So I'm back at it. The first step was figuring out a plan/set of rules for me. As I alluded to in a previous post, I might be limiting myself, but this is my initial set of rules. I'm not getting married to them. I've read a lot of journals and know that while everyone might be looking at the same vehicle (ES, NQ, CL, etc.), everyone sees things differently and has a different approach for entries, trade management and exits. My goal for this initial phase of trading (sim) is to get comfortable with entries based on specific rules and to exit based on pre-determined chunks of price movement. For instance, my initial stop will always be 3.5 points. Then my plan is for the stop to be moved based on forward price movement. Once price hits 5 points in my favor, the stop is moved to BE +1. Once price gets to 9 points, the stop is moved to +5 points. Once price gets to 13 points, the stop is moved to +9 points -- and so on in 4 point increments. I've looked at a lot of static charts and this approach is what I'll be testing. In my static chart review, MAE of 3 points was common so I'm using 3.5 points to provide a little more leeway. My reasoning for approaching it this way is that for so many, determining the correct target and/or determining that a move over is often the most difficult part. Holding (even trades that go in your favor) can be so damned hard too - and me especially. I also know that I'm not great at determining price action. I'm faked out a lot. For now, having rules for guidance are what keeps me from making decisions based on what I think I might see - and exiting prematurely. #1 is having a set of rules to follow (plan). #2 is to see if I can follow my own rules. I've struggled with #2 in the past. Today I was able to follow my rules and thus I'm pleased with my execution. Is there room for growth - yes. But following the bare bones of the plan occurred = progress! Right after the open is where many likely saw the initial entry for a long (A). The down trend line from just after 7AM was broken, with a nice RET and then the market shot up. I saw it too, but it occurred in the time window that's off limits to me - the first 10 minutes after the NY open. So though my entry was quite a bit later, I set it up based on the high of the 0946 bar (4203.75). It triggered 4 bars later (B). It hung out for a few minutes and did go into the negative, so of course I wasn't thrilled about that. But since my stop was set at 4200.25, it wasn't hit. The MAE of the trade was actually just 2.25 points. With the stop plan in place, I was stopped out of the trade at 4213.75 for a total of 9 points. (C) In the CWS world, I saw the next entry from the 1052 bar as the DL was fanned due to the higher high and then price hugged it (the DL), but I didn't take it (D). I didn't take it because I didn't want to risk losing what I'd gotten in my first trade. That's why I say that progress was made, but that there's still room for improvement. For my first day back in the sim saddle, I'm pretty stoked. Now it's time to rinse and repeat - consistently.
I didn't do so well on Friday and some of the posts by Db caused me to take a step back and realize that since I took quite a bit of time off, I need to regroup and do some watching for a while. The chart where he labeled things of 'no more buyers' or 'search for new value' and especially 'equilibrium' hit pretty hard. I'm doing some work to seek out the same kind of understanding so that I can understand market movement more clearly. For the time being, even sim trading isn't going to get me to where I want to go. It's annoying as hell to be going back to the observation phase YET AGAIN, but I don't think I'll make forward progress until I understand more and watching is how to gain that understanding. I've been reading some of the Wyckoff material and really trying to just SEE the market rather than think about trades. Getting it through my head (again) that the market is either trending or consolidating is a big step. I had a bit of an epiphany with looking at this date (1/5). There wasn't anything spectacular about it, but I'm realizing that each of the 1-minute bars do tell a story. Individually they aren't critical, but put together, they give pieces of information or tell you to be on the lookout for what happens next. It was like I was smacked in the head when I realized this - but likely because I've been seeking something definitive - and the market isn't definitive. So, I'm the one who has to adapt and the market will keep trucking along whether I'm watching, trading, on vacation, sleeping, etc. One bar against the current trend is just that. What follows is another puzzle piece... So with this day, I had the high, low and midpoint area marked of the overnight activity. Just prior to the NY open, the market tested below the overnight range, but quickly went back inside. Just after the open, it took a deep dive south, but yet again went back up into the range and failed shy of the midpoint. What followed was a series