Call me Vidvad - I day trade futures

This is probably going to be an unpopular opinion, but it is my opinion nonetheless: There are no end of mathematical edges that will allow one to convert the market into what Mark Douglas calls "a never-ending stream of opportunities by which one may enrich oneself."

What is difficult to develop is not a mathematical edge. What is keeping you from being a consistently profitable trader capable of trading so as to secure yourself a consistent and predictable income is the lack of ability to maintain the carefree state of mind one needs to experience in order to execute an edge flawlessly without inserting oneself into the trades in such ways as not merely to diminish the edge, but to destroy it.

The following is a link to my only public youtube playlist. In my opinion, this list contains the best trading videos on youtube. I consider them the best because each teaches a lesson or lessons that have helped me develop the ability to trade with the carefree state of mind which is prerequisite to effectively, consistently, and thus profitably trade an edge flawlessly.

https://youtube.com/playlist?list=PL...wpPbdwX6rxo4VZ

Again, there are no end of edges. All edges are going to be one of a family of three edges: Breakouts, Reversals, Continuations. There are thousands of workable variants that have been posted here at FF over the previous decades. If you find one that speaks to you, add money management to it, and go make your fortune. If you are unable to make it profitable over time, then you need to work on yourself, not look for a different edge.

bluesteele has mentioned the Topstep trader who is known as "Rips." In addition to being one of hte top all-time Topstep earners (he may be the #1 highest earner in Topstep history) he is also a successful high stakes poker player. He will be on Topstep TV today which is free to watch live on youtube. Last time he was on he took a $3000 loss and quit for the day. That is what no doubt has made him a top trader: He has a plan, he abides by his risk limits, and he knows to quit before going on Tilt.

Here is the link to the live show which starts at 9AM, but Rips probabably won't be on until 9:30 AM.
TopstepTV Live Futures Day Trading: It's Hard To Say "I'm Short", When I'm Long (12/10/24)

100% agree, "The edge is You" (each individual successful trader). If not successful, that means you have no edge. 5% of traders do have an edge, 95% do not.

Edge is not any of the "special" indicators or even entries into the market, it is Money Management and Mindfulness to withstand the Fear and Greed.

From the book, The Man with the $100,000 Breasts, by Michael Konik:

Eventually, Leon decided to treat his gambling not as an addiction but a business. "That's what made all the difference. Gambling stopped being fun and it started being a way to make a living. I figured I wasn't going to get involved in nothing unless I was getting the best of it. If I didn't have an advantage, I wouldn't play. That's the secret. Find something where you're getting the best deal and stick with it till there ain't no money left to win." (Konik, page 97)

Now, let's apply this to myself:

Eventually, vidvad decided to treat his trading not as an addiction but a business. "That's what made all the difference. Trading stopped being fun and it started being a way to make a living. I figured I wasn't going to place a trade unless I was getting the best of it. If I didn't have an edge, I wouldn't trade. That's the secret. Find something where you're getting the best deal and stick with it till there ain't no money left to win." (Konik, page 97)

See what I did there?

In gambling, the concepts of "getting the best of it," or being an "advantage player" means one is making bets where over the long run, the player's strategy is expected to yield a profit, i.e. the player's strategy has a positive expectancy.

Here is an interesting observation I've made over the past few weeks reading gambling literature rather than trading literature: The whole notion from probability and statistics that one might discover statistical edges with positive expectancy were developed by professional mathematicians who used gambling, e.g. blackjack, roulette, to study and discover these phenomena.

Read that and take it in carefully: In trading, we often hear people say "you need an edge" and your system must have a "positive expectancy." These are originally gambling concepts, and did not originate in the securities and financial services industries.

However, these same mathematicians, for example Edward Thorp and Claude Shannon, who first applied their statistical analysis to gambling soon turned to applying these concepts to their own trading and investing.

