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Pre-open analysis: "The bulls made an unexpected and surprising comeback. The daily chart is still not clear to me directionally, but it definitely looks more bullish now. After the rotation to the downside yesterday, price managed to squeeze up from the value area low. Price breached LVN 2987.50, the prior days VAL, the prior days VPOC, and started trading comfortably above the 3000 figure (I consider that to be a dramatic comeback). It seems that price is establishing a new balance as I look at it right now, as of 8:33am EST. Technically, it seems best to trade long, given the image in the daily and strength shown yesterday that was affirmed overnight and this morning.
Good potential buy prices: 3000.75 (LVN!), 3000, 2999, 2998, and 2990 (??)
Price has tested ~2998 once [today]. Given the proper signals in the OrderFlow, I will go long there.
Todays goal: Truly pay attention to and read the OrderFlow. Breathe/remain calm as price approaches potentially good entry prices. Execute after just enough confirmation.
Out of the open, price was pushing the value area high of the day. I don't exactly remember if the buyers were absorbed or if they were exhausted in this particular case, but they failed, and 20 minutes later around 9:50am EST after some chop and absorption from both sides, strong sellers entered the market and negated a re-attempt higher. It was mostly down hill from there with occasional bouts of responsive buying at pre-mature levels: each consecutive rotation attempt to the upside exhausted faster, and sellers were there everytime to take advantage of it. When the market finally reached ~3000, it went sideways. This was the time and place for responsive buying, but the bulls were rightfully hesitant (I recognize this is my own conjecture) and the bears came piling in at and around the 3000.75 level which brought price down to the 2998s. This price area acted as support early this morning, and I established it as the second best realistic buy price (~2996 was better). Long story short, I did what I was supposed to do and entered according to the OrderFlow that was in conjuction with my higher and moderate timeframe analysis:
+2.75 point gain. I initially set my mental profit target at 3005.50, but realized that I just need to take what I can get on Fridays. Volume and volatility was low, and I didn't want to walk away today with a losing trade. Context, context, context.
What I did well:
- My pre-open analysis was solid. I started it a little bit later in the day to no detriment. I was honest to myself about price sentiment. (It's ok not to know)
- I was very conscious of my goal as I was trading today. I was scanning the OrderFlow, and was narrating price action verbally, kind of like an auctioneer but not really. This works wonders.
- I waited for price to reach my best entry locations. Even though I established that 3000 was a good one, structurally in the minute chart, it could've easily been interpreted as a very pre-mature buy price.
- When price finally reached ~2998, I didn't enter blindly. I waited for confirmation / waited to see heavy responsive buying. I'm most proud of this.
What I did poorly:
- It could be argued that I could've held the trade longer, but I'm going to shut the inner critic down for now. I set out and accomplished my goal for today, so hell yeah.
What do I do next:
- I need to repeat everything to the T that I did today, and in better conditions, I obviously need to hold my trades until my mental profit target or stop gets hit. I could practice my execution this weekend in SIM, even though I hate market replay. Might try visualization.
My psychology was off this morning, so I stopped watching the market earlier than usual and took no trades. My energy was low and my anxiety was high- I think this has to do with the caffeine (admittedly, I drank some coffee before trading / broke my rule). I'm quitting cold turkey starting tomorrow, so I don't know how this will effect my trading this week; I may not trade at all. We'll see how it all plays out, and I'll keep this journal updated.
Pre-open analysis: "The daily chart looks more bullish to me now. As of 7:39am EST, price is approaching 3000. The nearest LVN under 3000 is ~2990, and price has tested that area overnight as well. Technically sound long entry prices = 2990, 2989, 2988, 2986.50. Technically sound short price given new balance: 3005.50 area."
Price sold off at the open with a little bit of a fight from the bulls, but the buyers were noticeably weaker. The initial selling brought with it a simultaneous 5 level drop (is this referred to as a price sweep?) which indicated bearish strength. After that, price action slowed down and went into a small range above 2994.50, and it eventually broke that level. I started paying real close attention for signs of exhaustion and responsive buying then, and I noticed bearish exhaustion after price breached 2992.50. I entered long there (I tried to get in at 2992 but was too slow):
3.5 point gain.
