My Story
I've created automated strategies in the past, based on the past, winners on the past. Some were too complicated, others too simple, but at the end, while running those strategies on real-time, the price action told me a totally different story. While taking those trades I found that many of the losers went against my thinking, and many of the winners went exactly with my beliefs (I have a private journal and I record my screen everyday at a low frame rate). I can even recall one of my biggest winners were I took the opposite direction of one of my "well-backtested-even-winner-with-2pips-slippage-plus-commissions" strategies. After that, I knew I had to close this phase of my trading and move to discretionary trading.
Reading the charts
While you're reading a new book, you start doing speculations about next chapters of it. Sometimes you do it well because you'd read others books in the past and some stories tend to be similar but they're not the same story, you have to be aware to not go too further with your speculations because something unexpected can happen and make it totally different, in other words, anything can change the course of it in a place that you never have seen before in others books. You can be successful doing some predictions because A and B tend to transform in C but words and phrases are different on each book, every day the market is different. Same stories, different words.
The Trading Plan
I'm reading Al Brooks "Reading Price Charts Bar by Bar" but I'm not gonna trade the same way as Brooks explain in his book. I have 3 years of experience reading charts, the last one I did it in a more regular basis while trading my auto strategies, so I need to add some of my experience on it, because, experience is the most important thing to have in any discipline (sports, chess, coding, learning a language,...), this is what gives you the proper skills. I use this book to start somewhere fresh and develop my own discretionary trading. In the past I got trapped too many times on ranges, one of my goals is to trade when there are more odds to breakout from this range, or take advantage of the same range.
My favorite time of the day to trade 6E/6B goes from 3:00am EST to 6:00am EST (London open), I'm in Spain so I have to be in front of my computer before 9am here. My "follow the trend" automated strategies did so much better inside this time-frame but I can trade beyond this range if market is too choppy.
Instruments
- 6E - I'm only trading this instrument right now.
- 6B - Watching it, sporadic trades.
- CL - Watching it, correlated with dollar.
- ES - Traded in the past, just daily on screen to see what's doing it.
Charts/Indicators
- 5min time-frame: this is where I take my trading decisions:
- EMA20 (line/slope color).