Week Two Trades-Spookywill

[wshahan 10]

4.14 WRAP UP

 

 

 

This is primarily directed to those learning to trade as most veteran traders will have “been there and done that.”

 

I got stopped out of 3 trades in a row early in the session. I took a total of 6.75 points in losses which are in a very acceptable range for me.

 

I took the rest of the day off after my three loses this morning. I have a rule that if I have three loses in a row I quit for the day. Thus I avoid “get even” trades, “revenge trades” etc. And I give myself time to back into a place where I can listen to the market objectively.

 

I had allowed myself to get somewhat sleep deprived and I caught up on that today.

 

When I follow my rules I expect to have a profitable day, and I violated a number of them as follows:

 

Rule1. Do not trade unless I am physically and mentally sharp. The vast majorities of my errors occur when I am tired, and today was a good example of that.

 

The subtle error off of being tired is that it sets me up for numerous kinds of thinking errors, and today was a good example of that.

 

Rule 2. I was thinking I was smarter than the market. I ignored market condition and set up 2 legitimate short trades in terms of risk/reward. They were at the level of the previous day’s high, but they ignored the powerful up thrust present in the premarket. Another way of saying this is that I had had three big days in a row and I got cocky.

 

Rule 3. I instituted new trades without analyzing what had gone wrong with the previous trade. In the case, value was migrating steadily higher.

 

Rule 4. Here is where I compounded my errors, I increased the risk in the third trade while decreasing the potential return. By then, my target parameters had lessened. And, of course, I missed a big up move.

 

Rule 5. The big error was in ignoring market condition. I religiously begin every morning’s with a detailed review of market condition. This begins with a top down review of the long term 10 year chart through a 120 minute chart going back 3 months down to a 30 minute chart of the last week. I did none of that today. Market condition was clearly favoring the upside by the time of the US opening.

 

So I hope this is helpful to some of you.

 

I have confidence tomorrow will be a better day.

 

Spookywill

[gosu 10]

4.14 WRAP UP

 

 

 

This is primarily directed to those learning to trade as most veteran traders will have “been there and done that.”

 

I got stopped out of 3 trades in a row early in the session. I took a total of 6.75 points in losses which are in a very acceptable range for me.

 

I took the rest of the day off after my three loses this morning. I have a rule that if I have three loses in a row I quit for the day. Thus I avoid “get even” trades, “revenge trades” etc. And I give myself time to back into a place where I can listen to the market objectively.

 

I had allowed myself to get somewhat sleep deprived and I caught up on that today.

 

When I follow my rules I expect to have a profitable day, and I violated a number of them as follows:

 

Rule1. Do not trade unless I am physically and mentally sharp. The vast majorities of my errors occur when I am tired, and today was a good example of that.

 

The subtle error off of being tired is that it sets me up for numerous kinds of thinking errors, and today was a good example of that.

 

Rule 2. I was thinking I was smarter than the market. I ignored market condition and set up 2 legitimate short trades in terms of risk/reward. They were at the level of the previous day’s high, but they ignored the powerful up thrust present in the premarket. Another way of saying this is that I had had three big days in a row and I got cocky.

 

Rule 3. I instituted new trades without analyzing what had gone wrong with the previous trade. In the case, value was migrating steadily higher.

 

Rule 4. Here is where I compounded my errors, I increased the risk in the third trade while decreasing the potential return. By then, my target parameters had lessened. And, of course, I missed a big up move.

 

Rule 5. The big error was in ignoring market condition. I religiously begin every morning’s with a detailed review of market condition. This begins with a top down review of the long term 10 year chart through a 120 minute chart going back 3 months down to a 30 minute chart of the last week. I did none of that today. Market condition was clearly favoring the upside by the time of the US opening.

 

So I hope this is helpful to some of you.

 

I have confidence tomorrow will be a better day.

 

Spookywill

 

Maybe you should consider a Rule 1(a): making calls on a message board to make a display of trading prowess is an unnecessary drag on clear thinking.

 

I can see someone doing it once in awhile for shits and giggles, and I myself have engaged in it in the past. But to commit to doing it for 30 days reveals where you are in the bigger picture.

 

I do see the golden C underneath your ID. I'm not making a judgment regarding the propriety or impropriety of you being a vendor, but I'm curious what you offer commercially - books, courses, services, etc.

