One of my historical issues with regard to trading is holding. I get anxious when I see so much movement and often look for any excuse to get out even when things seem so obvious and/or when they're going my way. Today I had a bit of an epiphany. Often when looking at a larger bar interval, one just sees the overall movement - not the nuances of each level of price and how it got to and from certain areas. Using a 1-min bar interval to learn the SLA has been an adjustment for me. At times, I still find comfort in the 5-min, 15-min and hourly intervals. Well, today I noticed how informative the 1-min bar can be based on two areas of rejections. Using the 1-min, price very obviously gets down to the 3673 area but bounces off immediately and almost violently. The same thing occurred at 3698. Price may have reached that level, but it didn't stick around. Looking at the same two areas with the 5 minute, you can see the rejection, but from where I'm sitting, it's not as obvious. I'm definitely getting more of a gist that a lower bar interval isn't noise - it's information. Something for me to chew on.
This morning was another good one for me. I took 2 trades and feel like I managed them both well. Price had been inching up since EOD. On the hourly, I saw a lovely hinge. Knowing that DB has indicated (and I've seen myself), that often the first move out of a hinge is not where price continues was in the back of my mind. However, I wasn't seeing a hinge on the 1-min, just a fairly narrow trading range (5-6 points). I noted the areas of interest with regard to yesterday's highs, lows, etc. and placed stops for trades. The first hit long and just took off. Being that it was parabolic in nature, I hung on for a little while and then just exited figuring that if price continued up, I could get in on a RET. Then I did see a hinge. But with that in mind, price was hugging the lower end much more than the upper end and it felt like it was difficult for price to get anywhere near where it had been. Again, I had a stop in place for either end of a RET and was going to see what happened. The short took and pretty much took off. There were slight pauses, but nothing major. The issue I had was that I wasn't so sure about my SL. As it kept going down, it seemed more like a trend line rather than a supply line. I kept noting RET for if I hadn't gotten in where I did, if the trade down would be triggered. The SL really wasn't ever tested but I kept noting the SLHs and just rode the wave down. Price was so far away from my SL that I drew a tighter line after the big move at 1007. Then I started getting nervous - I was 30 points away from my entry and I was nervous. Yup - still have a lot of work to do with relaxing and just watching what's happening. So I drew an even tighter line because price was getting close to yesterday's low AND it had already moved such a distance. My revised SL was broken and it went above the LSH so I exited. In the CWS world, I would have gotten more out of it had I waited, but it's what I did. I was balancing something db had said about not being greedy and something that Niko had said about scratching even when a trade is going your way (if it starts to do something that you're not comfortable with). In hindsight, I'm still pleased with how I managed the trade. As it was going and I was tracking the additional RETs (blue/purple circles), I kept thinking to myself after the trade would have triggered --- would I want to be in this trade if I just got in now? Strangely enough, some of the earlier times would have given more resistance after triggering than those down the road. I guess there's something to that cascade effect. I've got to keep doing what I'm doing and get more and more confidence in myself. The SLA has proven to me that it works. I just have to work the SLA.
This is pretty much what we did, except that we entered at 95 and exited at 66 after the break of your wider SL. I'm still in the second short.
So I figured I'd keep the train rolling and do some more replay action. I went back to 1/6/14. After looking at it in hindsight, it looks a lot like how today started out - fairly tight overnight range, big up move to start followed by a rejection and a nice down move. For whatever reason in replay, I didn't have multiple set ups for whether or not price moved up or down and I didn't catch the big up move. My prep for replay is really just looking at the 1-min, not the hourly or where things are with regard to a longer term channel. Either way, I got in on a RET and rode it down. I kept track of LSHs and fanned the SL when appropriate. I kind of got caught in some bigger pullbacks that were just a test of the overall move, but because it a) broke my SL and b) went above the LSH, my plan is to exit and I did. Tried to get in on the up move but it didn't trigger. Got back in on a RET south, but then things got a little fishy with my SLs. Because my rules caused me to exit, but the overall move was still down, I had 2 lines going - a longer term line and a shorter term line. I know that the lines aren't the focus, but they're a big part of how I determine where things are. I wasn't as excited about entering down low in the move, but as I determined with real time earlier in the day, sometimes the cascade effect takes over and you just have to jump on and go. I also realize that it's fear that causes me to thing that way. Only continued practice will allow me to trust how I'm viewing things. In the area near the red diamond, it was feeling like there was a struggle to keep price at that level. It was moving down, but there was a lot of opposing movement. When it broke both SLs and moved above the LSH, I was out again. Yet again, the up move wasn't triggered and it went a little lower. This time an up move was triggered though. But it kept flirting pretty aggressively with the DL I'd drawn and was hesitant. I let it go out of the DL once, but when it did so a 2nd time, I felt like I was forcing something so I got out. I'm getting more and more comfortable with my rules of a SL/DL cross and compromising the LSH/LSL. Sometimes allowing it to get to those points can be antsy, but more times than not, it works out. I see more replay in my future.
