EMini Volume Profile Daytrading

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About Me and this Blog’s Objectives

Posted by Editor on July 19, 2009

Personal Background

I am an old time surfer from California and Hawaii, a musician, a teacher of meditation, a martial arts instructor, and an active day trader. I began trading commodities in 1975. I have been sitting in front of a computer, day trading, since 1991. My emphasis has been the S&P’s and Eminis.

I taught a course in trading during the mid 90’s. It was quite well received by all my students, as my only “marketing” was word of mouth. After a few years, I quit teaching, when I learned that, even though my students were happy with the material, they did not necessarily go on to trade successfully. No matter how good the method, it is always up to the trader. I did not want to make money selling a “product”.

I have been a teacher my entire adult life, with a Masters Degree in Education. I enjoy teaching, and find it an ongoing challenge to somehow discover some effective means of communicating and transmitting the components required to enable a new trader to advance and gain mastery of the personal qualities required to become successful in an arena where the vast majority fail. This blog is an experiment to explore some of the possibilities.

The “Marketplace” for Trading Education

Consider the educational options which exist today. The number of vendors,”educators”, courses, systems, methods, training programs, trading rooms, advisory services, etc, is so vast, it may actually exceed the number of those who are seeking to learn to trade!

Yet, as a short time investigating on the internet will reveal, the majority of all these educational options fail to produce long term success in trading for those who invest the time and money spent on the programs. Trading forums are replete with members who share their experience with most of the programs available, complaining about their long term ineffectiveness. Initial enthusiasm of students wears off after some time, as the bottom line fails to hold up, using these methods.  Thus we see the common cliché  pronouncement that 95% of new traders fail within the first year. And most of these “educational” options are extremely expensive.

Why the Education is Not Effective and How to Separate the Wheat from the Chaff

It takes a good teacher to teach, and a diligent student to learn. This simple principle, when applied to trading, includes a significant prerequisite: the teacher must have  real experience with success in real time trading. Also, the student must have unwavering commitment, and work to apply the concrete tools which made the teacher successful.

The more you research the programs and “educators” in the trading market place, the more you find a common thread: those who “teach” are not successful traders. There are many categories of such vendors. Some are merely unscrupulous capitalists. Others may have tried trading for a number of years, and studied to develop methods or systems which they sincerely believe are ingenious and effective. Yet they cannot trade the methods for some reason, lack of discipline, fear of pulling the trigger, lack of focus, lack of trading capital—-any of a myriad of obstacles. They use the rationale as justification that they are qualified to teach, with the conviction they are providing something very worthwhile, which will work for anyone who follows their instructions. They might say, “some people are traders, some are teachers” seeing no problem in the assumption that a non trader can teach anything worthwhile.

You may encounter teachers or traders who claim success with techniques, methods, or systems, but the success was actually too short term to be representative of realistic future expectations. Perhaps a recent market behavior was favorable for quick profits, which might be unlikely in the future trading the method for sale. Other vendors may offer programs based on ideas, strategies, or systems which have been evaluated only by optimized back testing, or even forward testing, but no one has ever traded it in real time. Especially no one has ever taken every signal.

Take trials in some of the abundant day trading rooms available on the internet. The moderators will call trades, or make general prognostications, and at times. some of them appear to be extremely knowledgeable, with very effective projections of market behavior. But almost invariably, if you stay for a week or so, you will begin to find questionable calls of favorable fills on entries, stops not being hit by a tick or two, moved just before they were hit, etc. It can become very doubtful that the person calling the market has any real money on the line. Why should they, if they are making 20,000.00 per month, or in some cases, much more, on proceeds from their education and trading room programs.

Another category of the commonly available educational options out there is “the one size fits all” paradigm. This is actually by far the most prevalent approach to the “business of selling trading education”. (For many obvious reasons. This approach is the most economical, tactically workable marketing strategy, and most conducive to growth of income, with potential for spinoffs, after market add-ons, etc.) Most programs have some fixed framework with specific strategies for emphasis on specific indicators or time frames or variables, which may combine in any number of ways which might be totally incompatible with your own personality, inclinations, aptitudes, account size, objectives, and many other very personal qualities every trade must discover within themselves. There is no “one size fits all”, when it comes to day trading.

Students of trading would be well advised to follow two screening tactics when evaluating any teacher candidate angling for their time and money. First, whatever educational program you would consider, ask for proof of the ability to trade. It will not take long for you to find out that such teachers are very few and far between. Many will talk about it very confidently and find good logic for not providing the evidence. But very few will comply with conclusive evidence. Second, evaluate candidates in the context of what is written above, to determine if the programs suffer from all the limitations which make them unlikely to serve your personal objectives. The program should offer one on one guidance from a trader who has documented their own skills.

What kind of Education is Valuable and How to Find It

As a sixty something day trader, my experience has followed a pattern consistent with everything else I have found to be worthwhile in life. In surfing, in studying guitar, keyboards, and music, in meditation, in martial arts, it would not have been fruitful study, and my progress would have been minimal, without guidance from the highly skilled masters of these arts and disciplines—the ones I was so persistent in seeking out, and so fortunate as to have been blessed by their tutelage.

Anything very rich and deep and difficult to master, must be studied and practiced under the guidance of someone who has faced all the same challenges and attained a high degree of mastery. Although in one sense day trading is a totally solitary pursuit, waged inside your own mind, heart, and physiology, there are so many aspects to be encountered in the process that most people cannot possibly navigate them by “reinventing the wheel” along the way. As in any generality, maybe some freak of nature, or some one in a billion genius out there may be the exception to this rule. But let’s just say, don’t count on that being you. Try to get valuable guidance from someone truly qualified to help you in a personalized process of finding yourself and the strategy you can implement with conviction and confidence.

