KING - Some comments on my e-mini futures trades
The following is a number of comments about the trades I post in the "I can do it too!" sections of the KING part of my site that serve as informal trading blogs.
Some of these comments have been inspired by questions that I have received from the prospective KING buyers or KING students, so you can think about this article as an FAQ of sorts for the e-mini futures trades showcased on this site.
The reason for these questions, to a large extent, have been some conspicuous patterns that you are bound to notice if you pay more than a cursory attention to the screenshots with my e-mini trading results posted in these sections. This article answers what causes these patterns. To be brief, they either reflect some of my trading biases, or lifestyle
habits, or are simply by design.
At least some of these answers have already been provided in the past in the very same sections of
trading results, but I think that bringing them all in one place may be useful. Not
to mention that finding them in the sea of text that spans over 4 years
can be a pretty time consuming task to most.
Virtually every discretionary trader has
some biases, which I think you need to keep in mind whenever you are
analyzing someone's trading results. The question of trading biases
may deserve a special educational article, but this article focuses on my trading biases
reflected in my e-mini trading results rather than biases
in general.
Here are some of these patterns. If I recall more, I will update this article.
1. Short bias. Most of my trades are on the short side. That's certainly one of my biases that may get even more pronounced in the conditions of lower volatility. I prefer this side, and I feel more comfortable taking short positions, but that's pretty much my bias and you can also trade on the long side with KING. There is nothing about KING that would favor the short side. There is one more reason, though, that can justify this particular bias of mine: short trades do not take as long as long ones or they can be more profitable than
long ones over the same period of time, and while I have no solid empirical evidence to back this up, there is plenty of anecdotal one. For instance, the market crashes (or individual stock crashes) do have greater amplitudes than market surges and they occur over a
short period of time. That's why they can be so devastating.
2. Time of the day bias. I usually don't trade in the morning (EST), but that's not because KING is not working well in the morning. The reason for this is much more prosaic than one might expect: I am a night person, I often don't go to bed until 1 AM my time (4 AM EST) and getting up at 9 AM EST is really not my cup of tea. You need to be well rested to be able to trade well, and so I may not start trading until after 11 AM EST. Just as in the previous case, there is at least one good reason why doing so is not such a bad idea overall. The thing is that trading later gives you a bit of an insight into how the market might move based on how it moved in the morning during the first two hours of the daily trading session (9:30-11:30 AM EST). There is a saying among the Wall Street types that "amateurs trade in the morning and professionals in the afternoon" and there might be something to it. The point is that even if you may lose some morning trading opportunities, those you encounter later can be more solid as based on more information.
3. Profit of $200 or more a day. That's by design, a rule that I chose to demonstrate how you can make that much with a handful of contracts (1-2 contracts as the starting position that I may increase up to 6 contracts on some occasions, very rarely beyond that).
You can spot some exceptions to this rule, though they are rare. These exceptions (below $200 a day or 10 and more contracts used) may not even be always
posted in the gallery of trading screenshots as they simply do not belong among the results I chose to post.
These results are also petty representative of what is possible with KING once you have trained yourself well to use it. There is no upper limit on the daily results I may choose to post, even the $1000
results are possible and have been posted on many occasions, although these days (2012-2013) I am more likely to mention them on my Blogger blog (eminimethods.blogspot.com) than in the trading results pages of this site, which is also a way to promote
this blog. Such highly profitable days are unlikely during the periods of lower volatility, which may also explain why they occur less often these days than was the case in 2008-2011.
4. Minimum number of trades. No minimum number of trades
per day is assumed, but usually you see at least 4-5 trades, which
is what is often necessary to reach the daily profit target of $200 or more depending on the
market volatility. The maximum number is also not set, although the days with more than 15 trades are pretty rare these days (2012-2013).
Still, the days
with 20 trades (such as one of
the last trading days in 2011) or even
with 28 trades (my absolute daily trading record as well)
are possible too, even if very
rare and outright impossible in the low volatility conditions.
5. Trading spells. Some of them can last as long as two weeks or longer. They include well over 20 full weeks in 2011 and 2012 only (26 in total, to be precise), and 7 two-week periods of results overall since late 2008 when I started posting them. That counts only the trading days I specifically comment on, meaning those that usually meet the criteria of daily profitability. I like taking breaks from time to time or may trade less than usual or may close a trading day with a sub-par performance even if trading as usual, so the continuous 3 weeks of results or more are unlikely to be ever found among the results featured here.
5. Fast trades. I like to refer to them as "quickies" and by their very definition they take less than a minute assuming a standard target of 5 ticks (in YM) or slightly more on some rare occasions. They are not uncommon and you can see more than one among daily trading results on a good, volatile day. One screenshot with my results features 10 out of 10! For more about such fast futures trades, see this article.
6. Markets traded. It's predominantly YM, the Dow e-mini futures contract, but also ES, the S&P 500 e-mini futures contract. It's possible, I believe, to trade other instruments with KING, (not only futures, but also stocks or Forex), but it's also good to specialize. YM is a good market to trade, also for the beginners to trading emini futures and the KING trading methodology was designed with this market in mind.
You may also want to check out this article as it too is pertinent to the issue of KING trades showcased on this site and it should help you to read them correctly.
Posted on January 27th, 2013.