God dammit! Checking in real quick, I see I left far too much on the table. Ok.. now that I got that out, I wanted to update my daily chart. Seems my channel is drawn not too badly at all. In the past two days we hit the top of the upper line, and today we made out way down to the mean. Keep in mind that this channel was able to be drawn in from mid April to mid May. Those are the months where the highs and lows form the channel lines, and it was just a matter of extending those lines to get to today. This is why I have been hunting that short for a while. AMT would suggest that the LORL was now down to at least the mean or the bottom channel line since we were at the upper line.
I shorted a bit deeper than you did and it was definitely chasing price on my part because I hesitated to put on the trade higher. However, I had that 55 airspace level in mind and felt like the Queen of PA taking off my trade during the "bottoming action" around that level, which of course broke down again without me.
Wow... well if Ms. NoDoji herself can get out far too soon then I can't feel too bad at all! My exit of course was for terrible reasons, nowhere close to a bottom and right in the middle of the airspace, but these are good baby steps forward to at least put a good trade on and hold through some retracements! I'm just amazed at how much money this is for those traders, maybe even you, who are loading up on dozens and dozens of contracts. Now its at 60 points, so lets call it 50, which makes it $1000 for every contract. Some guys probably made 20k to 30k just in one day!
I wish 40D was still around. I studied his charts quite a bit, but the the environment that he was posting in, end of summer/fall of 2013, price really took off. He was decisive in getting in and out, and loaded up on the contracts. For the past couple of months, price has been going back and forth quite a bit, so it looks a bit harder, price isn't taking as direct of a route to get to where its going as it did in his charts I don't think. But of course on a day like today, the trend was very strong right off the top, and I wouldn't be surprised if he wasn't in for at least 30 or 40 contracts because that is what he had been trading back in the fall, and he I'm sure has come a long way since then!
So Db posted an interesting channel chart this morning. It shows a much longer term trend channel than what I was showing. (Once again, my options are limited for longer term channels because of my platform.) In this channel, much of the price action of the past few months was actually below the lower line, and hence in oversold territory. This looks to be a weekly chart, but based on this, price is essentially bouncing off the lower line to go back up. This also means that when price was sitting above 3900 a few days ago, this was at the mean of the channel, (although he didn't draw in a mean), but this certainly would favor price going back up. Its difficult to know which channel to follow since price is in multiple channels on different time scales at the same time. The secret of course isn't to blindly follow a channel. You follow price, and when price is showing a direction, which for example yesterday was down, you get into a down move, and use AMT to help you figure out where price might stop. PREP FOR JULY 9 At any rate, if we go back to a shorter term view, we can see that we are on the way up. We had a drop yesterday from 3906 to 3841, 65 points, so the 50% level of this would be 3873. We are just below this level now. Price overnight has been in a range, 3861 to 3870. There was a nice climb back up of 20 points yesterday after hitting the bottom. We are now close to the upper limit of this overnight range, so lets see if this favors going even higher at the open. It looks as if we are filling in that airspace now with traders wanting to do trades at the different price levels that we just blew through on the way down. If I had enough back testing done, I would know how likely it is that these price levels do get filled in after price moves quickly through empty airspace. The hunch I'm going with is that this is the case, and we have already filled in the bottom 20 points now from the action yesterday afternoon and overnight. Now lets see if we fill in the 3870 to about 3883 range.
