Well this is a thread I've been meaning to create for a long time. It's not a journal. It's just a collection of thoughts.
If you don't like them, then don't read them But the intention in posting to this thread is in fact to benefit some people who will read these posts and have an "ahh-ha!" moment (I have had many over the years). It is also my intention to improve my own trading by making sure I am following my own advice.
Mike
Need help? 1) If you're losing money then stop with all the indicators. The more indicators you have, the harder you make it for yourself. 2) Keep a journal religiously and be honest with yourself. Study money management techniques. Look to your own actions and not the actions of the market to explain winners and losers. 3) Set goals for yourself that you can reach every day. Make them about how you trade, and not about how much money you make. 4) Have a question? Create a new thread so the community can help.
If you want to support our community, become an Elite Member. I offer free coaching to any Elite Member who puts forth a serious effort.
The following 10 users say Thank You to Big Mike for this useful post:
First, for those following me for the last year or more, you know I've changed my style a few times. At first I felt bad about this, I felt perhaps I was doing something wrong before and that anyone that followed me was possibly now doing something wrong, too.
But with time, I realized that just isn't how it works. There is no right or wrong. There is only the now. (Hi George!)
Tip
The details below are just to satisfy your inner-self In truth, they are to keep your interest in this thread so you will keep reading and hopefully discover something much more important. These chart details (time frames, indicators) are not important or relevant to this thread.
So, let me start by saying that I primarily trade CL (crude oil futures), and that I exclusively trade a 5 minute chart. I do not look at tick, volume or range charts, and I do not look at any minute chart smaller than a 5 minute. I do have a 60m chart up, and occasionally also look to a daily chart.
On my chart I have the following indicators:
- BMT Envelope Fib Bands
- Prior Day High, Low
- Current Week High, Low, and R1/S1/PP pivots [CMI Pivots Indicator]
- Prior Week High, Low, and R1/S1/PP pivots [CMI Pivots Indicator]
The BMT Envelope is set to use my BMT CollectiveMA as the midline, which is merely a combination of a SMA 9, SMA 34, SMA 100, EMA 20, EMA 34 and EMA 100. Why these six moving averages combined as one? Because it is my belief these six moving averages represent the vast majority of all moving averages used today by big traders, and by combining them all into one, I've made my own unique S/R trend-following indicator. The bands then calculate Fibonacci levels away from the midline.
You can find BMT Envelope Fib Bands and BMT CollectiveMA in the VIP section.
The remaining three bullets are there because I've learned that price interacts with these areas in a remarkable fashion and that you absolutely must have them on your chart, and you must be aware of them at all times.
I trade only with-trend. I do not short when price is above the midline, and I do not long when price is below it.
I trade 2 to 3 targets, with each target having 1 or more contracts. The first target is usually quick, 8-10 tick profit. The second target is set in accordance to price action (recent lows, swing levels, s/r levels, fib band, etc). The third target is a runner that usually goes for 50-75 ticks, or more.
My stop is usually about 16 to 24 ticks. Some may cringe at that. I set my stop in accordance with price action, but I also set it wide enough to avoid stop hunting. My goal is to only get stopped out when I've made a bad trade. I do not get stopped out when I picked the trend correctly but just missed the perfect entry by a few ticks.
On CL, 1 tick is $10.00 USD. CL is trading at about $75 as we speak, so a 24 tick stop (0.24) is roughly equal to 0.3% of the trading price. CL almost always moves 100 ticks before lunch and another 100 ticks after.
CL is a very volatile instrument. It is not for beginners. It makes ES seem like watching paint dry. More on why this type of trading better suits my personality later.
Mike
Need help? 1) If you're losing money then stop with all the indicators. The more indicators you have, the harder you make it for yourself. 2) Keep a journal religiously and be honest with yourself. Study money management techniques. Look to your own actions and not the actions of the market to explain winners and losers. 3) Set goals for yourself that you can reach every day. Make them about how you trade, and not about how much money you make. 4) Have a question? Create a new thread so the community can help.
If you want to support our community, become an Elite Member. I offer free coaching to any Elite Member who puts forth a serious effort.
