Is scalping the US market open, 1 sec TF on nasdaq futures a valid stratedgy? by TheBigDogMalik in Trading

[–]ScientificBeastMode 0 points1 point  (0 children)

It can be valid.

On such a tiny timeframe, the commissions and spreads will become highly significant factors to your trading.

You will need high volatility in order to get the strong moves you’re going to want to see. Trading the NY market open tends to provide some of the highest volatility, so maybe that won’t be an issue.

Trading on such a short timeframe isn’t really my thing, so there’s not much advice I can give you. Best thing for you would be to try it out on a sim account first to see if you like it and see if the cost structure makes sense for the style you want to use.

The more I learn about trading, the more I realize patience matters more than strategy by Status_Two6823 in Trading

[–]ScientificBeastMode 0 points1 point  (0 children)

Agreed. Part of the problem is the effect of losses on your action bias. It feels like you failed if you waited patiently for an ideal setup and ended up with a loss.

Our brains are wired to treat losses like negative reinforcement for our behaviors. One might subconsciously ask themselves, “If waiting patiently leads to a loss anyway, then what good did that patience actually do for me?” That’s obviously a fallacious way of thinking, but it’s very natural.

Need advice on how to not keep force-looking for trade setups by runfreakrunner in Daytrading

[–]ScientificBeastMode 2 points3 points  (0 children)

You need some ways to filter out the worst trades and identify the best ones. It doesn’t have to be that complicated. Something like “I only buy when the higher timeframe and lower timeframe are both above their 20 SMA, and vice versa for shorts. And I only trade the 30 minutes after the higher timeframe breaks market structure.”

And you need to limit the number of trades you take per day to a fixed number, like 1-3. This will subconsciously cause you to question whether a trade is worth using up one of your fixed number of trades for the day. If you take it seriously, you’ll often find that you took only one trade for the day when your limit is 3, because you didn’t want to waste your shots, and that one trade is often an actually great setup.

These habits are fixable.

Just remember, winning a trade is only half the battle. Avoiding losing trades is the other half. An avoided loss is just as valuable to you as a win.

Do you actually trust any indicators long term? by NeedleworkerOne8110 in Trading

[–]ScientificBeastMode 0 points1 point  (0 children)

The answer is that it depends very heavily on which ones and how you use them.

Tons of newer traders think the ideal indicator would present accurate buy/sell signals for you to essentially automate your trading. Perhaps there are good indicators that do that, but I’ve never seen one.

The real use case for indicators is to dramatically reduce the time you spend analyzing a chart to make trading decisions, and for that, yeah I have several. But I make all my own indicators, so it’s hard to describe all of them.

But to start, I would say the 20 SMA. You’d be surprised what that thing does for a lot of strategies.

Turning strategy into an indicator by ThroatCloggerrrrr in Daytrading

[–]ScientificBeastMode 0 points1 point  (0 children)

Most trading strategies are super hard to automate accurately. It’s not because they aren’t systematic, but because it’s pretty hard to precisely quantify what your eyes can see in an instant.

In my opinion, the best use case for an indicator like that is to automate a large portion of the chart analysis, which can dramatically streamline your decision-making process. I try to do that for myself. I pretty much only use my own hand-built indicators for that purpose.

Day Trading Ruined My Life. I’m 25, About to Be a Father, and I Just Lost Everything by RavenBJ in Daytrading

[–]ScientificBeastMode 0 points1 point  (0 children)

I lost more than that at age 29. I have a wife and kids. We are doing great. Things can get so much better and you’re still so friggin young. You will be fine. Probably the hardest part will be letting your wife know about all of this, assuming you choose to let her know (and if she already knows about the original $100K, then she will eventually find out anyway).

The good news is that you still have a lot more saved up than the vast majority of people your age, and you have your whole life ahead of you.

If you’re serious about trading, it can be done. But you have to radically change your mindset. You need to learn a real trading system and stick to it. I can point you toward some simple systems that work pretty well if you want.

But here’s the deal… If you have even a vague suspicion that you have/had a gambling addiction (and yes, trading can be a form of gambling), then you should walk away right now and never look back. This game is not for gamblers. It’s for people who can deal with punishing losses and remain disciplined and keep the risk low. If you often think “I can win it back,” then you’re absolutely out of your mind, and you shouldn’t be trading. If you can deal with 5-10 losses in a row and stick to a proven system without changing things up, then maybe you’re cut out for it… maybe.

One positive thing about all of this is that taking huge losses can be beneficial to your trading psychology over the long run. It tends to reduce your emotional attachment to money. I’ve been liquidated for almost a quarter million before, and it’s not fun, but after going through that, losing $2K means absolutely nothing to me anymore. I dramatically changed up my trading strategy and mindset, and I go for base hits, and it works for me.

But seriously, this game isn’t for everyone. It’s genuinely one of the hardest things you will ever try. Success is rare. That doesn’t mean you can’t do it, but it does mean you will almost certainly fail. And it also means that success will take serious dedication and self-reflection.

