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[Niko 10]

Somehow the charts did not upload.

 

9:07 we just broke below S at 60 so the LOLR is confirmed down until it changes.

9:32 Failure to reenter the congestion area above 60. Strong REV .

9:41 Hinge of some sort,they dont want it above 60 but neither they want it below 48. Overlapping is increasing

 

Wait for a break of either 61 or 48 before acting.

9:54 We broke above 61, first attempt was messy, But bow it seems like buyers are committing.

Edited May 5, 2014 by Niko

[Bern 10]

140505 pre

 

Just before RTH open. LOLR down.

[r3algood 10]

Prepwork

 

 

The other possible course of action is to reverse above or around 60, and try to go back inside the hourly TC, In that case the stride of this downtrend form friday should be broken before we are back in bullish mode, that would happen around 75, from there we would need to take 82 and deal with the MP of the up TC, but if we can clear all that clutter we would be on our way to 604.

 

 

Remember to scratch and reenter when required, so to avoid fear and keep focus.

 

 

Approaching the mean (MP) now. Great prep

[DbPhoenix 42]

Means were again the dominant influence today:

[Bern 10]

These are the trades I took today.

[DbPhoenix 42]

FWIW, the chart on the left above is the end product. The following are "work product" that helped get me to that point:

[Niko 10]

Posting and taking live trades is not as easy for the inexperienced so too few "trading posts" today.

 

Very interesting day for me, lots of mistakes, most of them fear related, fear of what, fear that what I have tested doesnt work out as planned, I guess is the result of many times getting burned, that feeling of this can go really wrong today make me deviate from plan somehow.

 

Anyway, not such a crappy day after all, SCR kept my losses low. Lets recount:

 

Things I did not do that I should have done.

 

1. Looks like the entry of the day was the REV at 48, that number was way off my radar, Db explained that it was a 50% from the move down from 618. I was really expecting it to get to 43 so I did not consider an entry here. But realized they did not want it below that level at this time of the morning so the upside was the way to go. But now I defined myself a limit in my head, I did not want to get trapped in chop in my first day of live tradind so I avoided the next RET as it was inside the OR.

 

Heading South then reversing to look for trades North is not the same thing as trading within a range. The range hasn't even been determined at this point. Think of it as a Climactic Reversal rather than a Range Reversal, if you like. Unless you're making new highs (above 3740) or new lows (1700), you're always going to be heading back into something.

 

This is only tangentially about support and resistance. Support and resistance are those levels beyond which traders can't find trades. Find the means. Find how far from the means traders are willing and able to go.

 

2. A HH, therefore buyers were in control, and then price went back down just to test the DL. This again as Db pointed out was the second opportunity to enter, but then again I wanted to see price above 61 so I skipped this trade.

 

According to my current rules 1 and 2 would have been SCR, but both of them were legitimate entries that I did not take, fearing R at 61.

 

3. My first trade, After we broke above 63 I took the first RET, but then chickened out, I am not gonna be able to trade if I don't get rid of this damn fear, tomorrow goal is to follow the system rules no matter what. Lets give fear a day off.

 

4. Interesting spot, had I been long from below, this place wouldn't have triggered a trade, but given that I wasnt a LH after a DL break meant I had to take the trade, this one was rapidly SC, Given that I Sold at the precise location of the REV I should have SARed this one (a DTDB),

 

5. But I didnt, so I waited for the SL to be broken and took the next RET, here again price made a HH and I chickened out at the first sing of danger. By now is obvious how a first decision poorly made leads to a chain of bad decisions all the way to the top. Here I had the good sense of getting rid of fear and reenter. This was actually the entry of the day for me.

 

6. Here I lost track of the day trend, the one that started at the open, and focussed on the trees. Closing my last long and shorting just at the REV price, once again a DTDB, hence a long was called for, but somehow I managed to screw myself over again and reenter short. These trade was enough to clear my early winnings. Next time, if riding a trend focus on the forest and look for reasons to stay.

 

7. Being out I decided to take the short up here, but then SCR as it did not go anywhere.

 

8. The trendline was broken and a first RET so shorted this, but then I realized it was 11:00 and I was not really focused so I decided to close shop for the day.

 

So take the next step.Otherwise it's just CWS. What are you going to do tomorrow to avoid making these mistakes again? What are you going to do tomorrow to replicate your successes?

Edited May 5, 2014 by DbPhoenix

[k p 10]

So how does it tally up at the end of the day? (in terms of points or dollars.. whichever you prefer if you don't mind me asking)

 

It seem both of us were thinking of clearing that 3561 level and we both missed that REV on the bottom.

