MacAttack

I called several trades in real-time over in CL Redux between 11:30 and 13:00 central time demonstrating my scalping technique during the least desirable time of day for me. I was expecting an upside break for a test of the high, but I didn't "marry" my expectations and when the 5-min 20EMA flattened (sign of chop) I probably should've scalped for smaller targets instead of letting the trades reverse to b/e, but I got one full target and no damage on the scratched trades.

 

I know I saw you calling them but you are a GOD of oil trading. you are experienced enough to know how to get out without losing 12 to 15 ticks a pop. I had the same problem in equities, now that i have cut the quantity of trades down, I am much more profitable.

Maybe I am completely off base here, but I feel Mac is overtrading, and this is causing days like today where -150 ticks happens, especially when a trend has not been established yet.

Mac---I hope you dont take offense to me analyzing your trades...

 

Yes, I see a few issues including over trading. I use the 5-min chart as my core and only reference the 1-min chart for precision entries that fit my max stop parameters.

Mac, your trade entries seem odd and inconsistent. I can't discern a pattern from them. Often it looks like you're chasing price and other times it looks like you're trying to anticipate a level will hold against the prevailing trend.

If you used the tactic I described yesterday (1-min pullback entries once a key level breaks), the early part of the session produced a good day's pay.

Leading into the pit open there's a ever-so-slightly tilting upward channel and price was coming up off the LTL. Since the previous high was not too far above the high before it (in pre-market), the expected R level would be a few ticks above it. I almost faded that level and chickened out. Sure enough it was a weak break and price pulled back so quickly I had no interest in buying, and then in a few minutes the signal was short to the channel low. I took no trades until price broke the channel downside and pulled back to test the breakout. Price pulled back to the 1-min 20EMA and as it turned back down I began trading to the short side. At that point there was absolutely no reason to trade to the long side unless you're a highly experienced CL micro-scalper and I've only met one person on ET who fits that description.

 

GOD is our higher power; I believe you meant to say I'm the Queen of Price Action

 

I will go with Queen of Price action, that is perfect .

One thing you said that sticks in my head and is right on the money with CL, trading with the trend consistently gives you a 15-20 tick pop.

I use alot of price action set ups trading equities, now I'm starting to wonder if my efforts are more beneficial in the futures world.

 

1st: Long (-0.17) This looks too obvious for a short. It'll probably reverse to run stops. Just get in…….now !
2nd: Long (-0.12) I had 2 60-min levels drawn. It broke the 1st easily. This 2nd level should hold. Was up 15 ticks. Saw it stalling. Thought it would roll over, but I held on because I thought if I exit it'll just be a shakeout.
3rd: Short (-0.14) Looks too obvious for a long with that big volume climax, right at yesterday's low. It'll probably continue down for another 20 ticks.
4th: Short (-0.12) Just desperate on this one I guess. Don't remember.
5th: Short (-0.13) Price made it to a pivot high. It'll probably react to that & go down.
6th: Short (0.07) Short climax bar at resistance area. Was up 34 ticks, but was convinced it would take out LOD by a few ticks. Since target wasn't hit I had no idea when to exit.
7th: Short (-0.15) I should be able to get 10 ticks or so since no clear trend yet. Will probably chop around.
8th: Short (-0.14) Ok, back at resistance. I'm sure it'll bounce down now.
9th: Short (-0.14) Price broke the uptrend line & down looked like the right direction. I saw support on the chart, but I figured it would break right thru that.
10th: Long (-0.12) I'm buying this way too high, but price should break the swing high at 95.20. Don't want to miss it.
11th: Short (-0.15) Ok, price is definitely heading down now. Need to enter immediately or miss out.
12th Long (-0.07) Ok, wrong about down, it's definitely going to break that pivot high at 95.20 this time; I better shoot for 10 extra ticks since I'm so far behind.
13th Long (-0.15) Trend is up if you look at the day as a whole. It just broke a swing low, but that was just a shakeout/bear trap.
14th Short (-0.08) Price is definitely going down now. I'll just short this retracment.
15th Long (-0.16) Finally….here it comes…..a big breakout. It'll probably run up to yesterday's high.
16th Short (0.08) Price has turned down. Just get in.

SIM TRADING TOTAL
-169 Ticks (minus commissions)
2 Winners
14 Losers

NOTES
Here's the true reasons I took the trades today. Might as well make it as honest as possible.
Plus maybe a few people can find some humor in it.

 

The lower you go in TF the harder it is to consistently trade profitable and you are analyzing/trading one of the fastest out there, something to consider.

Earn the privilege of trading the fast TFs by proving your worth in the slower ones.

 

If 90% of speculators lose, that leaves 10% winners. Since most winning specs fly under the radar, they care less about ranking among their peers.

