2-5-2010 Total trades: 5RTs winner: 2 loser: 3 net p/l: 0.75 pt Staretd around 1:15 pm A descending triangle/falling wedge forming. At 1:22 price falling below the bottom of the descending triangle (LHs and slightly LLs). It could also be viewed as a bearflag from 11:40 to 12:40. Missed the short on breakout. Waited until double bottom. Then price broke the mini neckline at 1044.5. Shorted at second touch of 23.6% fib line at 1046 ( 50% down channel line) around 2:15. stopped out. Looks like there would be more move to retracement. Went long at 2:20 stopped out on pullback to 20 bar EMA (2min). Long again as price bounce from EMA and move above 23.6% fib level. The pullback to 20bar EMA was also a thrwback after break 50% channel line. Exit at 1047.5 after holding position for 3 min later. Short at 2:40pm as price hits the top down trend channel line. Entered wrong order (entered buy instead of sell again today).at 1047, reverse with 2 contracts at market order immediately and filled at 1046.5. The momentum was right, but lost 0.5 pt due to order entry mistake. Covered at 1045. I missed the pullback bounce from neckline 1044.5 (a good long entry place). I missed again as price broke down trend channel line at 1047.5. Price consolidated a little around 1047.50 (very important level judging by the price action. It bounced back right away everytime it dipped to 1047.25). The last good long entry I missed was near 1050 (price broke falling wedge top line). This was strong breakout. Price moved so fast afterwards, I was not comfortable to ener any scalp since the price bar became quite wide. I missed all these good trades was because I hesitated and didn't have the conviction to act decisively. 1047.5 is the best place to go long today before 3pm. However, I would probably get out at 1050 instead of holding for later big move). The upper trend channel expansion since 2pm was amazing.
2-8-2010 No live trading today. I was away from desk until 3:20 PM ET. The price movement together with last Friday's later bounce looked like correction leg A up and leg B down. At 3:26, the restest intraday low hold. Price bounced back a little. I did a paper trade at 3:28 going long at 1058 and out at 1059.50. The reasons were 1. price breaking micro supply line, 2. price bounce back into a the down channel after slight overthrow. 1059.50 was the support since 1:30 before price breakdown. 1059.50 turns out to be pretty strong resistance. At 3:50 price broke the intraday low. Price has been moving in a channel drawn from 12:40 to 2:15 swing high with steep slope. Price is testing 50% retrace from leg A up on SPX (1058.10 50% retrace level). If it doesn't hold, next support would be at 1055 on SPX.
2-9-2010 Total trades: 13 RTs winner: 5 loser: 8 net p/L: -2.5 pts total 8 trades have been stopped out between 0.5 to 1.5 pts loss. 5 winning trades were between 0.75 to 1.75 pts. Started at 12:30 PM ET. SPX tested 1058 and rallied 19 points. I was waiting for pullback to 38% fib retrace to look for long entry. However, the suddent drop at 12:40 of almost 9 pts within 5 min has changed trend. From 12:30 to 3, price consolidate within a descending triangle. The price tried to break the trend line drawns from 1pm to 1:50pm swing high, which has been a good resistance. The top of open price range from 9:30 to 10 is providing support. I played 5 short and 8 long between 1pm to 3pm (definitely overtraded today). I had 3 losing trades which were slightly profitable before stopped out at loss. Since today's 5 min price bars were relatively wide, my stops might have been a littel too tight, which has resulted many stopouts. It adds together became quite a loss. Another problem I had today was "chasing breakouts". I am using microsupply/demand lines to enter long/short. Since there were many overlap of bars within the descending triangle. I got shaked out a few times though I made correct judgement of the micro-trend. There was a good shakeout of shorts at 2:40. If I had used sell stop to enter short as price broke the micro-demand line, I would have suffered smaller loss. The protective stop should set to one tick above the trendline, but I used the swing high of the breakout bar. There are some inconsistance when placing stops. It will take some time and experience to figure out how to place protective stop properly. I am definitely not using mental stop here when price moves very fast. I will place stop immediately after my trade is filled. The stop has to be pre-determined for me. The best thing of stop is it will protect me from catastrophic losses, for instnace when the market dropped 9 points withi 5 minutes today.
Placing protective stops and knowing when to adjust them is still a major hurdle for me, too. I'm sim trading ES and live trading stocks. It doesn't matter whether it's real bucks or simbucks, I still have trouble with this. I also place hard stops, and if faked out, I can get right back in the trade. I was SO on the right side of that move today. Did you notice the slightly lower high after 3 pushes up? Check out a 5-min chart, there was a strong push off the test of support, then a smaller leg up, then another strong push about equal to the first one. After a move like that, the lower high sets up a very low risk/high reward short. I really wasn't expecting that much reward but I didn't argue I sent you a PM a while back, not sure if you got that.