The following 12 users say Thank You to Big Mike for this useful post:
I was waiting to pick up some new trading related books, and now with Kindle in hand, I have purchased a few on my wish list.
The first one I've been reading is The Daily Trading Coach by Brett Steenbarger. This is the first book of Brett's that I read, and already I feel very connected to him. I feel like in many ways, I could have written this book. We are in sync.
Most likely the next several posts in this thread will be about this book. I've made some 'Clippings' (on Kindle) specifically so I could share them with you, in this thread, and I've got quite a few stored up already.
Each clipping spoke to me and stood out in such a way that I wanted to post about it. Some of them may seem like common sense, but trading is about knowing your own weaknesses and strengths and even though I'm not a psychiatrist, I know that doing the right thing, or doing what is "common sense" is something that is sometimes very, very difficult.
So as you read the next several posts, don't just skim them and say "I already knew that". Really think about your trading. Think about your best days, and your worst days. Did you do these things? Can you improve upon them?
Stay tuned...
Mike
Need help? 1) If you're losing money then stop with all the indicators. The more indicators you have, the harder you make it for yourself. 2) Keep a journal religiously and be honest with yourself. Study money management techniques. Look to your own actions and not the actions of the market to explain winners and losers. 3) Set goals for yourself that you can reach every day. Make them about how you trade, and not about how much money you make. 4) Have a question? Create a new thread so the community can help.
If you want to support our community, become an Elite Member. I offer free coaching to any Elite Member who puts forth a serious effort.
It's important not just to have goals, but also to directly experience yourself as capable of reaching these goals.
Subtle, but so incredibly useful. It made me realize I've been setting my goals based on reaching a certain profit for the day. Profit is something you cannot control! The only thing you can control is how well you trade, not whether or not you took money out of the market (and how much).
Now each morning, before I trade, I am going to literally take a moment and picture myself trading the entire day. Picture the before lunch moves, the after lunch moves. Picture myself executing exactly as laid out in my trading rules. And that will be the goal, to follow my rules as best as possible.
Mike
Need help? 1) If you're losing money then stop with all the indicators. The more indicators you have, the harder you make it for yourself. 2) Keep a journal religiously and be honest with yourself. Study money management techniques. Look to your own actions and not the actions of the market to explain winners and losers. 3) Set goals for yourself that you can reach every day. Make them about how you trade, and not about how much money you make. 4) Have a question? Create a new thread so the community can help.
If you want to support our community, become an Elite Member. I offer free coaching to any Elite Member who puts forth a serious effort.
The following 3 users say Thank You to Big Mike for this useful post:
CL is a very volatile instrument. It is not for beginners. It makes ES seem like watching paint dry. More on why this type of trading better suits my personality later.
So why do I like such a volatile instrument?
Because in my years of trading, and in my many more years of just being, I've come to know and accept that I am not a patient person. Patience is a weakness for me, and I have to work very, very hard to overcome it.
CL suits my personality well because it has so many powerful moves with such great frequency, that I am able to force myself to have the (lesser) patience to wait for one. By comparison, ES often can be stuck in a 2-3 point range for an entire day, or at least hours on end. Being an impatient person, I succumb to overtrading in this scenario, which is the quickest way to bust an account.
Mike
Need help? 1) If you're losing money then stop with all the indicators. The more indicators you have, the harder you make it for yourself. 2) Keep a journal religiously and be honest with yourself. Study money management techniques. Look to your own actions and not the actions of the market to explain winners and losers. 3) Set goals for yourself that you can reach every day. Make them about how you trade, and not about how much money you make. 4) Have a question? Create a new thread so the community can help.
If you want to support our community, become an Elite Member. I offer free coaching to any Elite Member who puts forth a serious effort.
The following 6 users say Thank You to Big Mike for this useful post:
First, for those following me for the last year or more, you know I've changed my style a few times. At first I felt bad about this, I felt perhaps I was doing something wrong before and that anyone that followed me was possibly now doing something wrong, too.
But with time, I realized that just isn't how it works. There is no right or wrong. There is only the now. (Hi George!)
