What a shitty day... and I even tried to do everything right! A - So here is the short I took before open that I already discussed. When you look at the exit, its pretty much right at the top and could have been much better, oh well. Looking at it now, it seems as if I held on too long. It's a small loss though, so no problem. B - Here would be two places to go long. The bounce at the overnight low is now prominent, we have a DL and RETs now for the long so it looks solid. I figured I would just wait for the open. Of course had I taken it, I would be a couple of points ahead instead of being down $29 to start with. O - So here we have the open, we try down first, breaking the DL, but then turn around to go back up. I don't even draw in a new DL because its just straight up, so I'm looking for a higher low first. C - We go above the mean, but turn around and come back down. There is no way to get in if I'm gonna wait for a clear RET in the one minute chart. D - Here is the first RET. The entry is actually 2 ticks lower. I think I saw price coming down quick again as I was putting the trade on so just put it a point below the previous low as opposed to a point below that little RET. 2 ticks wont matter in the whole grand scheme of things. As it so happens though, I am selling at the ultimate low. I seem to do this quite a bit, but I'm not sure if I just remember those times when I do to make it seem like it happens to me more often than what is statistically not more often. E - We break the SL, to be expected as its quite steep, and I even expect to come back up to bottom of the range which is at 3921. We blow right past it and my exit is, once again, at the worst possible place. If I waited just seconds more I could have saved a point or two. It looks as if I took a hit of 5 points on this trade, way more than what I really should have, and way more than if I was just using the break of the lines. F - No matter, lets just continue. Here a long sets up as a result of the DL now and the RET. I take it, get a fill, and it goes sideways for a few mins. It breaks below the DL, but I hold on and exit just 2 ticks below my entry. G - Price does go above my entry, and even makes a higher high so we can fan the DL. Should I have considered a re-entry? We technically can't fan the DL until it goes higher, and once it goes higher, it goes past where the entry would be. I suppose going up to where the entry would be does in fact break the SL, so I would at least have that, but well, too much to think of at the time. H - Here is our first RET. The dip down below did respect the DL, so that is good, but the long didn't trigger. I - The next bar breaks the DL, and it's top allows us to start drawing in a SL. The short indicated here could almost be thought of as a RET for the short, but this happens before the DL breaks, unless I had a steeper one drawn in, which I didn't or else I would have taken it. I did almost take this short at 3925 but I just couldn't get it in fast enough and price just kept dropping. J - There is no RET for a short, and right here, we form a DB. The long indicated above this bar would be a decent trade, but I didn't see it in time and my mind was only on the short. K - This could be another long here. If price hit the entry point, we would have the DL as drawn in with that swing low, but price ended up turning back down, breaking the DL. So I used this area as a lower high to make my SL once price dropped below J. L - Not a single RET on the way down here, and dropping below the DB sure looked like it opened the door to a further drop down. M - So we break both SL's, the steep one and the one drawn in right from the top. No RET on the way up. N - This would be the first RET on the way back down, but it doesn't trigger, and once again, SL is broken, so we can continue with a DL. P - So here is our first RET on the way up. Perhaps there is one lower down, where two bars have the same top just as the SL breaks, but I didn't see this at the time. Anyway, this long here triggers, and price drops very quickly. DL breaks and I'm looking for an exit. I should say that I fully realize that we are in a range now, but I didn't want to not take a trade when we could just as easily visit the highs at 3929 again and this could be at least a 5 point trade. As it happens, it seems as if we form a double top at P here (a double top in the middle of nowhere mind you). The trade I took is somewhat legit, and the exit is for a loss of 2.5 points isn't so bad. Anyway, after this, I'm just about done. This is completely untradeable using SLA on the 1 minute chart. The entries don't come about until the end of the move. There is a general downtrend, but I'd have to be taking different types of entries. Nothing you can do, days like this do come up. SUMMARY So I'm down -($201). It kind of sucks to be down this much money 2 days in a row, but honestly, I am happy to say that I'm not at all upset over this. I'm pissed that the day wasn't better, that there were no entries except at the worst places, but hey, what can you do. In a way, I did quite well because I waited for solid stuff to appear, I was patient through the down moves when nothing presented itself even though price kept dropping, and I didn't stop, even after a few losses. In fact, I have 4 losing trades in a row, but I kept going, following the rules. First trade before the open I think was solid. It doesn't get any better than price falling out of a range and having a clear RET. It just didn't go anywhere, that's all. The second short could have been exited sooner, its crazy looking at it now given how far away the exit is from the broken SL. The third trade was beautiful. Far too often I miss the long after we hit a bottom, but I took it today. It just didn't go anywhere, that's all, and the scratch cost me less than a point. The 4th trade wasn't so bad either, but perhaps I should have not taken it as we were right in the middle of lots of congestion. Its easy to look at the chart now and think to just short at the top, but in real time its totally different. Perhaps the only frustrating thing is watching price drop and not being able to get in. I will go over today on the 15 second chart and post this after I wrap this up to see how different the day could have been. I think the 15 sec will obviously give way more entries, the lines will be broken way sooner, but perhaps it might add up to more points if I keep working hard at it. Let's see! Oh ya, I should also say that taking that trade before the open was quite nice. It moved nice and slow, more time to think, and more time to exit. Plus it might get you into the move sooner if the trend continues at the open. The only difference is that the margin requirements went up to 3k from 2k, which is no big deal since I'm only trading 1 contract for now and even going up to 2 or 3 won't be a problem. On some days, the overnight action trends nicely, and the opening is a mess, so even more reason to get in early if its a solid trade!