Well today was not as easy. O - At the open there is an older DL, and a more recent SL drawn in. Price moves down just a little but turns back up breaking the SL. No trouble clearing the overnight high. A - Finally get in here. Not exactly an SLA trade on the one minute, but once again, the RET is there on the 15 sec. You will note the green arrow above the next bar which would be the SLA long that gets filled 2 bars after my entry for a price that would be 1.5 points higher. B - After the DL break, I'm trying to hold on, but each low on the previous bars keeps getting broken so I'm out here. What a terrible place, the ultimate low before we head back up again. In fact, my exit couldn't have been worse. I had a chance to exit at BE or even a tiny profit just a minute or two later, no way to know that of course. I guess at the time it even looked like if I don't exit now then I will be forced to exit for a much great loss given how strong the drop was, so I can't be that upset. Also, waiting for the official SLA entry, given my same exit, would lead to a slightly higher loss, so the fact that the trade would still trigger with SLA and lead to a great loss leaves me not too upset or thinking that I did something drastically wrong. Getting in sooner of course would be better, and if I will be using the 15 sec to get in sooner, then I think this could have been done for a better price earlier on. So I'm sitting at -$(64). C - Moving forward, I see this hinge forming and mark it in, but its not the best looking hinge, and more of a range as it unfolds. Ultimately, it doesn't go anywhere. Dropping below the lows about 10 minutes later sets up a good move down though. D - Having missed this whole move down, I'm thinking of perhaps shorting here. Its an odd trade because there is no RET in sight, but seeing at how well the SL is being respected, shorting at the line versus below the line looks to me like it will lead to more profit. And honestly, at this point, I'm just hoping to scalp 3 points to make up for my loss. Since the trend at the open didn't go anywhere, I'm not hoping for a repeat of yesterday, but just to see if I can get back to BE, with the strategy being that on good day I make money, and on bad days I don't do damage, so I'm just trying to get back to BE with a scalp. E - Here I think about a long, but I think this was only drawn in after the fact. There is the SL break and a RET, but at the same time, this could be a range now, and the top of the range at that, so I can also make a case for going short where this arrow is. F - We once again have a SL break and a fairly tight range. Still looking to scalp, but do nothing. I'm getting a bit upset with myself for just sitting here as we have just had over a 15 point drop and I've done nothing. G - Here is a long marked in. I didn't consider it at all at the time given the range, but looking at it now, it is slightly above the level at which I would call the top of the range, so we can say that if price hits the entry then it has moved out of the range, and its also a decent RET after the SL break earlier. On top of this, the previous few bars all have a higher low, indicating the waves keep getting higher, and we haven't even been able to visit the lower level of the range. Price turned around at the midpoint before going out the top, so this looks good too. H - Well, when a trade works, it just works, and going long above G worked well right away. Here is the next opportunity. But lets face it, by now all I'm thinking of is what I could have done, I'm focused on just making 3 points, and every trade I consider I don't put on thinking that price might just go right against me instead. So this whole move up is essentially missed. The long here would be trickier because of the instant drop after it would be filled, but the DL drawn in from below would still be intact, so hopefully I wouldn't have been spooked out. SUMMARY I'm kind of mad that I didn't do anything else today other than my first trade. Its also unfortunate the exit was so bad, but I'm not sure if by blindly telling myself to always hang in longer is a good strategy. I do feel as if I was putting pressure on myself to have another good day. I didn't need 20 points, but I wanted something to show a series of consecutive positive days regardless of the type of day we would have. I keep thinking that it should be fairly easy to make up 3 points, heck, even 3 scalps for 1 point each should be a piece of cake, but if it was that easy, I could just do it all day long with 5 contracts and collect $100 each time... how awesome would that be if it was in fact that easy! I've got time today to stick around... not sure what I will do later but I'll update if there is a reason to.