If you've been trading for almost any period of time you've no doubt heard of the "Kelly Criterion." As traders this is often explained as how to control risk. However, it is not that simple: It is actually a formula that can be applied to you "bankroll," i.e. your trading capital to determine what fraction, i.e. percent of your bankroll (trading account) you should risk on each bet(trade) in order to maximize bankroll (capital) growth.

John Kelly, the mathematician who discover the formula for the Kelly Criterion did so initially by studying how a horse bettor gambling on horse races could best manage his bankroll!

This past month has been a real eye-opener for me. I had always considered trading as related to or as a form of gambling. But like most traders, even though I acknowledged the similarity to gambling, I only allowed myself to acknowledge just that: Trading shared similar characteristics to gambling.

I now see that what we do as traders IS gambling. It is 100% gambling. Our game is trading in the outcome of movements in financial instruments such as forex, futures, stocks, bonds, and options. Gamblers trade in the outcomes of games such as poker, blackjack, and roulette.

bluesteele mentioned here recently how one of Topstep's top traders is also a top ranked poker player (Rips, one of Topstep's top traders actually played in a poker tournament this past week against Phil Ivey, perhaps the best poker player in history).

What I have taken to calling My Roulette Epiphany" came about because of my reaction to the following components of the roulette players who actually beat Vegas:

1) Gonzalo directed his team only to play roulette and ONLY on biased wheels. In trading terms, they would only play their chosen instrument(s) and only using their method with a calculated and known edge, i.e. your system, assuming it has an edge, is your version of "a biased roulette wheel."

2) They played a system that would lose almost every time, but when it paid off, it paid off with a reward to risk of 35 to 1. In terms of trading this doesn't mean you need a system with 35 to 1 reward to risk. What it does mean is that you accept that your system is going to lose with a certain consistency and regularity, but that your edge is such that the reward to risk when you win will more than cover the losses that inevitably occur.

And then the lynchpin that really pulled the above principles together for me for the first time since I decided to give this trading thing a go is

3) They started with a very small bankroll and their start did not go well as they lost and lost and lost, and the bankroll was rapidly depleting. He was stressed out, but he knew he needed to be patient and trust his edge. TRUST HIS EDGE! After this period of losing, "probability bites back." They experienced several high stakes wins in a row, and despite having started with an extended losing streak, their first night ended profitably, and after just one month, they quadrupled their equity n the first month, and by the end of the second month, their equity was over $100,000 which was more than 20 times their initial stake of only $4700.

In other words, "Eventually, Gonzalo decided to treat his roulette playing not as an addiction but a business. "That's what made all the difference. Roulette stopped being fun and it started being a way to make a living. I figured I wasn't going to get involved in any roulette table unless I was getting the best of it. If I didn't have an advantage, I wouldn't play. That's the secret. Find something where you're getting the best deal and stick with it till there ain't no money left to win."

See what I did there?

Thanks to @moodybot for sharing these links in the Flying Dutchman thread here at FF.

Please, fellow FF mates, please do not fall for the garbage that the fake guru industry is trying to sell you. They do not care about you and their material will not helep you.

There are thousands of profitable edges on which to build a consistently profitable trading plan. What you lack is the ability to implement that plan flawlessly. Work on yourself. Keep your money for your trading account or your family and your future.

Do not buy FURU trading course, discord memberships, etc.

Exposing the #1 Day Trading Show & ALL Fake Gurus

It's Over For This Fake Guru. My Craziest Video Ever. Jesse "Casper SMC" Rogers.

And perhaps the individual who has done more damage to retail traders over the 15 years and the biggest trading fraud of all:

ICT Just Secured His Legacy as a Total Fraud - Robbins Cup

Roulette stopped being fun and it started being a way to make a living. I figured I wasn't going to get involved in any roulette table unless I was getting the best of it. If I didn't have an advantage, I wouldn't play. That's the secret. Find something where you're getting the best deal and stick with it till there ain't no money left to win

Totally agree with the above. Once the trading became boring, once the the excitement wore off, was when I turned my game around. I was a long time at the table seeking that adrenaline trading hit.

