Hi K p Lots of work you have been doing here ! grats on starting this journal been reading 10 pages + now skimming here and there . Do you think that all this analysis is in the way of your further progression ? Kind regards Alex
Thanks Alex. Yes, I have been doing lots of work, but honestly, probably way more than necessary in some ways, and not enough in others. I am definitely on the right track, but I am not applying enough of what I know. In some ways, I feel like I know better, but then I don't do this. Most of this game for me has been psychological and I'm trying hard to break out of this without any success yet. It really is taking an emotional toll, being able to see things so clearly and have that not reflect in my P&L. But I am persistent and so pushing forward.
Yes I know the feeling. But be very careful with rulesets and lines .. they can blind you . I forexample thought a breakout was a rush of momentum but looking carefully over it with a tape it was clear that most of the breakouts happened on very low momentum and then stoploss run within a few seconds . Guess what im trying to say is .. I thought I understood what to look for when someone said breakout , but when looking closer it turned out to be alot different than what the line or rules had explained. Hope im not confusing you its my second language . Alex
O - So we open up right in the middle of the overnight range. 2 minutes into the open, the right tick stops moving and this lasts for at least a minute. No indication that my data is down, but I hardly doubt we ran out of traders looking for trades! A - Getting into the long a bit late here because of the data problem earlier. Once the trade is on, I notice my auto bracket for exits isn't set for some reason, but I did have trouble loading up my charts this morning, so I better just get out right away and my exit is exactly at my entry price. I take a loss on the commissions so I start my day at -$4. B - Squeezed in here is a short. Of course the short should have been at exactly 73.50, and I am kicking myself for not taking this. I know my stop is so well defined, and there is no excuse then to not take that trade. Getting in here, already 3 points away from where I should makes me scared, and I exit for a point loss on the next bar. C - Since this short is clearly working now, I re-enter here, and exit on the same bar just because. I keep sliding my profit target down and it gets hit, but secretly, I am happy to be out for a profit so I now sit at +$38. D - Price keeps coming down, as I expect it to do after my exit! But it does stop here at a rather random place but oh well. E - Here we get to within a point of the OH and 1.25 points away from the previous high. I do nothing. F - I consider a long here because I assume we have a bounce at the same level as at D, but I hesitate which is a good thing as its in the middle of nowhere. I am just too eager to trade, I want to be in a trade, but then when I don't take the trade I should, I end up taking much worse trades that often lose and then suck out whatever confidence I have and therefore can no longer put on the trades I should. G - I do nothing here. H - During this bar below you see a long entered, and an exit for 2 ticks. On the one hand we did have a bounce off the OL again, but then look at all these overlapping bars, right in the middle of chop, and each bar has a lower high, so I'm not exactly excited about my long. When a bounce from a level happens, it should go somewhere, not go sideways for 6 minutes. I - Se we eventually penetrate the OL, and stop right here. This 54.50 level has been penetrated before, so I'd say the level is somewhat fuzzy now in terms of being exact, so its hard to know exactly what to be looking for, especially since the PDL is just below, but after hitting the low here, the rise up is fast. Its over 5 points in less than a minute. J - So because of that super quick rejection of 54, I feel very strongly about the long above that huge bar. Of course once I'm in the trade, I start to consider that after such a big move, almost 8 points in less than 2 minutes, there will more than likely be a fairly significant retrace which won't invalidate the move up, but easily stop me out. So I exit for just over a point profit. I think I'm at +$60 now. K - Sure enough, we do get a retrace, but it only goes 2 points below my entry price. L - So this long is really working now, and I decide to get into the move. Of course now it has gone over 10 points, and we do have a bit of overlap, so right after my entry, price starts to drop. M - Here is my exit, and I'm sad to say, it had too much wishing and hoping and praying behind it. It wasn't even that my loss target was hit, I dragged my profit target down since I knew this trade wasn't working and I just wanted to be out at the top of a wave, so essentially the smallest loss possible. My loss target was actually dragged way down as I didn't want it hit. I am now at +$11. N - I do nothing for almost 30 minutes, but here looks like a good place to try a long again. Honestly, I'm used up by now. I am mad for not taking that very first short at the top, I am mad for getting out of my trades too early when I said I wouldn't, and I of course took that last long in the middle of nowhere that didn't work. But at any rate, I take one more trade and the entry is hit, but my gosh, it goes sideways for too long, so I'm out on the next bar for 2 ticks profit. (by too long, I of course mean seconds, which is long for me when in the middle of a trade) Only 3 minutes later price shoots up like crazy, without me of course. I know I said I would not take these small profits, but look at what I'm doing. This low here is even a perfect double bottom to the tick with the low at "I". In no time this was a 10 point trade, so $200, but aye, I