This is a narration of my trades in post #2166 and post #2167. The videos in post #2166 and #2167 were deleted so I made another one narrating how the trades were made. Therefore, instead of looking at 2166 and 2167 look at this here as it narrates all. Well we made it back to our abode when not on the road. Got here late last night bone tired. This morning I decided to trade the micro NQ (MNQ). This is an example of trading with small size if I were to trade from a small account. Each point is $2.00. The idea is not go over 1 point position size of the E-mini NQ which is 20.00 point. So, it takes 10 contracts of the MNQ to make 1 contract of the E-mini NQ. Therefore, including averaging down or scaling in I don't want to surpass more than 10 MNQ contracts this morning in this trade video. On my last trade I did bump up to 9 total MNQ contracts then exited all 9 with a profit. The first entry was 1 contract, then I doubled down on that and added 2 MNQ contracts for a total of three. As it moved against me, I then doubled down again by adding 6 more MNQ contracts so I had a total of 9 contract. The other trades were all just 1 MNQ contract trades. First was long 1c and exit with a profit, second was long 1c and exit with a profit, third was short 1c and exit with a profit. So, four trades in total all winners extracting 185 points out of MNQ in about 1 hour and 15 minutes or so. That in dollars means 185X2.00 per point. Sorry the video is a little over 15 minutes long. I did try and stop and start several times but all together it still added up to just over 15 min long. So, I guess only the really interested will watch the entire thing with my comments as the trades were going down live. I suggest for mor info that you do watch it as it shows my thinking and reaction to the market live. One thing I want to drive home. I refer to TR techniques and grabbing quick scalps as opposed to waiting (usually several bars) for price to go back to the bottom or top of the TR after my entry. The way I see this is if I hold for that to happen, I miss out on three things: locking in profits, FOT (frequency of trades), and compounding. And I can always get back in if price continues in my favor. I like high win rate and FOT. I am simply a scalper which I define as 1 to 8 points in the ES. Of course, that scalp size increases when trading the NQ or MNQ. I am just trying to show that the techniques work on ES NQ and YM or their micro equivalents. I may not be trading the YM right now but the techniques I use for ES and NQ and their micros indexes also apply to YM. I took a 5th trade in top of TR. Faded the top. It was a 1c trade for 11 points. So, now up 196 points for the session trading MNQ. All trades are winners locking in profits. Doing other things and doing errands for the wife ..LOL. Again, ignore my post #2166 and #2167 above as this post here explains those trades via this video here below.
I am not feeling the best today health wise, so I crawled my carcass out of bed late. Started looking at the market late. I decided to take a small size trade in MES. Towards the end of the video, you will hear me calling it MNQ. That was a mistake. My brain is not working the clearest today LOL. Anyway, the trade was in MES. What I want to show is that even if a trader has a small account, it is possible that a trader, by using certain PA principles, and scalping as opposed to investing that quick profits can likely be made. So, I am trading very small here. However, understand that the very same principles apply trading ES or NQ or YM and their micro equivalents. It is simply matter of the traders account size and tolerance for risk. Again, I am not telling anyone to trade this way, but I am showing how I trade this way regardless of position size. I have shown previous larger size trades in previous posts. This trade captured 5.50 points. For scalping I generally don't worry about R:R because most of the scalps are initially going to be upside down on R:R. Not always, but much of the time. I know this so I do use SLs but usually keep them out of the way of possible HFT spikes...etc. They are there more for unexpected catastrophic movements. Nevertheless, I will move them and take a loss if I see I am simply on the wrong side of the market on my entries and analysis, especially if the market moves too much on momentum against my position. Tight SLs can papercut an account to oblivion, regardless of the size of the account. In my experience I have to give the trade room to work. Too many algos and HFTs happening that will clean out tight SLs. And I rarely am exact on my entries, so I use averaging down or scaling in, whatever term you wish to call it. Of course, the context has to be right for me to average down in. This was a 3-contract trade. Initial entry 1 contract..followed by scaling in on 2 more contracts for a total of 3 contracts short and covered with a profit on all 3 Cs. I have other things to do so I will not be trading any more today. This trade was MES in a tight bear channel using channel trading techniques. Remember a channel is simply a TR that is slanted. So, the same techniques can used as those techniques in horizontal TR with a few adjustments. In bear channels the main adjustment is shorting and not going long as shorting puts the odds in one's favor. And shorting in the top 1/2 of the channel depending on the volatility. Although I will go long at times in bear channels just because of my skill in doing so. Also, some adjustments have to be made in any trades utilizing intra-bars resistance support levels. Also, allowances should be made for BOs south of the channel. That is, it may travel further south and only make it back to bottom of the TR before heading on down so profits have to be grabbed rather quickly. However, because it is a bear channel slanted down it can often go back up through the bottom of the channel and well into the channel. I pay attention to momentum for this. On a BO near the top side of a bear channel in may only make it back to the top of the channel because IT IS A BEAR channel! So again, I like to grab profits and count on using FOT (frequency of trades) Many more opportunities should abound in the session. IN the video you may hear a little conversation between my wife and myself. I forgot to pause the video LOL. She knows very little about trading and her question was how much I had invested per contract to make the profit. At least she knows what a contract is! I guess she has heard me same the term enough! Remember this is MES regardless of what I say in the video LOL. My brain is convoluted today as is my mouth!