OMG... trading a 15 sec chart would be crazy! Sure I'm keeping my lines tight since I don't have much to go on initially before price comes down to give a swing point for example. But once you have a higher low lets say that lets you draw in a DL, that higher low is preceded by price coming down, which itself would have a SL to get down there. So first that SL had to break, then you need a RET above the higher low, and so now I'm forced to wonder if I am in a RET of an uptrend, or is the RET in fact that start of a downtrend. Far too much going on! Well, here is my chart, and as I went through it, I just couldn't decide what to do. The secret is in knowing how to draw the lines, when to fan them, when to draw new lines, when to go from DL to SL and when to just assume its a little pullback. I'm not even going to try and add up the points as I don't even know if in real time I would trade like this. There are at least 12 trades, and even then, some I didn't probably mark just because I knew where price was going. So I'm not sure what to do about all this. Maybe today was just a a bad SLA day and I should leave it at that without trying to fix it. I did after all only have a 10 point loss in total, less than even 10 points if you take away the cost of commissions, and for that one trade, I lost 5 points just because I was holding on too long, so taking a 2-3 point loss on that one trade should be less than 8 points for the day actually. As it is now, after hitting 3910, price has rallied up to 3930, a good 20 points. It of course took the long way to get there, nothing I could see that was solid enough in real time, but what I mean by this is that the trend is there, its just buried while fussing so much with the back and forth action of today. Anyway, so I'm not going to do anything about the bad result today. I will just continue with SLA for the week and add it up at the end. Even if I lose $200 every day, hence $1000 at the end of the week, I don't think I would care too much. I will be happy if I followed all the rules. And if I follow the rules, then I hardly doubt I will lose 10 points each day for 5 straight days! I just need to learn to define what staying out of trouble means, what I will do about ranges, when I will stop trading until price goes somewhere else. I think deep down I have been pretty good with my reading of price, I just hadn't taken all the trades that I outlined. So many days I stopped trading after one or two trades, and my bigger loss days were just as a result of both hanging on, and then not continuing to trade by the rules. So I think using SLA as a guide, and then trying to figure out the bigger picture of what the traders really want will be a killer combination. EDIT: Oh, never mind those trades you see on the chat. Those are the actual trades that were taken today. Its interesting how on the 15 second chart, some of them look like terrible trades, but they were properly set up on the one minute chart.
I gotta say, I'm a bit surprised by this overnight rally. It just seems like all the news lately isn't that good. Its not that I'm using news at all, I make sure not to look until I am done with the trading, so I have no idea what the news is this morning anyway. But just in general, things don't seem that great, and yet, overnight, we are making all time new highs. Yesterday we got to within a point of the previous day high, so for today my PDH is is 3934, but there was no problem going through that a few hours ago. So now we have a new high of 3948. I don't see anything else that is all that interesting. We will have a DL to start with, but its not the best to follow price since price goes up and down wildly, but as we are climbing back up to 48, lets see if we go further or bounce off. Other than that, all I can do is follow price.
