tampa's "short skirt" trades...

A few comments:

I see you made an early morning trade on the short side, on which you took a quick loss. Smart trade. Here's what I don't understand. In the next 45 minutes approximately we moved around 27 points higher, during which you made no trades at all. During that upmove we made 3 penants, which would seem to fit directly into your methods. What happened?

And this gets to what I believe the problem is with your method. A 2 point move in this market is largely random. A two point move in either directlon can happen for almost no reason at all. I believe you know this at some level, and because you trade too large a size you are therefore fearful. What else would explain no trade in that 27 point upmove?

If you're going to trade, TRADE. You don't need a 15 minute chart as you stated in some of your original posts.

Frankly, I think you're trading with a flawed method. A one lot traded on the upside today would have given you as much as you make on a great day trading 5 lots....assuming you gave it some room to move.

Sometimes traders of the futures focus on too small a picture. Have you ever looked at Trin for example? Are you aware that today trin dropped under .40? Are you aware that moves down with trin under .40 are rare late in the day? Do you think you could have used this information to your advantage?

I think you're way too busy overtrading your account with 5 lots to see a little bigger picture. Let's say you trade a 5 lot with a 2 point stop. That means you're risking $500. Why not trade a one lot with a 10 point stop. Still a $500 risk....but the odds of losing drop if you've selected the trade correctly, and if you've bought a set back in a strong trend.

At noon eastern time trin was hovering between .40 and .50...a low and bullish reading. About that time they dumped ES as the easterners went to lunch. We traded down to 786. 786 was a 38% retracement of the move up. Tick traded down to -750 or so. Could you have bought a one lot here, with a wide stop? Why not? Do you realize we traded about 20 points higher later in the day? If I'm not mistaken this beats your 5 lot trading on most days.

Now, admittedly we're talking about hindsight. My point though is that there are other methods of trading....methods that would probably INCREASE your odds of success. But you would have to learn to pick your spots, set wider stops, and reduce the size of your trading. You would also have to learn a few new tricks....like the fact that the stock market is comprised of a whole lot more than a couple of points one way or the other on the ES.

Tell me to mind my own business and I will stop making these suggestions. But frankly, your trading doesn't look like it's working all that well....and maybe I'm just the voice you need to change your thrust a little.

By the way, I'm not suggesting that you set 10 point stops necessarily. It's an illustration. Making counter trend trades on a day of the strength of today (again defined by trin) is a suckers move in my opinion. Personally on days like today I LOVE to make trades where we take out some type of short term perceived support...because I'll fade that trend every time....it's a high odds trade. But you do need to give them TIME to work.

OldTrader

 

According to LBR, some of the best trades do not actually retrace back to the 20 ma.... Also, a bit of advice...skip trades that actually go through the 20 ma . They are not strongly trending for this scalp setup... Also, Look for some sign that the move is actually a retracement by looking at time and sale . Wait for it to show signs of a continuation with the trend of the day....strong day , weak day... Dont just enter blindly when price touches movin average, enter stops and hope for the best. LBR says she enters before the move starts but I'm sure she wants to see some sign of it actually stop and show signs of it going her way. For example , if trend is up and it retraces ....let it first stop retracing and then look for buying ...look for people hitting the ask. let it show a little strength....then enter on market...

And like oldtrader said, watch that trin... It could keep you out of trouble...



My 2 cents but then again what do I know....

Good luck

Nick

 

Just went through the two posts above. Both give me a lot to think about, and it would not serve any purpose to just glibly comment. However, I wanted to acknowledge that I have indeed read them, and will address both later.

Thanx guys for the effort.

 

Admittedly, I’ve not a clue as to how to trade days like today and yesterday. The strong early moves leave me trembling in fear. The subsequent slow drift upward fills me with doubt.



My ideal time horizon is ultra, ultra short term. A trade that runs for more then five minutes is all but unbearable. But they tell me that in order to survive, one must adjust. With that thought in mind, I decided to take some of the advice passed along last night. – at least to the best of my ability.

Since I was going to be headed into uncharted territory I lowered my size to a one lot. I have been aware that more (far more) of my trades would work were I to increase the size of my stop, it was altered from 2 points to 5 points (GULP) What to do with the profit target was a real dilemma. I mean, I ain’t no frickin’ mind reader. I don’t know where the market is going to end up. So I pulled a number out of the air – 5 points. It’s a nice number.

After the initial gap, and run up, the market went in to a narrow channel that provided no real opportunity. So I took a two hour nap. Naps are good. I like mid day naps.

Upon waking up, I saw a possible set up, and entered the market.

12:48 Bot 833 ¾

The trade immediately moved in my favor, but after ten minutes, as prices retraced a bit, I cut and ran with a profit of 2 ¾ points. After a short consolidation, prices moved higher – a lot higher. But like I said, I ain’t no frickin’ mind reader.

At this point I am waiting for the boys to get back from lunch, and will see what happens then.

 

Well, when the boys returned from lunch they were not as bullish as this trader. In fact they were downright grumpy, and ignored several obvious areas of support.

02:20 Bot 838 ½ -5 points
02:53 Bot 836 ½ -4 points.

Obviously the morons on Wall Street do not know how to read a chart. Nor did the assholes have their collective eyes on the TRIN. There is little incentive to trade with people so out of step with the Market!

