Couple of notes on PA and Volume in the ES. Daily: PA and volume are fractal in nature...or supposedly. So many of the same concepts used intraday may have an application on higher tf's...albeit with some tweaks. Went up on good momentum up to current levels. Volume is creating a decreasing pattern going up...but momentum still looks to the upside until PA shows otherwise. Still new to looking at PA on the higher Tf's so if anyone has any insight...feel free.
7/8/11 Shares traded=1,000 P&L= +10 SPY= Put some trades in the SPY's today. 3 losers and 1 winner. Winner was off of the pre market, the others were throughout the day. I have attached a screenshot with executions. The trade towards the middle of the day around 11-12 was to test out and idea that we might have a stop run above those reversal bars...it went against me and I ended up holding on a bit too long! I also attempted to get long off of the pullback towards the end of the day and was stopped out. Also one trade before the open with the expectation that we may get another push down...we did later, but not on the open. Other than that took one trade in CREE for a small winner...based off of order flow and momentum. Attempted to find something along these lines throughout the day and was slow to act on orders etc. Next week I need to continue trading the SPY's, think im coming along well in this regard! Also keep looking at order flow and momentum and trade accordingly.
Here's the update for 7/7/11: I was down about 42 dollars on the day...just trading some random stuff and losing little amounts along the way. This day taught me that I need to limit the environments that I operate in...and focus on a certain approach. That is why I will be trading the SPY's and momentum trades based off of order flow!
Can I give you a suggestion? I think this will help. At the end of the week, make a list of the three biggest problems you had for the week. Getting out too early, too late, too big, too small, chasing trades, over trading, etc. Then over the weekend, come up with a scheme the following week to force yourself to address those issues. Doesn't matter if you make money or not. You want to do this to break bad habits. So for example. Say you missed taking a breakout trade several times this week. Next week, pick one day, any day doesn't matter and force yourself to trade every single breakout under the sun. Forget the p&l, just do it! And then two other things you need to work and pick a day to work on those. Remember, just address one issue a day. This really helps in breaking bad habits otherwise you are going to do the same things over and over again and god forbid focus on your p&l which is meaningless at this stage of the game. I cannot emphasize this enough. Do not develop bad habits!!!!!! Once you do, you have them for life! So don't start.
My first thought is that the SPY and momentum trades might not be the best match. Is the idea that you want to be able to scale up to big size without changing your approach? My take on momentum trades is that you want to ride trends and the SPY just doesn't trend as cleanly as other instruments. Have you looked at IWM? Also, if you posted an example of the type of trade you want to focus on, that might help you narrow down your criteria to help you avoid bad trades and over trading.
I was actually referring to two different things. The Order flow/momentum trading is more of a scalping approach in different stocks. Right now i'm looking at stocks near highs/lows and looking at briefing's liquid momentum list. Also looking at stocks in play on any given day. When trading the SPY i'm just looking at PA and volume...I'll post up some example trades and maybe this will help me clarify some of this stuff.