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Dear Ruby
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Dear Ruby

  #21 (permalink)
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rubyslippage View Post
Tiger, since you’re practicing your plan in a demo account, it’s critical to follow your plan with as much discipline as the market (speed and momentum) allows. You may get nasty slippage, you may be unable to place an order quickly enough if price bolts out of the gate as soon as a trade is signaled, but barring those instances, you want to have a consistency ratio in sim that’s at least 80%. (There’s no way you can avoid breaks throughout the day, so some trades will be missed.)

If you struggle with pulling the trigger in a simulated environment, most likely you’re either still struggling with accepting the uncertainty of trading (Douglas’ random distribution of wins and losses for any given set of variables that define an edge), or you have a subconscious fear that if you follow your plan with absolute discipline in real time and it fails, there’s no longer the hope that you have a solid plan and you’ll have to start over. As long as you end the day with excuses for sub-optimal results, hope lives on. It might be a combination of both of these things.

In a sim account, you have absolutely nothing to lose (except hope). So it’s important to master your trading plan in this environment until you hardly think while you trade. You see the setup, and if all contextual conditions are met, you instinctively place the order and manage the trade by the plan. Once you can do this without thinking in a sim environment, you’ll have the “muscle memory” and trader’s mindset in place to take it live.

It will likely be difficult to trade live at first, because suddenly there is something to lose. You can probably walk across a beam suspended a foot off the floor again and again without falling, but once that beam is 20 feet off the floor, everything changes. Suddenly the outcome (safe passage) becomes your obsession, when in fact the process (relaxed, confident execution) is what makes the safe passage far more likely.

Here’s a way to help keep yourself on task with your plan: Talk out loud as if you’re running a live chat room and teaching a group of beginners how to trade your plan. The more you talk, the more focused you’ll be when a setup appears. Tell the “class” why the setup fits or doesn’t fit your plan’s criteria, and if it fits, tell them how to enter a position, where the stop loss goes and where your minimum profit target zone (or fixed target) is.

The moment you tell them this, you place the order.

Hope this helps!

Ruby

This is very insightful and great advice. Thank you.

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  #22 (permalink)
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Mchenry Illionis
 
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Hi Ruby,,

I just stumbled upon your thread the other day when I saw you posted on the CL trades thread by VinceVirgil. I just went live recently and am treading water after some very good results on sim after taking over 100 trades and breaking them down into 20 trade increments. First 20 were terrible but I could see that I was not following my plan. Next 20 had improvements but could not recover the losses from the first 20. Next set of 20 trades I did much better and was close to break even on all 60 trades. Next set I was up and then after the first 100 trades was doing good P&L wise but still have issues when I am in profit and holding for targets. I have read all of Al Brooks books and now can just read the first book with much more clarity and also like Bob Volmans book. I use the 60 min for longer term trend and the 5 min for the now and to get a signal wth the 1 min chart for second entry. I have 1 set-up and its with trend / momentum. Your posts 15-16-17-18 are extremely helpful and really speak to someone that is working to get his feet firmly in place. After my sample sets of trades I can see for myself how one can move forward but it seems like its 2 steps forward and 1 step back. All the steps must be managed properly and taken on an individual basis. I am live and even though I have very good data to go over and many sample trades I still hesitate. I am talking to myself during trading hours as you suggested in one of your posts and this helps greatly with focus. I hope you continue with this thread and if its ok to talk about some trades that I have taken or didnt take and get your input. ,,,Also FT71 does the webinars on BigMikes in the "Ask me anything" series and suggested the book "The power of habit" which I am reading and find to be very interesting. I think it was $14.99 on Kindle. Thank you.