So, let me start by saying that I primarily trade CL (crude oil futures), and that I exclusively trade a 5 minute chart. I do not look at tick, volume or range charts, and I do not look at any minute chart smaller than a 5 minute. I do have a 60m chart up, and occasionally also look to a daily chart.
On my chart I have the following indicators:
- BMT Envelope Fib Bands
- Prior Day High, Low
- Current Week High, Low, and R1/S1/PP pivots
- Prior Week High, Low, and R1/S1/PP pivots
The BMT Envelope is set to use my BMT ConfluenceMA as the midline, which is merely a combination of a SMA 9, SMA 34, SMA 100, EMA 20, EMA 34 and EMA 100. Why these six moving averages combined as one? Because it is my belief these six moving averages represent the vast majority of all moving averages used today by big traders, and by combining them all into one, I've made my own unique S/R trend-following indicator. The bands then calculate Fibonacci levels away from the midline.
You can find BMT Envelope Fib Bands and BMT ConfluenceMA in the VIP section.
The remaining three bullets are there because I've learned that price interacts with these areas in a remarkable fashion and that you absolutely must have them on your chart, and you must be aware of them at all times.
I trade only with-trend. I do not short when price is above the midline, and I do not long when price is below it.
I trade 2 to 3 targets, with each target having 1 or more contracts. The first target is usually quick, 8-10 tick profit. The second target is set in accordance to price action (recent lows, swing levels, s/r levels, fib band, etc). The third target is a runner that usually goes for 50-75 ticks, or more.
My stop is usually about 16 to 24 ticks. Some may cringe at that. I set my stop in accordance with price action, but I also set it wide enough to avoid stop hunting. My goal is to only get stopped out when I've made a bad trade. I do not get stopped out when I picked the trend correctly but just missed the perfect entry by a few ticks.
On CL, 1 tick is $10.00 USD. CL is trading at about $75 as we speak, so a 24 tick stop (0.24) is roughly equal to 0.3% of the trading price. CL almost always moves 100 ticks before lunch and another 100 ticks after.
CL is a very volatile instrument. It is not for beginners. It makes ES seem like watching paint dry. More on why this type of trading better suits my personality later.
Mike
Mike,
Yeah, this thread and your post gives me "ahh-ha" moment.
I've been with you at your blog even before the creation of the BMT forum. I visited your blog nearly every day. You sent me e-mails and video links. I downloaded all the videos and played them several times. I've been very cautious of your changing of your trading styles (volume, range, regular renko trading styles, looking @ the bigger picture, etc) at all the times you did; and at a point I switched off from your style and method, with the exception of using Murrey Math, and looking at the bigger picture. I recently stopped using Murrey Math.
What I noted in your styles and methods is that there is always the idea that there a "right" and later a "wrong"; which to me is a kind off "trial and error" approach.
As a Computing and ICT Systems Engineer, my approach to designing a system or tool is to "get it right the first time and now", so that the system or tool can have a cost-effective, efficient and profitable edge (this may sometimes be difficult, but it is achievable). The design approach is always as follows;
- investigation/analysis
- design/layout
- coding
- testing (you can do all the trial and error here if it is desirable/necessary)
- live run/usage
So, that is the reason I detest "trial and error". What matters is "now".
I've been SIM-trading for a long time now (over 1 year) and have commenced opening a live account with Mirus. Using my design approach, I seem to love regular Renko (very much on NT7; I'm beta-testing NT7), even with the BMT Envelope Fib Bands (only the 1st version of BMT Envelope imports into NT7beta). BMT Confluence doesn't seem to be in the VIP Downloads section. Or do you mean BMT CollectiveMA ?
I'll meticulously follow this thread, specifically the aspects of Money Management and Advice, in view of my immediate plan to open a live account.
Thanks for the thread and BMT.
Lolu
The following user says Thank You to lolu for this useful post:
BMT Confluence doesn't seem to be in the VIP Downloads section. Or do you mean BMT CollectiveMA ?
I'll meticulously follow this thread, specifically the aspects of Money Management and Advice, in view of my immediate plan to open a live account.