 

Edit: ALso, did you not think of doing anything right at the open when we broke below 3560?

[Niko 10]

So how does it tally up at the end of the day? (in terms of points or dollars.. whichever you prefer if you don't mind me asking)

 

It seem both of us were thinking of clearing that 3561 level and we both missed that REV on the bottom.

 

Edit: ALso, did you not think of doing anything right at the open when we broke below 3560?

 

10 bucks up. I ended up working for the broker today :haha: .

 

I did not take the REV at the open, mainly because I was not interested in trading REVs today. Being the first day I wanted to play it safe with Line breaks + RETs.

[k p 10]

Well I think breaking even is an excellent result! Its like going to work for free but having the opportunity to work in the real work, kind of like a co-op type of program (not sure if you have there where you are). So the experience gained is worth working for free!

 

Today I think was tricky for most. So breaking even on a difficult day is once again excellent, and on the easy days when price just shoots in your direction is where the paycheck will be made.

[Niko 10]

I just finished reviewing my day, lots of replay, trying to come up with ideas to better my plan. I think I was just too fearful facing negative incursions and allowed a R bias to put some fog in front of me in the light of HHs and a solid up trending stride.

 

 

Now, I still don't think I would have taken the REV so I will discard it for now as it would require my prepwork to get much better.

 

What I think I should have done is taking the long after the HL at 9:41, the trend changed with the REV and this was the first RET.

 

If we zoom in this entry on realizes it was a BO entry in the Tick chart, prices had congested between 51 and 57 for over 3 minutes and after failing to get followers below 51 bears gave up and buyers managed to join above 57.

 

 

After the entry there was a normal RET, and the fact that buyers kept on buying at the top of the range halting the decline outside of the previous value area was meaningful to keep this trade alive. It was after this that the HH was achieved before prices returned to the DL. In this case I think I would have scratched this trade on BE and reevaluate.

 

The second trade would have been the Failure to break the DL at 9:50, in this case I think I would have required an scratch and a reentry, as prices moved against me way too much for my system, but given that just after my exit prices stopped falling, it would have triggered an immediate reentry not too far from the initial one.

 

This entry was different from the 1st given that it was a VREV in the tick chart, that means that as soon as bears notices that there were no more sellers they turned into buyers and raised prices rapidly.

 

After the entry the DL of this newly formed trend got broken and there was a 2 downwave RET I have noticed this a lot during back and forwardtesting, perhaps in the future I could modify my exit criteria giving more room to the trades in order to allow for this kind of retracements to occur. This would save me a reentry or two.

 

Edited May 5, 2014 by Niko

[DbPhoenix 42]

You may also want to look at the midpoint between the mean of the 5yr channel, which is currently at 3400, and the high, 3740, i.e., 3400 + 170 = 3570. In what way has 3570 been important over the past week?

[Niko 10]

You may also want to look at the midpoint between the mean of the 5yr channel, which is currently at 3400, and the high, 3740, i.e., 3400 + 170 = 3570. In what way has 3570 been important over the past week?

 

Whoa! . This looks like the "gravity" center for the market, and not only from last week, but all the way from January.

 

What I did was just find a trends that crossed that level and I found that movements usually ended at the same distance from 570 as the distance that took them to get to 570.

 

What is this all about? Is that the mean? Sorry if this should be evident by know, but it wasn't. Thanks.

 

Technically, it's a mean, but I see it as the usual 50% indicator of strength/weakness. Even since price hit the mean of the 5yr channel at 3400, it's been trying to work its way back to the high. It got as far as 3620 before retreating. This overshot the 50% level of 3400 to 3620, but held well above it. From 3620 to the low of 3481 is where we get the 50% level that came in handy today, i.e., 3548.

 

As to the significance of 3570, it is as I said 50% of the distance from 3400 to 3740, so is itself a measure of strength. That traders scouted as far down as 3548 looking for trades does not negate the value of that measure, particularly since we are now well above that level.

 

 

BTW, the chart is a little big, sorry, I cant compress the hourly in less space.

Edited May 5, 2014 by DbPhoenix

[Niko 10]

And regarding today. We found sellers at the same distance from 570 we found buyers at the open.

[Niko 10]

Prepwork

 

So we are at the top of the Daily TC. There were no more buyers above 604. From there selling has been the thing to do. Now we are 40 points lower, and selling is drying up, seems like 60 is too cheap and is scaring sellers or motivating buyers. Anyhow, the stride of the uptrend from the 28 is broken and we seem to be in the middle of a RET in the hourly chart.

