MC's House of Mirrors

[MC 10]

http://www.jamphat.com/rap/

 

WOW...ROFL!!!

 

If you guys know any rap lyrics and want to see them converted to charts/graphs check this out.

 

There is vulgarity so maybe not work safe, but it's rap...it's not meant to be clean. :o

[MC 10]

I just did my taxes...

 

Net lifetime loss in the market is about -$1,300 over the last 14 months.

Commission for all trades was $1,100ish.

Tradestation net slippage was -$300.

401k shifting from my knowledge was +10% or more.

 

So barring commission and slippage I actually would be literally in profit. I know that's not realistic and commission is the cost of doing business but still interesting none the less. The 401k shift and capital loss tax write offs saved me some sexy money so my net experience in 14 months is green as far as I'm concerned.

 

This year will be my 1st profitable year, I have no doubts on this as the only past limitation was my mind. I have been on FIRE with my demo account (yes I've always said it's nothing like live). Short term scalp/daytrades on the YM this week have been $500-800 a day. I feel like I owe this change to "trading in the zone". I'm going to read it a 2nd time and then fund a futures account to try my edge again with my more solidified discipline thanks to the book.

 

YTD the paper account is up $3906 net, playing within reason for my equity level. All comes down to showing the same discipline and execution when live.

$4585 gross before $679 commissions.

 

Added------

Something just clicked even further when I re-read this back to myself. I did very well on the 401k shift, not perfect but a true profitable trader is NOT looking for perfection in relation to gains. If you're chasing perfection in gains instead of perfect execution of your system you're set for failure and are being un-realistic. You will NEVER know for certain what's next in the market, and to think you will is going to lead to mistakes and losses.

 

Couple the above with the fact I was "trading" (more less) with an account I have no concern over. It's 401k and since it's gone from my check I don't even look at it as my money. When I removed the fear of risk, as I do with the paper account it was effortless and quite profitable. Going forward I will fully embrace the risk of testing out the unique market moment and simply pony up the stop as a token of my willingness to try the edge which I know has net profitable expectations. It's all been clear from very early on but in typing this over and over on boards it's starting to seep into my subconscious mind. This is where traders succeed or fail, the back of the dome, NOT what you know to be true but cannot act upon. The way we were brought up conditions us to have involuntary reactions that sabotage us in a trading endeavor.

Edited February 23, 2008 by mcichocki_

[MC 10]

I annotated this back a bit ago...

 

Currently...

UA is still looking strong against the broad market. $37-38 would be a good target entry with a tight stop loss.

Let's see if it pulls back that far or decides to rally without any new holders.

[MC 10]

When are stocks bad and futures better? TAX TIME

 

My stock nightmare...YES they had to be hand entered.

 

 

 

YES my 54 trades on futures get entered like this.

 

Not the P&L I'm looking for, but that was my first full year of trading so I came out pretty much unscathed.

 

 

Let's see if I can make 2008 a better year.

[MC 10]

They are selling into the strength IMO. That's what changes trends, when all the big money is out and bad news or something else hits the herd runs too little too late. Buy low on panic, sell high on news that creates herd greed.

 

Scaling in at lows 1,2 and 3. Hype rally then selling at 4. Rinse and repeat.

Also noteworthy is the supply line (volume by price)...they sold at the same key level both times with large volume. Then notice the limited volume that follows the hidden selling, that's big money showing no demand. This is how the market cycles and why I say retail moves nothing and big money is the coattail to ride. It's also why I suggest noting key levels at least as heavily as trendlines if not more so.

 

Good trading guys.

[MC 10]

ALL the index ETF's are showing similar traits with divergence and volume based support. One set stands out from the others to me though and thats the SPY/ S&P. I think this guy has a chance at leading the way for what's to come in the broad markets.

 

 

Here is my view. I remain bullish mid term and think we could get a large rally before the herd expects it.

Shorts will probably SCREAM and cover from this next wave also.

 

Macd divergence is fairly large and macd histogram divergence is backing us up as well.

 

Volume, volume, volume. Folks volume like this down low is bullish, that's not retail, that's big bucks moving around and in this case buying in at the lows. Why do I think it's buying...look at the support level and how it's been fought with big $. Go to the intraday charts and look where the volume is focused at...down low. Pros don't buy high and sell low folks.