So I came back later in the day to do more damage. (when I get really good and people will be doubting my trades like they do so often to guys who trade via price, you will be able to refer to this post as evidence for how it wasn't always so easy!) J - It just so happened that price bounced off 83 which I had already drawn in. I really was just looking to scalp now, going for a point or 2 by buying or selling at the top or bottom of a fairly well established range. I always say I should do it, so now I was going to try. K - I started to follow this SL down, and of course there was some news release at 1pm, like every Wednesday, so I wasn't all that surprised with the sudden drop. Thinking about getting in on a RET somewhere, but its funny how it just went up and down, looks like there we just as many traders who wanted to buy as who wanted to sell. I can't believe this absolutely beautiful hinge that formed. L - When hinges work, they really work, and once price drops out the top or bottom, it really goes. Here it drops out the bottom. I don't get in until here at just below 71. There was a much better place up above, you can see the RET between the two bars, so an entry between 73 and 74 would be so much better, just below this RET. I have a terrible feedback loop that goes on in my head. At first I think this looks like a good place to short, then I wait for a bit more to see if I'm right, then I wish I had shorted up higher after price is already a few points ahead, and then I look for the next place to short, once again waiting to see if I'm right before I put the trade on! Horrible, but only experience will solve this. In fact, right here on this chart is proof why this is no good, why waiting for confirmation and then the next opportunity is more risky. My entry here was unfortunately too late. For a few minutes it went sideways, but then started going up. M - Here we are breaking the SL now, and had my entry been around here, where it first dropped out of the hinge, it could have been an exit for a very small loss if I got spooked. What I was in fact doing was waiting for a test of the apex, knowing that price will often come back up after a hinge exit and then continue the drop if there are no buyers. N - Sadly here, we go through the mean, and I'm finally out about 2 points above even the mean, for a total of about 7.5 points loss. Ouch! This could have been about 4 points if I entered the exit from the hinge much sooner. In fact, maybe if I entered sooner, I would have exited at BE. But instead, since I was already down, I figured why not at least wait to test the apex. Its interesting how the more you're down, the more you're willing to wait a bit longer... a dangerous habit. I think its because its more painful to get out right before the trade starts to work again then to just get out for a greater loss. This of course sounds like a huge reason because of ego... and hence has no place in trading. All in all, I don't think my trade was that bad. There is a hinge identified, a solid, beautiful hinge, and there is an exit. The entry is much too late, but waiting for the apex test is reasonable (if only my entry was sooner of course though.) So now of course in my attempt to make up my 3 point loss from earlier, I have now added another 7 points to the total loss. At no time did I consider going long, but essentially when your trade is clearly not working, this means the opposite trade is working very well. Here we went from a low of about 70 to a high of 88, 18 points, and I managed to accumulate a 7 point loss! If I was driving on a highway, I would have gone for miles in opposing traffic lane before I finally got off! LOL P - Ok... so now we break above 83, lets go long here. There are of course better RETs lower down, but I just couldn't get into a long frame of mind. I perhaps used the level of 83 as an excuse to not go long above the nice RET just above N, but with this level being 3 points above this RET, it gives me lots of room to get out in case we bounce off 83 again, and if we break through, like we did, then I'm already in the long. Anyway, so I'm just thinking to slowly scalp my way out of a 10 point loss, and I'm out 1.5 points later as you can see on the next bar. Q - We seem to have some serious resistance at 87.50, but its not until the DL break that it starts looking solid. I don't do anything about this unfortunately. I was completely ready to, and being right there in the moment, I didn't want to risk it. But when I'm not quite ready to yet, I think of how easy this is when it bounces off the upper level so nicely each time. Each one of those bounces were good for maybe 3 or 4 points, but oh well. R - Realizing how unprepared I am, its time to make lunch. I come back here, see the break above that resistance line earlier, draw in some SLs and DLs, and after this higher low here at R, I go long above the break of the SL. Seems solid enough to at least get to the previous high of 90 as before. But something interesting happens. It takes way too long! I'm stressing out because it doesn't instantly work. I keep holding on, using 83 