Matcha's Dow E-mini Journal

NoDoji.
Al mentioned multiple times in his book about the entry strategy. I skip all of them..I thought those aren't important to know for me.
The way I enter my trade is, see the set up, caculate the risk I want to take, if it fits, then enter one tick above/below the reversal trend bars.... I got to read his entry strategies thoroughly again. Do you by any chance have a chart showing me where your entry is ? Or any recently entry and exit you made on CL? if possible? I am a visualized person
BTW, I am reading your "NoDoji's Journal" from beginning all over again. I wish you had more charts there ! hee....

 

Matcha

This is what I'm talking about, 20 min (4 bars) after a 40pt spike you jump in the top half of the bar with a long and yesterday prices chugged along for almost an hour covering almost 90 pts and you did nothing. Both times you entered longs in the top % of the move. Maybe prices will continue up and make you rich quick but I always figure something stopped the rally, and if I don't know what it was (YH, 3DH 5o%fib) how do I know the resistance was penetrated?

NOW, IF you entered a target at the high (-a tick or two or 10500) both trades would probably would've worked. Would you be rich? No, but you could have taken quick profits.

The last trade, If I miss an entry and get in later at a higher level I think of my missed entry's stop position as my stop. If it is more than I care to risk I'll pass on the trade. However, If I'm still willing to entry at higher prices then the price action must be doing what I anticipated. Staying in a winner is the name of the game. I can't see the tail on that red bar but if is above the MA line that trade would have also survived. We as traders must learn to embrace uncertainty :eek:

 

Hi Matcha, doing charts is tedious for me, so I rarely annotate charts any more, but I will tell you the exact entries on CL where I used stops to enter trades today. I did not trade through CL's choppy range with wide 5-min bars, though 1-min scalpers I'm sure had a field day with it.

I traded CLV0 today, still the Oct contract, but will switch over to Nov tomorrow.

There was a low of the day @ 74.77 put in at the NYMEX open 9:00am ET, and later on when price broke down through the bottom of the wide choppy range, I wasn't positioned and I missed the move, so I decided to play a breakout of the low. I placed a sell stop @ 74.77 figuring the momentum would carry price at least to yesterday's low, giving me 10 ticks of room to get out if it failed. At 10:40:32am ET the stop was triggered, the b/o failed and I exited less than a minute later b/e.

The next trade that I entered using a stop was triggered at 11:26:30am ET, sell stop placed @ 74.78, 1 tick below the 11:15am doji bar low. A doji is indecision and usually the direction it breaks is the direction price will go (most often with-trend). I was targeting a break of the LOD (now 74.68) and a 20-tick min target. Price broke out to 74.60 (2 ticks from target) and pulled back to stop me out b/e.

My last trade today that used a stop for entry was triggered at 12:22:03pm ET, sell stop placed @ 74.53, 1 tick below the 12:15pm pullback bar low, targeting a break of the LOD (now 74.46). This one broke hard and I was about to move my stop to lock in 20 tick min profit and it fell even harder before I had a chance to. I covered as soon as price stalled and pivoted off a level very close to the round number 74.00.

The nice thing about using stops to enter trades at breakout points (breakouts of highs/lows, whether S/R or price bar pivots) is that all the stops trigger at market and that will push price at least far enough your way to exit b/e or for a small loss if the breakout fails.

 

Hi Matcha,

I like using stop orders for almost all of my entries. The stop order "sweeps" me into the trade in my intended direction. I think both Dr. Al Brooks and Dr. A. Elders are advocates of using this type of orders. I find this easier to trade than using limit orders as I sometimes get frustrated when my limit is not hit and miss a trade.

In Dr. Al Brooks' book (page 396), it mentioned that "ALL of his entries are on STOPS, he considers himself a trend trader because he gets swept into a trade by the market going in the direction he needs it to go to make a profit." On page 11, he also mentioned about using STOPs for entries.

In Dr. Elder's book - Trading for a Living, he used the STOP order entries as a part of his Triple Screen Trading System. (page 241-242)

Good luck on quadruple witching day! Market is heading higher (+7.00 ES points right now) in overnight trading. I don't trade overnight hours, just watching the expiration day action! There are quite a bit of movements in pre-market hours and I think more to come at the opening and at day's end.

--po

 

Yup. Using time cycles can help to determine how long the continuation will last for.

 

I have been giving a lot of thoughts on Went Fishing’s comment last night. I thought that my lack of confidence is my barrier to entry any trades. I took a look again the past trades I missed. Yes, I would have more losing trades; I would be stopped out more often. But the outcome for taking the missed set ups will drive more profit for this week. “As a trader we have to learn to embrace the uncertainties once the setup is proved to work”. From the chart I can read my behavior, the fear of losing and taking a loss hold me back to get in a trade.

