini Futures. The fee is $2 in and $2 out. That means on the first tick (12.50), there is a profit of 8.50 Then 21.00 on just half a point. You could do a hundred in a day while you are learing how to do longer trades.

    Am I crazy?

  6. Jason, no you're not crazy and scalping hundreds of times a day for 1-2 ticks is possible, but it all depends on your style and personality. To be a successful scalper, your win rate typically needs to be upwards of 80%, and it requires near perfect execution. Scalping may seem easy from the outside since you're only going for 1-2 ticks, but in my opinion, it's actually a very difficult way to make money since it requires a quick mind, near perfect execution, and a high win rate. With my style, I can lose more than half of the time and still turn a profit.

    There's really no right or wrong way to trade; it all boils down to P&L.


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