 

Regardless, I enjoy your posts and the interaction it causes among the members, some of it hilariously entertaining (e.g., the Phantom menace of TL versus the Jedi steve46).

[wshahan 10]

Reply to gosu:

 

Maybe you should consider a Rule 1(a): making calls on a message board to make a display of trading prowess is an unnecessary drag on clear thinking.

 

I can see someone doing it once in awhile for shits and giggles, and I myself have engaged in it in the past. But to commit to doing it for 30 days reveals where you are in the bigger picture.

 

I do see the golden C underneath your ID. I'm not making a judgment regarding the propriety or impropriety of you being a vendor, but I'm curious what you offer commercially - books, courses, services, etc.

 

Regardless, I enjoy your posts and the interaction it causes among the members, some of it hilariously entertaining (e.g., the Phantom menace of TL versus the Jedi steve46).

• Like

 

I was not aware that I was designated as a vendor to traders Lab. I certainly have made no attempt to solicit any form of business activity while I have been here. The email address I gave was a business one so I assume that is where the business designation came from. I do have a full service chat room which is primarily involved with market profile techniques and I give webinars on various aspects of trading. In the past I have been very successful distributing intra trade recommendations, but I am not doing that now. I have gotten away from trying to call trades in the chat room and it is basically closed. It was too disruptive to my own trading. As I said, I am not soliciting any kind of business currently.

 

The 30 day calling of trades is a challenge. I find that I can do it without undue strain on my trades. And I hope is an opportunity to maybe challenge and help some who are struggling with the ES. Certainly, I don’t see anything else like it. And I will share both the good and bad. Maybe it will be useful, or maybe not. It will certainly be a valuable experience for me.

 

I haven’t had a day like today in a while, so it was a surprise. It was a needed dose of humility.

 

I am still figuring out what to do with thirty days. If you have any ideas, please feel free to share them.

 

Part of trading is becoming aware of your vulnerabilities. I think much of the failures in trading that the futures industry ascribes to human weakness and lack of self discipline is in actuality due to lack of experience and training. Gaining these skills takes time which interferes with the industries goal of turning client capital into commissions and fees. Selling emotional control and self discipline is big money for large numbers of “experts”. Internalizing good trading technique eliminates much of the emotional issues in trading in my own experience. I hope to be able to generate some dialog on this issue.

 

And I do make money with an unusual methodology. I hope to stimulate interest in auction market trading and in throwing out large numbers of indicators clouding up the screen. There is also the issue of “systems.” My experience is that they don’t work over a period of time. Traders who are successful in my experience have developed there own methodology independent of bought systems.

 

I have an undergraduate degree in economics from Vanderbilt and a graduate degree from there in developmental psychology. I also have an MBA from Columbia. Thus I am not a total simpleton, and I have earned the right to provide comic relief if I so choose. The education, by the way, was a serious impediment to becoming a successful trader.

 

I spent a number of years on Wall Street without seeing many of the clients make much money. That colors my outlook now.

 

I am glad you have identified where I am in the bigger picture. I wish you would share that with me as I would be helpful to know.

 

These are some disorganized thoughts that were stimulated by your tread. I will give more thought to a reply. Thanks.

 

Spookwill

Edited April 17, 2012 by wshahan
clearer,

[gosu 10]

Dear Spooky,

 

I've parsed your post and replied below.

 

* * *

 

I was not aware that I was designated as a vendor to traders Lab. I certainly have made no attempt to solicit any form of business activity while I have been here. The email address I gave was a business one so I assume that is where the business designation came from. I do have a full service chat room which is primarily involved with market profile techniques and I give webinars on various aspects of trading. In the past I have been very successful distributing intra trade recommendations, but I am not doing that now. I have gotten away from trying to call trades in the chat room and it is basically closed. It was too disruptive to my own trading. As I said, I am not soliciting any kind of business currently.

 

Hopefully you did not detect any accusatory tone coming from me that you are soliciting because there was none on my part. I was just curious because you were designated with the golden C. Thanks for satisfying my curiosity.

