I will keep an eye on your journal and your progress. I like your Method #3 too, might comment more on it tomorrow, as I have just realized that it is close to my thinking, but in a somewhat different way. However, the idea is similar. Have a good night...
The futures opened today above the R1 level of 914.5. I'm usually hesitant to enter a position during the first 10 minutes of the trading session, but there was immediate selling pressure and I sold short as ES was dropping down through the 914.5 level. My target was the 904.5 pivot point. Once I was ahead by 3 points, I moved my stop to breakeven. When I was 6 points up I moved my stop to 912.5. Unfortunately, there was a mild reversal to the upside and I was stopped out. Perhaps I was too aggressive with my trailing stop, as ES eventually traded down to my 904.5 target and I would not have been stopped out if I had simply kept my stop at BE. 9:36 EST SOLD @ 914.5 10:23 EST BOT @ 912.5 +2 pts At around 10:45, ES dropped below the opening 30-min range. However, I did not enter a short position here because I felt that the trading range was too wide as compared to recent narrow trading range in ES. Finally, today's 1:30 pivot price was 908.25. Price meandered around the pivot until about 2:35 when there was finally a discernable trend to the downside. However, I did not short here either because we were very close to the 904.5 pivot area again, which had acted as a strong support area earlier in the day. Today I felt a little disappointed with myself because I only took 2 points on a position which could have easily been a 10-pointer plus. But that's the way it turns out sometimes. Not a big deal. It's always a good day when your P&L is positive!! Tomorrow, I may attempt a pre-market momentum play after the 8:30 economic numbers come out, and then it will be business as usual during RTH. Daily Summary: 1 RT +2 pts
Trading breakouts when trading is this lethargic is tough since there's no little velocity. You almost have to play the reversals. Trick is to differentiate between reversals and chop. --Db
Yes, and what a trick it IS!! Most of the time it's hard to tell the difference. db, do you have any techniques for differentiating between reversals and chop?
I don't know that I'd call them "techniques". Rather looking for something that will make holders skittish, whether long or short. If, for example, price is just meandering aimlessly around, there is no point! at which one might feel as though he's missing something. Whereas if price were to take off and wake everybody up, then pull back a bit, traders who thought that something might be afoot and that they were missing out would more likely jump in with at least a tight stop just on the offchance that something might actually be going on. Therefore, you most likely will want to avoid overlapping bars. You want to see movement in one direction or another. Or both. such as with Ms and Ws. Today, for example, there was a clear M or double top. At least in the NQ. And if one had entered below the midpoint of the M, he would have made 5-8 points, depending on his exit plan. Or he could have taken an earlier entry following the same concept of rattling people and scaring them into a sell. Or a short. This often occurs - in the case of a long - when price drops below the last reaction low. In this case, the LRL on the NQ was at 1240 on the 5m. If the 1345 move up had not been a second attempt, they might just have held. But since it was the second, they were on alert. And when price fell below their entry price, they decided to bail. So a stop placed just below that LRL would have netted up to 15 pts. Another thing to look for is a very tight and lengthy range, such as occurred in the NQ on 11/15. This had an upside bias anyway, but price could just as easily have fallen out of the bottom as broken out of the top, so entering early would not have been smart. And there was plenty of time after the breakout for price to accomplish something, whereas these sometimes break out so late that time runs out. Trend, of course, is defined by higher highs and higher lows, or lower highs and lower lows. If you don't have either, you've got chop. You've also got a lot of overlapping bars. And you'll probably wind up with a coil, such as we had most of the morning. So if you happen to be nodding off and you see what looks like a mixture of higher highs and lower lows or vice-versa and it's hard to tell whether there's a trend at all, look to see if there are a lot of overlapping bars. They're an early indication of trendlessness. --Db
Don't blame yourself for this, sometimes you win, sometimes you lose, sometimes you break even. I employ the same strategy to trailing stops, after 6 pts in my favor, my stop-loss goes to +2. Correct, but you may want to check out my last posts in the thread 'The importance of simplicity' to see what else you can do in a case like that. Well, yes, but TRIN was steadily rising and TICK hit the upper Bollinger band on 5 min chart and did not recover from that. Moreover, TRIN was rising along with TICK which is not a very stable situation. It just so happened that one of my mechanical systems gave me an entry signal to go short at 904.5 about the same time you were contemplating your entry and two other of my systems were saying to go short too. One in fact had already been short from 907.5, and the other's entry kicked in at 902.5. I will write more about it in a thread 'Should you trust your system?' (to be published soon). I will have more to add to this method later when my time permits, as I realized just yesterday that I had similar ideas, but in a broader context which actually helps understand why 1:30 is such an important point. You are doing better than many a trader frequenting this board.
Db & wally, thanks for the input!! I've never tried applying BBs to the TICK. I'd love to hear more about how you use this indicator with TICK. I also find it very interesting that you apply multiple mechanical systems to the same instrument (ES). Looking forward to "Should you trust your system?" Looking forward to hearing your thoughts on the importance of 1:30 as well!! Good night.
I will talk more about it, thinking about a web page to share my thoughts about these things so that may take some time, but will happen sooner or later. I promise. The thread "Should you trust your system?" will be delayed by hopefully only a day. Too busy and too tired right now, almost a midnight... Good night too, will keep coming back to your journal.
Thanks for the encouragement!! I certainly will continue. 11:00 EST Update Well, I got up really early this morning (5:10 Pacific time - I live on the west coast) to possibly enter a quick momentum scalp after the CPI and trade balance numbers came out at 8:30 EST. The futures barely wrinkled, so I took no action. At 9:34 EST I bought at the S1 level of 893. It was a textbook reversal at that price to the tick! I was hoping to ride this to the pivot at the 904-905 area. Unfortunately, I did not like the way the internals were shaping up. TICK quickly moved up to a relatively high reading of +779 and just as quickly started to plummet... and at the same time TRIN was on the rise. As a result, I bailed out at 896 for a 3-pt gain at 9:48 EST. The market is really choppy so far. I'm just kind of standing aside for the time being until/if the choppiness develops into some sort of a trend. Part of my trading style is to stay out when things are choppy. In fact, it is not uncommon for me to take only one or two trades a day...or even no trades at all. I find that this kind of discipline saves me from a lot of whipsaw sorrow!!