 

Yes we have a descending triangle, yes we have both volume by price and the top trendline as resistance. BUT the top trendline is pinching off and building pressure like a spring. This spring is getting tight and that's why I feel whichever direction it breaks will have some great momentum behind it. Based on the above backing reasons I have to carry a bullish bias and fade the herd here mentally.

 

All that being said, a wise trader may have a bias but rarely trades on it. You should be ready for momentum to either side for the best odds of a winner. If your aggressive you could buy at support down low. The more conservative approach will be to have a buy stop AND sell stop in place just outside the triangle so whichever way it breaks you would capture some of the momentum early and then just trail the stops and manage the trade.

 

Good trading

MC

[MC 10]

I just watched a video and something clicked on the issue of taking profits early.

 

First let's look at why I (and many others) have this psychological issue of taking profit early...

1) Fear of being wrong and to end the pain of not knowing what will happen next.

2) Feeding the greed with quick profit to gain temporary pleasure.

 

I have known of and clearly defined my above issues some time ago, but breaking down your psyche and rebuilding is a difficult task to do by yourself. I still have some work to do myself, but I am getting better as I practice and focus on the below facts. Maybe they can help you also?

 

1) Focus on remembering that we can't possibly know whats coming next and just to use your edge and execute.

We have back tested and clearly defined the edge to prove it valid and profitable, now it's time to use the edge to make money through consistent execution. Fully embracing the risk and truly believing we don't need to know what's next should remove the fear and pain we create from issue 1.

 

2) Then think back to all the times we have taken $30 early to feed the greed, only to realize when it's too late that the move was worth exponentially more. :-\ Had we just executed the edge those few runner trades would have more than made up for the stop outs and we would be making great money. It's not small profit often that will make us net positive, rather just one good move caught and executed on could make a traders week, month or even make the year. The short term pleasure turns to negativity when you realize you are not executing and leaving $$$ on the table, costing you net profitability!

 

There's a cycle in place stemming back to the values we were raised to believe in. In the market these values are incorrect and they need to be broken in order to succeed. I will continue to work this out and I will become a successful trader.

 

To my point about the speaker in the video, something he said made me think...

Don't look at profit as something that causes emotions, look at it as a risk free trade.

A trade in the green is a risk free trade, all you have to do is manage it.

 

Good trading and Happy Easter,

MC

[MC 10]

 

Weekly is kind of what I'm focused on for the mid term. Week isn't over but that macd cross is tasty looking.

Can't wait to see how we close tomorrow.

[MC 10]

ALL the index ETF's are showing similar traits with divergence and volume based support. One set stands out from the others to me though and thats the SPY/ S&P. I think this guy has a chance at leading the way for what's to come in the broad markets.

 

 

Here is my view. I remain bullish mid term and think we could get a large rally before the herd expects it.

Shorts will probably SCREAM and cover from this next wave also.

 

Macd divergence is fairly large and macd histogram divergence is backing us up as well.

 

Volume, volume, volume. Folks volume like this down low is bullish, that's not retail, that's big bucks moving around and in this case buying in at the lows. Why do I think it's buying...look at the support level and how it's been fought with big $. Go to the intraday charts and look where the volume is focused at...down low. Pros don't buy high and sell low folks.

 

Yes we have a descending triangle, yes we have both volume by price and the top trendline as resistance. BUT the top trendline is pinching off and building pressure like a spring. This spring is getting tight and that's why I feel whichever direction it breaks will have some great momentum behind it. Based on the above backing reasons I have to carry a bullish bias and fade the herd here mentally.

 

All that being said, a wise trader may have a bias but rarely trades on it. You should be ready for momentum to either side for the best odds of a winner. If your aggressive you could buy at support down low. The more conservative approach will be to have a buy stop AND sell stop in place just outside the triangle so whichever way it breaks you would capture some of the momentum early and then just trail the stops and manage the trade.

 

Good trading

MC

 

Fade the herd baby, this was a post I made in a woods filled with bears. :rofl:

1 day before the mid term reversal.

[TacTrader 10]

Hey nice journal....

 

Have you thought of scaling out of your trades? I found that when trading multiple contracts, taking off 1/2 or some other percentage of the trade at a preset target helps me psychologically. I get out and bank a small portion then leave the rest on for the big move that may or may not come. If not, I get stopped out at break even but still have the original smaller profit. It is a happy medium for me...