To quote the repeatedly quoted Ed Seykota…
Everyone gets what they want from the markets

I posted this on the other thread, perhaps it is fitting to bring it here.

ICT is a fraud. I don't know how he has fooled so many for so long. He appeals to the conspiracy theorists and over the last 10 years there has been an explosion in that segment of the population.


ICT Just Secured His Legacy as a Total Fraud - Robbins Cup


How a Fake Guru Ruined His Life in 2 days by Livestreaming (ICT "Inner Circle Trader" Exposed)

From 24:14 to 29:42 is a great clip. The whole interview is worth watching if you focus on it and learn from it.

BOOM
Solid gold right there.
A couple of key takeawaysin my eyes)
1) Every trade is like flipping a coin.(Something I have been sold on these last few years)
No matter if it's an A+ setup you can still lose that trade. And when you lose a trade that all of the stars aligned...doesn't mean it's your psychology. It's simply a coin flip.

When flipping a coin if it lands on say tails and you bet heads...does that mean your mindset was off when you flipped it? No! Individually, It was just a flip!

Which leads to #2

2) A+Setups/Best Trade Setups
They are hard to screw up. You can have a subpar execution.. you can mess up all sorts of things in your trade but you still make money... Why? Because that trade has "very high edge"... That should be your focus finding setups with alot of edge.

Stacey Burke harps on about taking these types of trades.. trades that are hard to lose money on. ACB Trades.. trades that Aren't Coming Back.

High positive expectancy trades are truly hard to screw up...

Just my two pesos on that clip. Highly worth watching that several times as my ramblings sometimes aren't so clear

Thanks Vidvad for sharing ! More traders here need to see that and understand that.

Cheers !
Blue

My roulette epiphany included my sudden realization that though I have paid lip service to this concept for years, I hadn't truly accepted it. How does one know that one is saying this but not truly believing it? The search for the perfect holy grail will continue. The questo to find "better" ways to "filter" losses.

What do I do now? I define my edges. I have multiple edges. I use the appropriate edge for the market environment. For example, I have an M15 edge that I use most days. The virtue of this edge is that I can trade it every day, 5 days per week, and while I may have losing days, I'll rarely have a losing week, and never a losing month.

However, I also a hybrid M15/M1 edge that I use on tight range days. Very similar to the M15 edge, but it drills down to capture some "buy low, sell high" range scalps and mitigate risk on the breakout style trades.

Finally, I have a "fast/slow edge." This uses 2 moving averages as well as one big picture moving average. While it differs in certain particulars from LauraT's roadmap, it is certainly influenced by it. It's birth was years ago when I came across a method called "the 9/30" method which uses a fast MA (9ema) and a slow MA (the 30 wma).

Whatever the edge, every trade is an independent coin flip.

Still, even with the epiphany, the coin flip mentality isn't easy to maintain. So I protect myself by having my prop accounts lock me out if my losses exceed a predetermined level. I stop myself from trading the M15 edge if I have two losses in a row. Based on the nature of the edge and the size of my timing window, I'll stop after 3 M15 trades.




100%!

I see too many systems threads here at FF where you really have to be perfect, and even then, the dead chart can look like a stated trade was profitable, but if you strip away the indicators and drill down into the actual price action, the trade was a loser, most of the trades are losers, the perceived edge evaporates into illusion.

One thing I find remarkable is how few people here at FF have the pivotal levels on thier charts: No notion where price is relative to its previous day's high or low or even the current day's high or low. Last week's high and low? Many seem to think the market didn't exist the week before, and if it did, what happened last week has no import this week!

The best source of edge is trading off previous highs and lows. And I'd add that the current day's open is important. While I do not track it myself, I have found that the previous week's open matters more than the previous day's open. These pivotal levels, in addition to the high volume trading windows, are the basic building blocks of Stacey Burkee's "trades that are not coming back."

Good post, blue! Thanks for sharing.

Just sharing few thoughts...