as an exit, which is never hit, but price certainly isn't going up either. S - I see this damn hinge forming, and I have a target just above this to make at least one stupid point, but each high on these bars is a tick lower. Sure each low is also a tick higher, and hence the hinge forms, but if price drops out the bottom of the hinge, I'm screwed! I need price to break out the top! T - I slide my profit target down to 2 ticks above my entry! One tick covers the commission on the trade, and the other tick will get me $5 profit. It finally hits, and I'm relieved because at the worst, I was facing another $50 loss or so. Imagine risking $50 for a $5 profit! LOL Here is the sad part. By price coming up, it exits the hinge, which would of course favor going long right here. So as I'm getting out, other traders are piling in. We do eventually hit 90 again, although it doesn't hold, but going long where I initially did was still a 4 point trade had I held just a bit longer. So at it stands, I am down -$(186) for the entire day. It kind of sucks, but you know, I actually don't care all that much. I think its all good experience, and had I put the trades on that I should have earlier as I indicated with those longs, it would have worked out much better. So in a way, I am just learning to force feed the trades. It might cost me a bit of money to blindly put on trades just to put some on, but I do think I'm learning something in the process and hopefully shedding my inability to act. Oh, and one last point. Although nobody has asked, I have wondered if some people think that this journal is too focused on the money when it should in fact be focused on trading well. If this question does come up, I already have an answer. The reason for summarizing my days in terms of dollars and not points is two fold. First, I want to make it more real, where commissions and slippage can be factors, and a point or two profit a day can in fact be a point or two loss when these things are factored in. Second, I want to make sure that people realize I'm trading real money and not just sim. The fact that it is real money is perhaps causing me to often focus on the money, but this really isn't my intention. I am trying to trade well, and if some trades have to do with a money loss fear or motivation, which is clearly the case often, this is something that will hopefully dissipate with time. Furthermore, I think by tracking money, this will better summarize my trading ability. Would trading one contract and making 10 points be better than trading 5 contracts and making 2 points? The dollar value would be the same, and although the guy who can make 10 points might seem like the better trader, I think the guy who walks away with the most money in a week, or month, or for the year is probably the one who deserves that title. Although the money falls into place after you learn to trade well, I am doing this for the money, not to win a contest. So in essence, what I am saying is that that dollar value for me is a better gauge of how well I'm trading, and you can clearly see that like yesterday, even though I made over $400, I was still quite disappointed with an early exit and capturing only one third of the points available, so my focus really is on trading well, both in an easy environment, and a difficult one.
Thinking about yesterday, perhaps what bothers me most is not getting in on the long where price went from roughly 58 all the way to 80. If I took each of the trades that I had marked on the first chart, the morning chart, I would have done quite well indeed. I think the reason I don't take them is because I don't want to be wrong. It isn't so much about the money as any losses now are easily covered by one day, especially when I make the move to adding to the contracts once the trade is working well. After making the $426 two days ago, my account was already above break-even from where I started. I'm trying to focus on trading well, and I'm trying to stay out of trouble, so I stay away from trades where I'm just not sure, but then getting in too late has its own set of problems. I think deep down inside, I have an inherent problem with risk. Growing up, I think I was always shown the "safer", more responsible way. Logically I know that a calculated risk, along with a statistical advantage is a winning strategy, but when it comes to execution, I think these deep down issues definitely come up. PREP FOR JULY 10 Anyway, lets forget all that for now. Overnight, its been quite the huge move. From 3888, price has just been dropping. When I first started to type this up, it had bounced off of 46, but has now dropped even lower. I've got the previous low of 41 on the radar, so lets see what happens there. I can't remember seeing such a strong move during overnight. Makes me wonder now if at the open price will just go sideways, or will it still have more room to drop? Or will it perhaps be bought all the way up? As always, just using SLA, even forgetting everything else, is a winning strategy. Wow... just in the past 15 minutes its been another 10 point drop, blowing right through the low at 41.