Thanks for the videos, its interesting to hear you go through your thought process. I do have a question, maybe you addressed it and I missed it but, why did you short while the position was moving up versus waiting for it to start falling? Was it the candle pattern? Volume? I'm just not understanding why you opened your position when you did.
You probably need to read some in my journal to understand my reasons. Bottom line I am not that concerned about whether it is a bull bar or bear bar I am shorting. In bear channels I am more interested in where the bar is at in relation to the channel. Is it in the middle? The top? etc. Secondly, in tight bear channels in slow moving markets there is not room to wait for a bear bar to form to then short it because the channel is too tight and the bear move has already ate up too much or a great portion of the profit potential. If this were a broad bear channel with several legs in it, consisting of larger bars and overlapping bars then I would maybe short a bull flag or pennant at the top of the channel and do so a tick below the previous bear bar. Look where I scaled in on the two contracts (top of the channel) Actually, the better short was on the next bull bar outside the top of the channel. I did consider scaling in again on that second bull bar but I decided not to. Had I done so I likely would have extracted 20 or more points because I would have added at least 3 more contracts and maybe doubled down and even added 6 contracts. You have to understand that in bear channels I am looking to fade the edges near top 1/2,1/3, or 1/4 of the channel. I am simply betting that should price break out of the channel that within 5 bars or so it will trade back down to the top of the channel or towards the middle and can even go all the way to the bottom of the channel. Enough to give me a good scalp. What is more important is the location of the entry bar in respect to the broadness of the channel. Whether my entry is on a bull bar or bear bar is secondary. And the larger context since the open. It is worthwhile to also ask, where is price at in the market cycle? Read more of my posts about the market cycle. In this case for the market cycle we had a spike up open (gap all gaps are BOs) that morphed into a bull channel. Followed by reversal that became the bear channel. That bear channel later on in the day morphed into a horizontal channel of about 20 bars which was followed by a BO south. Subsequently, that BO south in turn morphed into a horizontal TR until the close of the RTHs session. The latter three don't show on this chart as I quit trading but if you look at a chart showing the rest of the session you will see it.