How come the 90% are always claiming the 10% are all wet and the 10% are trying to lend a hand to the 90%?

Winners rejoice in the fruits on their labor while the others spread sour grapes.

 

Seriously, the ET-ers who've demonstrated to me that they know what they're doing have all been very helpful

 

As I mentioned in my previous detailed post here, I found that I needed a very specific framework to work with. I chose the 5-min chart because it’s easy to see intraday S/R levels, a lot of “intraday eyes” are watching the levels there, and my technical price action mentors (Bighog and Al Brooks) used the 5-min chart.

I noticed that if price is above a rising 5-min 20EMA it makes sense to think long because the bulls got your back; if below a falling 5-min 20EMA, think short because the bears got your back. “Got your back” is important in trading because when you run with the herd you’re far less likely to be trampled to death than if you try to run against it. The market participants who move price have plenty of ammunition (other people's money) and are willing to use quite a bit of it to both defend their position and attract additional market participants to join them.

Around a flat 5-min 20EMA, there’s indecision. This is where I encounter chop, range, “barb wire”, and false breakouts both directions. In this environment, either I wait for clarity, look for entries in the direction of the previous trend, or fade the range extremes if the price action up to that point is fairly directionless. This simple framework alone was the foundation for a core trading plan that, when thoroughly tested, produced consistent profitability on a daily basis if every valid trade were taken and managed properly.

Mac, I believe you need this kind of structure because at the hard right edge you’re trading what you think, not what you see:

Your honest analysis of what you were thinking reveals nothing unusual for most traders. These are the demons that lurk in our heads and cause us to violate plans and common sense:

> Fear of missing out

> Chasing price

> Entering without waiting for a valid signal because you think you know what price will do and you want to get in at a “better” price

> Letting previous trades or P/L influence management of a current trade

> Revenge trading because you’re running on pure emotion and in no state of mind to make patient, rational decisions

That last one is extremely dangerous as anyone who’s taken a massive loss or blown an account can tell you. It’s pure gambling on tilt.

If you want to fix these problems, you need absolute discipline. You need military-style training because day trading in real time requires the ability to take hits and continue with the mission (follow the battle plan no matter what). When you have a top notch battle plan and have trained yourself to follow it mindlessly (trading without thinking), the desired outcome (consistent profitability) will be the natural result.

Here are my thought processes/trades yesterday during the time window of your early trades (PST time):

1) I see a well-defined downtrend with a 60-min LTL just below 94.00 and round numbers act as support initially more often than not. I’m already short the bar before your long and I take profit at the quartile (.25) because that’s the low of Thursday’s huge 60-min bull bar. I immediately focus on getting short again according to the rules of my plan because I still see a well-defined downtrend with ample airspace below.

2) While you’re long*, I see the with-trend continuation setup in play by the close of your 6:58 bar and during the 7:00 bar I’m short again for a test near the round number and I lock in my minimum 20-tick profit off that level.

* There’s nothing wrong with anticipating a bounce off that .25 level if your trading plan includes counter-trend trades where you anticipate certain levels will hold and you take very small losses if they fail.

3, 4, 5, 6) While you’re shorting near a key support level (you chased price), I’m waiting for a pullback to get short again because the trend is my friend until it says it doesn’t want to play with me anymore. The 7:03 bar was quite strong for a 1-min bar and since it came up off a key support zone and took price more than halfway to the 1-min 20EMA, I wait for a test of the 1-min 20EMA so I can place a technically survivable stop. I get short during the 7:10 bar and I’m stopped out on a break of 94.36.

This signals that a deeper pullback is likely, possibly to the 5-min 20EMA, so I watch the price action for a possible counter-trend trade to take advantage of such a pullback. I take a second entry long @ 94.37 and am able to exit break even following a short signal before my stop loss is hit.

The short signal is only a signal; my plan calls for caution if a 2-leg pullback to the 5-min 20EMA is possible (this is a contextual filter for me), so I wait for a second entry opportunity and end up shorting 94.28 at 7:30. This trade is scratched break even when a break of the 7:30 5-min bar high signals a possible 2-leg pullback. Because I just scratched the short, I’m not quick enough to take the second entry short opportunity during the 7:40 bar, but that would’ve ended up a scratch when price ran +10 and turned back up without testing the LOD.

Nothing per my plan gets me long for the deeper pullback to the 5-min 20EMA after this and by the close of 8:05 (5-min) bar, I’m only considering long entries per the rules of my plan.

Notice how I'm waiting patiently for price to act in ways that fit the criteria of my trading plan. I know that my trading plan produces net profits over time if I follow it and I know (from hard experience) if I cheat in any way the net outcome is negative despite occasional profitable trades.

Mac, do you have a trading plan that you could give to another trader who could produce consistent profits over time if s/he followed it? If not, that's the critical first step.