 

The 30 day calling of trades is a challenge. I find that I can do it without undue strain on my trades. And I hope is an opportunity to maybe challenge and help some who are struggling with the ES. Certainly, I don’t see anything else like it. And I will share both the good and bad. Maybe it will be useful, or maybe not. It will certainly be a valuable experience for me.

 

I haven’t had a day like today in a while, so it was a surprise. It was a needed dose of humility.

 

I am still figuring out what to do with thirty days. If you have any ideas, please feel free to share them.

 

Dealing with days when we are not at our best is far more important than days when we are "ON", which require little attention. There is no perfection in this business and I do not put much stock (pun intended) into any given trade or day. My goal is to string together good weeks that add up to good months that add up to a good year. Bad days do happen, and they are not a big deal.

 

With regard to the 30 days, I have no suggestions. For me, I see little benefit to me or to others in my going public with trades, but I can understand your difference of opinion and commend you for your desire to help struggling ES traders.

 

Part of trading is becoming aware of your vulnerabilities. I think much of the failures in trading that the futures industry ascribes to human weakness and lack of self discipline is in actuality due to lack of experience and training. Gaining these skills takes time which interferes with the industries goal of turning client capital into commissions and fees. Selling emotional control and self discipline is big money for large numbers of “experts”. Internalizing good trading technique eliminates much of the emotional issues in trading in my own experience. I hope to be able to generate some dialog on this issue.

 

I can vouch for the first sentence from my own experience, and your comments regarding the futures industry in general are in alignment with my own thoughts on the subject, although I don't think much about it.

 

And I do make money with an unusual methodology. I hope to stimulate interest in auction market trading and in throwing out large numbers of indicators clouding up the screen. There is also the issue of “systems.” My experience is that they don’t work over a period of time. Traders who are successful in my experience have developed there own methodology independent of bought systems.

 

I know little about "auction market trading" or market profile and, to be candid, have not much more than a passing interest. I see the posts on this site that use vocabulary I'm unfamiliar with and I sometimes make an effort to figure out the gist of what is being said and that's about it. I have my own way of trading, call it a method or a system, but it cannot be separated from the mind making the decisions. Therefore, my experience is derived from a similar path as yours. The way I see it, in the beginning it is good to copy someone who knows how to do it but eventually everyone has to develop his own style in order to reach a level of expertise.

 

I have an undergraduate degree in economics from Vanderbilt and a graduate degree from there in developmental psychology. I also have an MBA from Columbia. Thus I am not a total simpleton, and I have earned the right to provide comic relief if I so choose. The education, by the way, was a serious impediment to becoming a successful trader.

 

Comic relief is good. There is too little of it in trading and I do look to infuse some humor into my posts but it's likely too dry for most people's tastes. Today being tax day, however, I'm in less of a humorous mood than usual.

 

I spent a number of years on Wall Street without seeing many of the clients make much money. That colors my outlook now.

 

I am glad you have identified where I am in the bigger picture. I wish you would share that with me as I would be helpful to know.

 

I've had clients in my former employment but not in the financial industry. With reference to where you are in the bigger picture, I meant that you are at a place where posting live calls and garnering attention/validation/recognition/etc. from others with regard to your trading skill is still in the picture for you. I was in a similar place when I left my former profession and I wanted others to know I was doing well. It's not my style to drive around in a sports car or buy a mansion but I did reveal to others my blotters of $100,000+ days and my trading account balance because at the time it wasn't enough for me to be able to do it without others knowing that as well. In the realm of the trading message board where anyone can be anything he wants, calling live trades seems to be standard.

 

For me, nothing good came of revealing results. I'm no longer where I was, and regardless of the result on a particular day I feel good knowing that I'm doing what I like. Outside of close family, no one is the wiser as to what I do. I like the fact of being anonymous and chewing the fat on a message board is enough for me at this point.

 

These are some disorganized thoughts that were stimulated by your tread. I will give more thought to a reply. Thanks.

Spookwill

 

Not at all. Your thoughts were organized and conveyed the points you intended very well. Thanks for the thoughtful reply.

[goodoboy 10]

[COLOR="DarkRed"]

MONDAY WRAP UP

[/color]

 

 

Today was another terrific trading day. Weopened the US session with a sharp decline lasting an hour. It resulted in a retest of the Globex low at 1360.50, reaching within one tick of that low. This was followed by two and a half hours of consolidation between 1362 and 1367 (Friday’s range low was 1363.75) and included a retest of the low which failed at 1361.75 at 11:00 AM CST.