Unfortunately another bad day, and today was rather frustrating. I also stupidly reloaded my charts because I had an internet issue after I was done anyway, and then all the data that reloaded makes all my lines not that appropriate. Not much I can do about it now, and not much I can do about how the data looks in real time, but looking at it now, I think I would have done things a bit differently. A - I outline this range before the open. We move up and break the previous overnight high but come back down again. O - Where I have my open doesn't exactly line up with where the first price prints for this bar at 08:30. These bars of course are the a result of how you package the ticks, but I'm not sure how the first trade to happen at 08:30.00 can be a few points away on the real-time chart versus the reloaded chart. B - Anyway, so here I had my first entry trigger. Before I reloaded the charts I had a RET here to go short. You can see my SL up above. It sucks that the entry is so far away from the SL, but even with this reloaded data it certainly looks like we want to go down right at the beginning. I ended up shorting pretty much right at the bottom, and when price came up and broke the SL I got out. Looking at this reloaded data, I think the short is still justified, it should just be a little higher up. Of course I could also wait a few more minutes to see how the dust settles, but I thought the short looked good and I wanted to get in early. So I am starting the day at -$79. C - Here would be the first RET for a long that doesn't trigger. Now this DL I have drawn in would have used the swing low below this bar that sets up the trade. If price came back up to trigger the entry, then this swing low would be appropriate to draw the DL. But without price coming up, the DL is probably much tighter. D - So it looks like I have a DL break and a RET here to go short, but I wasn't so sure of how I had my DL drawn in. In fact, this is what I was fighting the entire day, not knowing how tight to draw my lines. This of course would have been a great trade, but after a strong move up, I think the short entry would just catch me in this area of congestion before price turned back up. In other words, I really have trouble seeing a move opposite to what just happened. E - So in my original charts, this bar below E hit the bottom at 42.25, forming what looked like a double bottom, so I thought what if I go long one point above this bar, and hence the arrow for a long. The SL wouldn't haven't been broken yet, but if price comes up again to trigger the entry, then this means that price really isn't going lower and that double bottom would have in fact been a double bottom. If the trade was taken here, price did unfortunately go all the way to 42.25 forming a triple bottom in fact, so the first long would more than likely be a scratch, and then who knows if I would have been in the right frame of mind for the second opportunity at F. F - Here we have another entry for a long. It looks clearer on this chart than it did on what I was looking at, but we now have a SL break, (once again, I wasn't sure if my tight SL was good though), and a RET for a long. Here we even have a nice higher low. This was an excellent trade that I didn't take simply because I didn't see it in real time. All I could think of at the time was when I could fan my SL, so I clearly wasn't in the right frame of mind to be taking a long. This is the same problem as earlier, taking a trade in the opposite direction of the move that just happened. G - On my original charts I had a RET here for a long, which filled 2 minutes later. In hindsight, I saw a bit of hesitation and I was hoping that I didn't get filled since it looked weak. Sure enough, just after it filled there was serious weakness. Luckily I lost just over 2 points on this one. I am now at -$118. H - So here I guess we have a short entry, but after getting sucked into two trades that quickly turned on me, I am not all too eager to go short after such a strong move up. It looks like an exit for BE could be made if I took the short though. Mind you, would I really exit just because price wasn't dropping like I thought it would? I would probably wait till the SL was clearly broken and price was moving away in the wrong direction, so perhaps I would always take at least a loss of 1 point or more, so maybe these BE trades I talk about would never really happen on a live trade. I - This long isn't clear on this chart once again, but it was marked in. All of these possible trades I just wasn't seeing fast enough in real time, so although they are marked, I think I did this after the trade was already gone. The DL's here are a bit messed up because of the data change, but first I had a shallow one, and then a steeper one. Going long here also was probably not considered because I just tried to go long earlier and it didn't work. This shouldn't be an excuse, this might even be the second mouse entry that NoDoji talks about. I'm also very frustrated by this point because these trades are setting up at the extremes of what could just be a range so I'm taking trades in the opposite direction just before price turns around. Here of course price just kept going up. J - So after missing that whole move up, here is a RET for a long, but I'm just so reluctant to buy after an initial good move already. The trade does fail, and even a short sets up. Here I got what I'm scared of, so I think its good I didn't go long, and other times the fear keeps me out of the trade that really works. In other words, I have no resolution to this issue. After this, I have some more trades that set up so they are marked, but I'm mentally already done, and these lines don't really show the proper setups anyway because of the reloaded data. SUMMARY So at first I was kind of mad with SLA because its making me take trades at the extremes. But as I went over the charts, I actually see that had I taken some of those longs that I should have, I would actually be well into positive territory even with my two losses. The double bottom is such a good trade, I just couldn't see it fast enough in real time. And then of course the big picture is that overnight we were in an up trend, and this uptrend just continued at the open. Yes we had a dip below the open, and yes we came down again to form the double bottom, but after that was cleared, it was up for a good 15 points. So not a great result today. Its only money, and not that much anyway, so who I'm not worried about the money loss. But I am clearly no where close to being profitable or even being able to trade 3 or 5 contracts since there is no consistency, unless you count stupidity as consistency!
