My Trading Style

I am a short-term trader of the E-mini S&P. Over the last 16 years I have tried trading pretty much all commodities on pretty much all time frames - but it has all led me back to the firm idea that it is much easier to predict the weather over the next 15 minutes than the next 15 days. So I use short term volume charts of the ES to trade.

My primary charts are the 9500v. the 4750v and the 2375v. I also have up on my screen a 19000v and a 3-min ES chart and I use these to establish context, which they do excellently. I don't watch the Dow or the Nasdaq or the Russell or the advance-decline line or the Tick or the Tiki or anything else. I have tried them all over the years and found a diminishing level of return from the information. Reluctantly, and after many attempts, I was forced to conclude that more is not better, that there is a limitation to the amount of useful information my brain could process and still maintain clarity. It was getting to the point (I'm sure you have experienced something similar if you've been trading a while) where I would see a trade setting up on one chart and would look across at a Tick chart or a Nasdaq chart and see something there that would fail to confirm the trade, so I would pass on the trade. And of course we all know what happened to the trade, right?!

I remember one day I got rid of all the charts I had up and asked myself "If I had to trade just one chart, which one would it be?" I decided it was the 4750v. So I experimented just using that for a while and actually did much better. The only problem was it didn't generate enough trades and it became too boring waiting for the next trade so I found myself at risk from distraction. So I added the 2375v. That filled in the gaps nicely, generating enough signals but without trading too much noise (although with the 2375v you've gotta know what you're doing or you will end up just trading noise)

Now having said all that, I keep an eagle eye on the 9500v and 19k because that's where the best trades come from. The ideal setup is where a nice swing is happening on either of these and you can find a way to enter on the lower timeframe charts.

I did a lot of research at one point on the average number of trades I could expect each day on the 4750v and 2375v and it came out to about 8 on the 4750v and about 15 on the 2375v, for a total of roughly 20-25 trades a day. I'll miss some of those as they're setting up (because I'm thinking something else is setting up) and I'll be away from my desk for some of these, especially in mid-morning slower times. But my goal is to take 80% of all the trades that will be marked on my charts by the end of the day as being decent trades.

I use a color coded system for marking my charts:

1. a PINK arrow means I took the trade and made a profit (or break even)
2. a BLUE arrow means I took the trade and made a loss
3. a GREEN arrow means I didn't take the trade but it showed up after the fact as being a decent trade (so I can learn from them)

So I don't want to see too many green arrows! Because that will mean I'm either not following my rules or I'm not seeing the setups well enough - either way that's not OK.