Awash's Journal

T-REX,

You're right! Activity is usually dull when there's an FOMC meeting. However, I try not to create a market opinion, nor do I try to predict what will happen intraday. I generally just place trades with the flow of the market with the help of my technical indicators. Having a clear had helps me make quicker decisions and not creating an opinion keeps me from leaning more to the short/long side of the market.

Nevertheless, I'm totally aware of what happens in the futures market after the meeting and, I have a rule of never trading 30 minutes before and after the minutes are released. I'm no longer nieve, so you will never see me place trades with such volatility again.

Remember, there will be plenty of opportunities later in the session to make a profit.

Good luck T-REX!

 

I respect that.

That is a great argument. I can not deny the truth in that statement.

Good luck DUDE.....T-REX

 

So are you short now?

 

T-REX,

We talked about this in prior post. I'm on the sidelines and you know the reason why! I'll place trades per current market direction not based upon the volatility from the FOMC minutes. If a signal isn't generated than I'll end my day going home with nothing. No big deal but I believe there will be opportunities later in the session.

 

Point well taken

see ya tommorow DUDE.

 

I have nothing really positive today about my trading. It seems as if my trades were predominately short when the overall trend was up. I took a trade against the trend for what reason I can’t explain but I know I need to take trades per current market direction.

Trade#1 – [Short 1017.75 9:57 EST & Cover 1019.50 10:17 EST] I had a divergence signal on my 1 –minute chart (%D) but I didn’t have confirmation from my MACD. I took the trade thinking divergence would come but after I looked at it again I realized there was no chance and this was a false signal on my chart. Actually not a false signal a completely wrong signal. Next time I’ll wait for double divergence on both MACD & %D. I need to start confirming my signals on my 3 minute chart too.

Trade#2 – [Short 1019.75 10:32 EST & Cover 1019 10:53 EST] Good divergence signal on my 3-minute chart confirmed with both indicators. I was able to scalp a quick profit with this trade. I covered my trade because the ES started stalling.

Trade#3 – [Short 1024 14:58 EST & Cover 1023.75 15:09 EST] For some reason I wanted to be short and there was some resistance around the 1024 area. However the market wasn’t going to pullback after such a strong move. It never does!!!!!!!!!!!!!!!!! I covered it instantly.

For tomorrow: Today I wasted a good trading day putting on all short positions when the primary trend was up. I’ll work on my overall trade management after entering a position and take trades per current market direction.

 

Another day of doing the wrong thing and making continuous errors. I keep taking the opposite position of the current trend.

Trade#1 – [Long 1025.75 13:25 EST & Exit 1024.75 13:44 EST] [ P/L: - 1 ] Overall bad trade when price was shuffling down of its high of 1029.50. I took a false signal on my 1-minute chart but what made it worst was I stayed in this trade for over fifteen minutes knowing it wasn’t going to develop in my favor.

Trade#2 – [Long 1024.25 14:13 EST & Exit 1024.00 14:43 EST] [ P/L: - 0.25 ] I took a divergence signal on my 3 minute chart but this trade took longer to develop. Another trader recommended I avoid divergence signals coming off a strong move. I guess I wanted to still test a potential reversal back to 1026 but there was too much downside pressure. Price actually reversed but by the time I considered covering it price moved back against me.

For tomorrow: Work on placing good trades!

PS, the post prior to this post is for Tuesday 9-16-2003

 

Hi Awash,

Are you suggesting that you have a time-based stop in addition to your 2 pt stop that you alluded to in your system? In either case, is it a hard stop placed as a working order or is it a mental stop? Also, if you see a divergence still in force even after you were stopped out of your first (or even 2nd) attempt, would you consider getting back in again (on valid signal, obviously)? It seemed that the divergence was still in place after price reached 1022.25 @ 2:27pm EST and turned around from there (looking at it in hindsight of course).

Kermit

 

Kermit,

Awhile back Porgie offered some advice about my tight stops and I took it. My stops are now placed no more than 4 points against my initial position. I'm flexible depending on the trade.

My first trade I covered after I realized I took a false signal off my 1 minute chart and didn't wait for confirmation on my 3-minute chart.

As to divergence still on my chart at 2:27 EST, I was thinking about adding another contract around 1022.50 because of the massive divergence on both my indicators. At first glance you probably would think that should be the obvious thing to do considering the valid signal.

But this week I learned a lot more about my divergence signals; knowing when to take them especially after significant moves. Divergence signals have some setbacks and major trends are one of them. (See today's trades). I'm learning to incorporate a market breadth index along side my normal setups to get a feel of the overall market.

Currently, I can't speak intelligently about these indices because I don't have a lot of general knowledge concerning them but as I learn more I'll let you know. Thanks for the input!

 

This is my third day in a row of doing the wrong thing and making continuous errors. I’m sort of embarrassed to mention most of my positions were against the current trend.

Trade#1 – [Short 1029.50 10:05 EST & Cover 1030.50 10:26 EST] [ P/L: - 1 ] I decided to go short to test yesterday’s resistance level thinking the emini wouldn’t make new highs. I covered this position after not much follow through.

Trade#2 – [Short 1031.50 10:40 EST & Cover 1031.25 10:48 EST] [ P/L: + 0.25 ] I took a divergence signal on my 3 minute and off a new resistance level. This trade didn’t follow through at all so I quickly covered it. This trade is an example of why I need another indicator to gauge the overall market strength because there was no chance of a pullback. I can’t solely rely on divergence in situations like this.

Trade#3 – [Short 1031.25 11:11 EST & Cover 1033.50 11:24 EST] [ P/L: - 2.25 ] Price continuously lingered around my 1032 resistance level for over a half hour. At that point I concluded the market was getting weak and was eventually going to turn to the downside. This was a complete gamble and I ate it on this trade. FUDGE!!!!

For next week:
This weekend I’ll do my homework on a few Market breadth indices to incorporate into my trading scheme

Today I learned a lot more about placing trades against the trend and I’m completely frustrated and tired of taking these positions. I’m almost embarrassed because I know trades of this sort will never work and I know I just need to stop taking them. After three days in a row I can say it’ll be to my detriment if I continue down this path of stupidity. For next week, I’ll focus on taking trades with the trend instead of against it. One way I can do this is to completely avoid reversal signals.