sit at only +$17. Its amazing to me how long a minute is when I am in a trade. Every tick that doesn't go in my favor is almost like another death blow and after a few hits, I'm desperate to get out. SUMMARY Well I guess I'm done for the day. All I think about is that I'm down $2,500 so far and how I want to turn it around but clearly I'm not taking advantage of the opportunity. The money loss isn't critical, so that's good, but its a blow to the ego, and I am using it as a yard stick so to speak to guage my progress and hence purposefully knocking myself down. I feel as if I used up the $2,500 on stupid trading mistakes, and now its imperative that I do things right. But when in the moment, I always second guess myself. I feel that if I could start at the begining again now, and set myself a limit of using $2,500 to play around with, I could do much better. The account could easily take this loss again, so this isn't really a big factor, and I could do this, set aside some more money, but there is a huge amount of doubt. I thought that other day that if I set aside $200 each day, each for 3 trades at a 3 point loss each, but make sure that the profit will be at least greater than the loss, then this would give me something I can live with, and it would more than likely actually prove profitable. I know that Db teaches that we should be trading well, not mindful of the P&L, and so in some ways I am doing everything wrong and this is taking a toll on the ego. Ego is of course the first thing we have to leave at the door when getting into this trading business, so I'm doing this wrong as well. All I really have is taking REV trades at extreme levels, not even looking for confirmation, just taking the damn reversal trade. So I think there is no way that this could be this easy, but for the most part, it seems to work quite well, hence why I have this constant internal struggle. I do see where it doesn't work, so this makes me scared, but at the same time, knowing that my exit is well defined, I do think that its statistically positive in the long run. Should I be going forward with just this though? Sigh.. looking at the chart, my long at "N" looks so good. Price only ever went against me 2 ticks. I want to make this work far too bad. I remember when I was trying to learn how to be successful with women, since this was a huge learning curve for me, when I finally stopped caring but any individual outcome, overall success greatly improved. Trading is so similar. I had to re-invent myself to become successful with women, and I can see this same thing is necessary for trading. I'm not sure why I'm fighting it so much. Well, my day ends at +$17.
A - Thought I would try my reversal trade, so went short here. B - Ouch.. I'm out for a loss here. C - So I think its coming down now, so I go short here. D - Ouch, I'm out here. Not only am I out of my short, I hit the reverse button and went long as well. E - So I'm out of that long here. 3 trades, 3 losses in a row. So I end my day at -$135. Is my strategy bad? No... I just didn't take all the good trades during the day so that my statistical advantage gets to work. I know that after many attempts at breaking through a level, it eventually will break, so I can't keep expecting price to bounce off. In this case, we had a repeated series of higher lows, so there was strength going into this move at the OH. Also, I know that when the action is sideways during the day, I'm just asking to be chopped up. And I also should not have kept going when I tried first a short, then a short again, and then a long. It was all just trying to make the money back and we know how well this usually turns out.
I think I know what you mean. When you see a quick spike up or down, this isn't usually a breakout and retraces back anyway. The true breakouts happen nice and slow, when no one else sees it yet, and when its obvious, price is usually already quite well into the move, so it isn't a breakout anymore, and getting in at that point is just hoping for a continuation, which may happen, but this mean a retrace to where the breakout really happened is that much more possible. Does this sound right?
I returned in the later part of the day to apparently try again, but I did more damage! A - Entered on a simple RET below the crest. The up trend was already broken, and we have a series of LH's and LL's. This is reloaded data so it looks like my entry should be much higher up if it was going to be 1 point below the low of the highest bar, but based on what I was looking at in real time, this was where my entry would have been. B - The exit for sure seems a bit high, but depending on how you draw in a line to track the down trend (which I show although I didn't draw it in real time), then this exit is just a bit beyond. But I knew much lower down that this trade isn't working, I was just hoping it would turn around. C - I see thing hinge but skip doing anything about it even though when it does exit out the top it initially looked strong. D - So now I'm seeing 85.50 as some serious support, so lets just place a trade to go long right at this level. Tight stop of 1 point, all preset automatically. Now if I'm playing this as a range, I don't like how price prior to this only comes up half way before coming down again, but lets just see what happens. I get filled and I have around 4 seconds of fun before I'm stopped out. Of course this is a level that isn't nearly as important, and although the market does set its own levels that can be important outside of what I'm already looking at like the ones on the hourly/daily chart and also the OH and OL, this is in the middle of the day, so perhaps I should not even be around. Anyway, so my day now ends at -$223. Coming up will be a list of my daily profit and loss for the past 3 months. Its not going to be pretty.
