NPP's Divergence and Breakout Method

Discussion in 'Journals' started by no_pm_please, Jan 19, 2004.

  1. rgelite

    rgelite

    Agree. I generally plot them overlaying each other and stay alert to their crossover.
     
    #41     Jan 21, 2004
  2. I'm back to a good state of mind for trading. Looking at screen 3 I see the CCI at 60 so it's not in any overbought/oversold area. Also, I have the 30 min. ADX at 25, so unless the market drops early then I don't feel great about big moves to the upside. The RSI is above 50 so the only breakout trades to consider would be to the upside.

    Market looks like it's going to open inside yesterday's range. I don't have a clear plan right now. Maybe buy if the early move is up and touches yesterday's high - the risk. If it starts lower I'll wait for a test of yesterday's low and watch for divergence before doing any buying.

    Today I'm going to avoid trying to explain anything while I'm trading. I'll just post buys and sells and explain everything once I'm done for the day. Hopefully it'll improve my focus so I won't make the same mistakes as yesterday.

    I tried to write down some rules for this method yesterday but found that I don't follow hard rules for most of the trades. I guess right now this is more a way of evaluating the market instead of a method of trading. I've dropped the keltner channel and adx from screen 2 (5 min. bars window) because I noticed I don't use them with this way of trading.

    I'm sure it's frustrating trying to follow something that's evolving. If I can't get the basics nailed down then maybe I'll suspend the journal until I get a few months of experience with this new way of trading.
     
    #42     Jan 21, 2004
  3. tanp21

    tanp21

    No_PM,
    If your old method worked well, then why change to a method or style of trading that is still evolving. When things become to discretionary it becomes much harder to trade without hard and fast rules.
    If I were you, I would trade the old divergence method to make a living while still evaluating the new work in progress. From what I understand your old method made you quite a sum of money in the past.

    Please let me know your thoughts.

    Regards,
    Tanp21
     
    #43     Jan 21, 2004
  4. Long at 1134.50
    Stop at 1132.00
     
    #44     Jan 21, 2004
  5. stop moved up to 1132.75
     
    #45     Jan 21, 2004
  6. Moved stop up to 1134.75
     
    #46     Jan 21, 2004
  7. Exit 1138.00
     
    #47     Jan 21, 2004
  8. Pretty pitiful trading today. I was more focused by not posting but still didn't make much.

    The market came down as I had hoped and yesterday's low was successfully tested (point 1). A positive divergence had formed and the CCI on screen 3 was below -100 so it looked good. I had a buy stop in at yesterday's low + 1/4 of the 10 day average range but the market pulled back (point 2). When I saw the drop with the positive divergence I decided to enter right away instead of waiting for it to hit the entry point (dotted red line). I got in at 1134.50 on a market order. Unfortunately if I had waited 20 sec. I could have got in at 1133.50 as the market dropped below yesterday's low and some stops were taken out. The bar turned out to be both a Emini tick volume spike and a Tick spike at around -600. The stop loss for today is 2.50 points so I put the stop at 1132.00. At point 3 the market crossed above the original entry point so I moved my stop up to 1132.75 (.25 below the low of the day on the SP. This reduced the risk in the trade to 1.75 points, so my early entry reduced the risk a little while being faithful to the method.

    At point 4 I noticed a positive Tick and Emini volume spike bar so I decided to move my stop up to breakeven + comm. just in case the market had a pullback. Shortly after that the market made a new high and started to diverge with the chaikin osc. Since it was the start of lunchtime I decided to put in a limit order just below the high of this run at 1138.00 and hopefully buy again at a lower price. At point 5 the market hit my limit order and I was taken out. Unfortunately if I had held another 30 sec. I could have had another 2+ full points. I thought some news must have hit so I turned on CNBC (no news...just stops being taken out).

    This was a example of me taking my profit earlier than I should have (target is low + 4*risk or 1142.75 for today). Obviously I made a mistake by cutting my profits short.

    If the market pulls back and there is positive divergence I'll jump back in, otherwise I'm done trading for the day.
     
    #48     Jan 21, 2004
  9. Trades since 1/20/04

    # Win 1
    # Loss 1

    Total of winners +3.50
    Total of losers -2.50
     
    #49     Jan 21, 2004
  10. Thanks for your concern. Yesterday I tried to do too much. One thing I do well is adapt to mistakes that I make. Today wasn't bad. By minimizing the browser when trading I wasn't too distracted. I've still got some work to do to not micro manage trades when I'm posting the reults to the forum. It'll get better as I get more experience with this method.
     
    #50     Jan 21, 2004