 

Given than we have LHs and LLs, this is a downtrend.

 

What could happen at the open.

 

Given the trend the most probable course of action is an attempt to break below 60 (this could happen even before the open) in which case the first destination of this trend would be 40 (50% from 480) and from there 30 has proven to be an important demand level so we could expect to find some buyers there as well. from there is all the way to the bottom of the daily TC around 460.

 

The other possible course of action is to reverse above or around 60, and try to go back inside the hourly TC, In that case the stride of this downtrend form friday should be broken before we are back in bullish mode, that would happen around 75, from there we would need to take 82 and deal with the MP of the up TC, but if we can clear all that clutter we would be on our way to 604.

 

SO far seems like the upside has more trouble than the downside. So lets wait, see and act only on prime trades. If the day turns choppy at the open, will be better to avoid trading until things clear out.

 

Remember to scratch and reenter when required, so to avoid fear and keep focus.

 

Regarding things to do better tomorrow is to take into account mean reversion, as it has been playing a major role in the last few months as proven today. In that way I will not be surprised by REVs out of the blue.

[Niko 10]

What are you going to do tomorrow to avoid making these mistakes again?

 

1. Regarding context, I will take into account mean reversion in order to avoid surprises.

 

2. Regarding the REV entries: Somehow I still dont feel comfortable with these yet, unless they occur at a level that has been tested premarket or the day before, perhaps is just a stupid bias, but I need to gather more input about these trades before going live with them. In order to do this as fast as possible, I will paper trade the REVs that show up and compile records. Besides, I will run more backtests on REVs during the week.

 

You needn't take the REV itself, but understanding what it is -- or appears to be -- will give you the confidence to take the subsequent RET. And if it doesn't work out, just scratch.

 

3. Regarding early exits: Once price moves away from my entry I will give it at least two ticks below (above) the last level of price where buyers (sellers) rejected prices higher (lower). This will eliminate arbitrary scratches. Once the line in the sand is above the entry price I will stop trailing it and manage the trade according to the bigger picture.

 

An example of this is in the following chart

 

 

 

What are you going to do tomorrow to replicate your successes?

 

 

My main succes today was to be able to objectively assess the market after a failed SCR and reenter, so I will just apply what I applied today in order to take reentries tomorrow.

 

4. Regarding reentries: A failed scratch is a DTDB that just bit you, but still didn't bark, so the fact that you made a mistake in the exit means the initial position was ok so a reentry is in place, now the reentry price should be based in PA. Like in the attached chart.

 

 

3 and 4 are essentially what I ended up with after the SCR reentry exercise, but did not apply it today. Lets see how tomorrow looks like doing what I planned.

Edited May 6, 2014 by DbPhoenix

[Niko 10]

You needn't take the REV itself, but understanding what it is -- or appears to be -- will give you the confidence to take the subsequent RET. And if it doesn't work out, just scratch.

 

Thanks, that is what I am doing now, but in the future I expect to be able to take the REVs, some movements only give you that chance to jump in, and I don't want to miss those.

 

Thanks and happy trading.

[Niko 10]

Prepwork - 050614

 

After finding buyers at the 50% of the move from 615 to 480 (570) strength was confirmed taking prices back inside the up TC in the hourly. But it seems like buyers ran out of steam at the top of last week TR at 604.

 

We are currently at 87 (the MP of last week TR) where there has been struggle since the 22nd of april. So we could have some struggle as well.

 

The 50% from yesterday´s upmove is 76, so, If sellers cant flood the market with contracts below that level then price shall rise to test 604, if they can the we should visit the bottom of the TR at 70, good old 70.

 

Now, if we can break 604, that will be visible in the daily and it will mark the end of this daily downtrend and back into the larger up TC in the daily.

 

Lets see what happens.

 

As I pointed out in my journal yesterday, today cant be contaminated by fear, I have to be able to let price do its job and retrace, only scratch the trades that fail to make what is expected (rise or fall), give the rest a break.

 

Since you're coming up on the open and you have clear rejections up and down, you can be more micro. What are the levels above which and below which traders can't find trades right now? What is the midpoint of this range?

 

0941: Note that the first five minutes represented a search for equilibrium bet 86 and 92, MP 89, which is also the MP of the 70 to 06 TR.

Edited May 6, 2014 by DbPhoenix

[Niko 10]

Prepwork - 050614

 

Since you're coming up on the open and you have clear rejections up and down, you can be more micro. What are the levels above which and below which traders can't find trades right now? What is the midpoint of this range?