Ok.. so here is the analysis. Not very scientific, and it was hard scanning my journal but here are the highlights. Its starts out in a random place because I wasn't keeping track too well, but just bear with it. (NT = no trades) -$60 -$80 May 14 -$98 May 16 +$111 27 -59 30 +112 June 2 -127 6 -39 9 +76 June 10 (I mention I am down about $400 overall) 11 +21 12 +31 16 +26 17 +32 18 -84 19 -88 20 -69 23 +26 24 +137 27 -69 30 -44 July 1 +81 2 +26 3 +36 7 NT 8 +100 9 -186 10 +87 11 +54 14 +11 15 -179 16 -7 17 +37 18 -211 (yikes.. this was a bad week) 21 -201 22 -118 23 -115 (received some good emails from a private member) 24 +56 25 +34 28 -116 29 -55 30 -123 31 +37 (continued)
Aug 1 +11 4 -194 5 -86 6 +16 7 -123 (I mention that I am down about $1,700) 8 -79 (I mention how I see that I have to just take trades at the levels) 9 (received some good posts from deaddog) 11 (received some good posts from toucan) 11 -49 12 -100 13 -117 14 NT 15 NT 18 NT 19 NT 20 NT 21 NT 22 NT 25 +11 26 +6 27 +21 28 +1 29 +16 Sep 2 -22 3 -97 4 -216 5 +32 8 +11 9 +32 10 -223 So there you have it. According to my account summary, I am down -$2,420, but I thought it was a bit worse than that... but this from when I opened up the account in January to today. (oh wait, till yesterday, so today is another 223 loss so it would be -$2,643) What trends do I see? First of all, I have only had only really good day (+400), and only a hand full of days that were over 100). There are clearly many days where the loses are between 100 and 200, and of the days where there are profits, they are almost always less than $30. Reading through the journal has also been like a blast from the past. I only skimmed, but it seems like it is a world away. I think I was actually doing better at the beginning than now in the past month when I am supposedly seeing things better. I had wanted to analyze the old charts a bit, to see where I have gone wrong, but it almost wouldn't matter now because I am in a different place. I'm too tired now to talk about going forward, but this is an update of where I am.
So first before the opening... A - There is this level of support that I outline, and when it breaks, does it ever break. So of course I'm feeling that left out emotion. B - I try for a short here, and catch a very bottom. C - Since I want to control my losses, I'm out here for only a point loss. Sadly on this very same bar it keeps dropping. There really is an art to "keeping your losses small" and "giving price room". Each situation is of course different, so I think each would have its own set of rules. D - I try for another short here and put my order in just a bit further away from price. There might be a minor RET on the tick chart, but on this one minute chart, its obvious that I'm trying to just get into the move after it broke below the previous swing low. It of course goes against me right away. E - And I'm out here. A loss of just over 2 points, but the exit was for sure justified and should have maybe even been sooner. I was eager to be in a short because I just thought it would keep going down and I wanted to avoid getting caught up in chop at the open. Anyway, so I start my day at -$63 I think it was. OPEN F - Major spike down right after the open. If I had a preset order to go long at 74.25 which is the OL (this happens to be exactly where I took my failed short), if it had filled, which is a big if since price moved so quickly, I'm not sure if I would be stopped out. The idea is that at these levels, the stop can be tight. So if I got in right at 74.25, I could give it 2 points, and price never did hit 72.25, it stopped just one tick higher. But since it moved so quickly, maybe none of my orders would have been filled anyway. So sim trading in this case has its limitations, and hence why i trade live, because I might not be able to consider this a win if I never got filled on the initial order. G - So seeing as going down was so quickly rejected, I know that if I just go long above the bar that rejects that price level, I could be in a good move going up. Of course the entry is now over 4 points above the level, that is the problem, but missing out on an up move is another problem. So I put in an order and get filled. Price goes against me 1.25 points but luckily it doesn't last here long. Keep in mind that I'm already starting with a -$63 loss, and trying hard to not let it affect me, but its hard to not be aware of it. H - So going into positive now, as we approach 80, I know that this might be a problem given that level of support that I outlined earlier. Levels of support often become levels of resistance, and I wouldn't have much room to get out if price turned, and of course it would be terrible to be stopped out if its just momentary resistance. Fortunately 2 minutes later we bust through. I - For once I am in a trade where there is a major break up and I can see the profits accumulate quickly. J - I exit here, mostly for profit reasons. I did slide my protective stop already up so that in case price came down I was already protecting some profits, mainly the loss from overnight, but since I was already a good bit ahead, I just wanted to take it. So I'm now at +$68. I did think that we could be making a run for the OH which is still quite a bit higher at 93, so I would hate to miss out on this profit, but perhaps the biggest factor for my exit in addition to wanting my money was that these quick moves generally retrace back down quite a