Quite the interesting day today... A - So after the huge drop overnight, we have this bounce here that goes up 7 points, and the next wave down forms a higher low, so the long indicated is maybe not too bad of a trade before the open. The SL, not drawn in, is tricky because it depends on how steep you make it, so its tough to say if it broke yet or not. B - Since the long went nowhere, a hinge was forming as drawn in, and although it appears to first leave out the bottom, it just turns into a range. O - We have the open, watching very closely of course to see if the drop continues. The first 3 bars are really pointing to an up direction. We tried down, but each wave forms a higher low, as evidenced by the lows of the bars. C - I get in here, not quite the SLA trade yet, but you can see how this bar has a low even higher than the previous lows, so no point in waiting for the RET that is visible on the 1 minute chart. D - Its interesting here how given where this offical SLA trade is marked in, getting in here is 1.5 points higher, but then I wouldn't have to go through the drop down a few points after my entry. This would have been a good place to add a contract, but not ready yet. In the back of my head is the down move from overnight that is just too strong and I don't want to get caught in a reversal with 2 contracts. E - Another place to add a contract. Of course I'm wishing I did this down below at D, and now here at E I'm thinking its too late, even though I guess a set-up is a set-up. F - Price drops through the DL. I had already moved my stop loss up to below the lows of the bar that connect my DL, and before I can take myself out of the trade, the stop is hit. I'm up $71, but it sucks that I was already up about $170. That 5 point drop was just so quick. G - So since the drop really was a change in trend, we have a place to short here. I tried hard to get my order in, but as soon as I confirmed, the lovely voice told me my order was cancelled because price had already blown through my entry I guess. Mentally this is a win, but I think I could have had the order in sooner. H - Another place to short, but there is some too much overlap now. I think I had this trade in as well, but removed it because we are essentially at the opening price level, so I think I should wait to see what happens. We do end up having a reversal just a couple of points below. Each time I also have to fan the SL, it shows the trend may not be all that strong, so even though entries are coming up, the fact that the trend is slowing down and the line needs to be fanned should be a clue. I - We have yet another higher low here. The first 15 minutes looked like it would be a strong trend and I was already $170 in the money, so the drop down caught me by surprise. Now with these reversals at the bottom, its looking very much like today will be a range, luckily one wide enough to trade, but because of this drop down to "I" again, I am wondering if this is setting up a hinge on a higher time frame, or even pointing to a drop below all this since since we couldn't even make it to the level at E again. J - Official SLA long here, but I spend far too much time thinking of what could happen rather than just focus on what is happening. As good confirmation, we have cleared the previous swing high, and the low at "I" is even a higher low. But sigh, trade not taken. K - I finally get in here at K, but you know, I don't feel good about it. Its so far in the trend, and these up and down waves are so big that could mean a huge wave back down to form yet another higher low, so I slide my target level down to get me out of the trade for a tiny profit and I'm out for just over a point. The DL does end up breaking a few bars later. L - We drop down, and I'm of course happy to be out, but notice how each low is higher, which I track with this thick line. We have trouble going above 51, so I've got a thick line drawn in there as well. And because of this, I favor a break up. M - We do break above, by a tiny amount, but drop back down. Seems like we need more people to buy. This same behavior forms after, once again favoring a break above, and just as I finish drawing it in, the break above this time is strong. Why the long at 52 wasn't taken I have no idea. SUMMARY So first I notice Db has posted the chart for today already, and of course, there were only 3 trades. The first long, sort of where I took it, then a short, where I outlined it as well, but then there is a long at 3839 that would be good for over 20 point now. Its lower down at 39, I first indicated one at J at roughly 43, but this was of course the trade of the day. It kind of sucks to think that there were at least 20 points in just that one move, but my over thinking is keeping me way busier than I need to be, and its keeping me out of trades. I am still up +$87 for the day, and although my trading yesterday wasn't the best, taking 4 trades yesterday and 2 today is somehow progress in my eyes. Today wasn't in fact that difficult... maybe it never is if you just follow the rules and don't focus on the money loss and don't let scratches wear you down. Damn that rise up for the past hour sure is nice. Sucks to have missed out on it. I even saw that range between 55 and 59 that formed while I was typing this all up, and then when price left the top, a long at 60 was a great trade, worth over 8 points already. So just as I post this, even though I missed the first long, there was a solid long at 52 once we broke above, an a solid long at 60 once we broke above the range. Why I don't take them given a well established trend I don't know. My pessimistic nature must be just waiting for the reversal so I can be proven right. (Knowing this, being aware of this, and accepting it, this all means that I do have the power to get past it, and I know I will, but perhaps I need to feel the pain of missing out just a bit more before I abandon it. I felt a bit reckless yesterday with the trading, but maybe its what I need to break out of this "safe mode" that I seem to be stuck in.)