I gotta say, I'm quite sad about today. The simple act of sliding up that profit target which got me out so soon from my first short really set up the whole day to be unproductive. Coming back to the charts now, I see that price continued higher, and turned around just below the OH again, here at L. This was hit at 10am (my chart time), and it took 15 minutes to really drop down below the little range that was forming. What is important to see here though was the failure of traders to take price past 95.50. It matches to the tick the previous high shortly after the open and set up a 15 point move down. I doubt I would hold to the bottom, but it was still a great trade. Had I not been upset from how the day started, I wouldn't have left so soon, and might have take this short again since price got to this level again only 90 minutes into the open. The other thing I see on the chart now is this hinge that formed at the bottom at M. I know that in real time, I might draw the lines differently, heck, I more than likely wouldn't even be around, clearly I wasn't. But the hinge action is clear, and I understand the behavior behing it, and once price leaves the hinge, it really keeps going. Other than this hinge, most of this action between 78 and 96 I can't make too much sense of, but there was enough just in the first hour to profit from. After spending so much time studying over the weekend I do feel as if I'm quite close, so I am moving in the right direction, but its just such a shame to not be able to monopolize on any of it today. What I have seen in my testing is that taking automatic reversal at the levels outlined does work, but not often enough to blindly take the trades. Sometimes price congests around these levels, and I might get chopped up by trying both longs and shorts with price stuck in a range at this level. So the secret really is to watch the tick chart. The beautiful thing about these levels is that the exits are quite clear to me, and when price does reverse, it tends to set up an excellent trade. As an example, today when price hit the bottom of the overnight range just before that hinge, I can see that it penetrated by only 3 ticks before it reversed up. If the long was taken, price only went about 2.5 points higher before coming down again. But the thing is that there was plenty of time for an exit at BE or even a point profit and not much had to be risked. This overnight low is pretty much the level of where the apex of the hinge would be, so this level certainly does just out for traders I think since it made both sides fight for it. Oh, and before I finish, I also see the importance of the 50% levels. If we look at the move from N to P, we can see that the RET up to Q is 50% of the down move. Price couldn't retrace more than 50% so the down move had strength. If we consider the larger move of N to R, we can see that S is 50% of this down move, and same thing, price dropped after retracing only 50%, so more strength in the down move. I can see this things so clearly, its just that being in the middle of a trade I find it difficult to hang on when money is at stake. I sometimes wonder if just for me, it would be better to put on a trade with a defined stop and profit, maybe in the form or a 1:2 ratio and just walk away. My managing of trades is horrible, so a stepping stone for me might be to walk away and give the trade time to work since I am impatient. This might teach me to not be freaked out by the slightest hesitation or when price is taking too long to move in my favor. Having just a few wins under my belt might do a world of wonder to my psyche. For my first short, I didn't have to move my stop at all. It was over a point above the OH level, a very well defined stop level, and price never got close, but messing with the profit target is what really messed me up and I didn't give it any time.
I think you are already using an "initial stoploss", but if you aren't, then try using one that you are comfortable with. If you have an "initial stoploss", then as profit accumulates, it might be easier to move the stop up. That way you minimize losses if price turns against you and allows your profits to run. I assume you aren't currently placing a target order at the same time you place your initial stoploss order. Actually I am placing both a profit target and stop loss as an OCO order. Its easy this way because if I lose my connection, both orders are at the broker, so at worst I hit my stop loss, or at best it hits my profit target. The targets though aren't fixed. I should be taking a loss when a trade is clearly not working as opposed to waiting for it to hit my stop loss, and i should be taking my profit when I think the trend is over. Clearly I am not good at this yet, but this is the way Db teaches and it certainly seems like the best way for long term profits. But seeing as I am still stuck and spinning my tires so to speak, I go a bit crazy with protecting tiny little profits or not taking my loses sometimes when I'm just hoping it turns around.
