jonbig04

Ah sorry, I'm an idiot. Let me rewrite: I play breakouts of what I consider to to be major s/r levels. The two factors that go into determining how "major" of a level it is in my view are the tests and the rejection. We saw rejection here at 71.24, and before at 71.20. 4 ticks apart is pretty good for the tests, but not great. The next part is the rejection part. In CL I consider a major move to be 100 ticks, thus I want to see rejection of around 100 ticks, hence the 70.20 level. Everybody seems to be wrapped up in this S/R zone stuff. I don't play "zones" anymore. I look for a line in the sand. The more specific the better. Sometimes there will be moves in CL that are in the hundreds of ticks, yet getting rejected just 0-3 ticks apart from one another. That way I know exactly where the BO will happen, if it does. Also, looking at your chart I see you have levels at 71.4 and 71.15. A great trader once told me that when you have a level that is bent before causing a rejection, the level moves the low/high of that bend. In other words, I would submit that 71.4 and 71.15 are the same level, just that the 71.4 level got moved to 71.15. That's how I do it anyways, just my two cents though

I play breakouts of what I consider to to be major s/r levels. The two factors that go into determining how "major" of a level it is in my view are the tests and the rejection. We saw rejection here at 70.24, and before at 70.20. 4 ticks apart is pretty good for the tests, but not great. The next part is the rejection part. In CL I consider a major move to be 100 ticks, thus I want to see rejection of around 100 ticks, hence the 70.20 level. Everybody seems to be wrapped up in this S/R zone stuff. I don't play "zones" anymore. I look for a line in the sand. The more specific the better. Sometimes there will be moves in CL that are in the hundreds of ticks, yet getting rejected just 0-3 ticks apart from one another. That way I know exactly where the BO will happen, if it does. Also, looking at your chart I see you have levels at 71.4 and 71.15. A great trader once told me that when you have a level that is bent before causing a rejection, the level moves the low/high of that bend. In other words, I would submit that 71.4 and 71.15 are the same level, just that the 71.4 level got moved to 71.15. That's how I do it anyways, just my two cents though.

Just noticed a potential on CL. If, and that's a big if, it drops down to around 70.20 from here without making any higher highs, then I will be looking to buy around 71.26.

I haven't taken a trade in CL for a while. It's been down trending so hard I haven't been able to. I'm sure something will pop up for me soon though. I am looking to short 6E at around 1.2463. Not the best setup in the world, but I will give it a shot if it makes it down there. I move to BE asap. Usually around +4 or +5 on 6E. With breakouts there is no need for a stop loss, and I bail on the trade if it starts to go against me at all. Taking heat isn't an option. Many times, like yesterday, the momentum is so great that I get fill 6 or 7 ticks into the green, even entering at market. In which case stop goes to BE immediately. If I get stopped out BE, I usually place another buy/sell stop a tick below or above the high/low of the move.

Sorry, I just realized you can hardly see the text in the charts. The targets are usually always 40 ticks. Even on the one where I scaled, AVG is still 40 ticks. Stops are anywhere from 2-4 ticks, depending on slippage.

Jmonday please see this page of the journal: http://www.traderslaboratory.com/forums/103/jonbig04s-log-4210-17.html It's post number 665 in the thread under break out setups. It's true what you say about instruments. They all do "feel" different and it's important to get comfortable with each one. Keep in mind that I'm not as much of a day trader as most here. I take a trade on average probably once every day and a half or two days, and generally use a larger time frame. Usually my setups take a few days to form and could be weeks in the making. So I'm not doing a lot of switching back and forth from instrument to instrument during the day. Here's my last few for Gabe. Notice this isn't an accurate representation of all my trading. I don't have 85% accuracy lol. Pardon the big blue arrows, they are just there to block the number of contracts traded as I don't really want the whole world wide web to know how many cars I'm trading. BTW for those not familiar with 6E, it's tick value is the same as ES. simple short breakdown Break out upwards, notice the 2 tries it took. I lost 3.5 AVG ticks on the first stop out. Another breakout, notice the requisite increasing volume Getting owned on ZN bc of its dirty little break out. Had the trade right but there was no way to get it without risking more than I like.