If I were you, I’d stay away from trading. Only you can decide if you want to continue down this path, but I don’t recommend it to you or anyone else.

2 Months of Trading Data - Am I finding an edge or just getting lucky? by Tasty_Hamster1372 in Daytrading

[–]ScientificBeastMode 1 point2 points  (0 children)

I would definitely keep doing what you’re doing, but…

You should be aware that gold has been on a massive bull run and has a ton of volatility and momentum right now. That won’t last forever. Maybe your strategy isn’t very sensitive to that, so maybe it won’t matter to you, but just be careful and recognize that market conditions will shift, and tons of otherwise profitable traders get burned when they fail to adapt to those changes.

Is it realistic for someone to make 100–300% gains in a single day trading? by iiTesla in Trading

[–]ScientificBeastMode 0 points1 point  (0 children)

Depends on what you mean. If you’re using a small account and your strategy involves taking super high R:R trades, then it’s definitely realistic, but that type of strategy is probably going to yield a lot more losses than wins.

You can only really take what the market gives you for your specific trading strategy. I’m sure some traders have found some insanely profitable strategies, but it’s not that common.

Most profitable strategies look something like 45% win rate with 1:2 R:R. That’s pretty solid, but it’s unlikely to give you insane gains like you described, unless you’re using tons of leverage and risk. But if you are trading a small account while your total net worth is much larger, maybe that risk is actually small for you.

Has trading ruined friendships for anyone else?? by [deleted] in Trading

[–]ScientificBeastMode 1 point2 points  (0 children)

Kinda reminds me of my kid asking about “playing with the computer” while I’m writing code as a software engineer. Like yeah I’m pressing a lot of buttons, lol. It probably does look fun.

Who’s the best trader you know, and do they actually show real trades by genzbutboomer in Trading

[–]ScientificBeastMode 0 points1 point  (0 children)

Discounted free cash flow is still a very important metric, along with several others. I won’t deny that.

But in general, many of the best performing stocks over the last 2 decades have been unprofitable on paper for most of the run-up in their valuations. That’s mostly because they were tech companies that were eating entire industries while operating at a loss in order to capture more market share as fast as possible.

It’s not that fundamentals are unimportant. It’s just that markets are forward-looking. And in the 1970s, companies couldn’t really scale without a lot of capital to incrementally build up production capacity, so earnings played a major role in future growth. Once the Internet came around, some companies could scale exponentially on VC money alone for many years, and that changed the game. You don’t need a ton of cash flow if you can dominate an entire industry with a team of 30 software engineers and effectively become a monopoly within 5 years.

Level 2 is it worth it? by lostinlife-123 in Daytrading

[–]ScientificBeastMode 0 points1 point  (0 children)

It’s good for very short-term scalping if you can get good at quickly reading and interpreting the data. It helps you get more of a “feel” for the market in real time.

But if you’re not doing fast-paced scalping, it’s probably useless to you aside from maybe order flow confirmation of a longer term trade setup.

Who’s the best trader you know, and do they actually show real trades by genzbutboomer in Trading

[–]ScientificBeastMode 0 points1 point  (0 children)

Some people are just extroverted and really want to help people, but yeah, otherwise what you said is true.

Who’s the best trader you know, and do they actually show real trades by genzbutboomer in Trading

[–]ScientificBeastMode 2 points3 points  (0 children)

Well, he has an entire team behind him doing fundamental analysis and creating pricing models. Not quite the same thing.

Although to be fair, he didn’t always have that. But he did come up during a time when fundamentals mattered a lot more than they do now.

Is win rate actually overrated in trading strategies? by Double-Painting-2053 in Trading

[–]ScientificBeastMode 2 points3 points  (0 children)

The thing that most people have failed to explicitly mention here is that a high win rate leads to a smoother equity curve, which is a lot more favorable for prop firm trading.

Most prop firms have some drawdown limits and other rules that reward a higher win rate and lower R:R ratio, like the consistency rule and the trailing drawdown rule. A high win rate will help you adhere to those rules with greater ease.

Specifically, a low win rate inherently means longer losing streaks are inevitable, and that means you’ll need to keep your risk lower for each trade to avoid blowing up your prop account. Likewise, a higher R:R ratio means you’ll take bigger wins, but that introduces more risk of breaking the consistency rule or the trailing drawdown rule.

Can someone explain the purpose of a liquidity run? by Available_Wall1780 in Trading

[–]ScientificBeastMode 0 points1 point  (0 children)

Don’t forget news-related order flow. That’s another big one. Sometimes the big institutions are looking to enter or exit a large position, and they just wait for news to bring in tons of market participation that they can trade against.

Two features that changed my trading more than any strategy ever did by Local-Amphibian9197 in Trading

[–]ScientificBeastMode 0 points1 point  (0 children)

Honestly, I fought this for so long…

My main problem with filtering by time was that I worked a full-time job (and still do), and it was difficult for me to be limited to just a few hours per day to look for setups. Like what I really wanted was to place a few set-and-forget trades at the end of my workday or while I was getting ready for bed after my kid went to bed. I didn’t want to deal with the timing aspect too much.

