Hello Im also going to start trading tomorrow and will have a journal "a newbie trading journal" here the post you made earlier in this journal is helpful to me and I wish mine to be the same to the others :>
Oldtrader, I would certainly have went long on the ES, as it tried to rally after the brief test of 884. Your above post gave me the idea you passed this false opportunity. If you wait to long to enter you will miss to mutch on a average move. Why did you pass this as it tried to rally, and how many points on average (ES, NQ) do you need to recognize an potential average intraday type of move? How you determine the (ES, NQ) intraday trend? Many Thanxs,
I think I've mentioned that I don't trade off of intraday charts. I only brought this situation up as an illustration of a possible trade that did not run according to form, one that I was aware of, was watching, and could give some comment on. But now that you bring this up, I think it's worth giving a comment on. If a trader were trading from a one minute chart, I can see that he might have used this to go long the breakout. Had he done so he should have sold it the minute it started failing under the breakout point...which was a matter of minutes later. No problem there....as it turned out it was a bad trade....one which resulted in a relatively small loss if you sold it quickly. But frankly, if you were using the one minute chart, I would have gone long earlier....we had a basing action between about 12:15 and 1:15 on the one minute chart. When we came up out of this formation I think you could have bought this too....and really had no particular reason to have sold until the false breakout after 14:00. But this brings up the illusion of one minute charts. Using the one minute chart in this manner puts you long on strength, and sells you out on weakness INTRADAY. So had you taken the trade let's say long around 880, you could have held and then sold around 883 as it failed....a 3 point profit. BUT, the move itself was around 9 points from low to high. So in other words, had you used conventional charting techniques you only ended up capturing 1/3 of the possible points. Buying on strength, selling on weakness, is a problem intraday. Because alot of the moves are going to be just like this one...and will produce results similar to the above. On the other hand, had you been buying the breakout around the 1400 area, this could have easily resulted in losing a couple of points almost immediately....in other words, in a few minutes you lose what it took you an hour to make earlier. See what I'm saying? What's missing here is all of the prior ingredients that could have gone into this...besides just the one minute chart. In other words, we have no "context". We don't know what tick was doing (it was -400 or so), trin (around neutral), A/D line (about even), and key stocks. Other things we don't know is what is the NQ doing? How about the SOX index? Or the BKX? In other words, the market doesn't function just in the context of a one minute chart. It functions within the background of all the other underlying factors. A market makes no move down without giving some reasons first....it's just a question as to whether you see the reasons. And in the absence of reasons what you're looking at is probably just noise. In fact, this particular downmove took back about 50% of the day's range that had been set earlier....bring it back to about what the markets internals were showing...that the market was basically in a neutral sort of position. I think you could have bought that decline at around that 50% area with some justification....-400 ticks, a more or less even A/D line, trin around neutral, a general bullish background. Doing this you end up buying when the one minute chart is looking kind of crappy. Ok, so this puts you in a few points lower than the one minute chart. Now when the one minute chart breaks out and all the scalpers are charging in buying, you're already long....and you're looking for signs that might we a time to sell. Ticks exploded up of course....and then generally started diverging/weakening as the price moved higher. Had you been watching the A/D line you would have noticed that there was really a fairly marginal change here...nothing big going on. So you could have fed your position into the strength. Now here is what this style takes. It takes a little bigger risk threshhold for starters. It takes acting BEFORE you see it on the one minute chart. You have to be watching other stuff, or you can't do this with confidence. And then you have to be willing to sit long enough for your trade to develop. You might have been in this trade for a couple of hours. Some people like Tampa for instance would never be able to sit with a position that long, so he could not make this particular trade. Personally, I didn't make the trade I described above...although I thought about it. So as we made the high there at 885 I was kicking myself. But if you forget EVERYTHING else in this post, remember that the market ALWAYS gives you another opportunity. It's there every day. The key to success in the market is waiting for what you perceive as the right opportunity. A few minutes later I saw my opportunity! LOL. I shorted the thing on that move as it failed and caught a quick move down. I wasn't smart enough to cover there at the low, so I watched as it took back most of my profits. But they smacked it down one more time....and when it failed to keep moving on the downside I covered....not a huge profit but better than a stick in the eye. Now I'm not going to discuss this particular trade....but the trade of the day was the morning trade from the lows. Go back and study that move....see if you can see any reason WHY you might have gotten long, and rode it up to the highs. That was a big move. OldTrader
Oldtrader, The entry friday morning was not difficult. Difficult for me is staying in such a move. As soon as Im above breakeven, I trail with tight stops. One of my projects is to learn how to tailor my (hard) stops much better to the opportunities presented. I much appreciate your response,
I tried to purchase an option through IB and I got "Order Rejected: Potential Pattern Day Trade." Nice to see options are included in this.
Nothing to write home about. I was able to apply my system easily with a lower leveraged instrument. I took a LONG trade on YJ at 8414 and sold at 8420 for a net profit for the day of $12. Trading with these emotions is easy -- I went with the strong trend for an easy scalp. My heart wasn't beating hard at all -- but had it been ES I would have immediately begun to get fidgity (sp?). I am done for the day (yes I know I'm being chicken-shit but I need to turn some screws in my head some more before I venture back into ES -- or more capital). $12 is better than nothing and I'm getting paid to watch the market (less than minimum wage).
Yes -- I am finding out that, in my mind, there are always two little guys on each of my shoulders. One is saying, "The trend is strong -- go with it!" and the other one, with a pitchfork, is saying, "It couldn't possibly go any higher than this! Short it now!" I must learn to listen to the guy with the halo over his head.