It wasn't really a overnite setup. It was more a late day setup. From yesterdays post I pointed to the divergence starting at 3pm central time. I didn't like it because the equity market was closed. I didn't have any way of knowing if the move down on light volume was caused by some floor traders or institutions getting ready to unload in after hours. Since the first bar of today didn't have a big gap up it looked like the move down was confirmed. Sorry to have put my subjective thoughts in this thread. I really want to just demonstrate the value of divergence trading for others that bought the wisdom of "don't try to catch a knife" and "bottom fishing is for suckers". I've only owned mutual funds before trading and I only feel comfortable buying low and I've learned to feel comfortable selling high. The risk/reward overall for me has been better than 3:1. The win rate has been about 70% and the win versus loss rate on trades has been about 1.4 to 1. When the two are combined, it comes up to better than 3:1 total profit to total losses. Glad you enjoy the journal so far. If there's anything I can do to make it better, please let me know.
For the purposes of this journal there are only two exits. the first is the stop loss which was set at 957.00. The other was if the upper band of the Keltner Channel was touched. Once a trade is entered those are the only two ways to exit.
1. ADX crosses above 30 - 2:50 bar on 8/5 2. Divergence starts at 3:00 bar New lows are set until the first 5 min. of 8/6 3. Keltner width is 10.83 on 3:15 bar - stop loss is 3.75 on this trade. 4. Buy near open of 8:40 bar. Entry was 960.75 vs open on SP of 960.80. stop loss 957.00 5. Trade exited when upper Keltner Channel touched 968.50 at 11:10am bar. Entry long 960.75 Exit long 968.50 Profit(loss) +7.75 Risk 3.75 Risk/reward this trade about 2.0 Cumm. trades sinces 8/1 # wins 4 # loss 1 Profit of winners +22.25 Loss of losers -3.0
Excellent journal. Simple, clear, crisp, straightforward, no touchy-feely, no fuzzy-wuzzy.... unlike most journals and methodologies at ET. Nice charts also, really fine job all around.
I don't know how it has done in the long run. I tried to test it in TS2000i, but I can't get it to recognize divergence properly. My personal results are understated because I work from 6pm - 2am and sometimes I'm too tired to get out of bed. Today I got up 20 min. before the open. I need to work on my discipline. Maybe this thread will help. My only losing month was April. I lost about 40 points during that month. Other than that, it's been profitable. Most months I have only traded 1/2 - 2/3 of the time. Lets see how the basic method does by itself. Wait a few months and see how it does.
I'm wondering why I got a different range on the Keltner for last bar yesterday. I got 9.22; are my settings correct?
Your setup is identical to mine. I went back and double checked. The range was 9.83. Keltner Upper of 972.01 and Lower of 962.84. I screwed up and had a little wider stop than I should've. Any other difference may be the quote vendor. I'm using Esignal and remember this is for the SPU3 contract...not the ESU3 contract. I don't think it matters much. It's just a estimate of the current market volatility. One point either way in the range is only .33 difference in estimating the stop loss.