Monday, 26 September 2011

It All Starts from "How Much Do I want to Earn"

As I was working on the program for the upcoming Workshop on November 5, I thought that I should share in this blog some of the information that we will be working on, at least to the extent that it can be in a blog.

We will be starting with a blank page and ending up with a bespoke trading plan and algo logic rules for each attendee to match their particular requirements.

To find those requirements, we start from the title of this post:  "How Much Do I want to Earn"? Once we answer this question, the next one is: What hours do I want to trade? We then ask: Which market do I want to trade? And then: How much risk capital will I use?

These questions set us up with some metrics that we can use to start off working on or Trading Plan (TP).

For example, my answers may be:
I want to earn an average of $300 per day as a first goal.
I want to work from 9am until Noon, NY time
I want to trade the eMini ES
I want to be a very active trader looking for quick profits
I will put $25,000 into my trading account
I need a win rate of more than 65% to trade in a relaxed manner

Once we have the answers to these questions, we can construct a trading plan specifically to meet these requirements.

The MarketDelta chart below has signals based on some new volume work that I'll be showing in great detail in the November workshop. The confirmation of the order flow and momentum is really clear and can be duplicated in both discretionary and algo trading.



As these markets become more technology driven, the discovering of what "they" are doing has become easier with all the tools available today. I have attempted in this blog to get my readers to think about what is happening rather than trade indicators as squiggly lines. We are trading order flow. Our tools help to reveal it. Order flow's footprints are there for us to walk in. Those of you on the road to CP will find the journey shorter if you use the available technology to do the heavy lifting.

ES rallied in Asia, pulled back in early European trading and then rallied strongly ahead of RTH. It topped at around 1150.00 which corresponded to the bottom of the buying tail of the Sep 13th Profile and then sold down ahead of the RTH open. The chart below shows the key points. The order flow is readily identifiable with the tools we use.





2 comments:

  1. EL: You said:
    "The MarketDelta chart below has signals based on some new volume work that I'll be showing in great detail in the November workshop."

    This appears to be Volume Breakdown related which requires Bid and Ask volume data capability in the software. I'm curious about this because Flo, your algo work, and back-testing is based on running in MultiCharts or TradeStation, and I understood these programs don't handle Bid/Ask. Are you proposing to simulate it with upticks and downticks?

    I do recall back in the beginning of the Blog there was discussion about this.

    It is unfortunate that we can't get one software that handles "all".

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  2. R/R, yes its various manipulations of the VB data. In MultiCharts I have to use Upticks and downticks instead of real volume. This is about an 85% match but works with the other stuff I am using. As I said, for purely manual discretionary trading, MarketDelta id king although I wish I could chart trade like in MultiCharts.

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