Micro E-Mini Game Changer


May 13

The Micro E-mini futures are a real game changer. Because of the e-micro futures, I am working to rapidly automate many of the dozens of strategies I have developed over the years but never deployed. I have deployed some of these strategies, already.

One question I have asked myself is why haven’t I had more success because I have both a strong ability to read markets with discretion and experience in developing very original and profitable systems.

One of the core answers that came to me was that I am not using my full abilities.

The answer has came in the following form as to the cause of my under performance:

  1. One of the core answers that came to me was that I am not using all of my abilities. I have developed many original systems and trading ideas. I realized it is literally impossible for me to manually trade all of the edges or perceptions that I have developed. This is a big clue I should be automating more strategies. The real key is that how can I expect to get the tangible results of my knowledge if I am not even utilizing it?
  2. Poor tactics. Impedance mismatch and over leverage are often the causes of losses for my more discretionary trades. Often, I have been able to offset my futures losses with options. This is a big clue to me that I am doing something wrong with my futures trades.. If you are right on your idea but getting stopped out or taking big losses, it is probably because you are not utilizing proper tactics. Today’s markets require more savvy.
  3. Operating outside my zone of comfort or expertise. The ES is moving incredibly fast. One of my problems last week was that I had developed algos, in order to give my discretionary trading bias. However, I had not automated the entries. Because of the increased speed of the market, I was behind the algos and getting chopped up and thrown off my game. Today, my automated algo, in live micros testing, has made over 100% winning trades with several trades lasting mere seconds and these are market orders– not limit order scalps.

    Discretionary traders need to make following adjustments in the current markets:
    1. Reduce leverage. Use the e-micro futures or, for traders with larger accounts, trade fewer e-minis.
    2. Think tactically. Is this an options trade, mini, or micro trade and why?
    3. Use limit orders and pick spots
    4. Wait for clear reads. Do not fear missing out.
    5. Utilize multiple time frames to help understand context.
    6. Develop graybox systems and use partial automation for the entries.

About the Author

The author is passionate about markets. He has developed top ranked futures strategies. His core focus is (1) applying machine learning and developing systematic strategies, and (2) solving the toughest problems of discretionary trading by applying quantitative tools, machine learning, and performance discipline. You can contact the author at curtis@beyondbacktesting.com.