 

From there we had a 90 minute rally to 1371.75 and failed. Prices then declined into the close, reaching a low at 3:05 CST of 1362.75.

 

The bottom line was we had a rotation al of trading at the low end of Friday’s range. Value continued to migrate lower with the high volume node in the 1364 to 1367 area down from 1370.50 to 1373 on Friday. The settlement was 1364.90 versus 1365, virtually unchanged.

Volume was marginally higher at 1,959,509 contracts.

 

I made 5 trade recommendations today, 4 of which made money, and one lost half a point. The trades are detailed as to rationale in the posts; here is a summary of the results. They returned a total of 21.5 ES points to anyone who followed them. I made one trading mistake which I will discuss in some detail in the hope it might be helpful to others.

 

Trades: Entry Time Long or Short Entry Price Exit Price Points gained or (lost)

 

1. 8:35 Short 1373.00 1364.00 11.0

 

2. 10:15 Short 1366.50 1363.00 3.5

 

3. 12:12 Short 1366.50 1367.00 (.5)

 

4. 12:35 Long 1367.00 1369.50 2.5

 

5. 1:35 Short 1369.50 1364.50 5.0

21.5 points

profit.

 

A very nice day!

 

Three positive days, twenty-seven more to go. Only time will tell.

 

 

 

 

My error was around trades 3 and 4. I was waiting for a break to new lower prices and I was focusing on the migration lower of volume. Thus I shorted for the second time at 1366.50. What I missed by focusing on volume was that we had a clear trend reversal pattern forming from 11.25 to 12:20 indicating prices were going higher. Had seen this, I would have gone long at 1363 or so instead of going short at 1366.50 only to have to reverse go long at 1367.

 

Either way, I go short at 1369.50.

 

What I did netted 2 points. Going long from 1363 would have netted 6.5 points, quite a difference.

 

 

The principle is to not have a stake in an outcome. In this case I was focused on a new low rather than being open to what the market was telling me. Today’s lack of being open only cost me 4 points on a big win day. I was lucky.

 

In the past this has been a very costly error for me. The trap was that by the time I figured out the problem, it had become very costly. Today I rarely get caught in this trap, and, like today, I don’t lose big money when I do. I share this with you in the hope that discussing situations that are difficult for me will help you become more conscious of them and possibly aid you in identifying them as problematic for you.

 

Hope it was helpful,

 

Spookywill

 

Thank you alot buddy. Your analysis is helping me. Thanks. Please continue

[goodoboy 10]

10 AM CST

 

We got a retest of the Globex low, and so far it has held.

 

Thank you. What do you mean by Globex low? Is this the low of the day? Thanks

[onesmith 10]

What do you mean by Globex low? Is this the low of the day?

 

Relief pitching for spooky out of gratitude for what he's given me and because this question is just about the perfect level for me with my skills. The night session is often referred to as the Globex session. It begins a few mins after regular session close and runs until the reg session open on the next day.

[goodoboy 10]

4.14 WRAP UP

 

 

 

This is primarily directed to those learning to trade as most veteran traders will have “been there and done that.”

 

I got stopped out of 3 trades in a row early in the session. I took a total of 6.75 points in losses which are in a very acceptable range for me.

 

I took the rest of the day off after my three loses this morning. I have a rule that if I have three loses in a row I quit for the day. Thus I avoid “get even” trades, “revenge trades” etc. And I give myself time to back into a place where I can listen to the market objectively.

 

I had allowed myself to get somewhat sleep deprived and I caught up on that today.

 

When I follow my rules I expect to have a profitable day, and I violated a number of them as follows:

 

Rule1. Do not trade unless I am physically and mentally sharp. The vast majorities of my errors occur when I am tired, and today was a good example of that.

 

The subtle error off of being tired is that it sets me up for numerous kinds of thinking errors, and today was a good example of that.

 

Rule 2. I was thinking I was smarter than the market. I ignored market condition and set up 2 legitimate short trades in terms of risk/reward. They were at the level of the previous day’s high, but they ignored the powerful up thrust present in the premarket. Another way of saying this is that I had had three big days in a row and I got cocky.

