David Jenyns, a well-known trader, interviews Stuart McPhee about topics of interest to beginner traders, including trading the eminis, fill rates, and chart indicators.
David: David asked us the following question: Can it be practical to aim at a consistent small fraction of profits when trading the eminis (s and p), e.g. To get two points out the market on most trading days while maintaining risk management. Although it sounds easy, it is very difficult.
Stuart: I’m sure it is possible, because I know people who have done it. Yes, it’s possible. However, when we are dealing with things that are volatile and that move quickly, our execution speed must be rapid. It is important to be decisive, then execute once we have made our decision. Then we must be confident in what we are doing and quick in our execution.
It is possible, but we need to have the winning methodology and the setup to get us into the right position to scalp the market to get the points that we want.
David: Now, the next question is how can you ensure a fill rate of one tick when trading on an ongoing one-minute chart? This does not include preordering or previewing market direction.
Stuart: I think about fill and the beginner trader being able to get in when he wants. The thing that comes to mind is liquidity, active turnover, active trading, and lots of buyers and sellers. It’s the ability to execute and get what you want. There’s great transparency in prices because we have a lot of participants. We also have great liquidity. You can get in and get out whenever you like.
David: My next question is: I use chart indicator to enter trades but get nervous when it doesn’t go as I planned. Can you share your knowledge about dealing with price action right after placing a trade.
Stuart: This is the feeling of nervousness experienced by beginner traders about the price. The price cannot fall below our stop because it is far away. For the rest of the trading day, we don’t need to do anything.
My medium term trades often result in my price dropping within days of my entry price. This doesn’t bother us as it is still below my stop that I have set outside of the trend channel. The worst thing is to check it ten more times within ten minutes of buying it.
However, I have found that once you buy, she will go. But, what do you do? You’ve followed the rules and your stops. If it reaches your stops, you get out. If not, you can stay in the trade. It’s best to close the browser, close the browser and log off. Then, go on with your life. In the next few days, it won’t hit your stop. It could happen, but it would be very detrimental to bring the price down to your stop. Beginners traders are unlikely to experience this.