I thought more about what you said and the problem is entirely in my head. Attached is today's five-min ES chart. The red arrow is where I sold 10 contracts. I was looking to get out at 1134.50. As you can see, it hit settlement (1136.50) and bounced which is expected. It then came back down where two consecutive bars closed right at settlment. But then the next bar broke through and reversed! Now this is a screaming signal to get out and even go long. But I refused. I told myself these things: 1) There's no way we're going to have a five point range. 2) We've had eight positive days in a row and 1134.50 isn't far-fetched. It's still enough to finish green on the day. 3) The 1138 area is key on a large timeframe, surely we're due for a shallow pullback. I didn't react with a blank mind and finished red on the day. Other trades followed the same pattern.
I have the same issue, had a few trades with 1 or 1.5 pt paper profit turning into losers. Well we trade on the assumption that ES will do at least 10 points range, and the odd is with us that most days it does that. Granted since March it sucks, big time. If the average range really settle around here, like 7 or 8 points, certainly need to revisit profit taking strategy.
b.t.w today is really one of those days that you can just blame the market I don't know if this is even an ES record in its history.
Hey, please let me know when you can predict the day in advance Have you gone back and simulated using your actual trades on the chart and seen the result of other management strategies? For example, go back a couple of weeks and see what would have happened if you peel 4 cars at 1 point move to breakeven stop, 3 more at 2 points, and hold the rest for your "far target" or breakeven. You can game lots of scenarios, and it's a real eye-opener. What % of the time do you hit a far target (say +4)? If it's 40% or more, you probably don't have a confidence problem. If, like me, the +4 trades are less than 40%, then your price reading edge doesn't warrent a +4 "hold or bust" consistently. What % of the time do you hit a +2? A +1? This gives you an overview of your price reading edge, and can inform your management/target strategy. Just some thoughts.
Let me get this straight: you can pick good entries at key levels, both on a smaller and bigger timeframe. You also can let profits run and cut losers short. The only problem you have is to deal with days like today because they won't give you your desired 4-5 ES pts? If that is the only issue you have, I think it's fairly easy to resolve. You should start studying volatility at a deeper level. Did you notice that Friday was a volatility expansion uptrend day? It's very unlikely to get back-to-back trend days as well as back-to-back wide-range days. I had 4 trades in - all longs - today and 3 of them were stopped out at BE because I too expected a little follow thru. I decided to take profits on my 4th long because I finally caught up with the market. I think the most difficult part is the opening range between 9.30am and 11.00am. That's the time that usually sets the tone for the day, and that's the time when I try to let winners run because there is more institutional involvement. However, if I see letting winners run is not working, I either quit for the day or change my plan and take quick profits. No other choice. In addition, as another poster outlined, the Nasdaq has been going up for 9 consecutive sessions, which could be near an all-time record.
I'm thinking of Mark Douglas' 20-trade exercise (Trading in the Zone). You trade 3 lots of whatever, and as soon as the trade gives you something, take off 1/3 to cover your basic expenses. Now you've reduced your potential loss even if stopped out. So you're trading 10, take off a few when you're given a couple points. I mean this is a no-news day and tomorrow is a no news day and so there's nothing really driving price one way or the other today. What a chop fest. I'll confess that in a damn sim account with not even real money on the line, today I covered the 2nd half of a CL short @ 81.88, quite happy to take $230 simbucks on the trade. Price then dropped another 78 ticks. I left $780 or some portion thereof on the table for NO REASON. However, to my credit I did take $100 pretty quick so even if my initial stop was then hit, it wouldn't have become a loser. Your problem was also my main problem when I tried trading ES. I had so many times when I was stopped out near break even and then the trade moved so nicely in my favor without me, that I then allowed a winner to become a loser. Every trade is brand new, and the most difficult things to do are throw away the residue of the previous trades, and avoid forming a strong opinion about what price will or won't do. If some big pharma co could just come up with a pill to cure these problems, I'd buy a helluva lot of their stock. "Ask your doctor about Restless Trade Syndrome" :eek:
it's a lot easier to form or hold or reject an opinion if you are watching several correlating markets and the internals
First, I'd like to thank everyone who read and replied with their thoughts. It's much appreciated. Second, the volatility aspect is something I'm investigating. I recently finished reading the Sinclair book on Volatility Trading for the second time. Although his book focuses on swing-trading options, he does write about using intraday data. I've read cryptic notes on the internet that it may be possible to forecast the next session's intraday volatility using 5-min data (anything less and microstructure can become an issue). I'm downloading historical data from eSignal and will use Python/R to test a few of the estimators in the book. It took me two years to come to grips with basic support and resistance, and volatility feels like a brand new aspect of the game. Yes, there were no key economic releases today and only a medium-impact release tomorrow. This is something I chose to ignore because I "don't pay attention to news". And there are still a bunch of dumb things that I do. NoDoji's comment on one trade influening the next is a major problem. Another problem is trading the PNL. Lescor thinks of each trade as just another entry in the ledger. For me, each trade seems to become an emotional investment that defines my self-worth. I don't know. I'll look into volatility and try to detach myself more. Maybe cut down the size and trade without looking at PNL or my account all the way to the end of March. Prove that being methodical pays off in the way that matters. Thanks again.