(Look gang, I am trying my best to be good humored about all of this.)

But I wanted to give them another chance – you know how it is. We were at yet another obvious area of support.

03:29 Bot 832 ¾ -2 Points

hmmm...me thinks that the boys are trying to tell me something. So I joined the grumps on the short side.

03:30 Sld 830 ¾ +3 ¼ points.

It should come as no surprise that these fools who only a short time ago could not recognize obvious support, now were blind to obvious resistance!

03:45 Sld 828 –1 point.

To be honest with you, I don’t know what to make of any of this. I am not nearly as cheerful about it as it may appear.

6 Round Turns / - 6 Points.
2 Winners / 4 Losers

 

So, what do you think the problem is? It could be a lot of things – and no doubt is – but if I am going to be honest about it, I have to say that the number one short-coming is that I don’t belief.

There are a number of different things that work – at least for me – but I always seem to be tweaking and fiddling to the point that they stop working. Or worse yet, I’ll hear of someone else’s method, and go rushing off to give it a try.

It’s the same old story – over and over again. I simply refuse to mend my ways. So I guess you could say that that is the real problem. A lack of consistency, a lack of discipline, and a refusal to improve in those areas – that pretty much sums it?

So that leads to yet another question: What am I going to do about it?

What do you think?

 

Tampa:

Did you write your plan? Do u have rules for exact entries and exits? If so, put them here..and we will look at your trades in the context of SSkirts....I honestly think that you just call your setups SS but you just take random trades..

_PKJR

 

I'm sorry that your day didn't turn out well...I feel somewhat responsible for that. I feel that perhaps I took you off your course.

Maybe I shouldn't be commenting at all...my methods are quite a bit different than yours. But I felt hopeful for you today because of the first trade you made....that trade Tampa went up about 10 points or so. You bought it perfectly, you had literally no heat, and there wasn't much reason to sell. You started out with a little bigger risk threshhold....and it worked for you instantly. I can't figure out why you sold the blasted thing.

Those afternoon trades are the ones that got me wondering. You say you bought at support. But I disagree, it didn't look like support to me. But then you made the cardinal error in my mind...you averaged down. Ouch. That did you in. I probably wouldn't have shorted either....everything was working against you, from trin, to the day's trend. So I wouldn't have made the profit on the short side, nor lost anything that way either.

So bottom line is that first trade was a great trade...you just needed to hold it to allow it to work for you. I didn't like any of the trades you made in the afternoon. Had I made any trade it would have been on the long side...but by the time they had the ticks negative in a pretty big way, it was getting late in the day...so personally I would have passed. You had it right this morning...trade the long side, sit there, let it work....would have resulted in maybe 10 points on a one lot...not a bad day. Had I made that second trade on the long side, I would have taken my loss...and that was it....NO AVERAGING DOWN. Had you done so it still could have been a good day had you held that first trade.

So in my mind you were on the right track....some small changes could have made a world of difference.

BUT, let me say this too. The primary thing I would have changed on your original method was how long you held your position. That looks to me like your big weakness. The one day I went back and evaluated you would have had some huge profits had you simply held a matter of another 15-30 minutes. Today's first trade you were in well, and about one hour away from the high.

On the other hand, if you're convinced you have a method that works without tweaking then use it, stick with it....if it isn't broke don't fix it. It looked to me like what you were doing wasn't working particularly well.

OldTrader

 

The "obvious support" I spoke of came from other time frame moving averages. unfortunately, the Wall Street crowd neglected to pay any attention to them!

In essence, I was bottom fishing - something I NEVER do (well, hardly ever do).

 

well tampa, that good old trend is indeed only your friend until it ends, isn't it!

i can see exactly what you were trying to do with those two trades. imo, the 2:20 was definitely worth taking, and i guess you can hardly be blamed for taking a punt on the second. however i really don't think that those trades were deserving of 5 point stops at all, especially not the second one. it's all well and good play off a perceived retracement, but i think it's a fallacy to ignore what the market is doing right now and recently , and rely on what it has done in the first hour or some other part of the day (week). old trader may well disagree.

also, i'm not a big fan of aiming for 5 point targets with 5 point stops either. using that type of a stop, again imo, means that you have a pretty idea of what you expect the market to do and are simply giving it that 5 points as room to manouvre until it does what you expect. simply cutting off your profits at 5 points because it sounds like a "good number", or simply cutting off your profits simply because they are profits, imo, isn't a viable long term strategy when your playing for the "major" move of the day.

if you do indeed wish to become more of the kind of trader Old Trader is advocating, i wouldn't be too discouraged by today's performance. your biggest mistake was obviously taking a quick profit on the noon trade (which was just plum picture perfect, if you ask me). when you find yourself in a similar situation in the future, perhaps you could ask yourself, "tampa, if i wasn't long, would i REALLY be selling here? would i??". (then again, i'm no expert on letting winners run myself, although recently i am holding onto my winners longer and longer, so maybe i have stumbled onto something.) anyway, my point is that if you're gonna learn a new trading style (which is what i think you'll be doing if you follow Old Trader's advice), be prepared to for a new training-wheel stage with the technique, and for a tough mental challenge on your pysche. one day won't do this. keep that chin up.