What Do You Want Out Of The Market? Trade Recap Oct 16, 2016

Posted by on Oct 16, 2015 in Blog

What Do You Want Out Of The Market? Trade Recap Oct 16, 2016

Do you have a regular job to pay the bills, pay the mortgage, keep the wife happy and the kids fed? But you want to learn how to either supplement your income with trading or one day make the transition to trading instead of working for someone else? Before you even attempt to do that you have to decide what you want from the market.

I think most traders will say they want to earn enough money to quit their regular job and become a full time trader. To do that you need to be consistently profitable. But also you need to figure out how much money you want to make per day. A lot of people come to me asking if they can make $1000 – $2000 a day trading with Orderflow. The short answer is yes. The long answer is still yes, but you should start with a bankroll big enough to last some losses. If you think you can start with a $5000 account and make $1000 – $2000 a day you are living in bizarro superman world. Maybe if you call every single trade correctly you can and if you have extremely low risk trade.

People will probably throw stones at me when I say you can start trading with a small account and make an income trading, like an account of $5000. You can make $250 a day which over the course of a month would be $4000 – $5000 and that is if you don’t add contracts as your account grows.

For intraday trading I recommend having at least double the intraday margin offered by your broker. So if they offer you $500 margin for ES or ZB I recommend having earmarking $1000 for your margin if for no other reason than it gives you peace of mind. You don’t want to have to worry about a position if it goes against you. Remember you are day trading in a short time frame, like a few minutes to an hour. You are using tight stops and target levels. So even if there is a black swan even you can still get out even with a loss. I know, I know there will be someone who writes to me and says “ a stop is not a guarantee of getting out. As you watch the markets if you see something brewing just get out.

But anyway, with that in mind. If you have a $5000 account and were to trade 5 lots of ZB and you make just one tick that is $156.25. If you make 3 ticks that is $468.75. That is the equivalent of working a job and earning nearly $60 an hour.

I tell the traders who come to me who have small accounts and tell them to think small to begin with. Set a daily trading goal that is attainable then once you are regularly hitting it, then you can expand on it. You need the mental assurance in your trading. I don’t care what anyone says, there is a big mental aspect to trading. You have to be able to handle the losses when they occur and be able to take the next trade. If you are going to stress out over every losing trade and let it affect your next trading decision then trading will be like banging your head against the wall.

I know my trading. I know what I am happy to get out of a trade. What are you happy to get out of a trade?

Here are a couple of bond trades from this morning.

The first trade, Trade 1, there was an Orderflows Trader Sell Divergence at 159-11. I got short at the next bar at 159-06 once it was confirmed. I went for a quick 5 ticks and put my take profit limit order to get out at 159-01 which was hit about 30 minutes later. You may think, pfft 5 ticks, whatever. But 5 ticks profit on 5 lots of ZB is worth $781.25. That is a nice trade no matter what anyone says. I am not trying to be the Michael Jordan of trading. I am happy to be the 6th man pulling down a nice pay check for being consistent. Because if you can be consistent and make $500 a trade and you trade a few times a day it adds up pretty fast.

10-16 ZB comment

Lets look at the second trade, Trade 2. This was a beautiful Small Print/Single Print sell set up. Once I got confirmation, I went short at 159-03. I just wanted to get in because it was a yum yum trade, so I just hit the bid at 159-03. Again I went for a 5 tick quick profit and put my target level at 158-30 which got filled in about 30 minutes. Another 5 ticks on 5 lots making $781.25.

10-16 ZB2 comment

2 trades for a profit of $1500. I am not saying it to brag or anything, but when you trade conservatively and within your means there is no reason why you cannot pull out a decent income from the market.

I created the Orderflows Trader software so that I can find these trades and make money consistently from the market. I don’t use a lot of fancy indicators. I just read and interpret the order flow based on what I learned while trading at JP Morgan, Cargill and CommerzBank. The same principles that apply to institutional traders apply to retail traders.

The nice thing about being a retail trader is you can easily navigate in and out of the market with small orders as opposed to having to move positions with notional values in the tens and hundreds of millions of dollars.

    1 Comment

  1. Big like! Well done Mike. I totally agree concerning consistency and thanks for putting the software together!

    Regards, Ziad

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