Tom

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  #23 (permalink)
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Tomross58 View Post
Hi Ruby,,

I just stumbled upon your thread the other day when I saw you posted on the CL trades thread by VinceVirgil. I just went live recently and am treading water after some very good results on sim after taking over 100 trades and breaking them down into 20 trade increments. First 20 were terrible but I could see that I was not following my plan. Next 20 had improvements but could not recover the losses from the first 20. Next set of 20 trades I did much better and was close to break even on all 60 trades. Next set I was up and then after the first 100 trades was doing good P&L wise but still have issues when I am in profit and holding for targets. I have read all of Al Brooks books and now can just read the first book with much more clarity and also like Bob Volmans book. I use the 60 min for longer term trend and the 5 min for the now and to get a signal wth the 1 min chart for second entry. I have 1 set-up and its with trend / momentum. Your posts 15-16-17-18 are extremely helpful and really speak to someone that is working to get his feet firmly in place. After my sample sets of trades I can see for myself how one can move forward but it seems like its 2 steps forward and 1 step back. All the steps must be managed properly and taken on an individual basis. I am live and even though I have very good data to go over and many sample trades I still hesitate. I am talking to myself during trading hours as you suggested in one of your posts and this helps greatly with focus. I hope you continue with this thread and if its ok to talk about some trades that I have taken or didnt take and get your input. ,,,Also FT71 does the webinars on BigMikes in the "Ask me anything" series and suggested the book "The power of habit" which I am reading and find to be very interesting. I think it was $14.99 on Kindle. Thank you.

Tom

Hi Tom,

Thank you for your kind words. It sounds like you're on a solid path to consistent profitability.

Breaking negative trading habits is tough, no doubt. Also, day trading is difficult to master because you have to be fully focused, nimble placing orders and managing trades, and willing to let go of a trade easily and wipe the slate clean immediately and be ready to trade the next valid setup and signal.

I use the same time charts as you and trade the price action concepts of Brooks and Volman (adapted to my own style over the years), so feel free to ask questions about trades and setups!

Ruby

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  #24 (permalink)
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Hi Ruby,,

I found it to be a slow day for me and I am good at not pushing but did find something. I had one trade today that I scratched and was wondering if you might comment on it. The first black arrow is the last swing low and swing high and I transfered it to the next swing low and up to a possible measured move for a target. I have a 60 min chart that goes back about a week and I have Volume by price on it (just for reference and target) and the measured move came up to the VAH on the 60 min chart (96.20 ). VAH and VAL are value area high / value area low. Thats where 70% of trading volume occured. Ok so I liked that for a target. The opening price today regular trading hours was 95.59. Price opened up and stalled and came down to make a new lod and the 8:25... 5 min candle high was 95.60 retest and then the next 5 min candle made a new lod. Candle 8:35 touched the opening again plus a tick and closed below and then the next candle (5min) broke up, stalled and retested the 95.60 and I entered (long) on the high of the 1 min 8:44 candle break with a stop at 95.55 and target of 96.20,,,,but but,,,,,,I also knew that the overnite high 95.86 was above and the 60 min VPOC (Volume point of control 95.75 ,,,,Price at which most volume was traded during that period),,,so I know there was plenty of Res above me and I would move my stop at b/e if I had +10 on the trade and, it went +12 and retraced back and stopped me out. The blue line on the 5 min is the 20 ema. The blue line on the 1 min is also the 5 min 20 ema and the red line is the 1 min 20 ema. I try to find Res and Sup areas and use trend lines for direction. I know its a mouthful here but I am hoping you get a feel on what I am doing / looking for and of course any comments are much appreciated. Thank you

Tom

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  #25 (permalink)
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Tomross58 View Post
Hi Ruby,,

I found it to be a slow day for me and I am good at not pushing but did find something. I had one trade today that I scratched and was wondering if you might comment on it. The first black arrow is the last swing low and swing high and I transfered it to the next swing low and up to a possible measured move for a target. I have a 60 min chart that goes back about a week and I have Volume by price on it (just for reference and target) and the measured move came up to the VAH on the 60 min chart (96.20 ). VAH and VAL are value area high / value area low. Thats where 70% of trading volume occured. Ok so I liked that for a target. The opening price today regular trading hours was 95.59. Price opened up and stalled and came down to make a new lod and the 8:25... 5 min candle high was 95.60 retest and then the next 5 min candle made a new lod. Candle 8:35 touched the opening again plus a tick and closed below and then the next candle (5min) broke up, stalled and retested the 95.60 and I entered (long) on the high of the 1 min 8:44 candle break with a stop at 95.55 and target of 96.20,,,,but but,,,,,,I also knew that the overnite high 95.86 was above and the 60 min VPOC (Volume point of control 95.75 ,,,,Price at which most volume was traded during that period),,,so I know there was plenty of Res above me and I would move my stop at b/e if I had +10 on the trade and, it went +12 and retraced back and stopped me out. The blue line on the 5 min is the 20 ema. The blue line on the 1 min is also the 5 min 20 ema and the red line is the 1 min 20 ema. I try to find Res and Sup areas and use trend lines for direction. I know its a mouthful here but I am hoping you get a feel on what I am doing / looking for and of course any comments are much appreciated. Thank you