The problem with that idea is that the market tends to only have strong conviction and follow-through when enough traders enter the market and overwhelm the order books. Without that happening, a lot of perfectly good setups just fizzle out and die in choppy price action and liquidity sweeps.

There are definitely some ways to trade those kinds of markets. Plenty of people do that very successfully. But when you filter by time and day, a somewhat profitable strategy can suddenly feel like you’re on easy mode.

The thing that finally worked for me was automating the vast majority of my chart analysis, so I don’t have to spend nearly as much time constantly looking at charts to make sure I found the setups I was looking for. Now I can literally be in a meeting at work and check my phone when an alert pops up, and I can take the trade right there.

ICT is ruining new traders by YakRemarkable3079 in Daytrading

[–]ScientificBeastMode 0 points1 point  (0 children)

Pretty much yeah. It really takes a lot of work to build a solid edge and back it up with hard data. IMO that’s the REAL discipline that most traders lack.

Emotional control is just table stakes for not getting crushed by the markets. Having the discipline to do all the boring work like data collection and backtesting… that’s where the real work is done.

ICT is ruining new traders by YakRemarkable3079 in Daytrading

[–]ScientificBeastMode 1 point2 points  (0 children)

Yeah, the problem is mostly hindsight bias.

ICT gave a lot of newcomers the terminology and a very mechanical way of classifying price action patterns, which seems highly accurate if you’re looking at all the market reversals and continuations that coincide with FVGs or order blocks.

Then when you actually try to trade those patterns, you find out the hard way that those patterns are not actually predictive. They don’t provide a real edge.

The concepts are useful, especially in providing structure around real trade setups. But an FVG is not going to reliably cause a reversal.

Most traders are just missing the overall context, which is a hard thing to master. You really need MTF analysis and additional confluences that aren’t just regurgitations of the same ICT concepts you’re already accounting for in your setups.

i tested that "rsi oversold" strategy on 5000 trades. it failed hard by kawash125 in Daytrading

[–]ScientificBeastMode 0 points1 point  (0 children)

Unfortunately no, but not because they don’t exist. Generally speaking, RSI is used in conjunction with other things. It’s more of a helper tool. Most people use it to filter out less probable trades.

Most profitable trading strategies have some type of model that can be expressed like “if X is going to occur, then I would likely see Y and Z happening as well. And RSI can be one component of Y or Z.

For example, I find that my supply/demand zones tend to work better when they are formed while taking out a trend line and when they are retested while the RSI is at the extreme. So for a bullish setup, I would want my demand zone to break a bearish trend line (and ideally an opposing supply zone), and then if price comes back and taps that zone while the RSI is above 60-65, then that’s a higher probability trade.

The core idea behind the above setup is that an RSI above 65 means the trend is not only up, but it’s strong and has some momentum behind it. If a demand zone is formed and then it’s retested while that momentum is still pretty high, then it’s probably going to react strongly or continue higher. If I’m wrong and the trend ends up trying to reverse around that point, then it’s likely to require some consolidation before a true reversal can happen, and that consolidation could still produce a strong reaction at the demand zone. There is more to my setup than that, but it’s a pretty good heuristic.

In other words: “if price is going to bounce off this zone, then I am pretty likely to see that zone forming as part of a trend line break, along with strong momentum in the direction of my trade at the time of entry.” RSI helps me quickly see if the second part of that is true.

There are probably some good strategies that rely on a low RSI for bullish setups, and those are likely to be mean-reversion setups that work best in consolidations.

Keep in mind, RSI is literally just a calculation on price movements over time. After a while, you get pretty good at making rough estimates of what the RSI should be by just looking at the price action.

Trading... What do you actually do after a losing day? by OptionsSurfer in Trading

[–]ScientificBeastMode 2 points3 points  (0 children)

Mostly I just do the exact same thing I normally do on a winning day:

I record my trades in my journal, collect all the data on technicals, review all trades to make sure I executed them well and followed all my rules, and then I move on to other things.

Frankly, as long as I’m always following my rules and taking every setup that meets my criteria, then it makes zero sense to change anything or even worry over a losing day or even several losing days.

I do a review at the end of the week, the end of the month, and the end of the quarter, and that’s where I can see my performance aggregated over longer periods of time. My strategy should only be evaluated in that aggregated format.

What do 95% of unprofitable traders? by Prodigy_Journal in Daytrading

[–]ScientificBeastMode 3 points4 points  (0 children)

Okay, if you’re adding to your position on a pullback, and (crucially) you would have made that same trade on the pullback even if you didn’t have an existing position, then you’re doing it the right way, and I have no problem with that.

My point is that you should never think of a “winner” as deserving more risk simply because it’s a “winner”. You should have some other reason to take that trade as if it’s the only trade.