Thanks for the thread and BMT.
Lolu
Lolu, thanks for the feedback and kind words. I plan to update this thread often.
Yes, I meant BMT CollectiveMA, I will correct the above, thank you.
Mike
Need help? 1) If you're losing money then stop with all the indicators. The more indicators you have, the harder you make it for yourself. 2) Keep a journal religiously and be honest with yourself. Study money management techniques. Look to your own actions and not the actions of the market to explain winners and losers. 3) Set goals for yourself that you can reach every day. Make them about how you trade, and not about how much money you make. 4) Have a question? Create a new thread so the community can help.
If you want to support our community, become an Elite Member. I offer free coaching to any Elite Member who puts forth a serious effort.
Why a five minute chart or any timeframe for that matter?
Because a 5m chart shows me exactly what I need, much better than other chart type or size. That's all that matters. I also believe that the majority of the successful traders, we're talking the 5% of traders that take 95% of the money, are trading a 5 minute or larger chart. But that's just gravy. If a 92 minute chart, or a 123 volume chart, or whatever worked for me then that's all that matters.
Also, let me throw out there -- This thread is not a journal. I'm not documenting entries and exits. I'm not showing a bunch of charts. None of that will help you if you don't already know how to make money trading.
Instead, this thread is about 'everything else' (the bold part of the above sentence). Too many people here are focused on "give me templates", "give me indicator", "show me entry", "show my exit". None of those things are the most important aspects of being a successful trader. I will attempt to show my opinion as to why that is in subsequent posts, but it's only going to be received by you if you are truly ready to open your mind to it.
Mike
Need help? 1) If you're losing money then stop with all the indicators. The more indicators you have, the harder you make it for yourself. 2) Keep a journal religiously and be honest with yourself. Study money management techniques. Look to your own actions and not the actions of the market to explain winners and losers. 3) Set goals for yourself that you can reach every day. Make them about how you trade, and not about how much money you make. 4) Have a question? Create a new thread so the community can help.
If you want to support our community, become an Elite Member. I offer free coaching to any Elite Member who puts forth a serious effort.
Because a 5m chart shows me exactly what I need, much better than other chart type or size. That's all that matters. I also believe that the majority of the successful traders, we're talking the 5% of traders that take 95% of the money, are trading a 5 minute or larger chart. But that's just gravy. If a 92 minute chart, or a 123 volume chart, or whatever worked for me then that's all that matters.
Also, let me throw out there -- This thread is not a journal. I'm not documenting entries and exits. I'm not showing a bunch of charts. None of that will help you if you don't already know how to make money trading.
Instead, this thread is about 'everything else' (the bold part of the above sentence). Too many people here are focused on "give me templates", "give me indicator", "show me entry", "show my exit". None of those things are the most important aspects of being a successful trader. I will attempt to show my opinion as to why that is in subsequent posts, but it's only going to be received by you if you are truly ready to open your mind to it.
Mike
Why do you think 95% of successful traders use a 5 minute chart or higher? Is that just a hunch or do you have some evidence to support it?
When I started out trading the ES, I used a 5, 15 and 60 minute chart with no indicators. I no longer trade ES or time based charts because, with respect to the latter, some of those bars can get pretty big and destroy some good patterns that I relied on. Having said that, all traders should know that it's really not about the chart--it's the price that matters. The market could care less about whether this or that did whatever in this time or range frame, especially in a market as volatile as crude oil.
The fact is, too, all the information about the market is the same regardless what chart one uses. I don't know of a single professional trader--and by that I mean one who makes his living from trading--who will claim his edge is the setting of his chart. (Sort of like that basketball shoe commercial--"it's not about the shoes.") Think about that every time you tweak your chart looking to make the pieces of the puzzle fit better.
The following 3 users say Thank You to Zoethecus for this useful post:
But the intention in posting to this thread is in fact to benefit some people who will read these posts and have an "ahh-ha!" moment (I have had many over the years). It is also my intention to improve my own trading by making sure I am following my own advice.
) Think about that every time you tweak your chart looking to make the pieces of the puzzle fit better.
Linear Mode
