It may seem like I'm skipping around some with different securities, and I am. I'm trying to find the right fit. I'm about to give up on forex because the pricing on this platform is so 'loose', the currency will range around quite a bit but the bid/offer doesn't move quickly. What this means is that I need a larger move to profit, which makes scalping harder. Add to that the fact that the wide range of an individual move makes it easy to get spooked out, and I think I'll hold on that for a while.
I like the futures because they are the purest form of the market. The market follows the futures. When you trade a stock you are trading something within a group or industry, and within that you are trading based on how the market is doing, so you are attenuated twice. Trading the market is trading the market. That doesn't mean that there aren't opportunities day trading, there are, especially around round level arguments.
Trading the SPY ETF is also trading the market, and has the added benefit of being able to take advantage of smaller moves.
Last night, Sunday night, I did 3 trades and netted about $30. Today I made 5 trades and grossed $125. I had one trade last night and today where I got out where I got in so it was a loss of commissions, but I had no losing trades. Today I was 4 for 5 profit and 1 even. The 10 minute/2 minute setup worked again and again, and I was very disciplined about not getting in unless the conditions were right. One trade was in the middle of a choppy range and went against me for 2 points, but I held on and it came back in for a small profit. Other than that one trade I executed very well.
I left money on the table several times, and that is something for more confidence to help with. I was getting out with 1/2 point on average. It worked, and I need that foundation, but I also need to learn to loosen up. The goal is not all of a move, but I'm leaving money on the table. This isn't greed, its needing to make sure I get wins to counteract the inevitable losses.
I could feel myself have the urge to go for it several times and I would look at the setup and just say 'stay out, the setup isn't right'. When you get wins it gets easy to get fancy and believe that you can predict what's going to happen or that you've 'got it'. The setup says 'stay out' or 'you may pass'. Before lunch things settled into a choppy range and I stayed out. I also correctly identified that the futures were forming a pennant and would likely go higher later, and that turned out to be correct. I was watching very basic stuff, higher highs and higher lows or lower highs and lower lows, moving averages and the setups of the stochastics and the MACD. I've also noticed that, on the 2 minute chart of the SPY, that there are frequently volume spikes around times when a short term move is close to an end. So, like the airplane pilot I cycle through the instruments.
I feel very good about my discipline today, and I had an up day of $125. I was right 4 times and I was lucky once. My day trading account is $40 away from needing another deposit, and I don't want to have it go under 25K again just now. I think I'll stick with the futures for a bit. I can make real profit and there are real moves, and its pure -- I'm trading the absolute market.
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