[MC 10]

Hey nice journal....

 

Have you thought of scaling out of your trades? I found that when trading multiple contracts, taking off 1/2 or some other percentage of the trade at a preset target helps me psychologically. I get out and bank a small portion then leave the rest on for the big move that may or may not come. If not, I get stopped out at break even but still have the original smaller profit. It is a happy medium for me...

 

Thanks, I don't keep it up as much as I want. I'm busy and all over the place but I try.

 

I'm still on paper but I do scale out.

The key to me is risk reduction, I'm not cocky enough to think the market will do what I want it to. Working well so far for me.

 

What do you trade, I'm stuck with swing trading stocks now due to a new restriction at work.

[TacTrader 10]

YM intraday

 

I have a messed up work schedule (12 hr shifts rotating every 28 days) but manage to trade 3 days/week on average. Some weeks I trade everyday, other maybe twice. Right now I am on midnights so I will wake up tomorrow around 11:30, use the lunch hour to assess the day so far and try and trade the afternoon. Other days I am at my computer at 08:30 and don't leave til the close. It is the biggest variable in my trading and it really bugs me (obviously). I can't trade at work, but I stay pretty busy anyways and it would be a major distraction.

[MC 10]

 

Kind of an interesting view. On a lifetime yearly chart the last monster bull run didn't even flinch, nor did it retrace even to 50% on the Y2K "crash". I guess the question is how do fundamentals make this exponential market rise look? IS the market overbought up here, or is there still room for growth after such a big long run? We did break the range and have tested the prior swing level, though we aren't even half way through the year so the test means little till it's closed.

 

Another thought that made me LOL was the consolidation from 1965 through about 1983. All this talk of the market returns x% per year. And the 401k hype that you put in x% of your check and you'll retire a millionaire. Who the hell are they fooling...well how about most of working class America. :crap: I mean of course it all depends on where you began investing, and where you cash out, and everything in between. But the pipe dream of the market always giving gains is anything but a guarantee, there's a 20 year span that might not have done much for your nest egg. Ask those that tried to retire after the Y2K started it's down move. How many put off retirement cause they were down so far that the simply couldn't afford to retire at that point.

 

How many ran and sold in '87? That looks like not even a blip on this view of the market. The market is bigger than most of us think about, myself included. All it takes is a gander at something like this chart to really make you think about your daytrades or even swing trades. We get excited on some of these 50 point gaps, but in the bigger picture its a tick. You can do this on ANY timeframe, and this is why it's important to roll back and look at the bigger picture. All good traders seem to use multiple time frames, and this is partially why. This is the equivalent of living on the ground all your life, and you finally take a plane ride and see things from 10,000 feet. You realize how small a speck you and your house is, and how little your life means in the grand scheme.

 

Enough of my ramblings, just wanted to provoke some thoughts and discussions.

[MC 10]

http://tradersbase.com/mcs-musings/a-new-thread-to-help-usher-a-new-era-in-our-country/index.html

Who wants to rant about the lending situation and/or economy? :helloooo:

[MC 10]

I've added some more volume by price support lines and updated the chart.

To me this shows the volume and where the majority entered the market after the Y2K bear. Almost 2 years of consolidation setting up the bear to bull transition. No doubt about it...this is THE key price pocket. Volume = market sentiment and it's staring us in the face. Now the question is do the big money players have chips on the table still, if so they support that line...if not they let it tank through and get in MUCH below that pocket of support.

 

The above I posted on the web on Jan. 23rd.

The levels I posted back then are coming up. 10,700 remains the most important level I can see. If we stay above that, the point of control is upheld and long term investors will hold albeit with a load of steamy crap in their pants at this point. If we break below there with conviction (especially close below) I'd look for massive bloodshed to accompany the crap in the pants.

I'm looking at that volume pocket as a fault line, if we break that open it's going to be like an earthquake when we have plate shifting at the earths core.

 

Here's an updated chart. In bell curve terms this is a chance to revert and test the MEAN. This testing is something the market does all the time on different timeframes. It's how value is probed in a 2 way auction. Goes higher, no interest...revert to the mean and see if there's interest. If there's no interest there it goes lower till there is no interest and then back to the mean. From the mean any direction could be tested FWIW, including chopping around and coiling at that section of price. My signature sums up how I feel about market movements.