 

Rule 3. I instituted new trades without analyzing what had gone wrong with the previous trade. In the case, value was migrating steadily higher.

 

Rule 4. Here is where I compounded my errors, I increased the risk in the third trade while decreasing the potential return. By then, my target parameters had lessened. And, of course, I missed a big up move.

 

Rule 5. The big error was in ignoring market condition. I religiously begin every morning’s with a detailed review of market condition. This begins with a top down review of the long term 10 year chart through a 120 minute chart going back 3 months down to a 30 minute chart of the last week. I did none of that today. Market condition was clearly favoring the upside by the time of the US opening.

 

So I hope this is helpful to some of you.

 

I have confidence tomorrow will be a better day.

 

Spookywill

 

 

Thanks for posting, I appreciate your comments. Keep going. Lots of traders took the short today. I missed the rally, all I had to do was risk the breakout above Monday highs for a LONG, and it would have been a good day for me.

[wshahan 10]

The question came up several times today about looking for an entry to go short in Tuesday's strong market. Here is a repost from last week that addresses the subject.-Spookywill

 

Don't Try to Fade the Rally

 

 

The temptation of many traders, even experienced ones is to want to fade a sudden, sharp run and to attempt to go short. This, the vast majority of the time, is a mistake.

 

Buy pullbacks in strong markets like Tuesday’s trend day up.

 

Do not fade a strong trend.

 

This bit of information will save you a lot of money and physiological distress.

 

Hope this info will be useful.

 

Spookywill

[wshahan 10]

4.18.2012 pre market

 

8:07 AM CST

 

Yesterday’s day session top doubled topped with the April 10th high. Since then, prices in the ES have been working their way back into yesterday’s range and have retraced about half of the day session’s range. Yesterday’s run up was on low volume and could be subject to retracement today. The most likely case after a day like yesterday is for trade consolidation within yesterday’s range.

 

1374 remains important support followed by yesterday’s day session low of 171.75, and the Globex low of 1359.75.

 

Yesterdays high of 1388.75 is our key reference area to the upside.

[joshdance 10]

Yesterday’s run up was on low volume and could be subject to retracement today. The most likely case after a day like yesterday is for trade consolidation within yesterday’s range.

 

Agree with your premise here, but curious as to how you define "low volume" -- in relation to what? Stats show that the volume was at the very least "normal" -- it was well above its 20 day median volume.

[wshahan 10]

8:50 CST

 

 

I have missed a long trade in the ES From 1381 area. We just took out 1382 and aggressive traders can go long upon a pullback to that area (which just occurred.)

.

 

We have a bullish pattern on the 39 minute chart at the opening without much conviction, and not much range so far.

 

Breaking today’s low would give a short signal.

[wshahan 10]

Goood question and I needed to be more precise.

 

Volume dried up after the ealy push up which was on high volume. Volume dried up from 11:30 CSTon until near the close., You can see how prices flatterned in a narrow range after that until the last 45 minute selloff which again produced volume.

 

The low volume through the middle of the day was indicative of potential upside exhaustion. This preceeded the Globex sell off and continuued through the overnight sesssion until 5:30 CST.

[Nikko 10]

The volume was there yesterday, I do agree with your thoughts of presumed consolidation for today. I believe that it is because of all the reports tomorrow. Today we should see a lot of short support / resistance trading, I don't believe and big moves will happen unless we get a hint of some premature news.

 

Nikko

[wshahan 10]

9:25 CST

 

The 9:30 bar slightly exceeded the 8:30 one, 1384.75 to 1384.50. We have also traded back into the lower part of yesterday’s high volume node and failed there.

 

An implication of this formation is that the high in the 9:30 bar has a 65% chance of becoming today’s upper range extreme if the 9:00 bar high holds.

 

We want to sell 1383 or better. I am short from 1383.25

 

Spookywill

[wshahan 10]

9:43 CST

 

We have now taken out the 9:00 30 min bar low but are holding above the balance area formed in the premarket. Our initial target is today’s low at 1377.75 followed by 1365 and 1360.

 

Stop is 1384.75.

 

Caution: Today s liable to be very choppy and very difficult to trade.