 

0941: Note that the first five minutes represented a search for equilibrium bet 86 and 92, MP 89, which is also the MP of the 70 to 06 TR.

 

Sorry for the late reply, I was focused on the market and just checked here now. Traders were having trouble with 93 and 84, the MP of which is 88, just what they struggled with at the open. After the open bulls went up to 92 (MP 91-93 TR) and found no interest then prices plunged all the way to 82.

Edited May 6, 2014 by Niko

[Niko 10]

I guess the plan has to deal with operational mistakes that throw me off balance. Today I made an stupid order entry mistake, in demo these were not such a big deal, but in real life you just cant take them away. So I had two choices, go away and cry for being so stupid or just keep on trading and pay more attention to what I am doing. I managed to choose the latter, but I felt pretty bad the rest of the morning,

 

So having said that, here is my day.

 

1. At the open, buyers gave up at 92, so the trend that started around 5:00 AM today was still holding just fine. I took the next RET. This one was an early SCR, so it was a mistake that cost me at least 2 points. It is the same mistake as yesterday, damn. I need to do this stuff right.

 

2. This is the Reentry of trade 1 but it got SCR pretty fast.

 

3. SL was gone we were at 82 and we had a RET, so long it was, but it was a SCR as well, by now I knew they didn't want to go anywhere, but I thought I had a Hinge, marked with yellow lines.

 

4. Being in a hinge meant that I could try to short the test of the apex and that is what 4 is all about, but just after the entry price went rapidly against me and I got screwed. I will have to think about how to deal with this VREVs after my entry as they make a lot of noise in the P&L when they show up.

 

5. Having failed on the downside my read was that this was a BO from the hinge and entered on what I considered the RET, but it was rapidly rejected, this wouldn't have been troublesome if I had done things the right way, but I just went nuts trying to close the trade with the wrong command, I thought this kind of thing couldn't happen to me anymore but there you go. I am gonna work on attached orders so that I don't end up with this trouble again.

 

6.Realizing I was in a TR and that given that I was not gonna get good entries, I just waited for the BO and the RET, I exited the 1st contract too soon. After this I just closed the trade at the first sing of strength after 11:00, have a lot of reviewing work to do.

 

Tomorrow task, once the trade is going your way, LEAVE IT ALONE!!!!

 

You're trying to trade the midpoint again. The first two trades are fine. But after those, you have a range, and the midpoint of the range is 86. As traders trade around this level, price forms a hinge, and the midpoint of the next swing high and the next swing low is again 86, so your 3rd and 4th trades should not have been made. As for the 5th, that's the first exit from the hinge and there's no retracement, so that's up to you, though the first exit from the hinge nearly always fails.

 

That this was a balancing day became clear by 1000, so there wasn't much to do except wait.

Edited May 6, 2014 by DbPhoenix

[Bern 10]

140506 post

 

Well, for the most part of the am session this was a trading range matching yesterday´s range (see 1000tick chart) and with the market not finding trades above/below the boundaries and going back to the mean.

 

These are the trades:

[k p 10]

Its great to have you trading live Niko because it just seems so much different from sim. Emotions are of course the only reason why it is different, other than order entry mistakes which don't happen in sim, but I too see how when looking for a live trade, all my good trades in sim just don't seem to come as easily. (I also notice you say you got screwed which gave me a chuckle cause of course we both know that price doesn't screw us!)

 

Something does jump out at me though since you are trading 3 contracts. My philosophy is all about protecting money, hence why I find it hard to place trades cause I'm always looking for the perfect one, but I wonder if it makes sense to drop down to one contract for now, and be able to hold it for a worse scratch, but which might make you not give up on a good initial trade.

 

Is this mathematically better? If you get out right away and scratch because it goes against you, the dollar amount for 3 contracts is of course nothing to sneeze at for every point. The idea of course is to scale out of your contracts as Db suggests, which works great when you are in the money to at least have a position still in the trade. But since we are both so new and any move against us seems tragic, could it be safer to trade just one contract and be able to hold just a bit longer without the higher money loss?

 

I find that often my direction is correct, but maybe my entry isn't, so hanging on a bit longer makes the trade work, but I'm too quick to get out. By dropping to one contract, perhaps you can practice with real money and have this be safer. Getting out early and missing out on a good move when you don't have a position on does hurt, but I think for us new guys, price moving against you on 3 contracts is more damaging.

 

Just thought I would share.. but what the heck do I know!