Another round of replay and it was a fairly frustrating session (1/13/14). In hindsight it makes sense, but for the sake of replay, it was annoying. The context is that the preceding Friday was a monster movement day. From the NY open until 1130, the NQ was down 35 points. From that point on, price marched back up to the morning high. Lots of movement so it makes sense that there'd be a day of consolidation. The day began with breaking out of a fairly narrow range (12 points). I'm definitely starting to notice behavior more. In the opening hours, price moves in a definitive manner. If it starts to make LHs or HLs (opposite where it had been moving), that's often an indication of a move having run out of steam. Sideways movement is one thing, but attempts to make a HH or LL and being unable to, that sends a different message. There was a big response to the up movement but that price wasn't able to be maintained. Price started to form a hinge. Rather than get mixed up in that and noticing another range being formed, I decided to stay on the sidelines rather than get mixed up in a bunch of entries and exits. Price did move out of that range, I saw a RET and took it. Price continued moving up and started to retrace but the retracing movement lasted longer than the up movement so I got out. SL drawn but trade not triggered. DL drawn but trade not triggered. The price movement seemed like a tennis match rather than having any kind of order. In real time, I likely would have gone away for an hour and came back to see if a definitive direction had been achieved. With replay, I just pushed stop and I'll try another date.
So today was a day where I took a step backwards in my progress. I thought I trusted SLA, but I still have a bit of work to do. Actually, I kept viewing bars as parabolic and then wanted to capitalize on the profits rather than giving price some room to breathe. If price retraced 50% (of a bar), I'd exit. Once I started down that path, I felt like I was chasing the market rather than going with the flow. Then due to getting out, I had a miss-mash of trend lines and didn't feel like I was really following any particular plan. It's safe to say that I'm definitely more of a fan of the moves that go slow and steady with some regular pullback rather than a bar or two of insane movement. Then the pullback isn't so fierce. However, what I like and don't like has no bearing on the market. I need to learn to react based on what I'm seeing, not based on what my preferences might be. I also learned today (based on my actions) that ego is still a big part of it. I've found that it's pretty easy to ride a wave when the pullback isn't too bad. But once things get too up and down, I definitely want to be right and that can't make for a good trading session. Time for more replay as I've got to get more comfortable with movement and to temper my emotions/reactions. Sucks for there to have been so much movement today and I made lots of mistakes. Now it's time to learn from them.
Read the Zen thread Why dont you try posting the prep work before the open, that has done wonders for me. That is what the lines are for, let them do their job, if you are trading only one contract that could drive you crazy, just use multiple ones and relax, besides, you are just learning, is not like is your retirement money . [/QUOTE] I screwed up today as well, but just review what happened and try to mend it if it is broken.
More replay and I picked 1/15/14 as I'm just working my way through past dates. I wasn't as diligent with my rules during sim today so I wanted to be precise during this session of replay. Db mentioned that sometimes you'll be plugging along and have no reward, but you have to plug along nonetheless. As a recap, my rules are SLA +. I draw a DL or SL, wait for a RET and enter 1 point above or below the RET area. Rather than just exit when the DL/SL are broached, I allow price to get to the LSH/LSL area. Sometimes this bites me in the ass and other times it allows me to stay in. The biggest issue I've had recently is when it seems like the DL/SL is far away from the current price movement. When that happens, I'm not sure if my DL/SL is correct and then if price starts to move against me, I get very antsy. So for this replay session, I just wanted to follow the rules. It was sort of uncanny how price would RET back to a DL/SL area and then continue moving in the original direction of the trend. I'm not saying that the lines kept price there, but that I'm pretty sure those lines were drawn correctly. I got pretty beat up though during the session, but as db has says (and no I'm not a parrot), it's just replay. It doesn't make or break me as a person. I'm practicing and getting comfortable. I had a bunch of NT trades and that was quite frustrating. But, that's how things go sometimes. I was glad I kept the session going past 11AM as I figured something had to happen at some point. It seems as if I'm figuring out ways to manage trades a little better. For instance, when a DL is broken, a HH occurs, price moves immediately back to the fanned DL and then forms a HL, that's a pretty good sign that the tides may be turning. In those instances, I may need to just exit at the DL rather than waiting for confirmation that it's over. If I was wrong, I can get back in.