Its good that you are using oco orders to place both initial stoploss and target. I assume that by now you feel that your stoploss and target are the best for the way that you trade. But you say that you go a little crazy protecting tiny profits... so the problem is managing the trade within the space between the stoploss and the target. Do you move the stop, the target or both? do you have rules for: when do you move each... when price moves against the trade, when price in the direction of the trade? also, its not clear exactly how you know when the trade is clearly not working.... or how you know the trend is over. The only way for me to know for sure is by using a stoploss that clearly shows the trade is not working or by a time stop that indicates that being in a trade for xxx minutes says that price is not moving today. There is no way to know a trend is over unless price pulls back far enough to change the trend direction. For the problem you had with your first trade today, in general, if price is moving in the trade direction and you were comfortable with your initial stop, then as price moves in the trade direction, moving the stop in the trade direction and maintaining the same distance as your initial stop, might be better than moving the target back just to capture a small profit. just my thoughts toucan
I'm just actually getting down to trading properly now. Before this, I see many of my trades were just getting in because I saw it drop too far,which is of course the worst trade and hence why my account is down. I of course knew the SLA rules, but many trades were not SLA based, and when I had a couple of losses, I stopped trading which prevented the good gains once price was trending again. SLA works if you keep working it, but far two often I would get stopped out twice and then not get into that great 10 or 20 point trend. So everything up till about today has just been bad. Now I know to only be trading at the extremes, or trading breakouts once price actually breaks out of something. So I understand so much better about what I'm doing and why, and what I need to see to tell me that its not working. Time has been a factor for me, but there is no reason why I couldn't give price a bit of time to work. If it isn't going against me after all, this means that there are some guys on my side for example that are keeping price from going against me. (ie. If I go short and price is going sideways, this means there aren't too many interested buyers to bid price up.. so its not so bad yet) My emotions are affected by time, but this is no reason to exactly exit a trade. Perhaps a reversal works best if price reverses right away, but if there is slight congestion at the reversal point, who's to say that it work break down.. just like the first trade you bring up. So I entered short a bit lower than I would have liked to (2 points below the OH), so price then had a bit of room to go higher and still not penetrate the OH. For 3 minutes I was in the red, and the emotional toll of this was a desperation to get out. So I figured with price going back and forth, if it just goes low enough to hit my profit target for one point I would be happy. This was of course exactly where the bottom fell out and price plummeted so a terrible exit. I just wanted out for a tiny profit after seeing that the trade didn't instantly work. I'm sure with time i will be able to see that price is having trouble going higher, so good reason to stay short, but just for today, I was caught off guard. At least I knew that my stop was just on the other side of the outlined level, and although price does sometimes penetrate and turn back down, as long as I can do a quick re-entry, I think this is a solid setup.
Well... I think its about time to close this journal because I just keep embarassing myself! O - Going into September, the activity is sure picking up. There were over 4000 contracts that first minute, and so much of the action was quite violent and I was a bit spooked. A - I took a short here, thinking that I was getting in at the top of this little mini range forming, but by the time I put the stop to get in a bit further away from the top to be swept into the trade, I was actually shorting closer to the bottom of the range. I started to think, once in the trade, that although the trend was coming down now for the past hour or so, each lows on the previous bars after the open were bought up, so I got out with just 2 ticks of profit since I made a strong case for not being short in my head. Price dropped shortly after my exit. B - I tried another short here, seeing the penetration of the PDH and price came down to trigger my entry after a bit of a RET back up. I was instantly a good 2 points ahead, but price reversed quite violently. I wasn't too worried at first because the general trend still looked like it was down, but look at how much price went against me before it came back down again. I was happy to exit with a tick profit. Of course the down trend still looked good, but my entry was already after a good drop, so a RET of 5 stops is quite normal. C - After my exit, I note this hinge forming. It drops out the bottom, but since I figure we are close to the OL, I will wait for that. D - We go below the OL and come back up. I'm having trouble figuring out if this is a reversal or not. E - By the time we get to here, we have a higher low, and I thought a HH as well, but not yet I realized way after my long entry. Of course this long entry is now 4 points above the OL level that should be my area for a trade. And as you can see, the trade goes instantly against me. F - And in spectacular fashion, my exit is made at the very bottom of this bar, having taken a whole 5 point loss before price reverses back up. Price continues to range between the PDH of 96 and the OL of 91, but I am down $97 now, so of course this will cloud any further trades I might consider. I'm quite disappointed in myself for these last 2 trades, having held on for such a huge loss. For that second short, it worked out because I got out with 1 tick profit, but it went against me 4 points. The third trade, the long, went against me 5 points, and I took the loss right before it turned around. Of course there is no way to know if holding on a bit longer is prudent, but holding on is just wishing. So the entry has to be good so that an exit can be made for minor loss but also at a point where the trade is clearly invalidated. This long here was too high up, and price coming down to test the level again wasn't so bad if the entry was made at the level. But given my entry, its no good. G - The poke up to here sure looks like a test of where the apex of the hinge would be if I drew it in, but of course given that I just lost some money, its preventing me from thinking clearly about what is going on. H - This time as price reaches this level it breaks through. I wasn't watching that closely anymore, so I'm not sure if the tick chart would clearly show that a REV shouldn't be taken and instead going short once it drops further below was the correct trade. SUMMARY I guess its not all bad today. If I learned to just sit on my hands, that first short would have been a great trade. But my willingness to hold a losing trade for so long is a big problem. One thing that keeps coming up in my head is this constant battle between thinking I should wait for more confirmation of the trade which then gets me in at a less than ideal entry. What I think is safer is actually making me lose money. I can't help but wonder if it would be better to just jump in when I think "oh what the heck.. this looks good enough" and just have a quicker exit in case I'm wrong. Being a perfectionist, I'm looking for the most perfect trade, which of course doesn't exit, and in my quest for something good, which is tied to ego, I am getting in at terrible times, and then perhaps because of ego or the fear of money loss, I am reluctant to get out, until its absolutely necessary or the automatic stop loss gets filled. Anyway, so I end my day -$97.