Tom

Hi Tom,

I believe you're my brother from another mother, lol! I too bought 95.66 and also had calculated that exact measured move and I could taste the 50 ticks profit as price quickly moved in my favor and....fizzled just as quickly.

I thought the setup was perfect in every way, proving once again that what we think/feel about a trade is only as useful as the follow through.

I'd originally been long at the open, too, long at 95.68, absolutely certain that the overnight high was in play and a few seconds after my long was in place, price was 10 ticks higher and I could taste my 20+ ticks of profit and it tried and tried and...it fizzled just a few ticks shy of testing that price.

Oh well. Wipe the slate clean and wait for clarity.

Mark Douglas says, "When you put on a trade and it doesn’t work, all it really means is that some of the traders didn’t come into the market that had the same belief that you had, or the same conviction about this market doing whatever it is you thought it was going to do. You have to learn to walk away.”

I found most of the day's action to be quite difficult. Had I been scalping for 10 ticks or so, it would've been fine, but I expected more and got little (8 scratch trades and a few "oh, screw it" scalps deep into the session).

When the action gets quite tedious I generally log into Skype and chat with a couple friends so I don't walk away and miss out altogether. That was a good idea today because I ended up focused into the closing action and caught the big breakout. That setup was fantastic, IMHO.

As a Brooks/Volman-style price action disciple, can you figure out where and why I went long?

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  #26 (permalink)
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Hi Ruby,

Thank you for taking the time to view my charts and give me your opinion because I do have hesitation at times but am getting better. Ok,,,I did miss that last run up and also didnt take and usually dont trade at or near the open and will ask you about that in a minute. As far as that last long which was a winner winner chicken dinner,,lol,,I see a spike up on the 5 min at 12:40 and bull flag with a double bottom with candles 12:45 and 13:05 lows and as far as entry I am seeing (not thinking,,,lol) the 13:13 candle on the 1 min chart (doji) being squeezed with the 1 min 20 ema and the HOD already being broken this was a pullback although not pretty but entry above that 1 min candle. I missed that one as it was a long day but that is no excuse, it would have been a day maker.

Ok,,,I do not trade the open or after 1:00 CST because I have been spooked with people saying ,,"I never trade the first 15 minutes",,,or never trade that late in the day. I admit that many times there are very good moves and think I am missing out on some good ones. What is your experience with these times?,,,,I will say that when Crude has volume on any move its a wild ride so whats the difference really?

One other thing on hesitation which I still have to get over. I read that the year Michael Jorden scored the most points,,he also missed the most shots. No fear. Babe Ruth was quoted as saying that every strikeout (and he had many) would bring him 1 swing closer to his next Home run. I know this and am working on internilizing it so I can get over the hump. You are helping so Thank you

Tom

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  #27 (permalink)
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Tomross58 View Post
Hi Ruby,

Thank you for taking the time to view my charts and give me your opinion because I do have hesitation at times but am getting better. Ok,,,I did miss that last run up and also didnt take and usually dont trade at or near the open and will ask you about that in a minute. As far as that last long which was a winner winner chicken dinner,,lol,,I see a spike up on the 5 min at 12:40 and bull flag with a double bottom with candles 12:45 and 13:05 lows and as far as entry I am seeing (not thinking,,,lol) the 13:13 candle on the 1 min chart (doji) being squeezed with the 1 min 20 ema and the HOD already being broken this was a pullback although not pretty but entry above that 1 min candle. I missed that one as it was a long day but that is no excuse, it would have been a day maker.

Ok,,,I do not trade the open or after 1:00 CST because I have been spooked with people saying ,,"I never trade the first 15 minutes",,,or never trade that late in the day. I admit that many times there are very good moves and think I am missing out on some good ones. What is your experience with these times?,,,,I will say that when Crude has volume on any move its a wild ride so whats the difference really?

