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Finally Turning the Corner, tha "its 80% Psychology" thing...
That's how I'm choosing to view the Cumulative Delta, via a 2 & 5 period ema and keltner bands. I find that looking at the delta per bar tends to fake me out sometimes and this smoothed version is easier to work with. In that particular chart though it was actually useless because I don't have Eurex data, I'm just using CFD data because I don't trade the Dax much. (I had duplicated the chart from my Dow chartbook)
That's a very cool idea, I like that. Have you discussed your charts in other posts in more depth? I watched your webinar and wonder if your charts have other nuggets like that one that I may find useful...
I decided that I wasn't getting enough value from the delta and I've since taken it off my charts. I found that sometimes its helpful and sometimes it hurts (like when its late and costs me the wrong decision). I have had a 'long-term relationship' with Trix lol, so I get what its telling me and I use that for divergence, strength analysis etc.
As far as learning trading from me, I think you'd be better off with someone like FuturesTrader71 who has a 15+ year track record of successful trading and actually knows what it feels like to trade a 50 lot position.. There aren't a lot of people in this industry who share publicly and are legit imo. One day I'll get there but its a journey and a grind to be honest. That's why the psychology part is so valuable, if you want to make it through the grind, keep your sanity and keep improving.
Makes sense, I like FT 71 and will one day do his room for a few months (at least). I also like similar indicators to TRIX for divergences, one of my favorite confidence boosters is when I see a nice divergence at an important level.
Ok, here's an analysis from a trade today on NQ. (after the fact, I didn't trade this) for a "double top sharkfin who's motivated" trade
I highlighted with the boxes some key clues. The context is that its a couple hours into the Asian session so odds are against follow through on breakouts, I havent' analysed lately but guessing 2/3 probability of mean reversion plays working. We had a big run up in the day session. I'm looking for clues that the market could be ready for a rest, gather some strength, settle some transactions, etc. So POC play, if price gets outside of value and show weakness, look for a trade with confluence and target the point of control or a relevant high volume node.
Top box left: significant decline in volume on the profile, price went outside the volatility band and created a double top with a higher second top
Bottom box left: Trix shows clear negative divergence, RSI went out side of its volatility band for the first top and was back inside lower on second top
Top box right: nice first or second entry opportunity, footprint showing a reversal brick with voume at the top, this is a tail on a higher timeframe.
The motivation part is thinking about who's involved, sharks or whales. There's an opportunity for certain participants to drive price above the former double-top, absorb the orders and then revert back to the start. These happen a lot in trading and creates wonderful opportunities.
I recently finished an excellent trading psychology book, Market Mind Games.. I heard Dr. Andrew Menaker mention the author Denise Shull in one of his talks and speak highly of her work so I ordered the book:
It's definitely one of my favorite trading psychology books. Denise has quite an interesting story, she was a floor trader in Chicago for 7 years. This is an advanced trading psych book and would make more sense imo after you have read Trading in the Zone a few times and have been trading for a few years..
It's funny to me that even though it's quite advanced info in some ways, it breaks down into the simplistic parts, being aware of our state, creating routines for success, making sure we get enough sleep, eat well, have other sources of energy in our lives outside trading.. These are the basics that create our foundation. She talks about intuition which is a skill many of the best traders rely on. In fact, I was surprised (pleasantly) to hear Morad (aka FuturesTrader71) say in his recent webinar that for his first 4-5 years as a high volume scalper he relied entirely on his intuition to make decisions.. (and was hugely successful)
I've been thinking about this a lot lately and came to the conclusion that there are 3 main parts of me that I bring to the performance of trading:
1. "Positive Ego" - I prepare in advance, do drills (trading simulator), read my notes, maintain awareness of my fav setups, self-coach, perform emotional regulation, read books, keep improving, etc
2. "Negative Ego" - this is when I get sloppy, make mistakes, get upset, am impatient, get irritated, risk more then I planned on, get angry at the market or myself, think negative thoughts, etc
3. "Intuitive Flow Master" - these are the times when I see everything clearly, go on big winning streaks, know exactly what to do in each moment, trading "in the zone".
