NQ Beginner - Trading With Discipline

Discussion in 'Journals' started by kidPWRtrader, Dec 10, 2007.

  1. Eh I suck at journal titles.

    I wanted to start a journal 2 months ago but got sidetracked by Anek's thread and was constantly posting in there. I was recommended to start my own journal once again, so here I am.

    I have been swing trading for just a little over 1.5 years with the last few months being moderately positive. I think I am better suited for intraday trading because of my patience, but we shall see. My initial experience with futures have been really good, although I have for the most part traded based on feel, which is a big no no in my opinion.

    My monetary goal is to take a hypothetical account equity of $5000 and with a maximum daily drawdown of $250 and maximum weekly drawdown of $750, double my account. There is no time limit for this task.

    The drawdown limits I am imposing to mirror what I would have to do in the real world to feel comfortable. If I am able to pull off this task without more than a total drawdown of $1500, I will go live.

    The goal that matters most, however, is that I stick to my trading plan. This is the purpose for creating this journal. If at any time I break my rules, I cannot lie to myself or anyone else and make excuses.

    Trading Plan:
    I will for the most part use a trend following method. I will be using nothing but price, volume, and T&S. No indicators of any kind.

    I will for the time being have 2 charts that I will trade off of. A 500 CV chart and a 1000 CV chart. I will use whatever gives me the best entry and sometimes will drop for a lower time frame if need be in a fast market.

    For trend qualifiers, I will be making mucho mucho channels and trend lines and will be watching the 60 minute chart as well as the 5 minute chart for volume.

    I will also be paying attention to times of important economic news/contract expirations which I have never done before and see under what conditions are most ideal for me to trade in. I will for the most part stay out of dull times unless I see something that MUST be taken.

    To get my bearings, I will have the previous days close and High/Low plotted as well as the day's open on my charts each morning.

    I will be trading a single NQ contract using MBTrading feed (which I will change when I go live cause they suck) and Opentick for historical data.


    1. White Hammers after completion if can get in the range of the white hammer (vice versa for shorts).

    2. A break of a smaller time frame trendline that is with the bigger time frame trend with a wide range bar (greater than last 3 bars bodies)

    3. A break of a faster moving trendline near a previous long term trendline with a WRB before the break of the smaller trendline as in #2. This scenario will have better r/w, but a smaller probability of success.

    There must be at least a 1 : 2 risk to reward scenario for all of these setups. Always enter after the completion of the signal with limit order or during the last few remaining moments before a bar closes. After 2 bars after the signal, I will cancel the order if I don't get a fill.

    4. A break of a long term trendline. A wide range body must visibly penetrate the trendline. My signal will be based on a pullback to 25-50% of the previous bar length (i've heard of this called a "kissback" bar).


    To the first profit target, a break of the new trendline created with the assertion of the new trend(a close below/above it) or a wide range bar or 2 normal bars closing above/below the last bar. If profits locked in, use a longer term trendline or keep putting stop underneath last low / above last high. I will also be looking at things like equal moves, previous resistance/support levels, fib extensions, wave count, slowdown of momentum (with shallower sloping waves) to get me out earlier if I think it can get me a better price.


    Stop will go one tick below the lowest/higher bar in the entry. For entry #4, it will be above/below the bar previous to the "kissback" bar.

    Other Considerations:
    I will be constantly looking for new setups and better entries/exits. I will be discussing their potential use here.

    I will also be attempting to learn to read the tape using T & S. I will not be taking ANY signals off of any of my findings until I can verify through enough experience that the findings are indeed valuable. This is a problem I've had in the past - by integrating too many things into my system, I don't know what accounts for my successes and what accounts for my failures.

    As a reminder, I would like to start looking for a Piscuy style entry where in a pullback or bounce, the bar does not make a new high/low and the entry signal is given on the break of that bar with the overall trend by 1 tick. This will be a project for me to do in the coming weeks.

    Hope that wasn't too long. I undoubtedly forgot many things so I will have to post them later.

