Hi Matcha, I love it when you said "Think Bullish"....."Think Bearish"..... Did you see the pattern??? Both affirmative thinking yielded very decent profit for you. Keep those thoughts up! --po
Matcha Nice to see you catching a couple nice within the range trends, good job Your 9-29 chart reveals what I call a Search & Destroy Day. I identify these days by large bars in both direction at the open to, "secure the perimeter". The secured range usually ain't nothing special. Then the fun begins, most of the "easy money" (us the public) won't fade the highs or the lows so after establishing a quick range, the center of that range is filled with the stops of traders buying highs and selling lows. The day plays out by drifting from high to low shaking out the weak hands and putting pressure on those stops. When "the heat is on" the long bars (quickly) finish the job. I find these patterns on days with "no new news" or days prior to big news (GDP, jobs). You did well, your tight stops (and sticking to them) allowed you to stay in the game and identify the pivots. These moves are usually fast and in one direction (stop running) so expect long bars "all day". My recipe for search and destroy days is 1(rounded) teaspoon sugar, 10oz black coffee and 5oz whipped half & half. Consume as needed, you need to be quick,,,, but not "jittery" Note: Not recommended for seniors or persons operating Boli's multiple moving averages charts
Didnât do very well today. Didnât catch the drop at the early session. The first short position was taken at the opening. I bailed the trade too quickly when I saw a strong green candle developing. It ended up to be the best price to enter a short for the day⦠When price failed to make D/B at 7:40(was stopped out for a long), I didnât join the sell-off. I was too afraid itâs going to turn to be a morning sell-off then rapid reverse type of day. So I SOH, I watched it drop dead. 10:45am. I entered short position again betting on another drop after retracement. So I expected at least 2 leg move. But it rapidly goes back up. Small profit turned a loss. Then I flip to the long side. Since the buyers are very strong to finally push price higher. TRADE A: long. Took profit -3 tick below YTDâs VWAP level. Last 3 short trades were crazy bets. I continued to short. Price traded below VWAP, and price formed a W top. But every time price wasnât going to break the S1 level, buyers came in. So I was chopped hard!!! 4 losing days in a row this week. I am going back to SIM trading tomorrow. I need to do more practice and get more and better results before I jump in live again. Today's PnL: -$71.80, 7 trades, 20%winrate
Your first short was pure counter-trend, so no problem bailing out if you felt the momentum down was not strong enough to warrant holding. You had no way to know price wasn't finding support at a higher low for the next push up. Only in retrospect do you know it was a great place to short. The second trade, price had broken previous support to make a lower low and then found sellers at a lower high (previous support became resistance). What you are calling a double bottom is not so. It's not at the end of multi-legged downtrend, and price hasn't moved back up through previous resistance, so it's just a test of the previous pivot low and price closes that bar below the 20-bar MA. The fact that a lower low and now a lower high (where previous support became resistance) has been put in, makes this a very strong short signal, with a confirmed short entry via a break down through that previous pivot low. The price where previous support became resistance was an internal double top, a double top at a lower high. It's a double top because it follows a multi-legged uptrend and it's an internal double top because it's not at the day's high. This is one of my favorite short setups. You are forming too many opinions (as I still do all the time; my worst habit). Trade what you see, not what you think (I posted that on my wall recently). Ask yourself as you see a potential setup forming what you actually see. You see what looks like support being established at the same price as the previous pivot low and you interpret it as a long signal. Ask yourself: Q. How would I know the bulls have regained control after they failed to maintain the previous support level? A. At the very least, price would have to be bid back up through that internal double top. Q. What would convince bulls to start taking profits and bears to start selling short? A. A break through the lower low following he lower high. A second down leg would then be very likely.
Thank you for pointing that out! I didn't realize I actually have so many opinions. I often doubt my setup when I trade. These 2 questions are super helpful. I will remeber to ask myself again and again when trade. So I have less doubts and opinions. Any more questions like these 2. Please post!
