Yes, it's true: YASPEM - Yet Another S&P E-Mini Journal ... considered YAFSPEM, but... naaaahhh. I'm just starting out - although I've been paper trading and simulating a good bit, I'm just starting to trade real money - although just one contract until I'm sure that the "real" trades are doing what I want. My goal here is fairly conservative - I'd like to average 1.5 or 2 points per day, which I will try to do by being right at least half the time and making more when I'm right than I lose when I'm wrong, and I'd like to hold the trades down to somewhere in the neighborhood of three to five a day. Anyway... putting it out in public like this beats hell outta scribbling notes to myself in my little red book, even if no one reads this and/or no one has any advice or constructive criticisms. It's all well and good to play what-if and look at what might have been, but one night more years ago than I care to think about, in a locker room with more than a faint whiff of death and despair, when a reporter asked Saint Darrell Royal if he thought we would have won if a particular play had worked the way it should have, he said, "Don't talk to me about woulda shoulda coulda... what shoulda happened is what DID happen." O' course, on another, happier, occasion in the very same locker room, another reporter asked him if he thought maybe we were pretty lucky to have recovered a fumble when our opponents were inside our five-yard line with first and goal, and Saint Darrell stared at him for about ten seconds before he drawled "Luck? I'll tell you about luck. Luck is what happens when preparation meets opportunity. You got to be ready if you're gonna get lucky. We were and we did, and that's all there is to it." Now, I'm pretty sure Saint Darrell didn't think those spiffy little aphorisms up all on his own, but they hit home for me. So I'm lookin' to be prepared to get lucky. Here's what I think is gonna happen tomorrow. Like every other day, some people will buy and some people will sell. The buyers will want to buy cheap and the sellers will want to sell dear. The price will go up, down, or sideways. If it's going up, it'll keep going up until enough buyers decide not to buy any higher, and then it'll go down or maybe sideways. That price is a resistance. If it's going down, it'll keep going down until enough sellers decide not to sell any lower, and then it'll go up, or maybe sideways. That price is a support. Regardless of the direction, the price will move in a herky-jerky way - that is, it'll go up a little and then down a little, up a little and then down a little. The reason for that, I believe, is that there is a "magic" price that's the "right" price, and it's roughly halfway between those highs and lows. When you keep track of the prices of trades for some period of time, you call the starting price the "open" and the ending price the "close". These "open" and "close" prices are strictly an artifact of the period of time, and their only real use is to let you tell whether that "right" price is getting higher or lower, or staying the same. By looking at the time period and the direction of the "right" price, and the difference between the highs and lows, you can get an idea of what price you'd like to buy or sell at, how much of a profit you expect to make, how much of a loss you're willing to accept, and how long you're willing to wait to see if you can sell or buy at a profit before you give in and look for another game. ------------------- Now... it's well after midnight at my desk, and ES is trading right around 130200, right around where it "closed" back at 1515 yesterday afternoon. I'm in US Central time, so synchronize your watches accordingly. Based on the Daily chart, the trend has been up for the past week or so (indeed, overall, for the last several weeks), but the last two days have shown "inside" bars, inside the range of last Friday, and decreasing in price, range, volume... pretty much everything. Based on the 60-minute chart, it looks like the same thing - it's been down in the mornings and up in the afternoons, but flat overall, and with decreasing range and volume. Taken together, this looks to me like the uptrend is petering out, so I'm kind of expecting the price to start dropping pretty significantly. For myself, though, I've been setting up an "over/under" trading situation, in which I look at a pivot price (PP), two prices above (AI, Above Inside) and AO (Above, Outside), and two prices below (BI and BO). I call these five lines the BoB lines, for Bounce or Break. When the price hits a BoB, I look at the next move and trade accordingly, using the adjoining BoBs as initial Stop and Target. I also set a breakeven and a three-step trail, depending on how far apart the BoBs are... right now, with everything closing down, they're pretty close! I usually stay out of the early craziness - I like to trade between about 0915 and 1100, watch during lunch (although with a wide over/under entry just in case), then set an over/under based on the min/max during 1100-1300 lunchtime. Right now my BoBs are AO 130650 AI 130400 PP 130200 BI 129925 BO 129700 These could change dramatically, depending on what happens with the Europeans overnight, and don't forget the Bond Market players have caused some havoc between 0720 and 0830 a few times lately... and, what the hell, they're way too close together to make much My "oh, hell, it's only paper" play right this instant would be to short it - yeah, I know, the 60 and Daily trend is still up, and it's bad juju to go against the trend... but it sure looks like that uptrend has topped out... doesn't it??? Time for some shuteye - hasta manana.
