“I've got strengths, and I've got weaknesses. I don't work on my weaknesses. I ignore them, and I cultivate my strengths. The level of achievement that we have at anything is a reflection of how well we were able to focus on it. Because the only thing that's holding you back, is the way you're thinking.” - Steve Vai
Below is a list of commonly traded futures and their DTN IQFEED symbol for both current month and continuous contracts. I have also added the Interactive Brokers symbol for reference.
Over at TradersHelpDesk.com, they posted an interesting article discussing what a beginning trader can hope to take out of the markets. In general, there steps were as follows:
1. Determine the Average True Range for a given set of days for the instrument (they used 254 periods – I chose 100 for the chart below).
2. Determine 10% of the ATR. This is (likely) what a beginning trader could pull out of the market as a scalper.
3. Divide the number by 2 to determine your stop for a ½ risk reward profile.
For example, the S&P 500 E-Mini has had an ATR of about 24 points for the last 100 days.
Since there are 4 ticks for each point, the profit potential is equal to 24/.25*12.50 for a total profit potential of 1,200 or 96 ticks per contract.
10% of this full profit potential would be $120. Since we want cannot trade partial ticks, we round up to 10 ticks or $125. We would set our stop at 5 ticks for a ½ risk reward profile.
How likely is it that we would be successful with a 5 tick stop? Not very. But this is a good place to start your testing.
No comments:
Post a Comment