When you see a possible setup, ask yourself why price should go higher or lower than your entry price. If your answers are purely technical, the trade has a much better chance of success than if your answers are based on your opinion. For example, today I woke up, opened my platform, checked the chart of CL, reviewed what had happened in the overnight session up to that point in time (7:40am ET) and then I talk to myself about what price is telling me. "Price is in a strong uptrend off the overnight pivot low and has put in 6 legs up." This is a true technical statement. "Price is moving back up to test that high of 78.79." This is a true technical statement. "If it wasn't for 6 legs up already I'd have a buy stop @ 76.80 for the breakout, but I can't imagine it running a whole lot higher before staging a deeper pullback." This is my opinion and is based on the fact that I can't recall ever seeing a 7th push in a trend provide a really strong breakout. "The early pullback long entry @ 78.75 has already passed me by and that makes it tricky to avoid a loss if the breakout fails." This is a true technical and risk management statement. I decide to watch price at the high and put on a counter-trend short position if I get a reversal signal such as a failed breakout, a double top or a failure to test the high, as long as I can enter with a stop of 15 ticks or less. Price breaks out only 3 ticks and closes below the previous bar's high, leaving a shooting star after a failed breakout. "A break of that bar's 78.72 low should take price back to the 20-bar EMA based on my knowledge of CL price action." This is an educated guess based on experience trading CL. "An entry @ 78.71, with a stop @ 78.84 and a target @ 78.51, which is near the 20-bar EMA and also my standard profit target for pure counter-trend trades, fits my stop loss and risk:reward criteria." These are true statements based on my rules and experience trading CL. I put on the trade with stop and target and take 20 ticks profit when price finds support right at the 20-bar EMA (78.49). This is the kind of stuff that runs through my mind and provides confirmation right after my system alerts me that the neighbor's dog has barked exactly 16 times in the last 45 minutes: http://www.elitetrader.com/vb/showthread.php?s=&threadid=205493&perpage=10&pagenumber=26
It was what BSAM posted on ES Journal the other day and I wrote it out and hung it in front of my face to help me trade price not opinion. Still struggling with the whole opinion thing...
Hi NoDoji, Thank you very much for analyzing one of your "favorite" short setups. I read that paragraph 3 times and now I have it visualized in my head. Hope I can use it probably next time I see this particular setup. And thank you for pointing out those 2 questions to ask before deciding to go LONG or SHORT in a trending situation. --po Hi Matcha, It's good to go back to SIM to do more practice. I have been alternating between LIVE and SIM for the last few months. I like the SIM environment to try out the new things I have learned so that other people's methodology will become "my methodology" and that I will have the confidence to use it. You did good in your LIVE experience though. Like everyone else have commented that you have demonstrated you exercised good discipline in your trades especially playing very good defense. --po
The "context" I have been thinking so much about this term these days. I even have a headache now thinking about it. Besides practicing, reading history charts bar by bar, I am not sure how I can build the skill that I can get a right read on the context/picture most of the time. And the term is still very vague to me. Context=Market Common Sense=Market Evrionment, isn't it? What exactly is the market context. What elements are incuded in the market context. How should I approach them. Tools/methods I am using to read the context now: Multimple time frame, Momentum, MA, Price Action, VWAP, Price Histogram, Time cycle count, avg move pts count, push/wave counts. Anyone can easily have 2-4 best setups ever in the world. but without a right read on context in the market, best setups are invalid. then we second guess the setups . We all know that. Like where I am at now. Sometimes, when I see "the best set up", for example a pullback, I will question the entry, should I just enter now or wait for a 2nd chance? what if a 2nd chance didn't happen, price just shooting straight up? Then should I still put my entry in at a much higher price? Is bull still strong?buy order are going to help me? Sometimes, I enter a best setup while the context is wrong. Once I realized it's wrong I am not sure how to flip to the right context.... I wasn't asking how to become a psychic. I just want to know if there is another approach to build the skill besides practicing. Is there any tools I am missing? How to correctly read the context most of the time so I can be CP? When did you build up your common sense in your trading career? How long does it take you to get the right picture most of time? Please, any SIFU?