All that above depends on the technique that trader is trading. One of my techniques is a Breakout, so most of the comment above is absolete and TMI. Breakout is either breakout or not. No need to identify OHLC levels or previous Day, Week, Fib and rest of the(name any indicator here). What is most important for my technique is the power of breakout and what PA pattern is breaking out. As simple as it sounds it takes years to identify patterns and power of Breakout.

Of course Entry is only 10% of this business, 40% - MM, 50% Controlling Mindfulness (Fear and Greed).

The markets open soon.

I saw this today and I thought how much this speaks to the roulette epiphany. The ability to observe price and deploy your edge, without evaluating the result of any particular trade is a necessary condition for consistently profitable trading. It is itself an ability unlike any other you may have acquired throughout your life. Most of us have yet to acquire it as it is one of the most difficult skills to develop.

With respect to trading, the ability to observe without evaluating is indeed the highest form of intelligence. Not only does it speak to the ability to trade a plan, over and over, with no regard to individual trade outcomes, but also with respect to remaining bias free and trading price itself rather than what we might believe about the state of the world, the economy, and politics at that moment.

I'm entering 2025 as confident as I have ever been that I have all the tools I need to become the consistently profitable trader I've always strived to become.

If I fail, I will have only myself to blame.

An older, wiser, much more successful trader whom I had "met" at another forum several years ago once told me that I will be unlikely to succeed at this trading business until I understood how the following message applied to me: "I am the problem. I am the solution."

Like so many other trading aphorisms and cliches, I gave lip service to understanding and accepting them.

I had lied to myself for so long. The roulette epiphany was the scales falling from my eyes.

"I was blind, but now I see."

And what do I see?

I see that "I am the problem. And I am the solution."

You worked hard this year and good luck to you in 2025. I will keep myself in check with my Edge and continue controlling Fear and Greed with my "Mindfulness", fully understanding Mark Douglas premise that:

The roulette epiphany I experienced really drives this home to me. Like so many trading truths, this is another that I had paid "lip service" to believing. However, my roulette epiphany, and no small part of that "Aha!" moment was I realized that I had never really accepted this: That every trade does indeed have an uncertain outcome." I spent many years trying to refine away the losses rather than accepting that such losses are inevitable, and what I should be honing is the ability to follow a trading plan, which includes accepting the inherent uncertainty of what we do.

1000(one thousand)% Agree. That is what separates 5% from 95%. Takes years to acknowledge it.

On Discretion in Trading

I have long been of the opinion that discretion is the enemy of consistently profitable trading for most of us. I have allowed myself to question that opinion and over the past year or two, there have been times where my certainty in that opinion has been shaken loose. There have been brief periods of time during which I allowed that a certain amount of discretion may very well be a good thing. However, with the benefit of the perspective brought to me by the roulette epiphany, my mind is now firmly settled: Discretion is the enemy of a consistently profitable trading plan. The presence of just a small amount is corrosive to the process.

Consider the case of Gonzalo Garcia-Pelayo, the professional roulette player whose method beat the casinos out of millions of dollars at what had been considered an "unbeatable" game: There was no discretion. For each wheel he and his team played, they knew the one or two numbers that came up more often than they statistically should have come up. They bet only those numbers, each and every spin. Even when variance struck them negatively and they suffered a longer losing streak than they'd expect from their edge, there was no discretion. They didn't simply start betting other numbers to see if they could break the losing streak. They bet their edge, and only their edge, and they defined that edge with precision.

With respect to money management, again, there is no room for discretion. Trade size (i.e. bet size) is governed by the starting size of the bankroll and the edge. Trade size increases during periods of equity growth and correspondingly is reduced to periods of drawdown. The factor by which trade size increases or decreases and the conditions governing such adjustments was not discretionary for Gonzalo and his team. As traders, we too must have an active money management plan that allows for sizing up as equity increases and reduces position size during drawdowns. The risk, as a percentage of bankroll (trading account), should remain constant.