And the hesitation and fear come from “my not yet embedded my head replica trades”. I thought I have already mastered at least one setup. But not enough, I haven’t had that robotic reaction to my setups. When I realized those are sounding setups, it’s too late to get in. I still don’t trust it’s my best setup until I realize it’s too late to get in. Before I pull the trigger, I thought “what if it turns back and against me? I might need more confirmation on it.” To conquer that, I am going to do a more thorough analysis on a separate spreadsheet from my trading journal. Document entries, stops, winrate, profit on set ups etc. to give myself more statistics to prove it’s truly a great set up and I am willing to risk with no fear, because I know the outcome for the set up is x% of winrate, x% of profit margin. Then I believe I will begin to have a replica trades. Maybe I could become CP soon?

Anyhow, last night and this morning I briefed myself that: no fear, take the set up you have been working on, you have nothing to fear about, because you will stop once you reached $200 loss, and so what if that happened, you are just going to go back to SIM for some more time, no big deal”!

So here is my result for today.

First trade is a short, price sell off cut through pivot point then retrace back to pivot point, topping tails on a Doji bar sets up a sell signal. My plan was to continue ride the momentum then buy at the end of the fluid emotional selloff. But price quickly formed a base –D/B pattern on 2 min chart. On 5 min chart it quickly formed long bottoming tails showing a lot of demand is here. I was stopped out.

Then I took a long trade, the stop was a bit wide. It worked out well at first, then next 10 minutes I was whipsawed by a large bottoming tail again. It took my stop then went back in favor of my direction. It was brutal. I have seen this lot. My fault for the trade is not tightening my stop quick or I could leave a wider stop at 2 ticks below the pivot low. My stop was an odd place to be at. Because this is the type of double bottom retrace almost 100% type of pattern, or you can call it a triple bottom, plus the speed of the going back up and the large bottoming tail at the retrace bar. It usually offered an even more high probability entry. Read this from Al Brook. Besides, look at the left side, the fluid selloff creates no S/R line. Meaning we have less sellers hided at the range. Could be a great place for a high R:R trade.

Quickly re-asset the situation, I re-entered.

TRADE A: finally worked. Long , took profit at the 61.8 retrace where is also a R level. It was a right thing to do. 31Pt.


TRADE B: Buy set up at Pivot Point, a double bottom at 5 min chart. Set my target at the range high, but if the momentum is strong , I could hold it until it test the HOD. But I didn’t hold the trade very long because market was very slow and the candle retraced a bit too deep. Only 10Pts

Today’s PnL:$88 5 trades, 40% winrate

Weekly Recap:
PnL: $274
Winrate: 47%
Avg trades per day: 4

 

see your strategy! thanks Nodoji. Still need some time to "get" the entry strategy. I use 2 min for all the entries. one tick above . below the signal bar.

 

I've been dealing with this for quite some time now. Significantly limiting profits by choosing what I think are the "best" and "most confirmed" setups. The upside is very few losses. The downside is less profits overall. The additional downside is that if you skip several trades waiting for a "best" setup and then the best setup fails (and the best of the best sometimes fail miserably), you can end up with a losing day despite the fact that a 5-year-old trading your strategy would've come up quite profitable.

Today I skipped a valid signal because Mich sentiment news was due in about 15 minutes and I missed an $840 move from my entry price ($270 of which occurred before the news even hit). I decided to take the next signal, and got $370 of a $430 move from my entry price, a fantastic trade, BUT by picking and choosing because I'm afraid of a specific risk scenario (having to exit just before the news or risk holding through the news), I leave twice as much on the table.

I often wait for extra confirmation before putting on the trade and then either get left with a much smaller profit or get stopped out b/e because so much of the move is already over. Yet another case of less risk limiting losses but severely limiting profits.

When you get to where you react to every setup instantly with no second-guessing and no excuses, please let me know how you got there, because I've been conducting an exercise very similar to the one you describe above for months now and STILL haven't broken through this barrier! :eek:

 

I use this strategy with a 5-min chart 90% of the time. If I'm in "cowgirl trading" mode, I might give it a go on a 1-min chart, looking for a really early entry

 

Hi Matcha,

First of all, congratulations on your 1st week of profitable LIVE trading! And you did great on keeping the number of trades in check to target the high probability opportunities. Keep it up!

Your analysis is superb! I, too have to reflect on how I can improve on my confidence and not second guess my setup and be robotic about my execution. My problem tend to be after I open a trade, I fiddle with my stops quite often that it ended up shortening a lot of good trades. Looking back at my trades in the last few months, I would have done better should I have been more unemotional and follow my trading rules. Case in point, my trading was everywhere today. Twice, I shorted at 11:18 e.t. 14:47 e.t and I quickly moved my stop to breakeven, missing 2 great short trades. I hesitated after executing the trades and loss confidence on my setup. Wasn't a good trading day for me. I need to work on my weakneses.

Have a great weekend everyone!

--po