So true. I saw on es a price I wanted to go long at, but was not getting a 2nd confirmation. By the time I got the confirmation to go long, price had already shot up. Looking back, there was a very good long setup early in the morning, that if I was awake, I would have taken and made some money. So no trade for me today.
No live trades today. Watched ES exclusively and sim traded the opening range long trigger @ 982.50. Since it was sim and I had no emotion tied to the trade (no comments please, I know, ditch the sim) I decided to stay in the trade as long as I could unless the 20-period EMA was breached earlier. A very distinct pennant formed around noon, and I contemplated putting on a live breakout trade @ 988.75, but ended up not doing it. I'm still not totally confident, but getting there. I feel like I'm not always seeing the whole picture, and I realize why so many long-time traders posting on ET say it takes 10,000 hours of screen time to "get it". Late in the day price pushed above 998.00 and pulled back. Since this was the next previous-support-becomes-resistance area after the breakout through Friday's level, and it was late in the day, I took my paper profits @ 998.25, providing a very solid gain. Now I understand the value of catching and staying with a trend. I've been studying ES action around near- and longer-term S/R levels, using both the 2-week chart and the intraday 5-min chart to guide entries and exits. I display only the 20-period EMA on the 2-week chart, and the 20 EMA plus the Keltner channels on the intraday chart.
I will say this, it's been good for me to practice decent trade management, like not moving stops too quickly. Now if I can transfer that footloose-and-fancy-free feeling to live trades....
I was stupid today, had 2 winning trades that would have worked out if I left them alone. One mistake was that I brought up my stop loss which then got hit also on that same trade I had a limit order to get filled which was lower than the market price, but bought at market since I thought market was going to reverse 2 ticks above my price. Both trades I had emotional reactions once I was in the trade that I wanted to get out right away. I am writing this so that hopefully I will not make this mistake again and just let the market either hit my target or stop no matter if it takes an hour or not. The good news is that I was able to pick the right times to go long or short, just need to not mess myself up by getting out early.
This is very difficult for me to overcome too. Today it was easy to stay in the original breakout trade not only because it was sim account (no emotion), but mainly because the trend was never even close to invalidated. Lately the action has had deeper pullbacks to, and even through, the 20 EMA, shaking you out of the slow trend more easily, but today was a happy dance all the way up, and even the stall in the action mid-day set up a perfect exit/continuation strategy (when the pennant formed and was at its narrowest range bar).
I came back and fired up the pc and the TV. Was reading nods post and on the TV the commercial about the little girl on the bicycle that was confined to riding the bike in a confined little space comes on. That reminded me of someone that used to be a range trader wanting to breakout and spread their wings. Fading a trend and wading on a small range is not gonna get any trader much past second base. Nod is becoming a believer of trend FOLLOWING. I have never been a fan of FADING a trend because it smacks of guessing and nothing else. Yes, i know many say they can do it but i am a skeptic. Seems to me if someone can fade a trend by nothing but osmosis then why would they not be able to just FOLLOW the trend in the first place? It just does not jive with sensable reasoning now does it? Range trading, channels etc are fine to pursue as long as they are secondary objectives and when mkt condictions permit. The main strategy of any trading plan should always be the days main trend. More aggressive types that want to train themselves on holding onto the trend through some retraces and ranges can experiment with a training exercise. EXAMPLE: Open a second account in the ES and peg your #1 account as your main account that is used exclusively as catching the one-way trend days and the meat of the "RUNS". Condition yourself to follow the trend as long as your initial signal is still validating your original entry.................only get out of the trend if you first see a reversal setting up and indeed the reversal signal hits. That and only that should get you out of the original entry. In account #2: This is your account what i would call the milking account. With this account you trade AGAINST account @1 account to milk the retraces, milk the ranges, etc, etc. The purpose of acct #2 is to train (condition) the trader to stay in acct #1 while trading against acct #1 in #2 account. Follow? When trading against the main trend you will stay focused during the slow times and actually make more milk while getting a better understanding about trends in general and how they tick. Holding a trend for more and expecting a continuation is a sign of a professional. Any smuck can fade a trend because they ASSUME price can not go higher or lower.............thats rookie-tunes stuff. Example: say you are long and the trend has had 2 very good up legs. What will the average new trader start to look for? Right, a reversal, they KNOW price can not go up any higher because that is what they THINK. So they go short as the previous leg consolidates and BOOM, sure as shit, price takes off on a third leg and the fader is killed. Thats how we only learn from mistakes. haha.. In no way a 2nd account should be used to hedge a loser. That defeats the purpose and is just plain wrong. If you are wrong in acct #1 you will know it and act accordingly. This is not a plan, just a training exercise. Kind of a step up above sim trading. Sim trading is just fine as long as a trader feels it is helping..................think of interns as med students. You do not take them out of med school and allow them to practice on your kids without a lot of OJT.. On the job training with real Dr's. Sim trading is your internship. PS: later when you understand trends better you drop acct #2 and just use #1 to enter, exit, reenter, etc, etc milk the other stuff etc. Or just keep it and have a playtoy.
whether you are fading or trend following, it is just personal trading style issue. there is no "which is better" question here. look at warren buffet, he made lots of money just using "buy low and hold or bottom picking or a pure fading stragety, in such a low price, no one will think later on it is a black swan, it flies". can you learn from him? I doubt it! because that style does not fit most people look at another guy, 100 years ago, he was the greatest trader at his period, he was called jessise livermore, he first played fluctuations (i guess most are fadings, just a suspect), he did pretty well, then he discarded it, he started to play speculation game, did he succeed, he did, then he failed, his big mistake was keeping searching the best, but there is no best, there is no holy grail! some trading styles do not fit some particular person's personality, so do not force yourself. if you are not warren buffet, then do not learn warren buffet. you are you, others are others. the right way toward it is: find your own strenght, improve it, enhance it, until no one can dupilicate it, then it becomes your edge, it is yours, so you will trade very comfidently, so you will always win since that is unique to you only you have it!
the big mistake people made in trading including daily life is: do not know himself, blindly cat-copy others. to me, it is the most uncomfortable thing to trade another person's idea. if it is your own idea, you will have faith in it, as for winning, just the faith's by-product. nodoji sit before screen, think about this break out or that break out, if es crosses this price, she does this or that... but she has no faith on that, how could she pull her trigger? even she pulled the trigger, she still has no faith in it....
Hey Nod, I know what you mean about penant formations. I was short EU at about 1915 and noticed a penant formation. I had to stop and google it to make sure I really understood it. Needless to say I had to exit short and get long and currently up a few points. If you'd like to check out the penant it's from 1200 to 1700 hours on a 5 min EU chart. I've also noticed that many of the best setups occur about 0700 to about 0830. I've been inquiring about trading at this time premarket ( concerning volume ). Much that I've read says not to but looking for insight from the big dogs ( punn intended ). I too laugh everytime I pull up to a pivot line thinking about the big dogs sniffing the hydrant while traders just want to go around it, lol. I'm learning right along with ya. Your doing great! You are destined for excellence! metoo