Don’t Count on a Lagging-Indicator E-Mini Trading System to Perform in All Market Conditions

I am an e-mini scalper and doing so generally results in gains between 10-30 ticks. While many traders of this style have much lower profit targets, I have found that letting trades run a bit results is a far more profitable system of e-mini trading. In my opinion, one of the leading contributions to the staggering failure rate among new traders is using a lagging indicator trading system. Yet, the vast (and I mean nearly all) mechanical systems being touted as “the next big thing” are systems built around lagging indicators. Nothing new here…

Here is the crux of the problem; if you are targeting 10-30 ticks and start 8-10 ticks behind the correct entry point, how are you going to consistently trade profitably? It is like starting a 100-meter dash 8 meters behind where everyone else is starting. In short, it’s very tough to be an e-mini scalper when trading lagging indicators; use a real-time trading system to put you considerably ahead of the lagging crowd.

That being said, lagging indicators can be considerably more effective for the swing trader who doesn’t live and die on volatile market conditions. But that is not in the realm of e-mini scalping which shines in volatile market conditions. Relying on a “late start” in this system can result in utter disaster and new traders are the recipients of the effects of non-real-time trading systems. This is not to say that every trade utilizing indicator-based systems will not work out, getting in late on a particularly long run just minimizes maximum returns. However, the market is often in consolidation mode and indicators/oscillators/moving averages are close to worthless in under these conditions.

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