 

As I am writing this, prices declined to our original buy point and have bounce bat to their day session highs. What we are seeing is no range development, ie no conviction, and hence poor opportunities so far in the session.

 

My inclination is to scrub the trade and await developments. As I am writing, we are back at today’s high so scrubbing the trade seems appropriate.

 

The 9:30 bar has now overlapped the 9:00 bar and that is a buy signal.

 

 

 

 

Spookywill

[wshahan 10]

9:55 CST

 

Keep in mind the caveat: today is likely to be a choppy day within yesterday’s range.

 

We traded back into yesterday’s high volume area and prices failed. Same trade as last time, but if the trade becomes profitable (goes below 1382, set stops to break even.

 

Short at 1384.25, stop 1386.50

 

Spookywill

[joshdance 10]

9:55 CST

Short at 1384.25, stop 1386.50

 

Since you are going for posting trades in real time, you should know that your time stamp is 12 minutes behind when you actually posted. You posted a short at 84.25 when the market had just plunged to 81.50. I'm not saying you did this on purpose, but you should know that it looks dubious. I can't imagine it taking 12 minutes for someone to type what you typed, but maybe you are just the world's slowest typist.

[goodoboy 10]

Since you are going for posting trades in real time, you should know that your time stamp is 12 minutes behind when you actually posted. You posted a short at 84.25 when the market had just plunged to 81.50. I'm not saying you did this on purpose, but you should know that it looks dubious. I can't imagine it taking 12 minutes for someone to type what you typed, but maybe you are just the world's slowest typist.

 

Leave this guy alone man. Some of us is enjoying the analysis. There is too much arguing and foolish on this forum. Let the guy do his thing and save the comments for after the market close so we all can focus.

[wshahan 10]

12:04

 

Yoiu are absolutely right. I got side tracte and neglected to get the short posted. And the speed of the decline trumped my posting. This is the only time I have ever entered a delayed post. If it happens again the thing to do woud be to note the delay.

 

Spookywill

[wshahan 10]

12:09 CST

 

 

 

We rotated down and tested this morning’s low which held. The likely event after this is to rotate back up and, once again test yesterday’s high volume area (1384-1386.) So far, prices have been unable to do this, and I am still short.

 

In a day like this with a narrow range and rotational type trading, if you get more than three points, conservative traders can profits. In today’s case prices traded down from 1385 area to 1379.50 and spent 30 minutes in the 1380 area before rising to 1383.50.

 

1383 held and offered another short entry at 10:55.

 

Another potentially interesting factoid is that when you have such low range, rotational type trading in the early session, there is possibility that you will a sharp move later in the session. Be alert for this.

 

So far we have a balanced day and this frequently produces a good move later in the session. (See Above.)

 

At this juncture we have developed balance between approximately 1385 and 1380, so go with a break in either direction.

 

No range equals a boring day. Boring days sometimes lead to “Frustration Trades”

or chasing trades. Go fishing for finny fish instead.

 

As I complete this post, prices are rotating higher, and we have a higher low. If we don't get higher prices soon, the odds increase for a retest of today's lows.

 

Spookywill

[wshahan 10]

I believe a break to lower prices is very near. Hold shorts or get short 1381 or better, stop 1383.75

Edited April 18, 2012 by wshahan

[joshdance 10]

Leave this guy alone man. Some of us is enjoying the analysis. There is too much arguing and foolish on this forum. Let the guy do his thing and save the comments for after the market close so we all can focus.

 

I enjoy his comments as well. Put me on ignore if you must; if you can't focus because of my post, you'll have a hell of a time focusing on the market.

 

Willy boy, I am short with you brother from 82.75, as posted over on the day trading emini thread. Good luck my friend.

[wshahan 10]

1:10 CST

 

We just took out the morning lows by one tick.

Next is the Globex low at 1377.25, and then yesterday’s low of 1371.75 and at then the Globex low yesterday of 1359.25.

 

This is a good place to attempt to rotate back up, so don’t be alarmed, just be aware.

 

Prices are attempting to rotate higher, so only time will tell.

 

Spookywill

[wshahan 10]

We now have a one tick bottom on the 30 minute chart. As I write prices are back to 1381. I would colse shorts entered at 1381 and be looking for a pull back to go long..