If you are trying to learn someone else's system or method, and you find yourself asking questions such as "Why did you enter here?" and "Why was this not an long (or short)? then you are probably not looking at a system or method that is objective and rule based. The author of that system or method likely uses a fair amount of discretion in deciding when to enter, when to take profit, and when to take a loss. This is not a system or method worth your study as you will never be able to trade it consistently. Even if the system author were to show you actual P&L statements that prove he is consistently profitable with the method, you will never be able to reproduce his results. If the system author never shows you any proof of profitability, even if only in a SIM account, then you will absolutely fail. Why waste your time with someone afraid to show you actual trade fills?

I have a little discord with three of my friends. We are working on honing what I have referred to as My M15 method. Each of us can trade this method independently of one another, and yet still have the same entry (barring slippage) and the same initial stop loss and the same take profit. If one of us deviates from the plan during the course of a trade, for example, if one moves hi stop to breakeven before the plan calls for it, he risks getting stopped out for a breakeven result on a trade where the other three might record a +50 profit or a -25 point loss. But if we each stick to the plan, the only variable in result will be that we each are trading a different trade size.

Having mentioned the method, I wish to note that I will never again discuss charts and methods here at FF. What method you choose matters very, very little. So many methods and systems have an edge so long as you understand that in order to benefit from any edge your trading plan must define when you will take a profit and when you will stop out of the trade for a loss. For example, a simple method such buying when the price of a M5 candle closes above VWAP will result in many trades going into a profitable position. However, not all will remain in that position. Some will rally for a while, others will almost immediately reverse, close below VWAP, and signal a short. Many will continue to rally, offering an acceptable profit, and then reverse lower, taking with it any profit you had previously showing open in you trading platform.

You need to have a plan that says not only "Buy when price is above VWAP." You must continue to develop your plan by stating "I will set a profit limit order at 100 ticks/pips, and I will set a stop loss 10 ticks/pips below VWAP. I will trail my stop 5 ticks/pips below the low of the most recently closed 5 minute bar until I am either stopped out or my profit target is filled." Such is a proper trading plan.

If you have such a plan, then where, I ask you, is the room for discretion? Price is either above VWAP or below VWAP. If you enter at 121.00, a 100 tick profit target is a simple calculation of 121.00 +1.00, or 122.00 TP. If VWAP at the time of your long entry is 120.85, then a stop loss 10 ticks or pips below VWAP is a simple calculation of 120.85-.10 or 120.75. Once the position is open and the initial stop loss is in the market AND the take profit is in the market, managing the trade, according to the plan as stated above, is a simple matter of waiting for each M5 candle to close, and then moving you stop loss up to a level that is equal to the low of the most recently closed M5 bar - .05. Such plans, such simple plans, are not only possible, but, imo, are necessary to composing a consistently profitable trading plan.

However, just because you now have a simple, rule-based plan that leaves nothing to discretion, that does not mean that you will actually be able to execute that plan flawlessly so as to reap the benefits of your edge. Unlike the roulette wheel where once your bet is placed and the wheel is spun there is no room for the player to alter the outcome of that bet, this is not the case in trading. In trading, once in a trade, we can do all sorts of harm to ourselves by deviating from our plan. How? Let me ask you: Have you ever moved your stop loss farther way from your entry as price dropped toward your stop loss in an attempt to avoid the loss, even though doing so increased your risk? Were you telling yourself you were giving the trade "room to breathe?" Have you ever moved your take profit closer to to price, willing to take a smaller profit because you didn't want to give too much back should the market reverse against your position? Maybe you moved your stop loss too close because you had taken a few losses and you were trying to at least end the day at or near breakeven? Have you ever taken a quick loss on a trade, and immediately clicked you mouse to enter a new position so you could get back what you just lost? Have you ever done so repeatedly in short order, and ended up losing far more than the original loss?

I have committed all of those errors and more many, many times. Such errors are always the result of an exercise of free will, choosing to take actions in the market that are not restricted or bound by the rules of a trading plan, i.e. all trading errors are the result of discretion.

