Review of this morning. I'll first mention too that I've really enjoyed learning from DBpheonix and his teachings on Wyckoff. With that being said, the morning began in a range. My plan doesn't allow ranges, unless they are very wide. 15 to 20 pts at least. So I sat and a watched for an entire 5 minutes. When price broke out of the range at 0937, I was hesitant to short because we were around the mean of a range on the 60. I wanted to KNOW where price was going. However, my plan doesn't concern itself with me knowing. Neither does the market. According to plan, trade #1 entered on a RET at 0938. It immediately went in my favor. I closed it quickly. Why? Out of fear. Fear that the mean was going to be a good spot for demand. I attempted to predict the future instead of following the supply. Price then held at a 50% retracement of the large down move. Another short taken , trade #2, at 0945. My supply line broke at 0952. Why didn't I hold the trade? In the future I plan too. Especially when i trade more than one lot. With one lot, and being in the green, I decided to exit and lock in profit. One could hold here, Price failed to go anywhere threatening, and traders were still unwilling buy at these prices as the market chose to tank even lower to a low of 3991. I was predicting 4000, and there we go to 3991. What a move. I believe the trades I took were the only trades according to my plan. However, fear kicked me out of trade #1. What's the worst that could have happened? Broke Even? I'm only in SIM. However, after a 13.75 profit in 20 minutes, I still felt euphoric. I stepped away from the computer to compose my success this morning. I'm wanting to go live, but still working out kinks. For now, my plan evolves around one lot, and the rules for one lot are very different compared to 5 lots. or 9 lots. Etc.. Later this evening, I will replay this afternoon and post results. That will of coarse be in hindsight, but I try my best to play bar by bar. Thankfully, I didn't overtrade today. I struggle with that sometimes.
This mornings prep: Since April in the NQ we have been in a very steep uptrend. However, traders have begun to NOT find value there. Price over the past couple days has moved out of this channel. I reviewed my charts again, and instead of a flat range, I think we can clearly say that the 60 is in a downtrend have a made new lows yesterday 3965. In this channel however we are at the lower extreme. Because true value is found around the mean of these channels, I'd predict a climb to at least 4010-4013. However, if at NYC open it decides to tank, we'd be ready for that too. We are a little above yesterday's low, so I wouldn't doubt kissing the low again before heading on up to the mean. I hope I'm not speaking from a bias. Price continues to revert back to this mean since 9/19. So what exactly am I going to do at 930 AM EST? I'm going to trade according to plan, keeping in mind that price is at the lower extreme of this channel. I nice "target", would be the mean, but who's to say it can't hit the upper extreme again? I'm also ready for a short, however, that would require going to new lows again. That's ok though. Since 9/19 traders are finding value at lower and lower prices. A massive drop would not surprise me either. I'm going to be ready for both. The end. I will replay today's action after work. Not good enough to trade for a living. I hope to write these every day, twice a day to increase my learning curve. Also premarket is already trending showing signs of back to 4012. We'll see what happens.
I replayed todays session bar by bar after work today. I chopped up a little, however I ended with 13 points. Today is a great lesson in learning how to not be surprised by price. In the prep, I was leaning towards heading up towards the means of the downtrend channel which began a couple days ago. Dropping as low as the market did today, actually didn't surprise me because price continued to find value among traders at lower and lower levels. Price began today in a nice premarket range. After today's trades, price landed in the same range. Is this normal? Or is that coincidence? This might suggest that traders are finding value around 4980 then. I need to do a lot more thinking on todays trades. However, attached is the chart of what I would have done. I know I could be a liar and not playing well, but I will say I intentionally stay away from any news so I can trade the NQ without cheating. If I heard it tanked today, I would immediately replay the whole day with a short bias. All trades are green=buys, red=sells. Red line is a protective stop. I try to exit before a stop is hit if the trade isn't going well. Trade #1. I will note that I don't play ranges, so if I was trading live, I would have been sitting starting at a nice unplayable range between 988 and 967-968. It can be played, but I haven't even thought about testing a system there yet. Immediately at 1032 price caught my attention. I was looking for my entry and found it for a quick 9.25 points, with very little heat. Well, 2 pts. So not little, but my stop was like 3 points away. Trade #2 was a quick scratch. Look for the next short. Trade #3, immediate stop on one bar. down then up. I regret not immediately placing another short. It would have been a perfect opportunity, but that now is in hindsight. Trade #4 is causing me the most problems and it comes down to me needing to really backtest this specific situation. I constantly backtest my plan, and have 100 trades logged so far in excel with good stats. However, exit on line break, or hold for the retracement? I held the retrace on trade #1 and clocked 9 points. I held for the retracement here, and lost almost 3 points. I not only lost 3 points, but a great immediate long opportunity following that V reversal. It seems that after this trade, I got a little confused. EVEN IN SIM!!! LOL. ERGO, a couple trades I shouldn't have taken. Trade #5 first long not triggered. Demand was still in and shouldn't have initiated short, (not triggered), and gone long again where I went short. Traders were clearly buying here, and I was operating out of fear of losing what I had gained. Trust the plan. I'm learning it constantly and applying it and trusting it more and more everyday. Trade #6. The retarded