Week3 10th day of 15-day sim-trading ES. The purpose is to build good habits to follow the plan and setups consistently. Starting now to focus on both entry and exit. Today i did not do well i exit. How can i do better? the following: Before entry, answer following; After entry, act based on answers. ⢠Why am i taking the entry? ⢠What am i expecting to see to validate my entry? ⢠What to do if PA different from expectation? ⢠What condition will allow a re-entry?
Week3 11th day of 15-day sim-trading ES. The purpose is to build good habits to follow the plan and setups consistently. Starting now to focus on both entry and exit. Today i made many mistakes. Time to think how to change.
Week3 12th day of 15-day sim-trading ES. The purpose is to build good habits to follow the plan and setups consistently. Starting now to focus on both entry and exit. Today i made many mistakes again. I suddenly realized that i was taking too many low probability trades and gave non-working trades unnecessary long time hoping it will work. From now on,i should try to take high probability trades and scratch out when trade is not working in 10 minutes. trades: http://i.imgur.com/bNLweW1.jpg
Week3 13th day of 15-day sim-trading ES. The purpose is to build good habits to follow the plan and setups consistently. Starting now to focus on both entry and exit. Today i again was not waiting patiently for high probability trades but did try to learn to follow a better exit plan by using DL/SL after the pain of exiting losers too late. trades: http://i.imgur.com/4VBQvV6.jpg lines are not drawn in real time. Plan is to draw lines in real time in the future like in NQ practice. Paper trading NQ: http://i.imgur.com/85g17J5.jpg & http://i.imgur.com/a9uMODf.jpg Together i watched candle charts writing note in TOS (notes in CST): http://i.imgur.com/eU5Ml86.jpg & http://i.imgur.com/rmnoMom.jpg attached is NQ 60m chart.
I really like NoDoJi's posts from ES Journal - 2013 in the below. The chart discussed in the conversation is also attached. By Huyang: May you please point to a link on how you would enter a strong trend? Thank you very much. By NoDoJi: I don't have a link to all my posts about entering a strong trend, but what I do is this (based on intraday scalping using a 5-min main chart and 1-min chart for with-trend entries): 1. On the 5-min chart, I wait for a high or low of the day, a key trend line, or a narrow range consolidation, to break with conviction (more than just a few ticks). 2. I then watch the 1-min price action for a pullback toward the 1-min 20-period EMA. 3. Finally, I position in the direction of the breakout during the pullback. There are several ways to position during the pullback and it's best to backtest these ideas on whatever instrument you're trading to determine the method that has the highest odds of success within your personal risk:reward tolerance. One way is to trail a stop order a tick above/below the close of each pullback bar. Another way is to simply buy or sell the close of the first pullback bar. A third way is to place a limit order a tick or two from the value of 1-min 20EMA. If the breakout is especially strong, there may not be a defined pullback. Price may simply consolidate by printing an inside bar or two (small triangle), or by printing several narrow range bars (flag), in which case I'd buy or sell a break of the previous new high/low if the instrument you're trading is known for its momentum moves (oil, gold, and currencies come to mind). So looking at ES prior to the open today, there's a channeling uptrend, not a strong trend. In other words there are pullback bars on the 5-min chart. During a strong trend, no 5-min bar high or low breaks in the opposite direction by more than a few ticks, if at all. However, once that pre-market lower trend line breaks with some conviction during the 9:44 ET 1-min bar, I'd look to get short for an eventual test of the overnight low by trailing a sell stop below the pullback bars. The first pullback bar prints at 9:50 and I'd be short during the 9:51 bar at 1740.25 for a test of the overnight low around 1737.00. By Huyang : That is very kind of you to write in details on how you trade with trend. I will definitely spend time to digest your thoughts after which i may need to get back to you for further questions. Regarding today's ES, i have one question: when i found out 9:35 EST 5m bar (9:38 1m bar) is at 1741 which would break pre-market weak up TL. I just shorted 1741 without waiting for 5m bar close. Immediately i got a heat of 1.75points when 5m bar is closed. Then i scratched out at 1m 9:50 bar high where you were waiting for short since i didnot want to have the second time painful heat and then missed the whole down move. You waited for break down TL with conviction and i did not wait for the conviction. May you please give me advice on my entry and exit? How do you think of shorting bar 9:44 when it breaking down bar 9:43 low? lower high, L2 (B9:35 L1) and pre-market weak bulll channel. Thank you very much for your time. By NoDoJi: The initial break of a trend line is far more often than not a failure. Unless it breaks off of a narrow consolidation from a far lower high (or higher low in the case of a downtrend reversal), chances of a fake out breakout are pretty high, so that's why I watch the initial breakout for the reaction, then decide if and how to approach the entry. ES breaks out 9:35/9:36 and it's weak. Trends don't die easily, so expect price to give it another upside try. I'd short a break of the 9:42 bar as a 1-min 1-2-3 pattern, early entry for a 2nd test of the LTL, or wait for the initial failed breakout to break and then look to get short using a pullback method I described yesterday. Shorting a break of the 9:43 bar is a bit late for the 1-2-3 early entry approach because there's not much "airspace" to work with. When I'm anticipating a reversal instead of waiting for actual signs of one, I like to at least have some airspace to the nearest price level that's likely to be defended by the group that's been in control.
Today i did not do sim-trade but paper trade NQ. Yesterday and today NQ moves much larger and cleaner than ES. This week i made many mistakes. Anyway, mistakes are part of learning. My current biggest problem is to get the direction of least resistance wrong so that i often enter late. How to find the correct direction as early as possible? Prob one easy way is to wait to trade the first PB after the strong BO showing the direction of least resistance. After a strong BO showing the direction clearly, then the next challenge will be how to find the ending of PB as early as possible. This will be dependent on context and needs good PA reading. Notes on NQ 1m: http://i.imgur.com/as4J2FG.jpg NQ daily: http://i.imgur.com/PDph1xA.jpg NQ 60m: http://i.imgur.com/lADsdo1.jpg
Week 3 sim-Trade review Majority trades had immediate adverse move after entry. 9 trades had favorable move after entry but for 7 trades which had immediate favorable good move, i exited too early. Clearly i was not following the setup. My setup is box bottom long but i long the top and short the bottom.
Paper trading NQ today During the weekend, i realized that i was not trading the market i was observing but trading the market i was hoping to have, which explains why i was making so many mistakes. This morning i changed my mindset: to trade the market i am really observing. Slowly i am feeling the big difference. Anyway need more time to test out. NO more paper trading today, only observing the market.
I just read again the first several posts of the journal http://www.elitetrader.com/vb/showthread.php?s=&threadid=278341&perpage=6&pagenumber=1 For the first time, i started to sense something i have never sensed before although i have read it many time before.
Week4 today I did not plan to sim-trade ES. but i did sim-short NQ. one sim-trade only today. at 6:38PST, the direction of least resistance is down but what kind of PB will it have? enter short early then likely immediately adverse up move which would need a wider stop or exit and then re-enter; enter at further PB but then there may be no further PB. Also the same concern for Exit. If not extremely strong down, then prob had better wait for further PB. For exit, had better use previous swing high as trailed stop, using 6:52 H but not 6:55H when moving stop at 6:56. sim-Short NQ (time in CST): http://i.imgur.com/WXyw1dW.jpg