Sempai's YM Journal

Here's a link to the chart with the key support/resistance levels for today's trading which were formed on yesterday's 5-min. chart.

I only use them until the price trades through a particular level. Then I use new highs and lows that are formed on the current day's 5 min. chart. I usually wait for a retracement swing of at least 15 points before I'll mark a new level.

Also, the study that plots the support/resistance lines is an eSignal efs formula that I asked if they could create for me (Jason programmed it). It comes in very handy and will plot the same levels in multiple charts, so I can enter the levels in the study and apply them to the 1, 3 and 5 minute charts without having to put them all in individually.

You can get it at the eSignal web site. Go to the efs library and do a search on "LinesLabels.efs"

Description of LinesLabels.efs: Draws up to 30 horizontal lines at price levels specified by user through the "Edit Studies" option.



Here are the support/resistance levels:

 

Here are some of the support/resistance levels for tomorrow, 8/25/03. The ones marked on the chart are from Friday. The levels not marked are similar 5-min. pivot levels from previous days.

 

4 Trades: 0 winners, 4 losers.
Gross P&L: -18 pts.
Net P&L: -22 pts. (-1 pt/rt for commissions)

I didn't deduct for slippage because these were actual trades and slippage is already figured in (just 1 pt. slippage).

Today sucked. The market just chopped around and whipsawed me on every trade. However, I followed the rules and avoided making one impulsive trade in particular that would have been a loser. Also, I was considering stopping trading after trade #3 because of the choppy market action, but I had another valid setup for trade #4 and I wanted to give it one more shot. Luckily, I only lost 1 pt. on that trade (due to slippage).

Well, tomorrow is another day, and I want to continue with this method for a while to see if it will work. To be honest, I was more than a little skeptical that this would work at all when I started, but after spending some time gettting things dialed in, I was a little surprised that it seemed to be working as well as it was, so I decided to implement it in real time.

Unfortunately, I've had methods that worked great when I was paper trading them, only to have them fail miserably once I started trading them for real. (I'm talking going from a 70%+ win rate to less than 20%). I don't know if it's because the market has already started to factor in whatever it is that I've discovered before I've even have a chance to trade it, or what. That's why I went right into trading this when it seemed to be working with the guidelines I have set up now.

Also, I know that posting this publicly could have an effect on the outcome, but so far, the benefits of keeping this journal have outweighed any negatives. The main benefit I get is that I have to be accountable for following the rules, since they are publicly posted and if I make an impulse trade, I'll have to post it, which I don't want to do. It also forces me to do my homework and pay more attention to the details because I have to write everything down and think about things more when trying to explain them to others.




#1 Retracement

9:44 a.m. -1@9305
9:47 a.m. +1@9309 (-4)

#2 Range

9:47 a.m. +1@9309
9:52 a.m. -1@9302 (-7)

I was considering stopping and reversing on this trade (with a retracement short), but it was right at support and market looked like it was starting to go sideways (i.e. support was holding).


#3 Range

9:54 a.m. +1@9306
9:56 a.m. -1@9300 (-6)

#3 Range
10:11 a.m. -1@9314
10:16 a.m. +1@9315 (-1)

 

If anyone has a method that made money I would like to see it, one reversal after another, no fun, no fun.

 

Here is the chart for yesterday's trades. I didn't get a chance to put notes on it but I marked the entries and exits that are posted in the summary.

 

3 Trades: 1 win, 1 loss, 1 scratch.
Gross P&L: - 1 pt.
Net P&L: -4 pts.



#1 Retracement
9:37 a.m. +1@9293
9:43 a.m. -1@9294 (+1)

#2 Retracement (mistake)
9:44 a.m. +1@9298
9:45 a.m. -1@9298 (0)

This was a valid retracement signal based on the chart, but it was the second retracement in the trend and I had forgotton about the rule to only take the first retracement when I entered, so I exited at the market for a scratch.


#3 Range
10:11 a.m. +1@9258
10:14 a.m. -1@9256 (-2)

I was a little tentative taking this trade because the market was heading down fast, but it was a valid setup at support so I took it. However, once I had a little room in the trade, and a small pivot (sort of) was created by the 10:12 and 10:13 a.m. bars, I placed my stop below the low at 9260. My stop was taken out with 4 points of slippage, so I ended up losing 2 pts. instead of gaining 2 pts. on this trade. (No problem though - it was a good decision to tighten stop).


There was also one trade I passed on - a range trade (short) at 10:01 a.m. that really took off and would have been good for about 50 points, but I didn't take it because a report just came out at 10:00 and the market got very volatile. Due to this, my initial risk would have been 17 pts. which was a little much for me. I was waiting for another bar to form that I could enter on with a little less risk, but the market ran before I could get in. I'm dissapointed I missed it, but it was a discretionary call and in hindsight, I still think it was the right decision. (I also think I may still be a little gun-shy from yesterday's losses).

 

Here is the chart for today's trades. I've stopped putting the prices and pts. per trade in there because it's redundant - all of that info is already in the daily summary.

 

4 Trades: 0 winners, 4 losers
Gross P&L: -20 pts.
Net P&L: -24 pts.


#1 Range
9:38 -1 @ 9327
9:40 +1 @ 9329 (-2)


#2 Retracement
9:40 a.m. +1 @ 9329
9:46 a.m. –1 @ 9327 (-1)


#3 Range
9:58 a.m. +1 @ 9319
10:00 a.m. –1 @ 9313 (-6)

I started to get mad after this trade.


#4 Range
10:01 a.m. +1 @ 9318
10:07 a.m. –1 @ 9307 (-11)

I got really mad after this trade.


I passed on a retracement setup (short) at 9:54 a.m. because the entry was at 9322 and support was at 9314 – 8 pts. away. Had I taken the trade and followed the rules, I would have been stopped out at 9319 for a profit of +3 pts. (bfd).

This is really starting to suck now. This is what always happens – I take an idea that appears to be working (at least fairly well) and then when I try to apply it for real, it goes to shit. One criticism that could be made is that I didn’t spend enough time backtesting and forward testing, but in the past, I once thoroughly tested a system in real time with 30+ trades over a period of a month and had a 75% win rate. When I traded the system strictly by the rules I had just finished testing, I had 10 losers in a row. TEN! It seems that this is happening again. I’m actually considering doing the opposite (switching buys and sells) I’m so disgusted. Now I have to decide whether to keep trading or just paper trade or throw in the towel. The question is “How long do you trade a losing system before you’re convinced it doesn’t work?

 

Howdy Sempai,
Sorry to see this. Maybe you should consider dropping the range trades?

 

Well, that's a thought, but to tell the truth, I don't think it will help. The method that I described in my prior post that was making 75% winners until implementing it was very similar to the retracement setup.

Sure, I'll give it a try, what the heck. It's only money.