How nice that this level that was at first support is now resistance. I drew in the cyan line that first shows support, just a couple of ticks below the OL, and then it turns pink here at J when it acts are resistance. Oh, and yes, I see that if I just waited for price to reach this level and then took a REV trade off the OL at D and/or F I would at least be a couple of points ahead instead of 5 points down. Even if I tried again at H, I could quickly reverse to short after I see the long wasn't working. Who knows if I could do this of course in real time, but there are trades at this level that can be profitable.
Its a good thing I'm not addicted to drugs because my actions this afternoon were quite reckless. When I decided to "make up" for my losses, I did some more damage and frankly I didn't even care. So luckily the loss to the account is only money, but if this was going on a drug binge, the damage to my body might be much worse! I managed to bring the loss today down to -$62 from a couple of scalps, and then of course luck runs out, since this is all just gambling for me at this point in the day anyway, and I finish the day at -$229. There is no point in trying to make sense of the trades in this chart. They are are simply based on wishing and hoping price goes up or down one more point after a strong move so I can scalp a bit of profit. I of course held on for 5 point losses, but only wanted to get one point in profit. I'm no math wiz, but I don't think this is statistically positive unless my success rate was over 90%... which would have to be closer to 99% with commissions! Since I probably took about 6 "scalps", with only 2 I think being positive for a point each, well, I'm a bit shy of the necessary 90% success rate. At this point, I just feel like going short one contract, and holding it for days, or weeks, how ever long it takes price to give me some profit. We are at the top of the channel, where ever it is, and given the news, which we of course aren't supposed to use as price action traders, I can't help but think this rally has to run out of steam soon, in fact, today might have been the day. Lets see... if it goes up another 100 points that is $2000, no problem, I can sit thought it, and I'm sure I can make $20 on this short as long as I hold long enough so it comes down 101 points! I had this chart all marked up with other possible scalps that I didn't take, most of those worked of course, and of the ones I tried, they were all well into the move since I love the confirmation and feelings on missing out. So just when I think it can go a little bit further, this is in fact the exact moment to trade in the opposite direction. I of course don't want to be scalping for points, but for two days now that I have entered shorts that would have turned quite profitable right off the top, I just wasn't able to hold on. This has me quite down. I really never thought I would be so stupid to rush for the exits with one point in profit and yet hold for losses of 3-5 points knowing the trade doesn't look good but I hold for just a little longer with hope in my heart. But its in the charts, and regardless of what I think I would do, the evidence of what I actually do is obvious. I hope I don't need to hit rock bottom, and I do think I'm doing many things right, but my gosh, you have to do everything right every single time! First you have to know what you're looking for. Then you have to see it. Then you have to put the trade on. Then you have to watch/manage it. And lastly, you have to exit it. Each one of these steps have to be perfect every time for every trade. Sometimes I get the entry good, sometimes I get the exit good. I'm pretty good about watching in real time, but this of course falls apart while in a trade. Basically, I can do a couple of these things, but I haven't quite been able to pull off doing all of them for every single trade. And once one of these is missing, that whole trade is shot! Ok.. enough babbling.
So one more post about today before I leave it. Looking over the charts, I see how on the 29th, we hit a low of 62 and price very quickly reversed. As it so happens, price stopped dropping today at 62.50. Shame I didn't have this level on my chart in advance as I might not have taken my stupid random trades as one of them was a short at 63. Had I seen the level being approached as price was coming down, I sure would have been waiting for signs of a reversal, and going long instead of short might have been just what was needed to rescue the day. Ok.. so today is done and tomorrow is a new day.
Thanks for the journal k p I guess we do have to perform every step correctly, and I can see how hard it is in real time. I am no expert on any of this, but I can throw some ideas at you. Why not take each of your points one step at a time. First see if you know what you are looking for. Then spend a few days just looking for these entries on the charts, in real time or backtesting. Then put the trades on in SIM without thinking about the exits. Then see if you can exit at the correct points according to the plan. And if only I could follow my own advice