[Niko 10]

 

You're trying to trade the midpoint again. The first two trades are fine. But after those, you have a range, and the midpoint of the range is 86. As traders trade around this level, price forms a hinge, and the midpoint of the next swing high and the next swing low is again 86, so your 3rd and 4th trades should not have been made. As for the 5th, that's the first exit from the hinge and there's no retracement, so that's up to you, though the first exit from the hinge nearly always fails.

 

That this was a balancing day became clear by 1000, so there wasn't much to do except wait.

 

Thank you, I guess I saw today open just like yesterday open and tried to trade accordingly, but reviewing, yesterday there was a HH that occurred before the entry on the RET against the DL, today there was not such thing. (Chart below)

 

 

Regarding 5, yes I moved in too fast, I should have waited for the RET that never came.

 

Thank you for your comments.

 

While the macro is important, you're not moving past it, and the macro isn't going to provide much guidance at the opening bell unless you just happen to be up against an extreme of some sort.

 

You must locate those levels beyond which traders can't find trades. Without that, you have only guesses and feelings to rely on. This morning, traders couldn't get past 93 (0730-0815). To the downside, they couldn't get past 84 (0845). Therefore, all you have to do is calculate the midpoint (87-88, Again) and see how traders trade around these levels. If you're not doing this, then you're just asking to be manipulated.

 

You can't clear muddy water by stirring it.

Edited May 6, 2014 by DbPhoenix

[Niko 10]

Its great to have you trading live Niko because it just seems so much different from sim. Emotions are of course the only reason why it is different, other than order entry mistakes which don't happen in sim, but I too see how when looking for a live trade, all my good trades in sim just don't seem to come as easily. (I also notice you say you got screwed which gave me a chuckle cause of course we both know that price doesn't screw us!)

 

Something does jump out at me though since you are trading 3 contracts. My philosophy is all about protecting money, hence why I find it hard to place trades cause I'm always looking for the perfect one, but I wonder if it makes sense to drop down to one contract for now, and be able to hold it for a worse scratch, but which might make you not give up on a good initial trade.

 

Is this mathematically better? If you get out right away and scratch because it goes against you, the dollar amount for 3 contracts is of course nothing to sneeze at for every point. The idea of course is to scale out of your contracts as Db suggests, which works great when you are in the money to at least have a position still in the trade. But since we are both so new and any move against us seems tragic, could it be safer to trade just one contract and be able to hold just a bit longer without the higher money loss?

 

I find that often my direction is correct, but maybe my entry isn't, so hanging on a bit longer makes the trade work, but I'm too quick to get out. By dropping to one contract, perhaps you can practice with real money and have this be safer. Getting out early and missing out on a good move when you don't have a position on does hurt, but I think for us new guys, price moving against you on 3 contracts is more damaging.

 

Just thought I would share.. but what the heck do I know!

 

 

Hehe, the market dont screw you but you can surely screw yourself. So I got screwed by my own stupidity today. Lets just leave stupidity in bed tomorrow and wake up smarter. .

 

Regarding position size, that is not an issue, I dont trade 3 contracts because of size, but because of exit flexibility, some times I want to take profits on a parabolic move, but not on the whole position so I take profits on the first contract. The other two are for break of Last Swing and Line break. It could be 3 or 6 or 9, any multiple of 3 will do.

 

Regarding your difficulties with entry, just take them, get a clear way to scratch and take all trades that match your setup, I see you want to minimize info risk, but that will always cost you more if you miss a trade than if you take one an scratch it. So, lets do something, take the next 50 trades that come in your way, dont think twice, just take them (is demo money anyway), see how you manage them after the entry and add that into your records, lets talk back 50 trades later and let me know what you found.

[k p 10]

Regarding your difficulties with entry, just take them, get a clear way to scratch and take all trades that match your setup, I see you want to minimize info risk, but that will always cost you more if you miss a trade than if you take one an scratch it. So, lets do something, take the next 50 trades that come in your way, dont think twice, just take them (is demo money anyway), see how you manage them after the entry and add that into your records, lets talk back 50 trades later and let me know what you found.

 

I agree 100% in regards to just taking the trades. My excuse for today is that nothing looked quite good since we were stuck in that range. The only problem was that when we got out, I still didn't do anything, but today there for sure weren't many opportunities. I'm looking for real trades now... the simming was great, but I knew that I needed to test what I would actually do when real money is on the line. So I hope to at least get a handful of trades in this week and then re-evaluate to see if I'm on the right track or not.