    I am 100% confident that if I am able to act disciplined, I can take my trading to a new level and this is what the journal is really all about. More about my discipline will be posted in later responses.

    Thanks to anyone who participates!!
  2. if done with discipline, 5k --> 10k is not very long :) have fun
  3. First day. Couldn't trade morning because the new version of MBT Nav. wouldn't work with ninja so I had to mess around with it forever until i figured out to just get the beta 6.5 of NJ.

    Anyways, traded the afternoon.

    2 winners, 0 losers. Followed trading plan to a t.

    Net PnL $95.

    Woops. Turns out attachment captures all three of my screens. Sorry for that... entries are on left side upper half
    • day1.jpg
      File size:
      651.2 KB
  4. ganesh6


    Good start :) Keep it going.
  5. Which patterns will you initially be focusing on?
    H & S, DT's & DB's, Sym triangles etc...

    Good luck, hope you reach your goals...
  6. Thanks Ganesh. Only my first day though. Plenty more days left :).

    To describe it more succinctly than my first post, I am looking for any pattern WITH the trend that gets me 1:2 r/w and a minimum of 3 possible points.

    You will notice that my first short was countertrend. That's because that's the second setup "type" (breakout/down and not just pullback/bounce) I look for. The basics of it is that we break a longerterm trendline and I shorted after the strong bar down and a pullback of 25-50%.

    I do pay attention to double tops and bottoms, triangles, etc. but I see things more in terms of with the trend and countertrend. I don't usually trade breakouts, but when I do as I described, I like to enter into a miniature pullback/bounce to allow for a tight stop.

    Other details of the setups that I look for I described are described in my first post.

    The first short was taken, as I said based on the trendline break which isn't visible in the screenshot. I covered at price support because it didn't look like we were going to breakdown and I want to build my confidence, so I am taking profits earlier than I normally would.

    The second short, the pullback was >50% which I usually don't like but the r/w was nice so I went for it anyways. The 5 minute chart made it pretty obvious that there was little buying at this point as well. I am aware that the 60 minute chart looks really bullish right now, but we are overbought on the daily so I think there could be a big move to short side soon.

    Hope that describes it pretty well. When I get home today I will review the day and check out Piscuy's entries on the chart to see how they would perform and go over how mine would have performed in the morning.

    The biggest part of today was that I didn't take any trades trying to find a new pattern, which I almost always inevitably end up doing when the market gets slow. Glad that I didn't try to squeeze a dry sponge...

    Random Q, if anyone has ninjatrader 6.5 beta, is anyone crashing? I was trying to put on a stock position today and was playing around with the charts searching for some afternoon setups and I ended up crashing twice.

    I also can't seem to put in the paintbars I had for ninjatrader before even though I put the code in... They just don't show up in the indicator window.
  7. Hi kid

    Where is the chart?

    Don't give up after one day!

    If it was a bad day so what u have to learn to deal with those as well

    Please continue your goal and post your chart!

  8. Just saw this.

    It wasn't a horrible day although I did break my rules.

    I am programming right now, will post the charts and analysis soon.
  9. Well guys. Today was a blow to me, but it was a great experience.

    I learned that the market pre FOMC sucks amongst many other things. Was able to get a good short position going pre-FOMC in a stock because I felt r/w was huge. Turned out to be right, covered half, reshorted, and covered all by EOD.

    Did much worse in sim though. Too many countertrend buys even though I was RIGHT on all of them. I just didn't have enough confidence to hold, which is important. So... no more trading countertrend ever... but definitely keep looking at these setups to potentially use them in the future.

    Got chopped a lot. Basically didn't follow my plan like I was supposed to.

    I will follow my plan from now on. I calculated what my profit would have been had I just followed my plan and even not taken the first short which got me some profit (the one post fomc). I would have been up $135.

    Instead, I am down $35 bucks including commissions.

    Running total on my journal is now: $60 bucks.
  10. And the other one. Really... I didn't learn much so far as setups. But, I did learn that trading with excitement hurts results even on good days.
    #10     Dec 12, 2007