One other thing on hesitation which I still have to get over. I read that the year Michael Jorden scored the most points,,he also missed the most shots. No fear. Babe Ruth was quoted as saying that every strikeout (and he had many) would bring him 1 swing closer to his next Home run. I know this and am working on internilizing it so I can get over the hump. You are helping so Thank you

Tom

The open and the last half hour can be quite volatile, but if there's a setup that fits my risk allowance, and an overhead target (the overnight high in this case) that offers positive R:R, I'll take it. If there's a trend or a trap in play, I think it's worth trading the open because there's good follow through for the most part, so you have a chance to scratch in case it stalls.

In the past, I've jumped in at the open and been stopped out so fast that the afterimage of my initiating fill was still visible in my mind's eye, so I'm one of those people who would agree that you shouldn't try it at home until you're really comfortable trading. I've also been chopped around in the last half hour, so I rarely trade then unless something juicy appears.

The spike you noticed during the 12:40 (I'll use CST time) bar was off the same sort of setup that got me positioned for the late runner. The break of the 12:05 bar high was weak. It was a potential bull trap setup and eventually tested the range low and found support there. No sellers. A break of the bull trap high should send the shorts running for cover and the longs chasing back into their positions (double pressure concept). I went long on that break, but only scalped a bit. I was holding for more, but the break of the HOD was weak and I assumed price would pull back at least to the 20EMA and maybe even the channel low zone.

Support appeared to be established at the 20EMA. Buying a break of the 1:05 bar high looked good, but I was unsure about taking a first break entry because the 20EMA tends to get tested twice (forming a 1-2-3 on the 1min chart most of the time) and I didn't want to have such a wide stop, and also the channel was still in play and that was around 95.95 or so. I watched the reaction to 95.20. When a weak break of bar is a trap, price tends to move in the opposite direction quickly. When 96.20 traded, price barely budged. I immediately placed a buy stop at 96.21 for a test of the HOD. A lot of shorts looking for a move to the lower channel would bail above that level and yesterday's high followed by a 60min channel around 96.90 would be in play for the close.

The "safer" play was a break of the HOD directly, because price was coming off a higher low, didn't even make it back to the lower channel line, so you'd expect a true breakout into the close this time.

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  #28 (permalink)
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Hi Ruby,

Thanks for the practical and useful insights, but it is interesting to note that you have not used any chart or picture to illustrate some of them..

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  #29 (permalink)
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Hi Ruby,,

Hope you did well today as I saw a great set-up early but,,,,,,,,,,,,,,,,,I hesitated and did not take the trade because it was so close to the open. We spiked up past the O/N High and there were 2 possible entries that would have made my day. The 1 min 8:03 bar and the 1 min 8:07 bar with a buy stop 1 tick above either. A stop a couple ticks below the prior bar and each entry would have yielded a possible 30 ticks.The risk was no more than I usually take and that moment of truth comes when you have a few seconds to make the decision to take the trade and I always feel most uncomfortable. I have many sample size trades with this set-up and did very well on sim. I guess I didnt do anything wrong as I mentioned that I am not trading the first 15 minutes but that was my only set-up I saw and did not take any trades the rest of the day. Perhaps I should change my rule and if the risk is within any other trade I would take during the day I can go ahead and take a good set-up at or near the open. Yes there is frustration in my tone,,,,lol,,,,,but I did follow a rule and did not break it. I will not trade 10 minutes before major announcements either and rules are there for a reason.

So yes there is a question here,,,,lol,,,,I think you know what I am looking for and it seems like it sets up best on a break of an O/N level. I would say its a continuation trade with entries on pullbacks. Did you see any other times today where this set-up?,,,sometimes I think I am seeing something or my mind is wanting to see something that isnt there. It was a rangeing day but maybe you see something I dont. Again your opinion is much appreicated. Have a good weekend and thank you.

Tom

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fourtiwinks View Post
Hi Ruby,

Thanks for the practical and useful insights, but it is interesting to note that you have not used any chart or picture to illustrate some of them..

I'm new to posting on Big Mike's and was too lazy to annotate a chart and figure out how to post it. Let's give it a try here (my chart's timeline is PST and it's the 1-min chart I use for precision trade entry).

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