So I'm still sitting here watching, and I like to draw in stuff I see to forward test. (god, this forward testing will take forever, and I'm not even compiling the stats on paper, just in my head, which is worse than useless I think because my brain is probably trying to only remember when things work and not when they don't.) At any rate, I saw this resistance level forming, and by A, I could draw in this line. At B, I am drawing in this line, not exactly a SL, but a line that does track demand and the fact that price is rising. As the minutes progress, by the time we get to C, I think I have a higher probability of the trade going to at least A and breaking through than going down. It does appear that price drops 3 ticks, but it doesn't break the previous swing low, and when we turn back up, we do shoot through the level at A. In other words, if I entered at around 55.50 at C, I think I had a much higher chance of making 2 points lets say versus losing 2 points. So then some minutes later, that resistance level at A is now support, although one tick higher. By the time we get to D, it obvious we aren't able to go lower. But I also notice how right at the end at E, we have a case of price not going higher. Sure we can't go below D, but this is almost like a level that gets slowly worn down with each try until it eventually breaks. Now I know that breaking through a level is the exact opposite to what you expect if you are trading a range because you expect a bounce at D for example, but for me, the critical difference is how price comes to that level. If it does so slowly and methodically where each attempt doesn't bounce off as far, then to me its clearer that the level will be broken. A trading range seems to be more random bouncing between the extremes, not this slow and methodical march to penetrate a level. In terms of behavior, first we have traders not willing to pay more than the level at A, but we also have sellers not willing to accept any less than the line that tracks up B. When these two come together, one side will have to give in. In the second part, we have sellers not willing to accept any less than the price at D, but we also have buyers not willing to pay any more than the line that tracks E. In fact, with each passing minute here at the end, they are willing to pay less and less. Eventually there is nobody left to buy at any price above the level at D, so if traders want to sell, they will have to find buyers lower down and hence why price drops through D. Am I looking too deep? I don't know, but I like to draw these things in and see where they go and think about what's happening. I'm also looking for ways to scalp a few points, a high probability trade, with low risk, and I'm happy to take a small little reward each time. I'm willing to work hard until I'm confident enough to buy at a channel bottom and wait for price to go up 100 points to the channel top without caring about the route it takes to get there. Edit: These lines were actually drawn in in real time.. hence why you see the first one broken a bit. They were drawn in before the move I was looking for actually happened, so each trade could have been worth at least 2 points, and certainly that short for the second half is worth even more.
So it looks like we have a repeat of almost yesterday. Overnight we have price going from a low of 3944 to a high of 3968, the mean of which is 3956, and breaking the previous high. The DL has broken, depending on how tight we draw it, but then the SL drawn from the highs of 3968 has broken as well, so its no wonder that just now before the open we are in a bit of a range. What made yesterday not the greatest day is missing the double bottom and hence the subsequent longs. I cannot understand why the long wasn't taken, and because I reloaded the charts which make it look quite clear as I looked it over for my journal entry, I'm not sure what I was looking at the time to make me not sure about what to do. But this is just yet another good lesson to make sure to take every single setup. Here is what I'm looking at just before the open, but we still have 30 mins for the picture to change!
So now after a couple of line breaks we do seem to be in a bit of a range. I would say the upper and lower levels should each be reached at least twice to count as a range and here I only have one swing point that forms each line, but at least this gives me some context about where price is, and more importantly, where it has to move past in order for us to say its moving again and going somewhere else so that we can monopolize on it!
