Friday, March 28, 2008 Almost didn't trade at all today as too busy with other things, but saw an opportunity for a short when I open up TradeStation to check on the market (screenshot attached): 1046 Short 2 ES 1330.75 at 510T resistance. Initially I set a profit target at 1328.75, which isn't according to my trading plan of waiting to get 5 points in my favor before paring, but there was a previous low set at 1327.75 (+2 pts) and I figured it would bounce and possibly reverse there. I ended up raising my profit target at 1329.75 (only +1 point) since price action was looking jittery. It hit 1329.75 at 10:52, so I moved my stop to entry on the remaining contract. Stop was hit at 10:52, for a total of +1 ES points. Note that 10:57 my original profit target of 1328.75 was hit and exceeded, the low being 1327.50.... I should have left it alone and doubled my profit. +1 ES for the day.
Tuesday, April 1, 2008 Made a handful of trades before 11am, when I called it quits. Some good trades, but a couple of unusual errors caused me to end trading early. One was a fill at market that should have been a limit fill, all I did was change the OSO order quantity from 2 to 1. I review the messages and it looks like it got sent as a market order after making the change. I'm not sure how this happened. The other thing was a weird TradeStation error, it didn't crash but I decided to shut down nonetheless. Still made 5+ points on the ES this morning. A chart is attached. 0930 Long 1 ES 1338.75 @ 510T support. Entering a trade right at market open always makes me nervous, as big swings can easily occur. So I only entered with 1 contract. I used a 2 point trailing stop after after the price had moved up a couple points, with worst case being +.25 point. Problem with using trailing stop is that often the stop point ends up being right at support. In this case I got out at 1341.50. +2.75 1006 Short 1 ES 1347 at red bias line on PBF squeeze indicator. The ES at this time were about +13 above the 5 min 18MA support, so I was looknig for a pullback. There was a small dip of a few points, but this was generally counter-trend and my fill was a bit lower than what I would have liked. So I was stopped out at 1348. -1 point. 1019 Short 2 ES 1346.50 @ 510T resistance. The 510T 18MA resistance line had a slight downtrend, making this trade legit per my trading plan -- but the overall trend was up on both the 510T 18MA and the 5 min 18MA. Stopped out at 1347.50 at10:20am. -1 point. 1022 Long 2 ES 1346.25 @ 510 support. Note that at this time the 510T 18MA was still downtrending. The fill was good (actually a tick below support), which allowed me make a small profit. I pared 1 contract at 1347 for a +0.75 gain, and moved my stop to 1346, which was hit for a -0.25 loss. +0.5 on the trade, though not a good trade. 1037 Long 2 ES 1348.25 @ 510 support. This is in effect a continuation of the last trade at 10:22. This is a good trade per my strategy, a pullback to a rising 510T 18MA support line. Now for some reason I got nervous, probably because most of my trades were small losses or wins, and I set a profit target for 1 contract at 1349.25, which it hit for a profit of 1. Then I was change my remaining stop-loss to 1 contract from 2 and move to entry. At some point, that stop loss became a market order, and I was stopped out right at support at 1348.25. I'm still not sure what happened, as I could have stayed in the trade. +1.25 1046 Long 1 ES 1349.75 @ pullback to 510T support. This is a continuation of the 10:37 trade, trying to get back in a long position after somehow getting stopped out on my last trade. I got in right at support, with a great fill at 1349.75. I was only trading one contract due to this being the third "wave" up the trendline, so rather than getting stopped out for breakeven I just set a profit target at 1353.50 for +3.75. It hit profit target at 10:57am. The high on this move ended up being 1354.75, but the 510T 18MA support was eventually broken at 11:12am at a tick or two less than my exit price so ended up being a good move. +3.75 +5.625 ES points for the day. This number represent the average contract gain/loss for each trade, and then those numbers added together.
Just found your post and it's great. You're doing very good job, very discipline and good method. I'm new for day trading as only 8 months. I will keep following your post. It's might be stupid, but can you explain for me what ES is? How do you choose your position sizing? Do you trade with same size every time? If you can help me with those questions, thanks ahead.