short I didn't need. Trade #7 - Seems to be that same temporary range of value found after first immediate drop in price at 1030. To put it simply and completely elementary, the price action from 1030 on looks like people Sold up to 1102 where they began covering. Then they sold the rest they had for a little more. At 1145, it looks like traders bought. Again, at about 1214, they covered what they bought, and then bought a little more. RIGHT INTO THE OPENING RANGE! Tell me, how often does price come back to it's premarket/opening range? Need to look into this as well. I recall asking this earlier. If I ever come back to my journal, it's going to be LONG. I"ll print it for reference at some point. Trade #8. - Sold a retrace after a line break. Looks solid. However, it got scratched just like trade #2. Maybe I need to research this as well because this also looks like a solid measured move down then up. Trade #9 - Waited until the small range between 52 and about 44 broke. Caught first retrace for a long at 1252 with absolutely no heat. Covered at a line break, however holding a retrace here and I would have made double. My fear took me out here. How many trade with these same fears of mine? If I can see them, maybe others can. And that can be exploited right? Trade 10 - We are back in the range. B/E. Almost got stopped out. I feared that the top was had because we made it back to the range. It was. However, I could have held for a couple more points. Trade 11/12 - were not triggered. We were in the range. I stopped as we stayed there for the rest of the day. All in all these reviews really help one think. They are helping me see patterns in behavior. For instance, I used to think head and shoulders were just that. A head and two shoulders. No. It is FILLED with trader behavior. Sorry for the journal. Once again for my sake, I need to look at price, supply and demand, trader behavior, and see if there is something I can see that would help me determine when to exit a line break, or take some heat on the retracement. My backtests to date are having good results still. Win Rate 74% Avg Win $149.78 Avg Loss $42.68 P:L - 3.51:1
3OCT2014 Morning Prep: Overnight once again a lot of trading occurred around the mean of the range at 3980. This was broken though around 130 AM EST. 3994 seems to be the new value that traders are finder for now. After yesterday's activity, we saw a large drop a not enough demand to even make the Midpoint or mean of this downtrend starting on 9/19. This still suggests that traders are seeking value at lower and lower prices. ON the weekly and daily we have price breaking out of an uptrend, and it "could" revert back to the uptrend that began in 2009. One might call price "overbought". If that's the case, in the next few weeks/months, price might end up back in that channel. However, I'll follow price. What am I going to exactly do at 930 EST? I'm ready for either way. We are so close to a midpoint of a DT channel, that I'll probably wait for price to clear 4000 before considering a long. From the open, a short is fine too but I will be concerned with some CHOP around 3980 which price settled into constantly the past 2 days. Price has already taken out yesterdays high. If price became overbought overnight, price will revert back to at least 3980. Today, at the open, I would have to wait and watch and let price tell me where it's going.
YELLO. So here I am after work doing replay. Bar by bar. It went pretty quick seeing as how the entire day from 1044 EST forward was all range. I don't play range. Not yet anyhow. I assume with friday and gorgeous weather here in PA that people wanted to get one last golf game of family time. Beats me. As posted earlier in my prep, we completely blasted through the lower extreme of the 60 m trend channel. AMT as taught by DBpheonix suggests the probability of value being found at the mean of this channel. Price indeed returned. It did not reach the opposite extreme however, which could suggest a little weakness in demand for trades at that price level. The move today confirmed that high probability play. I know I said I would wait for price to move past 4000 to consider a play. However, traders quickly rejected the overnight range from two nights ago, and last nights range. Which once again broke at 130 am today. This suggested to me that traders were looking for higher prices. So my trades today were good I think. Now the review... Trade #1 : Great play. Exit on a line break, especially trading one car and having 26 points already. However, trading 2 cars, I would have left one in and probably exited on the hammer at 1025. Then again, with 2 cars, I'd miss the next short. I still missed it anyway! Traders immediately blasted through the mean around 4000-4005. It continued to 4027. Traders were finding value and wanted trades at these prices, around the mean that is. Trade #2: Demand for trades began to diminish. I did not short early enough. Entry could have been 5 or 6 bars earlier creating another nice 2-3 points, conservatively. After yesterday, I was hoping for another measured move. That was not the case today. Traders were not demanding trades at these high prices. THe extreme wasn't touched. At least 8 more points to go. Trade #3: This trade could have been profitable as well if I caught the first retrace. Would have been in with very little heat. At this time too, I'm a little biased and hoping for a measure move. Measured moves might just be for targets. Don't ya think? Not for prediction. I began to see a range at this time, but wanted to be aware of any breakouts. Trade 4: quick loss. Almost a scratch but stop hit. Volume and momentum has seriously faded by this point compared to other days around this time. I know it's 1130 AM EST lunch time, but yesterday had some nice moves around that time. The rest are all trades not triggered. Price rose outside of the range a couple times, so I would try to long the retracement. Only to see it fall in line. I should have stopped at 1130. If this were real time, I probably would have stopped at 1011 Am EST. 26 points is a great day. I might have switched to SIM, or simply observed. All in all. 4 Trades. 1 W 3 L W 26 points L -1 point L -1.25 point L -0.5 point Profit - 23.25 Points. 26:2.75 = 9.5:1 P and L.