I have reviewed all my trades today. There were 3 trades that actually were profitable at one point and turned into a loss at end. I probably thought I would give it a little bit more room for large swing. I believe I've misunderstand the situation where you would hold a little long for large moves. You are only supposed to hold winner a little longer for it to be a bigger one. If the entry is really good, market should not go against you for more than 0.5 pt move. If buying/selling for breakout, it would be wise to use stop 1 tick below the breaking resistance/supply in case of failed breakout. There is not really any good excuse for big stop loss for scalpers. From 3pm to 4pm, the breakout of the descending triangle was some kind of end of move (not really the shakeout). On 2 min chart, it was a double top breakdown neckline at 1070.50. After 3:40, it never closed above 20bar EMA on 2min chart.
The move at 12:40 was not what I would have expected for today. In retrospect, the best I would do was to short at 1074.5 for second leg down after a mini bearflag. But I would have set my target to 1073 (23.6% fib) and equal movement. I was expecting a pullback to 38% at 1070 support,w hcih was also the resistance at 10:20 swing high. I did receive your PM. Thank you.
2-10-2010 Total trades: 5 RTs winner: 3 loser: 1 wash: 1 net P/L: 2.5 pts Started around 11:50am ET. The first 60 min ater open has defined the price raneg of the day 1056-1070. I have drawn two down channels since 7am this morning. Once connects 7:40 and 9:55 swing high and the other connects 9:30 and 9:55 swing high. Between 10-10:30, it was double bottom. price broke the neckline at 10-:40, then the steeper down trend channel supply line at 11:10. A throwback found support at center line of the less steeper channel, and followed by another leg up to challenge the less steeper down trend channel. Went long at 12:14 after price broke the down trend channel and bounced from 20 bar EMA (2min). Long 1063.75 (stop 1063, 1 tick below 20 bar EMA and also 1 tick below 12:14 2 min bar swing low). Got stopped out with 0.75 pt loss. Watched price took off, broke 1065, then 1067 and 1069. This was the most "expensive stoploss" to me for the day. There was chance to re-enter at 1064.25, but I didn't take it since I didn't really plan for it after shortly exiting a trade. Long 1067 again at 12:53 at 20 bar EMA and uptrend channel line rebounce. stop 1066 (good buying at 1066.50 and price immediately bounce at 1066.25 based on my tae reading). Exit at 1068 at 1:02. Another good long entry was between 1:16 to 1:22 with vol dried up and price found support at top of the congestion zone from premarket between 8am to 9:30. There were 2 test of open high from 12:30 to 1:15. 3rd test was imminent. Short at 1069 (stop 1069.75) at 1:45 after price broke the uptrend channel and covered at 1068.25 within a minute. Short at 1068.75 (stop 1069.5) at 2:18 after lower low and lower high and second time dropping below 20 bar EMA (2min) Covered at 1067.25. At 2:28, price drop below the up trend line second time and failed tostay above 20 bar EMA. A good short entry was 1067.75 as it broke the 23.6% fib at 1068. The price probably wanted to retrace to 38-50% fib level, 1065 was the lower level of the premarket congestion zone between 8-9:30 and 10am swing high resistance. There was some support here. There was not much panic at down move, the slope and price overlap between bars indicate it was a bit controlled movement inside a not too steep channel. From 12:30 to 3:30, it looked like a mini HS or a big bull flag from 1:30 to 3pm. It looked like a breakdown from neckline 1065. The chance to retest intraday high might be low, and daytrading bulls are probably going to take profit or get out here. Shorts might also want to cover here in the middle of the day range before close. On SPX chart, today's intraday high looked like a throwback retesting the bottom of uptrend channel lines. Monday and Tuesday might be a giant bear flag.
2-11-2010 No trades today. I have been away from my desk until 3 min before market close. The intraday rally to new high around 12:30 was a little early, The second attempt to break to new high occured in 60 min at 1:30, but it went only one tick above 12:30's high. The retrace was shallow since it stopped at 23.6% fib level, but it moved within a nice trend channel with LH and LLs. The last 5 min before 4pm was probably some short cover from day traders probably because market refuses to go down more than 23.6% retrace. 11:30's was a nice bull flag for long entry. Another good long was around 1pm after tight flat consolidation. Looking at the market internals, it is quite reasonable for a 100pts up day so seller didn't really have any edge today.
2-12-2010 No trade today. I was away from my desk until 3pm ET. I was thinking about going short after double top, but could not act decisively to take the trades. Today's price pattern looked like gap down retest yesterday low and then move up to close the gap (search and destroy called by some floor traders?). Today's price moves are the best daytraders could get. Pirce retraced 50% after each top. The last 30minutes price move was just too volatile for me.