So it's been a while since I last updated! Sorry about that. A lot has changed in my trading in the last 2 months. One day I began to look back at my trading. Sometimes it went well, sometimes it didn't. My gains were more than my losses, but it just seemed so...hard. My losses were always under control though. As many of you know, I am trading for a living now. I pay my rent, food and booze with profit I make from the market. No profit, no booze haha....and no rent. I say that because it quite an experience. The market is altogether different when you depend on it for everything. It's horrible...and great. I had a month where I was in the red, a month when I would do well, a mediocre month. My trading was just ok. I didnt like that. Then I came across this quote my the great Paul Tudor Jones: "I'd say that my investment philosophy is that I don't take a lot of risk, I look for opportunities with tremendously skewed reward-risk opportunities. Don't ever let them get into your pocket - that means there's no reason to leverage substantially. There's no reason to take substantial amounts of financial risk ever, because you should always be able to find something where you can skew the reward risk relationship so greatly in your favor that you can take a variety of small investments with great reward risk opportunities that should give you minimum draw down pain and maximum upside opportunities." Frankly, compared to his approach, I was picking up pennies off of the freeway. Risking $300 to make $900 or whatever. I scrolled through journals of traders here on TL and elsewhere and we all seemed to be doing the same thing. That is, compared to Paul Tudor Jones and other managers, we all seemed to be picking up pennies off of a free way. In reading journals, some of the traders that are struggling or just getting by are so smart. They annotate charts brilliantly and have so much good stuff to say. Yet who's making all the money? I got into trading to make a boatload of money. As I said before, I'm not in it to wax philosophically about the market or the "best" way to trade or whatever. I just want the money. I wanted my R/R to be tremendously skewed, like he mentioned. Sure those opportunites may not come around often, but who cares? Everything I read seems to say the same thing. Sure you can lower your stop, but you'll just be stopped out more. Sure you can raise your target, but you'll just hit that target less. In other worse there is no real difference between a system with a 1:5 RR and one with a 5:1 RR. They equal the same expectancy in the end. Your accuracy will just be lower with one and higher with the other. So..what we need is a system with decent accuracy AND high R/R. But how? A high RR system means a small stop (in relation to your target) and that means more stops. What I have learned is that this isn't necessarily true. I looked back in my journal and realized I already had the darn answer to this question! Momentum. If you can find a trade that depends on and foretells momentum as well as direction you don't need a wide stop. Sometimes you don't need a stop at all. There's no point in my going over the setup because I already have many times. I've just realized that with that setup, I don't need to take anything else. The R/R is so skewed and the accuracy so great (relative to the R/R) that all I should be doing is looking for those setups! What's funny is that I've actually said in here "I should just looked for these setups because they are awesome". So I just started taking my own advice! :doh: Since I've made that change things have been going very well. My average R/R is 1:10. My accuracy is around 50%! Granted, that's only through the last 10 trades, but even at 25%, with that R/R, I'm in business. Trading has become so much less stressful. If the market isn't breaking out hard, I just bail on the trade for BE or a few tick loss. Then I start looking for the next opportunity. I look hard for the perfect setup and when it comes, I bet big. There are too many markets and too many opportunities for me to plays these mediocre setups. The setup doesn't happen very often. But that problem is solved by adding instruments. I've almost sworn off ES entirely. I'm sick of it. I hit a 60 tick target (15 ES equivalent) on 6E the other day in less than one minute. How long does it take the S&P to do that? Too darn long. The damn indices are the ultimate freeways and I'm not playing on them anymore. The hunt is on for things that move. Crude and 6E are the bomb. I tried out ZN for a while, but that thing just doesn't move like I need it to. I'm thinking i should look into FX, but I really don't know enough about it yet. I'm open to suggestions on instruments. So that's my spiel. I'm not sure if anyone follows this thing along or not, if so feel free to ask questions. I can post trades up here if you want to see them. As I said, I'm doing the same thing I've went over in here about. Momentum is where it's at for me!

If you had a robot that gave you an automatic edge, would you sell it for $100? Don't waste your money.

If we're talking dream cars...

Gotta love living in CO!

too bad I was asleep, that would have worked well. Gah I have NO luck lol Click for full size - Uploaded with plasq's Skitch

Sometimes I don't sleep so well. Sometimes I sleep like a baby and I wake up and suddenly realize I don't know what the trade did haha. 83.10 is pretty good S today. I'm watching the 83.79 potential double top area, thinking maybe even a buy stop at 83.88ish. Then again I've been sucking lately so..

do you have a target?

Gotcha, stop is the top red line?

I'm having a tough time seeing where you're in from.