How does this Blog fit in? My latest “Experiment”

This is my second blog on trading. You may want to check out my earlier blog:

ES Mini Daytrader

This blog is somewhat unique in that I posted several consecutive strings of trading days,as they were occurring in real time. At the end of each day I posted actual time and sales of every trade, along with screen shots of the charts, showing exactly where each trade was entered and exited. I also posted some videos of analysis of the setups, logic and management of the trades. You will  see that my trading results were exceptional in many ways. My trading produces extremely high accuracy, beyond what is considered possible by most trading experts. On my blog, I explain how the accuracy is achieved, and I demonstrate it on hundreds of trades documented throughout different periods of trading in 2008. I also offer some logic and context on risk reward, profit taking, trade management, goal setting—–all variables which could allow for the attainment of such high accuracy in a scalping trading strategy.

For the entire year of 2008, I made 2021 trades, with a total of only 41 losing trades, and a total of only 11 losing days. All of this was in pursuit of specific goals which facilitated high accuracy scalp trading. Do not mistake all of this as simply “bragging”. I do not claim to be a great trader. The guys who trade billions, like Monroe Trout and other such Wizards, they are the great ones. I just identified my edge and set a goal, and for the year I did something few humans have ever accomplished, trading almost every trading day, 98% accuracy scalping index futures. Plus I made money doing it, not the other way around, as I see it. I look at last year as an experiment. Every year is different in one way or another. This year is totally different in the index futures, as any active trader will testify. In my view, trading always requires adjustment to the vicissitudes of the markets. This blog reflects my current approach to the current state of affairs.

My plan is to develop this blog as an educational program of genuine value. You may review my earlier blog and find fault with it as not spelling out a clear cut method. I may agree with that assessment to the extent that it would require someone to be very diligent and to examine every trade one by one to start to appreciate exactly what I was doing in those trades. The “secrets” are revealed, because very entry and exit is spelled out. By serious study, the patterns should become recognizable to the student. But most curious onlookers would not get to the point of such deep investigation. That blog was not really intended to teach the specifics of a trading strategy. Rather it was intended to offer insights into the “inner game” of day trading——hints of how to adjust the perception and uplift the spirit, which is the key to braking boundaries which restrain our performance.

This blog will go in different direction. I will attempt to offer very concrete instruction which can help traders develop a very high probability trading plan, right here on the pages of this blog. You will be able to see the day by day development of a trading “manual” which unfolds a trading strategy which will facilitate extremely high probability day trading in the index futures.

Give Stuff Away for Free, and See What Happens

As a teacher past 60 years of age, I look at teaching as a noble profession. The tradition is that some individuals are great achievers in some field. They attain great success, to the point of mastery of their art or discipline. Then as they get older, it is time to pass it on to future generations. This tradition is what I have benefited from, learning from wonderful individuals in the arts I have studied throughout my life.

I have given considerable thought to different approaches towards education of traders. Some of these ideas would employ standard marketing practices. This blog is the outcome of rejection of that approach. Following is some of my logic for this outcome.

The high cost and dubious value of most educational programs has led to widespread “piracy” around the internet. It is amazing how so many trading methods and tools, some of which are marketed for thousands, or even tens of thousands of dollars, are floating around for free or swap downloads somewhere. So why should I bother to sell a trading method? Not if I am attached to efficient garnering of the monetary fruits of my efforts. Furthermore, as I wrote earlier, selling a “one size fits all” method, with cognizance of the reality that most purchasers will not become successful traders, doesn’t have great appeal for me.

So why not take a different tack? Create a great instructional manual for extremely high accuracy trading, and give it away for free! This blog will be the product of that endeavor. Gradually, day by day charting of a volume based strategy employing market profile techniques will unfold this trading plan. Throughout the curriculum, there will be detailed consideration of all the nuts and bolts: how to get the data feed, charting capabilities, the best broker, the best rates, etc—–how to do everything as inexpensively and as efficiently as possible to have all the tools, all the opportunities for an edge, and with the least expenditure and squandering of capital before any profits have accrued.

Reverse Logic of Undertaking Teaching and Learning Strategies

Finally, there is an option for some individuals who return to this blog often enough to make genuine progress, learning from it and applying some of the tools shared here with promising returns. I will be putting in time at the end of each trading day, developing the curriculum. It will be there on the screen for interested students to assimilate. This format is different from the norm, in which you go to class on the first day, see the teacher, get some books and start studying them. Here you will get all the material first. You can study it and work with it, and even trade with it.

After some months, as the value of the material on the blog gets more tangible and “complete”. Some blog regulars may start to realize their potential and seek more. If some express interest, I may be available for personal instruction, on a one to one basis. That training would require lots of homework by the students, and daily evaluation of real time performance during the trading day, to gain capability for executing the high probability strategies with total consistency. Obviously that level of training and personal attention will cost money. The program would be custom designed for the needs of the individual student, so the pricing is not fixed; it is contingent on the exact structure, time and frequency allotments, and program duration, in the personal interaction on phone and internet. All these factors are dependent on initial consultation. The students’ background, trading experience, objectives, expectations, trading capital, commitment to doing all necessary homework etc—–all these things are critical in qualifying for this training, and for our creating a teaching/learning plan.

If no one ever wants to seek personal training, that is OK with me. The stuff on this blog is yours to use as you see fit. If some do want to study with me personally, that is OK with me also. I will do my best with one key objective. Once you begin, my constant goal is that you achieve success. I only want to teach those who can plug into that commitment, and those who I feel show promise to make it happen. Meanwhile, please enjoy and watch how things unfold in the coming days and weeks. Thank you for visiting my blog.

 

Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

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