Max, Do you plan to post any trades to this journal.....or your approach to trading the e-mini's? Thanks.
Excellent interchange, thanks for the question and response. Yes there is no way to know the future. Anyone who tells you differently is trying to sell you something or rip you off. The short answer is that I had a hunch the move would continue based on a couple of patterns I look at. To just briefly touch on them, they are: 1) Fed day's IH/IL are key - watch what price does when it comes to these points. It will either bounce prior to, bounce after poking (which is a clue that it is not trending in that direction) or slam through the intraday points --> which is a clue that it is trending. It slammed right through the intraday low so this told me it was trending down. 2) I look at pivot points. One pattern I've identified is that S2 or R2 will often be as far as the market will move. But, when there is strong momentum in the market and it goes through S2 or R2, it is a good bet that it will get to S3 or R3. 3) Markets usually take time to turn from short to long. The market didn't spend enough time making a bottom to convince me that it was going to turn. All this I had to synthesize while the market is tanking. #2 was the most important point for me when I shorted through S2 and then took it on S3.
what makes you sure you can rely at all on pivot points? I have seen numerous times that a market went down through support levels and tanked all the way and I have seen numerous times that right below the support level buyers kicked in and lifted the price. I find no value in watching pivot points and I attached a picture for illustration. Can you see any pattern or would pivot points help you at all in this instance? If not here then what guarantees you that you see it elsewhere? Please, if you could attach a chart with pivot points of the Jan 28th trading day and explain your point and also attach a chart for today (Jan 29th, once trading ceases) and make your point clearer that would be excellent. I myself do not believe in TA at all and have never used it as I find it useless. I only sell/buy into ternds but I derive them from money flow and simply reading the tape (which I like to describe as some sort of micro fundamental analysis, as I derive my short term trading ideas exclusively from current supply and demand). Of course I can/am sometimes (be) wrong. But I rely on absoutely strict money management rules and if I find a trade going against me and hitting my stop (which I determine from my past trading exerience, current volatility levels, and volume/money flow analysis) then I will immediately cut my position. In the end my short term trading comes pretty much down to a volatility play wrapped into an analysis of probabilities. As I trade profitably I am not begging for new ideas as I am currently happy with my short term trading mechanics. But I am open to listen to new ideas, as always. I have so far not seen how any TA, including pivot points, fibbonaccis, and other stuff, helped me entering/exiting positions more favorably. All (realistic) backtesting has so far confirmed my belief. But I am open to your point and would like to ask you to elaborate on your pivot point idea.
Here are yesterday's pivots on the ES. I don't plot them on NQ, but use the pivots on the ES. I agree that the pivots on the chart that you posted don't seem to correspond to much. My view on pivots is that they often provide an area where price reversals and tests are common. They are often good for support and resistance. That's an over simplification but I hope you can see what I mean in the pictures. From the top down: The top cyan line is the overnight high. The light blue line is the central pivot. The white lines are intraday high/low. The purple lines are S1, S2 and S3. The lowest cyan line is the overnight low. After price took out S1 with no reaction or any sign of bottoming, it proceeded straight to S2. It then tested under S1 and on the overnight low, and then proceeded down through S2. It then tested under S2, then proceeded to S3.
Here are today's pivots on the ES. While the pivots were extremely spread out because of the huge range of 1/28, and typically this would lead to a trading range day. Today price reacted off S1 low, and then stopped at the pivot / overnight high.
What is confidence? Confidence is different than faith, a hope that leads to action that leads to results. Confidence makes things seem clearer, increases our ability to act and creates an environment where peak performance is possible. Where does confidence come from? It can't be purchased for $3,000 or backtested or simulated or generated from the pages of a book or article, or even from our results. Confidence comes from within. It can't be bottled or stored, and has a short shelf life, and has to be periodically replenished. You can have confidence in many things, your hardware, your internet connection, your software, your system, your skill, your lucky dice, etc., but will that help you be a winner? Unless your hardware, software and system are operating independent of YOU, there is a missing ingredient. Confidence in self is paramount. Believing that you have the capability to do the right thing is the first step. Next comes the belief that you CAN do the right thing then WILL do the right thing follows over time and experience. Confidence is not a silver bullet. False confidence can be as destructive as pride, or maybe it is pride. What is false confidence? I'm not sure but it might be related to attachment to ideas or concepts that are unenlightened. But confidence will keep you going when few things can. It points you in the right direction and gives you something to work towards. It also makes you feel good and feeling good and trading well are not so distant relatives. Do you have confidence?
Looking forward to your Journal. Are you using the standard formula to calculate your pivot levels? Best regards, Trapper