A trading plan need not be overly complicated, or complicated at all. Over the years I've tried so many systems and methods. Go back to the beginning of this journal and my other journals here at FF you'll see me using moving averages and Renko bars with Heiken Ashi candles and different oscillators and changing things up and tinkering and making changes. Such tinkering is almost always the result of trying to refine away losses and reduce (remove! lol) uncertainty. You cannot do that. The best any of us can ever do is to identify an edge where the likelihood of chosen trading instrument to do one thing, e.g. "go up in price," is measurably higher than the likelihood that it will instead do something else, i.e. "go down in price or stay in a tight range." Once you have identified your edge, design a money management scheme that will allow you to capture some of the profits such an edge will offer while minimizing the losses that will occur at those times where all the variables are in place telling us our edge is present and yet the market still does the opposite of what our edge tells us it is more likely to do.

In a few weeks if not sooner I will be starting a new journal here at FF. I feel that this current journal is too disjointed in that its focus when I started it was still the misguided search for the right combination of trading indicators whereas since the middle of November when I experienced my roulette epiphany the focus has been on what really matters: How to cultivate the proper mindset necessary to become a consistently profitable trader.* In the new journal, I will continue to explore the impact that my awakening has had on my emotional discipline. I will also be starting a new funded prop account where I share the ups and downs of the equity curve, position sizing and resizing, and adjusting bet size (position size) to maximize capital growth and capital preservation.

I will not be discussing the nuts and bolts of my method. I will continue to discuss the insight I have gained and continue to make about the nature of this activity called trading and why a rule-based trading plan free of discretion along with the ability to follow that plan and NOT introduce discretionary elements is the key to success at this trading game.

I've said elsewhere in this thread that "if you avoid tilt, assuming you have a trading plan with the proper elements (entry, take profit, stop loss,) you cannot fail."

Discretion is the genie that causes you to tilt.

Even the best of us tilts from time to time. In addition to our trading plan and our discipline to stick to our plan, we must also cultivate the mindfulness that allows us to observe when we are in tilt, preferably while still in the early stages of tilt, so that we can put the brakes on it before we lose too much, up to and including our whole trading account. As someone who has blown accounts in the past, I can tell you that tilt is real, and it is inevitable. The more you focus on chasing indicators and ignore focusing on your own trading behavior, strengthening your emotional discipline, and cultivating the mindfulness that will alert you to your own follies and errors and self-destructive behavior, then failure is inevitable.

Discretion is the enemy. It is the genie that tempts you to tilt. It is the devil that draws you to your own destruction. There is no room for discretion in trading.

* It is interesting to me that even though my roulette epiphany has led me to work on myself and my discipline and realize that methods and systems are secondary, my years long search for the perfect set of indicators clung to me and didn't truly die until a few days ago. I now use a 15 minute chart only. The only indicators I use are price levels drawn from the daily and weekly charts: today's open, yesterday's high, low, and close, and last week's high and low. My main chart template is just a 15 minute bar chart with those levels plotted on it. I have one chart that shows 15 minute candlesticks with an indicator that labels the OHLC and Range of each 15 minute candle. One of my friends in the discord introduced me to the VWAP some time ago, and so I keep it one copy of my main template open and available with the VWAP on it, though at this time the VWAP has no input on my trading plan. In other words, the moving averages, the ema bands, the stochastics and Willimas%R and ADX's and all the stuff I have tried and posted on FF about using over the last couple of years is gone. I use basic 15-minute bar chart with price levels plotted from the daily and weekly bar charts as my primary template. I truly think most of you would benefit tremendously from exploring price-based trading methods over the moving average and oscillator laden systems that characterize most of the systems threads here at FF, even if eventually you decide to build a system that sues such indicators.

**Discretion is the enemy. It is the genie that tempts you to tilt. It is the devil that draws you to your own destruction. There is no room for discretion in trading.**

I, personally do not care about anything outside of my plan for the past 3 years.

Statistics - Yes, they are part of my plan.

Discretion - Never.

Only plan! 1 - 2 - 3, rinse and repeat.