Thanks very much for your comments -- trading discipline has always been my weak point, but I seem to be doing better with discipline lately. The ES are the S&P 500 emini futures, and are electronically traded. It basically tracks the S&P 500 Index throughout the day. Although my trading strategy calls for the same size trades, I do not always do so. For example, my first trade of the day was right at 9:30am EST (stock market open). So I traded only 1 contract as there can be wild swings as overnight orders are filled. Also, if I feel a trade may go in my favor but the setup isn't ideal I will enter with a reduced contract size. I like to trade with 2 or more contracts as it lets me pare my trade, taking some of the profit as the price moves in my favor but still leaving some in so I don't have to try to re-enter later on. Right now I am trading with one or two contracts only. In case you missed it in of of my earlier posts, here is my trading strategy: Long trades - When ES price is well below (>6 points below) the 5 minute chart's 18MA resistance. - or - - When ES price is at 5 minute chart 18MA support. Long entry trigger: Green bias line on the PBF Squeeze indicator (wait for pullback in case of large candle) - or - Pullback to 510 tick chart 18MA support. Short trades - When ES price is well above (>6 points above) the 5 minute chart's 18MA support. - or - - When ES price is at 5 minute chart 18MA resistance. Short entry trigger: Red bias line on the PBF Squeeze indicator (wait for pullback in case of large candle) - or - Pullback to 510 tick chart 18MA resistance. Lately I am using pullbacks to the 510 tick chart support/resistance almost exclusively, not using the PBF squeeze indicator as much. Hope this answers your questions, and good luck with your trading.
Wednesday, April 2, 2008 I had a frustrating trading session, even though there was a partial recovery at the end. It was a sad tale of missed entries, being stopped out repeatedly, watching a trend run away from me and one partial victory. At 0930 market open, the ES were about 5 points above the uptrending 5 min 18MA. The 510T 18MA was also uptrending, so I was looking for long entries only at this point. There were a couple of short entry points, at 09:38 and 09:44, but these were above a strongly uptrending 5min 18MA so I didn't take them. 1007 Long 1 ES 1368 @ 510T 18MA cross and pullback on green PBF indicator bias line. Note also stochastic divergence (yellow lines in the attached chart) on the 0955/1001 candles, indicating a possible reversal. My plan was to scale in by adding another contract after a little run up and pullback. I moved my original stop at 1367 up to 1368 (entry) too early, however, and got stopped out at 10:10 at 1368 for breakeven. +0. 1013 Long 1 ES 1368.25 @ 510T support. This is a continuation of the last trade, trying to get in at a decent price. But the stop was again hit at 1367.25 (the low for this move). Note the stop from the 10:07 trade (1367) would not have been hit. The trend ran up without me. -1 point. 1043 Long 1 ES 1376.25 @ 510T support. Stop hit at 1375.25. -1. 1048 Long 1 ES 1377 @ 133T 18MA cross and green bias line. This is not a legit trade according to my trading plan, just trying to find an indicator to get in. I was stopped out at 1376. -1. 1051 Long 1 ES 1377.75 @ green bias line and pullback on 510T chart. Stop hit again at 1376.75. -1 point. 1054 Long 2 ES at 1377 @ 510T support. I was able to move my stop up and a little past entry and pare out 1 contract at a profit target of 1379.50 (+2.5 pts). Trailing stop was hit at 1377.50 for +0.50 on the remaining contract. Total for today is -1 point on the ES.
I forgot to mention in my last post a couple of things: 1) The chart I posted shows the stochastic indicator. Normally I don't keep this on my chart as the PBF Squeeze indicator shows this also. But since most folks haven't purchased this indicator I removed the volume and added stochastics for display purposes. My normal charts show price (candles), PBF Squeeze indicator, and volume. 2) I figured out why changing my quantity in the Tradestation OSO order caused the order to be executed at market. When I enter an order I always use an OSO and set a stop-loss at -1 point below parent order (or +1 if short). As the price moves in my favor I will change the order and move the stop also. However changing the order quantity for the stop-loss (say after paring a contract) causes the stop-loss price to be reset to -1 below market - *current market price*. So in effect by changing the OSO order quantity yesterday I also moved up my stop to -1 below the current market price at the time I changed the order, which turned out to be too tight. Something to watch for in the future.
JTK.... this is what I've learned from looking at your charts/trades. 1. Most of your profitable trades occur when you enter after a minimum of 2 counter trend candles have completed. 2. Fewer losing trades occur when you respect the relationship of the Cyan to the Magenta moving averages. ie: only entering long when cyan is above, only entering short when below. 3. Your stopsloss is unrealistically tight. I suggest you go over all the instances in which you were stopped out of a trade that otherwise would have been profitable and determine what stoploss setting would have kept you in those trades. If you have confidance in your entry decision, you need to demonstrate that in the stop you set. If you are not confidant in the entry then you should not make the trade. I assure you the combination of un-necessary losses from a 1 point stop loss added to the profits you then denied yourself are greater than any loss you would incur with a stop of @2.5 pts. At least you need to allow the entry bar to complete then set a stop below it's low. If you follow the above you should see a dramatic reduction in the number of losing trades and as a consequance get your account moving in the right direction. Best of luck, Pivotas