Edited July 12, 2008 by MC

[Guest forsearch]

Who wants to rant about the lending situation and/or economy? :helloooo:

 

[MC 10]

 

While the paper markets are in breakdown mode...commod's should bounce.

Silver looks prime for a bounce IMO. Tight stop and quite a bit of potential upside off this divergent test of the last lows, this is an excellent trade opportunity as I see it.

 

Remember you're counter trend if you're long, the 50ma has crossed below the 200ma already. Pay extra attention to the red dots as they are double backed resistance (by ma and structure). The best trades (with the trend) would be to look for rejection at those levels and get short. Those could also be used for long targets which is classic textbook support and resistance.

 

I LOVE this chart example for TA...it just is clean and clear. I see too many people out there trying so hard to make sense of a shitty chart when there are TONS of other plays. If the chart doesn't hit you quickly don't bother trying TA. If you cant see a clear line in the sand where bulls and bears will interact don't play it cause it will be hard to gauge risk/reward ratios. Trending plays are MUCH easier to work TA with as the side winning is already evident and of high probability to continue. Choppy sideways action is often like betting on red at the roulette table IMO...unless you wait for the breakout that is. The consolidation plays do tend to be more violent and can provide quicker profit if you are patient and quick enough to enter on the break.

 

JMHO

[MC 10]

Pretty bullish on the 60 minute chart. Gapped right back into that rising channel and above the prior high. Passed a lil pullback test even.

 

Bigger picture though...we will be encountering HUGE supply in this zone. It's a damn big zone so be sure you know how to play the game if your looking to go in longer term. From R1 to R2 resistance you're looking at almost 1500 points. R1 isn't something you want to short at and just average down on all the way up. If R1 breaks RUN and look to short at R2. This could be one of the times where averaging down leads to margin calls and wipes traders out. This also would potentially propel the market upwards towards R2.

 

We do have a minor trendline and the shorter MA's acting as support below. I would not anticipate R2 testing without some kind of consolidation building or an insane squeeze. This rally has been a bit too vertical for my liking. It's pretty emotional based on the slope. Think about it, if there were a deep correction would it hold? NOT LIKELY. It's vertical with uber tight pullbacks for a reason, and it's not because the market is all the sudden bullish with all that resistance looming overhead. HRMMM.

[MC 10]

That red level would push us to fill the long wick on that wild candle down. That's market excess and there's lots of pain/supply to be found in that dead cat bounce area.

 

If we hit mid 9000's and show rejection on the tighter timeframes (daily, 60 min) I'll be unloading some more of my 401k into stable value funds as planned. That's the area I could foresee capping this rally.

 

 

If we pierce into that red supply zone I could see investing but with a trade style stop. Once inside that range we MUST hold or I would run to the hills as they say. Though all in all I think one is nuts to buy long into all this supply. Bulls either bought awhile ago or they should wait and pray for supply to prove broken and buy new found support. The support would be the top of the red zone and should be confluent with the bottom line of the downward sloping channel. Simple as that IMO.

 

I'm not saying longs can't squeak more $ out of the rally, just that the upside to downside risk is still rather bearish at this point.

 

 

--------

 

This weekly chart shows the Point of Control being tested already. The green arrow is upside potential (assuming the supply range holds) and the red arrow is the downside potential (assuming the green support levels don't hold). Range bound is ok to make moves in, but either use the range extremes for entry and stops or employ some scaling method using the extreme levels as stops. Or use range breaks to enter of course...breakouts are a very sound way of trading. In range the market is said to be "in balance", and when balance is disrupted it tends to move to the next level of "balance" for testing. Enjoy!

[MC 10]

 

Man I'm still tweaking the software but Investor/RT is a powerhouse!

The profiling capabilities are killer and it's so easy to just drag a box and voila, you have a profile!

 

Who else here is a "VALUE" based trader, using market structure?

[MC 10]

Ok. If this coil can't break into the next channel zone above it look out below.

We have macd (trend) and a custom stoch (momentum) both showing divergence. When both are aligned the move tends to be powerful. We are also at a fib 121% extension which at minimum suggests a retracement ahead.

 

Place your bets if you're aggressive, or let the breakdown begin if you're a more cautious trader/investor. We could be looking at a 800-900ish point retracement based on the broken resistance that never tested as support.

 

GL and play smart.