of seeking out new value and then the market settling in a range of +/- 10 points. There was an attempt to head north, but it failed around 94 - and buyers and sellers tried for a lower area. That didn't work out and 94 was reached, but not breached again. Back into the area where the most activity had been occurring. Then the lower area was breached and moreso than 30 minutes early. But the other side tried to pull it back into the high trading area again. This time it didn't make it (couldn't breach last swing high) and ended up going further south. But, though a new LL was reached, price made the trek back up into the higher trading area. But this time, it couldn't make it all the way to the upper range before falling outside to the south again. What followed was a series of lower highs and lower lows - a rather definitive down trend. Shortly thereafter, price was drawn up again but 74 couldn't be broken. However, then price didn't go lower than the previous low when it did breach 74. How wild --- price went back into the area where a lot of trading activity had occurred??? (duh) That range was like a magnet, but each time price went back, it couldn't get as high as it had previously. Seeing price in this way and KNOWING that the range where price had hovered for a while was a likely return area made so much damned sense. I don't know the exact reason why it kept going back there, but many trades happened in that range and therefore it was a hotbed of activity. Seeing the ebb and flow of price away and back to that area, but with slight other pieces of information (lower highs, lower lows) was awesome. But in this instance, knowledge is an incredible tool for making trading decisions. I'm not trying to get ahead of myself, but today was a rather heady experience of "seeing" more than just bars or thinking about entering or exiting or retraces or whatever. I feel like even with a static chart, I can see nuances.
Your analysis is looking better as you're becoming attuned to the flow of the price itself rather than making it conform to your preconceived notion of what it ought to mean. Observation without any dog in the game makes it a lot easier to hear that silent song. Gringo
Thanks for your post, Gringo. I'm working on trying to see the signs and signals that the market provides and not be surprised when price hangs out at a certain level. The swiftness of the morning move took me by surprise, but the price levels (and hesitations there) made a lot of sense.
I was doing a lot of reading yesterday and didn't post my chart commentary. As I mentioned in my response to Gringo, the down move wasn't a huge surprise, but the intensity of it and how price just flew through previous levels was a bit of a surprise. I know there are a lot of levels marked and I'm sure that can likely be confusing, but many of the pauses did occur around those areas and having them pre-marked was good to refer to. It was an interesting day to watch.
This morning was another interesting session to watch. Overnight, the market had been steadily climbing and breached the 1/12 swing high at 11AM. Price advanced and retreated, but the overall trend was up. Right around 9AM, a new HH was established and the SL (hourly chart) was crossed. Price then cruised through the 1/12 swing low area and kept on going. * NY Open - After 6 minutes (and 20 points of movement), buyers and sellers settled into an equilibrium area for a few minutes. A - Initially it looked like price was hitting a wall (1/9, 1/12 swing HIGH), but then it thrust on through. B - Quickly thereafter, buyers seemed lonely and that venturing too far from 4228 wasn't where the action was going to be. C - Irrelevant to the market, but price was hugging the DL. D - Another stab of price up. No major price retreat, but more time is being spent in equilibrium than in moving higher. E - Attempting to breach the high. Not going higher, but not going lower. F - Doesn't take a rocket scientist to see that the slope of the move is becoming more shallow. G - Stabs of higher price attempts are progressively lower - nothing significant, but price can't advance. H - Stab down and right back into the consolidation area. I - Test of the high side followed by a test to the low side. J - Seeking new value K - Failure L - Price can't seem to breach the 1000 high - keeps retreating to the consolidation area. M - More tests north and movement back into the consolidation area. N - HH, new DL, but it's broken almost immediately. O - Trek back to the lower end of the consolidation area is very steady. Balance of time comparing "up" movement to "down" movement definitely favors the down, but it took 7x as long to retreat the up distance. Patience is not my strong suit, but each day that I watch price move, I see that patience is definitely needed and so often pays off. Movement is often a series of moves and counter moves and what starts out as a 'stab' of price in one direction can go either way and often is a fake - and price keeps on trucking.