There are several ways usually to trade PA. One can trade BOs..channels..TRs and other scenarios. Often there are multiple ways to trade these things. As trader I just have to know what element of PA I going to trade and use the appropriate principle and rules for doing so. Take Friday's PA. I did not trade it this way, but it could have been traded as a SPBR (small to medium PB bear trend). This chart of the day session shows that trend. Of course, it is easy to see in hindsight, but the trick is developing the skill to see it evolving in real time. I only made one trade Friday October 25 and that trade was not using the principles and techniques for trading SPBR (small PB bear trends) or MPBR (medium PB bear trends). I traded of different PA as the video above show. I used tight channel trading techniques in that first bear channel off the high of the day. OK so what if I had trade this as a SPBR or MPBR trend how would I have done it? By bars 11:55 to 12:10 I would likely have decided that would be a SPBR or MPBR trend. It had pretty much been staying under the EMA (20 period exponential moving average) since about bar 10:25. And by bar 11:55 it had been aprox 31 bars in a down trend from the high of day with more than 1/2 of those bars under the EMA. For me this indicates that every rally is being sold. So, what are the techniques to use if trading this as SPBR or a MPBR trend? 1) Sell every rally towards the EMA AND averaging down if wanting to employ scaling in. Exiting on any push down that renders a decent scalp. Do this as often as there is a rally. Such as those between bars 12:40 and 12:50, 13:10-13:45, 14:25-14:35, 14:40 to 14:50 2) Sell every strong BO south on momentum and bigger bars and consecutive bear bars such as that in 12:10-12:40 3) Sell at bar 11:55 and hold to the close of the RTHs covering just before the close. 4) Buy every rally towards the EMA scalping out at the top then reversing and selling on the subsequent decline. a) #1 would have outperformed #3 in terms of points and in terms dollars especially if utilizing scaling in and even more so if doubling or tripling size on subsequent scale-ins when adding to the initial entries. b) #4 would have outperformed all of them especially if using scaling in on both longs and shorts, especially if doubling or tripling down on scale-ins. Of course, the trick is catching those moves. That takes skill and a few years to learn. Multiple entries and exits have the potential to outperform taking a position and holding for the bigger move. Why is this? Because of the potential for Scaling in. The potential for doubling and tripling in on scale-in opportunities, locking in profits when they happen, and compounding profits. I never worry nor get irritated about missing big moves. I used to until I learn the principles of scaling in (averaging down LOL), locking in profits, compounding profits, and FOT (the so many frequencies of trading opportunities in a day session.) I also don't believe in over trading. As long as I am psychological in a proper frame of mind in any session and not tired mentally or physically and I seem to be in tune with the market flow I see no reason for not taking as many trades as I can, all session long! I hear traders say things like: "I was doing good then overtraded and lost it all." Well, I trade some more and get it back! I have already alluded to how I do that in other posts. Of course, the exceptions to doing that are mentioned in the previous paragraph above. There are a few days in a year it is best to shut down the computer (not shoot it) and go fishing, gardening, shopping, or to the library and just sit and read. I sometimes go to Books a Million or Barnes and Nobles buy me a big hot chocolate sit in a chair and read till I fall asleep from the sugar. I probably gender a few laughs from other clients at the bookstore snoring...It is a sweet sleep and all my day's troubles in the market fade away as I enter another dimension. It is what it is: I will awake tomorrow or awake on the next trading session with NEW fresh opportunities. I cannot change the past, but I can learn from it. And I can come to grips with it and accept it. Then MOVE on.
Look at the same session 10-25-2024 but from a 1m chart perspective. Can you see the myriad of opportunities to trade this as a SPBR and MPKR trend over and over? From around 9:43 to 13:10 (green vertical lines). Then again from 14:03 to around 15:14 (blue vertical lines). Naturally it requires fast decisions on a 1m chart but the opportunities abound even if missing some of them.
Now look at the same 5m chart for 10-25-2024. See all the channels that could have been traded using tilted TR (i.e. channels) techniques? See the green horizontal TR that could have been traded using TR techniques? In addition, bull channels are bear flags and if not on this TF on others. The first channel was such. Bear channels are bull flags on this time frame and if not on other TFs they show up as bull flags with a resumption of the bull trend. When they don't resume (as in this case) the that is the unexpected. When the unexpected happens, I look for a MM (measured move down) This was a bear channel (second drawn in channel) then a little sideways move (market cycle) but instead of the bear channel reversing and heading up (because of being a bull flag on a bigger TF, but instead heads down with a another bear channel then that is the unexpected happening and I would look to going short and holding for a MM down. Do you see the MM from the high of the day (to the left) to the little sideways move then the BO of that sideways move followed by the same distance high to sideways range then extended down aprox same distance to the bottom. There are so many ways to trade PA. I try to have a toolbox of techniques to use with whichever PA element and cycle is in play at the moment. All of these things could have been traded Friday not to mentioned the many more opportunities on the 1m chart if trading it. Often times we don't "see" all the patterns until later but we can learn to trade those we do see!
Everyone sees things differently. No right and wrong way, only a win or loss. But once price traded and closed cleanly below 930am NYT low nothing but shorts for me from then on - since it never reverses much, of course. Actually AVWAP closed below gave a signal 2 hours to the minute before. 1114am vs 114pm.