(I interpret ego as self-identity, awareness of our individualized self with unique preferences, strengths, weaknesses, etc)
So in the past #3 for me has involved unstructured discretionary trading, because I just "felt" what was the right move and I would say all of my biggest winning streaks came from this intuitive flow state. But the challenge was if I traded in a purely discretionary manner and then fell into the Negative Ego trader, I basically donated my trading account money to the market and caused myself a ton of frustration- because I wasn't seeing things clearly or able to hear my intuition - trading from fear and desire. (or being numb) So then after as I'm digging myself out of the hole I just created, I would make detailed plans to trade in "positive ego mode" in order to protect myself from negative ego trading, using detailed structure to make sure I wouldn't do stupid things.
Lately I've been finding my way to be "rules based" but not "totally structured". Creating space for the intuitive trader to come through.. An example of this is having a couple "bread n butter" setups to trade exclusively if down on the day and giving some permission for intuitive trades when up on the day.. Being totally structured with risk and having some flexibility for which trades I take. Listening for intuitive guidance all the time in life, not just during trading..
I've had an interesting logistics issue to come to terms with this year. I've been living on PST for years so the open here is at 6:30am and I've been on and off for trading late nights vs trading early mornings. Over the last year for months I was getting up at 5:30 to begin trading at 7:15/7:30. What I've had to come to terms with is that even if I drink coffee, go outside for a walk, do exercise etc, I'm still not even close to as sharp and as emotionally resilient as I am in the evenings. I found that I need at least 4 hours in the morning before I would be ready to be in a peak performance state.. Otherwise I'm a risk of being a menace to myself by having less patience, getting more irritated after losses, etc. Seeing how there is no way that I would get up at 4am and go to bed by 9 consistently, I've had to customize my trading around my personality. One day I would like to be trading from the Caribbean but for now I am night-trader. Besides checking on some structured swing trades in the morning and throughout the day, I do my high intensity scalping at night from 11pm - 2am. (start of europe) Its taken me quite a while to figure this out about myself.. It's really important to be very aware of our mental/emotional state and its fluctuations if we want to be a high performance trading athlete.
I just found out tonight that Brannigan has some webinars here at FIO! (and is doing another webinar next week)
I didn't think to search his name before, I've been following him on twitter for a while.. He's someone to pay attention to imo..
It is my pleasure to welcome back Brannigan Barrett @ Habitus Capital for our 349th webinar event, on Tuesday, May 21st @ 4:30 PM Eastern US.
The title for the event is "Pro Trader vs Pro Athlete", and bullet points include:
- …
Notice that there's a lot of failing involved on this journey. Its a helpful reminder to not take it personally. Just think of Edison with a huge team of geniuses taking 1000+ tries to create the lightbulb..
This is a great webinar too, in one part he talks about objective vs subjective, logic vs intuition, etc
I haven't posted much here this year, I've been busy working hard each day on getting better. I took some time to study some of the goats (greatest of all time), WD Gann, RN Elliot, Bill Williams and learned a few things I've integrated into my unique style of trading. I've also ditched the footprint and delta. After a long time spent applying them I realized that for my niche (momentum trading thin markets) while some times they helped, other times I was getting faked out and confusion is the last thing I need when making rapid decisions as it leads to poor decisions and frustration. I've opted to use the volume profile draw tool on key areas to get more info for volume inside price.. Many of my scalps are 1:1 R which I'm ok with as my win rate is high. When I see a great Elliot wave setup I'm getting 2-5 R so that gives a nice boost.
I also did a course from Trader Dale which I really liked. He trades in a similar way to FuturesTrader71 (reactions from key levels) and is an excellent trading course educator imo who makes it really easy to understand exactly how he trades. Personally, I only do "reaction-style fade trading" when its off of key levels on the daily or weekly profile, otherwise I mainly look for trend continuation setups.
Another change is that instead of trading 1 market, I now watch 3 (NQ, DAX, Dow) and look for which one has the best setups that match my style. If the markets are moving really fast then I choose my favorite and minimize the others so it's easier to concentrate. I'm trading at night because I'm sharper and have more patience then in the mornings, the pace is also slower which is working well for me. Sometimes I trade the US close if I didn't stay up too late as there can be some great opportunities on some days.
I'm feeling stoked about my progress and later this month I'm going to start the FTMO 100k challenge. I think this is the best path for me to get where I want to go. After passing I will get my initial funds back (works out to 800 CAD) and once I'm doing well for a couple months I will repeat the challenge (just by using a trade copier from my original account to the next). They allow up to $400,000 USD to be managed per trader (so that would have a 40k drawdown limit) and you can combine it into one account or separate it how you like. (funded traders get paid 70% of the profits they make in the account)
