Matcha's Dow E-mini Journal

Hi NoDoji,

Thank you very much for your advice. Glad that you mentioned the price could have gone either way at that point. I will heed your advice to wait for the break to get the confirmation.

--po

 

your method is interesting, but seems to rely too much on bar patterns. my sense is there will be an improvement if can look at support and resistance levels and do whatever u do, within the framework of s/r levels either from swings, pivots, fibs or market profile. it seems u have something going here, but i do not see a pattern of trades that are repeatable. On all three trades, i would want to see price breaking a s/r level to go short or long.

 

Take a loss today. One trade over my maximum limit of trades per day.

First trade was a short at micro trend down. Stopped out by a deeper retrace up. Then I didn’t re-enter because the 10 am news is coming up.

7:10. market made a V bottom, quickly reversed to the up side with no pullback on 5 min chart.

7:40-8:00 I took 3 short positions. All failed of course. I took them because 1) failed break out, 2) on 15 min chart, price is making lower high. 3) On volume profile it was a VAH, YTD’s VAL acting as resistant level. 4) Topping tails. D/T pattern on 2 min. 5) 50% 61.8% retracement of the swing starting from yesterday. But bull again killed all my shorts!

10:05: took another short. Failed break out trade. It turned to be a failure of failed break out (Al Brooks)….

10:50. I took a breakout pullback trade. Long. Bull is strong. I thought it could be the day where it can break the key resistance level and continue move up. So I choose to hold the position for long time. Besides on larger time frame, it’s the 3rd time price wants to break to the upside. But I was once again stopped out at b/e. Then I re-entered, didn’t work out…

11:42am , took my last shot, short at break down. It didn’t go very far. Stopped at for a small profit because bull again fought back. VWAP acted as a very strong support level. It could be the best long set up ever. But I realized I am over my maxi. trades. I had to let it go.

It was so painful to see it rally, I am finally get it right but I have no bullets at all!!! However, nothing is more critical than following my plan…

I was killed today mostly fighting with the strong bulls… Too sad by the time I realized I was fighting with trend, it was too late…. The morning sell-off always makes me feel skeptical about the bull strength trend of the day, is there going to be another move of the day? Is there going to be a succeed of the break out?…. By looking at larger time frame and the overall trend, I thought today would be those large range days where I should buy at major support-day low, sell at resistance-day high. I kept shorting at failed break out, VAH where I thought it would be a range high –range top. But today was a reversal then trending up the whole day long type of day… And I should really respect my lovely VWAP….

Today’s PnL: -$186. 9 trades, 20%winrate

 

Thank you! I see what you are saying. I do trade on S/R levels. I will work on waiting to see price break S/R level then enter....

 

I just want to make another point about today.

Just like Nodoji said yesteray, Today trend has been stong all day. 11:00Pst, Major trend line was broken. At 11:30 pst. Price retraced deeper then make a small "bearflag", buyer and sellers are fighting again here, but this time buyer won. so the long could play very well after price broke the small "bearflag" to the upside. The bearflag then transformed to be a base-double bottom on 2 min... So wait untill the S/R is broke can play very well today.. too bad I had no bullets...

 

Here are two very important things to consider and this helps keep me out of trades with lower probability of success. If I'm compelled for some reason to take trades under these conditions, at the very least these concepts ensure that I exit quickly if there's no quick follow-through in my direction:

Look at the low of the day that was put in on the news selloff and then notice how quickly price came right back on decent volume, broke through the previous resistance point without even hesitating, and closed above the 20-bar MA. What does this tell you? The previous downtrend has confirmed its demise in 3 ways and rather quickly! The bulls are in control.

Now, at this point bearish-looking price bars that do not close below the 20-bar MA are most likely bear traps. My friends noticed a while back that I would ignore certain short signals that looked very appetizing, but it was because of either the strength of a previous run up, the fact that a previous resistance level was broken, or the fact that price had closed above the 20-bar MA, all of which had transpired when you began your three shorts.

The last of those three shorts in that time frame was the first confirmed counter-trend signal you had because it was a fairly weak break thru the top of the range and price pulled back quickly and broke that bar's low. However, it would still be very much counter-trend at that point until price broke the low of the range (and the 20-MA), so I'd want to exit a short position taken at the break of that bar's low very quickly if price didn't break the range low with conviction. If not, a move back up would have plenty of trapped shorts to fuel a break out and a continuation long play would be in order.

Counter-trend trading can be profitable, but it requires a lot of experience and the safest place to counter-trend is at extremes, such as at the extreme of a 3rd (or better) push, or following a measured move (notice how nicely price dropped around 11:15 on your chart after the sloppy measured move up out of the range you were shorting earlier).

So, in a nutshell, if a previous trend puts in solid reversal signals, switch gears until price tells you otherwise, and if you want to counter-trend trade, do a lot of study of price action at extremes first.

It's always easiest to look for reversals after 3 or more pushes in a trend or after a strong measured move.

Hope this helps!

 

Be careful with your words / thoughts. You have worked hard and done well to reach the point of live trading. You study charts and likely other things to build an expectation for the day. It should mesh with your evolving knowledge of the market. If you looked at today's chart without those expectations in your head, would you have traded it differently? (Just asking - no response required). To quote the old song, "Momma said there'd be days like this" We've all had them. Protect yourself from negative thoughts.

 

The biggest mistake for today is not recognizing uptrend quickly... Your comment is very helpful, Nodoji.

 

Thanks for reminding me. I wasn't negative at all! I didn't feel discouraged or anything. I will be very careful choosing words!

 

Very Good - I've been reading / posting a bit in the Psychology area, on emotions / Behaviorial Finance. I think I'm just overly sensitive (because its running around in my brain right now). You're one smart cookie, and you are doing well. That make me