Last night's "oh, hell" trade, around 0130 would have been short at around 130200. As it turns out, that's exactly my first trade this morning. The 0720 Bond Open didn't do much. The 0830 Pit Open was around 130150, ran up to 130400 (my AI) and bounced. I probably should have played the short right there, around 130300 at 0900, but I like to wait out what I call the "Nine O'clock Chaos", so when it bounced off the PP at 130200 and came back to it, I went: 0906 +130200 S130400 BE 130100 / S 130175 T1 129900 / S 130100 Follow 2 T2 129700 / S 129800 Follow 1 T3 129200 / S 129250 Follow 0.5 I've been watching this one since then, and nipping back to write this. Right now, it's been to 129850 so my stop is at 130050 for +150, and I'm a happy camper. It is basically running sideways along the BoB at BI, but we'll see...
Here's the 60-min chart, showing the uptrend flattened for the last few days (and right at my current BoB AO - Above, Outside). I was going to append it to the last msg but forgot, and I didn't see a way to attach when editing... maybe I just wasn't looking closely enough.
Current trade: 0906 +130200 S130400 BE 130100 / S 130175 T1 129900 / S 130100 Follow 2 T2 129700 / S 129800 Follow 1 T3 129200 / S 129250 Follow 0.5 As of 0948, price has made it to 129750, so my current stop is at 129950 for +250 and my camping is getting happier. This is closing in on the BO (I think some of you might call it S2?) and if it breaks through that it could run a long way... we'll see. Waaahooooo! Ride 'em! 0956 - here's where my troubles start... it's made it to 129725, almost to my second target, at which point the follow (trail) switches to 1 point back... which will lock in a +4 points (400 basis points) profit... but I'm starting to get greedy and want to keep that trail at 2 and let it keep running... 0957 Yep, it hit 129700, and I'm gonna stay with the plan... but if I was trading my full ten contracts, I might keep half of them back to let 'em run... the fact that this price IS a potential breakout low might let me justify that... but I guess you can justify almost anything if you obsess on it long enough... hell, there's plenty of dead babies scattered around in the name of Freedom, ain't there? 1003 It did come back and hit 129800, and I'm staying in, keeping the follow at 2 points. Dammit, I'm happy with the +3 profit, and the volatility is there. Let's see... is there anything that would convince me to bail right now on accounta it's headed back up??? 1008 Glad I stayed with it. It hit 129600 and my 2 point follow locks me in for +4 with the stop now at 129800.
Current trade: 0906 +130200 S130400 BE 130100 / S 130175 T1 129900 / S 130100 Follow 2 T2 129700 / S 129800 Follow 1 T3 129200 / S 129250 Follow 0.5 1009 It hits 129525, my stop moves to 129725, for +475. Yes, I kept the 2-point follow (trail) instead of moving to 1 point. The camping is getting happier all the time.
Current trade: 0906 +130200 S130400 BE 130100 / S 130175 T1 129900 / S 130100 Follow 2 T2 129700 / S 129800 Follow 1 T3 129200 / S 129250 Follow 0.5 1012 It hits 129475, my stop moves to 129675, for +525. I'm gonna run downstairs, check the wheatgrass and get a fresh cuppa.
Current trade: 0906 +130200 S130400 BE 130100 / S 130175 T1 129900 / S 130100 Follow 2 T2 129700 / S 129800 Follow 1 T3 129200 / S 129250 Follow 0.5 1020 It hits 129400, my stop moves to 129600, for +600. Let's see, what have I got for the week? Monday -400 Tuesday +175 Today +600 (so far) Net +375, or 125 per day... I want 200, dammit! Which means I need another 225 today (+825, which means I'd like to see the price make 129375) to make the average... hmmm... it's tempting to dump it now... the range is decreasing, volume's decreasing... could be a turnaround. Yep, I'm gonna bail right now... Out at 129500, for +700. I think it could go on down to 129000, and I'll jump back in short if it ducks under 129400 again. I'm gonna go set up my next entry. Trade summary: 0906 +130200 1026 -129500 Result +700 1 contract: Gross $350.00 Commissions 4.52 Daily System Cost 15.00 ---------------------------------- Net so far: $330.48
Next entry: +129350 / - 129750 I've got some consulting to attend to, so I might not be able to document the next trade as exhaustively as this one... it's set up in Ninja Trader and should take place automagically. Either way is the same basic setup with regard to loss stop, breakeven, profit steps... we'll see.
1116 Waiting for a callback from a client. It's Noo Yawk lunchtime, so I've changed the entry to extreme values and will be taking lunchtime (1100-1300 my time) hi/lo as next entry points if the extremes don't get hit. Lunch entry: +129300 / -129950