This is just my opinion, but who cares? I've never really bought into the whole "smart money" thing. Not because I think it's invalid, but because I don't really see the reason for it. To me, the law of supply and demand that you mention and it's manifestation through the movement of price is all we need to focus on. Once again though, just my opinion. EDIT: just wanted to clarify, I'm not saying it's not and interesting or valid subject I just don't think it's possible to know whether the "smart" or "stupid" people are the ones buying and selling. To me the law of supply and demand and price's movement take care of all that for us. They sum up everyone's hopes, dreams and intentions so we don't have to worry about them.

Thanks for the insights guys. This is one of those tough questions that there really is no perfect answer to. I'm in the midst of a drawdown right now so I'm not going change anything, but I'm going to keep working and thinking about this until I figure something out.

Lately I've been getting my butt handed to me in the market. It's no fun. But I have been noticing something about my trades that I think can be improved. However, it involves an amount of discretion I'm not used to exercising. For example, here's a short sequence. As has been gone over in this thread, I would enter when price makes a lower low, with my stop above the lower high. However I have been noticing that when I take a full stop, it's usually because even though price made a lower low (or higher-high in the case of a long) it only did so enough to get me filled before quickly rebounding and stopping me out. In other words, in the case of a long, we can think the higher high as price breaking a resistance level. But sometime the level only bends enough for me to get fill via a stop-limit order, before falling back down. Here's an example of a long on ES that took out a full stop on Friday. Oh and I know you can't tell here, but I did wait for the blue line to get taken out before I got in long. Here's a 5 second view. Notice the vol spike just as a I get fill. Price then retreats and retreats before stopping me out. My question is this: is there a way, in these kinds of circumstances, I can look at the chart and see the vol spike, see the rejection and get out early? I know for sure that if getting out early is an option than reentering has to also be an to be an option, and that's fine. The obvious answer is seems to be yes, but that's easy to say here. We have to keep in mind that this is a decision that has to be judged and decided while I'm in a trade. As of now I've avoided making price based decisions while in a trade because that's when our judgment is most skewed. But I'm starting to realize that dynamicness (dynamicism?) would have it's benefits. What exactly can we look for in price that may tell us to jump out early? I think a volume spike can be meaningful. For whatever reason, they seem to happen just as price changes direction (just like here). The other thing to look for is of course whether price is moving against you. But then if you look at the long above, price could easily have went against me for a time, then made a HL and continued upwards. How are we to know the difference? Could time be factor? For example, the rate at which price is moving against us? And if we do jump out early, do we re-renter with the stop in it's original place? If so that means additional risk which could outweigh the benefits of getting out early to begin with.

Whew, I hate rollover. Finally starting to get back into the groove of things. Took a long on CL last night that ended up BE. Kind of disappointing as I had high hopes for it. Click for full size - Uploaded with plasq's Skitch Interesting action on ES today. It became pretty clear that we were going to break out above the 65 area, but the failing pattern wasn't big enough so I didn't enter on the break out. Instead I am waiting to buy the flip test of 65, which I'm hoping will happen tomorrow or tonight. I consider an entry on the breakout a good trade, it just with my rules I want to see a larger pattern confirm or fail. I figure then we have a better chance at seeing a full 10-15 point break out. In this case, I'm thinking price will pull back and flip test before hopefully making higher highs. Click for full size - Uploaded with plasq's Skitch

Ok fair enough, it's obvious when there is something amiss. Your post implied that because I was looking at the wrong contract it is somehow dangerous and I could lose money and I better not trade CL until I get the contracts straight. When anyone looking the the J contract today would know enough not to trade it, whether because its the wrong contract or some other reason for super low volume. You could pick 1 of the 3 contracts at random, pull it up on a chart and know right away whether you should be trading it or not.

Cool. I was a month behind. I was trading the March while everyone else was trading the April. When everyone rolled over, so did I...to the older contract haha. Stupid. Easy fix though.

I suppose I could do that if the volume is going to flip flop between contracts. If not, there is really no point, I'll just stick with the new one. The reason it's not so simple for me is just because m y setups usually take a few days to fully play out. It just means I'll have to have separate workspaces for each contract which is no big deal. Why not? It's obviously pretty easy to see when your watching the wrong contract lol.

So is it safe to say the majority of the volume will be on the K contract rather than the J? Or does it just depend on the day?

I wish it were that simple, but yea I'll get it figured out.