A - So this I really didn't see till after the open, but this long here could almost be thought of as a RET for that DL I have drawn below. But of course if I'm waiting for the the open then this trade is already gone. B - First RET happens here, but it doesn't fill. I would have drawn in a new DL once it filled but since price turns down south, no point. C - This sure looks like a DB, just like yesterday, so I'm gonna take advantage of it and buy at one point above the height of this bar if price does come up. D - I get filled here, but price goes lower so I'm out on the next bar for just over a 2 point loss. E - So with price coming down again, the series of lower highs is quite apparent and one point below this bar above here would be the entry. The good thing is that if price comes down to here that double bottom from earlier has been breached. I get a fill, and although price comes up again, it makes another lower high so I can draw in my SL. F - I'm a good 4 points ahead here, but we turn around here and go back up. Still well below my SL mind you. G - I'm out here, clearly not the best place, and I just touched the SL. The exit was mostly just so I could get out at BE. H - So now its looking like this is just a RET in the down trend, so a re-entry at one point below these bars would be the place. I know the re-entry is exactly at where we could have a double bottom again, but I can't let what might happen stop me from what is happening, and this price level of 3960 is kind of in the middle of nowhere anyway, so if my entry gets filled, it means price is coming down. Sure enough, it is a double bottom, and I'm out on the next bar. In hindsight, knowing about the double bottom possibility, the exit could have been a stop and reverse at my exit instead of just an exit, which would have been a great trade, but its only an exit for another 2.5 point loss. I - Here is the next opportunity for a long. The DL is fanned just a little because of what happens later, but for now I'm using the steeper one. J - The exit here, two bars to the right, is a result of the DL break and I'm thinking I should make my stops a bit tighter given the environment. Its very much a mean reversion day by this point, so I'm out. Price shoots up right after my exit, but ultimately comes back down. As a result of price shooting up I fanned the DL here, but it breaks quickly as well. K - I'm a little hesitant to take this short that sets up here.... L - But I take this next one. M - Wow.. look at this exit, worst place again. The short ultimately didn't go anywhere, but the exit could have been much better. We do form a double bottom again, but these in the middle of nowhere don't have all that much significance. At this point I am at -$115. N - Two long set up here. The first doesn't fill. The second would break the DL ever so slightly before it fills, but lets face it, we've got this mean reversion day, and we are just above the mean now, so messing around here at this level isn't the best trade. It wouldn't have turned out so bad actually, and price does come down to the entry level but its never in the negative, and it looks like price just keeps going up slowly. Yup... as I type this its already worth 5 points, and has broken the previous high. SUMMARY Well, the results speak for themselves. The worst part is that this day looks so similar to yesterday. After so much of the back and forth in the first 30 minutes I wasn't able to take advantage of this opportunity to go long which would have been the best trade and easily covered the small losses. So I sit at -$115, less than 5 points if you take away the commissions, and that last long would have been 10 points. Oh well. I will at least finish up the week and re-evaluate.
So thinking about the day some more, I do want to emphasize that the reason I stopped trading was slightly because I didn't want to lose more money, but also because of the clear range/mean reversion we were in. Looking at the chart now, there is a perfect RET in there with an entry at roughly 3973 that just about cleared the previous highs and hence out of the range, so that could have been taken, but I wasn't watching intently anymore and just typing up my journal, and of course, missing the first entry makes all the further ones just a bit riskier. So those first possible longs at N could have been taken, but given the context of the range and mean reversion, I feel as though it was legitimate to pass them by at the time. For some reason its important for me to put it out there and even though I have perhaps a 4th day of losses in a row, just the fact that I took 5 trades today and stuck with it is still I think progress.
So our slow march to the top of the channel continues. It looks like the upper line of the channel is actually at 4000 (or 4020 depending on that high from April 24th that is used to draw the upper line of this channel), but either value is not that far away now. Overnight we bounced off just above 91, complete with some lower highs and lower lows, so its more than just a RET perhaps. The low is all the way at 72, so its almost a 20 point move. Looking at several months of data on a compressed hourly chart, its hard to miss how this move up since the 17th is quite steep. Of course there were places to short along the way, but on a higher time frame chart, its just been up all the way. One realization that is coming to mind is how we draw in these levels of congestion and carry them forward because price essentially just likes to go to these areas, sort of like the stairs on the staircase. I am running into trouble by trying to trade on each step, getting caught up in the momentary chop, and then miss the entire move up or down to the next stair. Yesterday for example, after missing that long in the later part of the morning that was a good 10 point move, price settled around a mean that looks to be about 3979. It did drop below for some reason in the afternoon, but quickly returned to this level. Likewise, the opening hour from yesterday had a mean of roughly 66 and was perfect for chopping me up as mentioned, but once it settled, traders took it up to the next level. And for today, it looks like we have a mean around 88. I am attaching this 5 minute chart to show this. I certainly see how this trading business seems easier when using a higher bar interval and a longer time frame. The moves seem clearer. So in essence, I could just be waiting for price to settle around a different mean once I get into a move and get the direction right of whether price is going to go up to the next mean higher or down to a mean below. This of course isn't much different than how Db has been teaching us all along, but I think I have been getting caught up too much in the lines and have lost this fact. I have received some assistance through private messages about both this and the longer bar interval trading, and so I certainly see the value in all of this. Anyway, there will be lots of study over the weekend.