For my sake, I want to mention a little bitch that I have recently noticed. Its continually amazing to see how trading really identifies one's self...their true inner self that has the potential to ruin any possible career in trading. I'm still in SIM, and still writing/tweaking/hypothesizing my plan. I plan to go live soon. I'll post my testing results and plan here once it's done. The Little Bitch --> Self-Sabotage. I'm sure many books are written on the subject. I'm sure a great many trader's have been ruined because of this. There are many reasons for self-sabotage. A couple include familiarity with failure, unconscious need to control (even to the extent of controlling the failure), and a low self-worth (such as, "this is too good to last", or "I don't deserve this") . The reasons are however pointless. What's important, is that one identify that they do it. Listening to yourself trade, understanding your thoughts behind every trade, help to identify your true self...IF, you are able to honestly point out one's own weaknesses. If I can't own up to my own shortcomings, or even admit being wrong, how can one trade well, let alone live in relationship with others well? Trading is actually influencing my personal journey in life. It's extremely odd to see this happen. I am learning a lot about myself, and a lot about patience in the market. I don't play ranges, and it ranges often. Can I stay neutral, and patiently wait, and also stay emotionless? I'm not there yet. Even in SIM after big moves I'm faced with an ego boost. I don't want that. Neutrality will enable me to continue to pay without bias or personal interference. Watch for the self-sabotage. Some of it probably exists in all people, some worse in others. If you have worked hard, hypothesized, tested, confirmed, wrote a plan, tweaked, continue learning, more tests etc...You deserve to win. You earned it. Do you understand? I tell myself this now. I deserve to win here. I'm earning it, I'm continually earning it. Our plans have to be trusted. We have to believe in them. The method which we employ has to be ours, not theirs. A big thank you to DBpheonix and the countless other traders who want to trade price via SLA, AMT, Supply and Demand, Support and Resistance, Price Action. I continue to learn from you all and am so thankful for your contributions. I enjoy this. I enjoy the learning curve, I also enjoy learning to do things I hate such as waiting out ranges, because I learn more about myself in those moments.
The current trend of the market appears to be down. I would imagine a test of around 3819, which is the swing low in an uptrend made on 8/8. That could be this week, it could not. We'll see what happens. Price is now around 4024. After that large climb on Friday, price settled into a range with a mean around 4018-19. Traders have since returned to that value area this evening, after testing 4035 and reverting back down on friday. The weekly and daily show obvious breaches of the uptrends that began in april. I've been posting hourly, but the daily and weekly show it more "definite". At least for me. Price has failed to hit the extreme top of the Downtrends channels. The top would probably be around 37 or 38. Failure to reach this top might signal some lack of demand at these prices. Since the climb friday, and the immediate rejection at around 35, price is now retracing it's decent. It has now retraced 50% of the downmove at 1600 EST on 10/3. So put on the short. right now. I will review this in the AM. Unfortunately, I will be unable to trade SIM tomorrow, but plan on prep and replay as I have been for the past 3 days. Tomorrow morning, I'm looking for price to break out of the 12 to 26 range, and head for the mean of the downtrend. I'll monitor closely around this price level, which is around the 4000 range, to determine if price is headed for the lower extreme, or if traders find value here and begin to buy. If at the mean, price clearly breaches it, I'd look for price to head closer to 970 or lower. On the other hand, traders could demand trades and many of them at 4000. If this happens, and price clears the previous overnight range between 12 and 26 to the upside, I'd long up to around 4030. I'm trying not to hold a BIAS, but with the downtrend and AMT theory, the mean of the channel seems highly probable. This is about probabilities, and right now, that's the one that I'd play. Once again, I'd enter after the range is broken between 12 and 26. This could break tonight or pre-market. We shall see. 3980 was also a previous value range where price sat for some time. I would also consider exiting in this area. Price hovered and returned to 3980 for almost a day and a half. Could be a new value area for many traders.
Sorry for the MIA this morn. Computer charger broke. Running to radio shack later today. I did some prep last night, and will replay today's action tonight around 6 or 7. Tomorrow morning I'll actually get to SIM! So don't tell me what happened. I feel like I'm avoiding hearing football scores. Lol. Seriously don't.