The vast majority of information we provide pertains to the S&P 500 E-mini futures contract though the concepts can be applied to pretty much any liquid market in any periodicity with a bit of contextual adaptation. We do not recommend applying our concepts to any of the thinner equity index markets such as the Dow for liquidity reasons, or any of the thinner more volatile markets such as the DAX or Crude Oil without some significant modifications which will probably be beyond the scope of this blog. Honestly there shouldn’t be a need to anyway as the strategy doesn’t seek profit from momentum or “big moves” which is what trading in those contracts is all about in our opinion. Most members generally trade all in/all out or max two scale strategies between zero and three times each session on average depending on the account and risk objectives. Most members trade both countertrend and trend continuation from key market structure to key market structure using an analysis of bias and context along with volume based price action and orderflow analysis. Most member models rely on the risk management overlay and drawdown mitigation as part or even most of their edge over time rather than seeking max win rate. Many retail traders are major over-traders in our opinion. In many cases it is the principle cause of their failure to profit. If you learn to limit your trading you will be amazed at how much easier it is to quantify risk and goals. We always wonder why reasonable returns aren’t enough for many retail traders who have goals of consistent double digit monthly returns. If you can consistently return just 20% each year, in the institutional world you will have to beat the clients away with a stick. If you can make more, more power to you, but you might want to ask yourself if the best traders in the world managing the most fickle money in the world can’t consistently return these outlandish 100%+ annual goals most retail traders have, why do they think they can? Especially without any of the execution advantages professionals have? Don’t take my word for it. Visit Altegris/Managedfutures.com or any of the other futures industry databases where the best traders in the world running real money post actual performance. How many programs do you find earning 10-20% a month every month? ZERO. So ask yourself, if the 700 or so best traders in the world never do it why you think these sort of numbers should be your goal? A big part of what the community is focused on here is lowering unreasonable and realistically unattainable expectations into easily attainable ones. Forget the battle, win the war. Setting a goal of making a handsome living from a $25K account is just something you need to let go of. Instead, why not learn to make a more reasonable return on that money, build a track record and raise some more either through trading proprietary capital or managing client assets yourself?
Next: How Do You Trade?