Monday, 17 October 2011

Looking into the Future

It's lunchtime on Saturday here in France as I start writing this. I woke up early, as usual, but not to trade. I watched the Formula 1 qualifying at the Yeongam circuit in Korea. We then made a few runs to the local dump to get rid of the rubbish left over from our redecorating efforts which was completed, not by me, on Thursday evening.

I'm writing this post as a look into the future. I know I will scalp the ES on Monday. Scalping is a different thing for every trader. For me, scalping nowadays is trading off a 30 second or 1 minute charts or even a 0.75 range bar chart, for 1.5 or 2 points, not ticks. I re-enter on pullbacks of the trade is still intact.

I know I will make money, not because I am full of myself but because I have a trading plan that has been backtested up the wazoo and that if I get any sort of volatility will enable me to get a pay day unless  do something stupid.

This supreme confidence is built on backtesting and then trading in SIM to prove the TP and develop the muscle memory and then proving the SIM with live trading. After this process I know I will be profitable. I do need to watch for any changes that require an adjustment of stops and targets.

If you look at the chart and go long when the candles go green, scratch if the momentum doesn't continue but take profit at 1.5 to 2 points and a stop at 2 points. Of course I override when I see that the trade should be exited as the order flow is waning.  Simple TP. The smarts have gone into the algo that makes the bars change colour.

In my opinion, this is the way to CP. You risk only your time and lost opportunity until you have proven yourself. The risk is only the transition risk from SIM into live. 

Those of you who are in email contact with me know that I usually do my correspondence at around 5am here in France. The view below is from my work area at about 7.30am this morning. Mont Blanc is just around the corner to the right behind the hill.

I've had my sauna and been working since about 4.30 am today. Not much market action, yet, although there were a couple of good moves during the Asian timezone. I'll start my scalping now.

Saturday, on the week-end, was the second anniversary of this blog. I'm pleased to say that not only did Kiki reach CP during the blog, but a host of other readers have emailed me that the blog has helped them achieve that milestone. I guess it's not a milestone because to most, the distance is not a mile but is like the distance from the Earth to the Moon. Congratulations to all who are CP. You are in the best business in the world. And now, it is a business for you! You deserve credit for all the hard work you put in. The harder you worked, the luckier you became.

It's now Monday. This is how things went this morning (London time). It was a quieter than usual morning. Market was strong overnight and started that way in London until the German Chancellor made a comment. SOLD!


  1. I see you've got the ATR trailing stop on this chart. I use the "3" setting for the ATR trailing stop. Is that what you're using?

    Thanks for posting your charts. I've learned a lot by studying them.


    Loyal EL Fan

  2. Yes, 3, but it's not a hard stop, only gives me info.