bit, so I didn't want to wait around for it to happen. K - It appears to me that we have this nice level of support forming here at 85, but it breaks, and then price comes back above, and then it breaks below again. So I really should be staying clear of these micro levels unless there is a very well defined trading range. L - So it takes about 7 or 8 minutes, but we do get the drop. I stay out because initially, it just wasn't obvious to me which way that area of congestion between 85 and 87 would break, and once it started dropping, who knows where it would stop. I always catch bottoms. M - It does stop here, and I only note it because it is almost exactly at the open. After this, the ride back up and down is all just random to me. N - When we get to here, I wonder if 87.25, where the previous high is, will provide a juicy level of resistance or support if penetrated. Its interesting how price actually jumps 2 ticks to open on the next bar higher, and although it drops back down below, there is no decisive move either way, which for me is the worst case scenario when focusing on levels. Once again, all of this is random to me, or at the very least, nothing worth risking my money on because maybe someone else is making sense of it. P - So once again, price comes down here and stops 2 ticks shy of the previous low at 77. If I was going to treat this as an important level, going long would be called for with a tight stop, but its a bit too random for me, espeically on a day when I'm protecting my $68. As it so happens, there is a bounce of 2 points, but depending on where the entry is, this might only be 1 point, and when price comes down again, it breaks through, but not by much. So I would say I'm making something out of nothing and this is all just a regular congestion area. When you get your levels right, the chances of a REV are that much greater, and if you get penetration, the chances of continuation are also that much better. Db did say something along these lines as well where when a true level of resistance is penetrated, price bursts through with force. Anyway, so as price is coming down, that OL at 74.25 is the level to watch or perhaps 72.50 since this is as low as price got today. That price level mind you is probably just stops being run so I'm not exactly sure where the level of intended support should be. I do remember reading a comment from last year where Db was commenting on a level of support that fortydraws had drawn in and he said he wouldn't put it as low because there were many more instances of price bouncing off from a level 2 points higher. Q - So here we go. Price breaks below the OL, nothing special happening here. And then price makes it to 72.50. It penetrates below, climbs back above, and then a fairly good drop. Too late to get in now. R - Had I started chasing I might have gotten into a short close to here, right where it retraces back up. S - This seems like a good place to take a short, just below the crest. As you can see, I have an exit 2 minutes later. The nerves just couldn't take it. Its already been a drop of almost 20 points, and we did after all get a bounce again at roughly the level of R, so if this is a double bottom, I don't want to find out. I'm able to exit for a tiny profit. So I'm now at +$74. T - We do drop even lower, but that is rejected fairly stronly. I wonder if right here at T a long would work. There is something about that spike down and quick rise back up that makes me wonder if the down move is over. Of course I want price to make it to 54 because this should provide such a juicy trade but lets just focus on what is happening. U - Well we did go higher, but stop here, which is curiously where price stopped dropping right at the open. It ends up being a good move up, but I stand aside. SUMMARY So at least today ends positive. First two shorts before the open were just me being too eager. The first long after the open was excellent, and I think I reacted sooner than I usually would which is good, and although I couldn't get in close to my level because of how quick the drop was, going long above that bar I know from looking over all my charts is a solid trade. I find it difficult to have been able to take a short when price came back down, this was after all a much bigger move than the move up. There was no clear trading range that I could have seen price fall out of, and random swing lows generally don't mean much until they are tested multiple times. Likewise, the move back up after hitting the low just below R wasn't that obvious. Taking the long at T would more than likely lead to a slight loss when price came back down to "V", and by the time its obvious that there are a series of HL's and HH's, taking a trade is riskier because price has already moved quite far. I think my biggest problem is not having a plan. I try stuff and get discouraged when it doesn't work, but really, it might work in the long run if I did it 10 times. And because I don't have a solid plan, I don't get into moves early enough until they are well on their way, and this increases the chances of a RET stopping me out or the move being closer to being over. So if I'm going to have any chance of long term success and not end up going crazy, I really need to formalize a solid trade or 2 and just stick with this for at least a week. Anyway, it looks like my day ends at +$74, unless we reach the OH of 93 or actually come down to 54... then I might look for another trade.