What I did well:
- My pre-open analysis was fast (charts were easily interpreted), simple and to the point.
- I adapted to todays volume and volatility and entered at a realistic price.
- I was in sync with my thoughts (this is very important to me) and executed when I thought I should have logically, given the situation.
- I let the trade develop, I was in it for roughly 35 minutes.
What I should work on:
- Again, I should find a way to calm myself down as price approaches a price of interest.
> I think that once I learn how to remain calm when price is at a potential turning point that I could enter at better prices by virtue of being in control and by being logical.
- I should practice holding trades longer. I am getting better at this, though.
I actually walked away from my computer after I entered. I'll be doing that from now on.
Daily chart analysis: "The daily chart looks as if a triple top is developing at first glance. If we drop from where we are right now, the daily image would be of a head and shoulders pattern. On the other hand, the last two trading days have been relatively very bullish, not to mention we're trading around 3000 again (bullish sign in my eyes). Honestly, today could go in either direction, as we're still in a range in the daily. I do have a long bias, however.
30 minute chart analysis: " We have been bullish since July 21st. Since then, ~2990 has been respected/traded around. It's also important to note that yesterdays VPOC is very close to todays VAL (conjoined levels), making that price area a potential good buy. Given the perceivable developing head and shoulders in the daily, it looks like we could be due for shorts at current prices (~3000.. Realized I repeated myself, going to keep it for transparency).
Price was bought up steadily since the open. It took 20 minutes or so for it to reach around the top of todays range (at the time) near my established best sell prices: The top of the range then was 3008.25, which was my third best price to enter short. I paid close attention to the footprint at those higher levels, and I perceived bullish exhaustion and responsive selling by the time price ticked around 3007. I ended up selling at 3007.50, and got stopped out by a false breakout/from stops getting hit very soon after I jumped in the market:
After I entered the trade, I walked away like I should have. I came back and wasn't all that surprised to see that I was stopped out. I thought for a second, and I realized that I got stopped out because I executed as if I was trading in a lower volume/volatility day- I realized I should hold out for a better entry location when price action is volatile and when there's evidence of directional conviction. I was more nervous than I like to admit as price approached these higher prices, so I wasn't as coherent in my execution as I could've been (last week I was killer in this regard, what happened?)
2 point loss.
After that loss, I sat down and watched price action. After seeing price go sideways at these higher levels, I was convinced that I had the right general idea- it's just that my execution was off. I re-analyzed the daily and the 30 minute charts, and established ~3012.50 was a great sell price, given another false breakout, given exhausted buyers, and given responsive sellers there. I watched as price chopped around, until a surge of buyers came in and brought price to 3013. Bullish follow-through was weak, I saw responsive sellers come in, and that was my shot and I took it. I entered at 3012.25:
Again, I walked away from my computer, but I didn't stay away long enough and when I came back, I ended up questioning my position after re-looking at the daily chart, and closed pre-maturely with a 3 point gain ("I need to be on the side of caution" popped into my head).. It's funny, I just posted about this yesterday, and this goes to show I truly need to implement my own advice. I could've squeezed out another 3-4 points from this trade, had I been less ambiguous about my profit target.
Gained 3 points.
What I did well:
- My pre-open analysis was thorough.
- I re-entered the market after a loss (had courage in this regard).
- I walked away from my computer after entering both trades.
What I did poorly:
- I wasn't calm enough during the execution of my first trade.
- I didn't stay away from my computer long enough for the second trade to develop.
- I didn't have a set profit target. (rookie mistake..)
What I need to do:
- I'm going to have to get creative in regards to my nervousness as price approaches good entry prices:
> I've mentioned this before: I could look away from the screen and breathe for 10 seconds or so. I may miss trades because of this, but I'm willing to seriously try it. It may be effective.
> Why was I so calm last week?: I think because I was net negative, and now I'm not. I'm net positive since yesterday. I need to remind myself as I'm trading that losses are part of the game. I may have to re-hash some of my older trading processes to remedy this.
- I need to establish my profit target before I enter a trade, then after I enter, I'll walk away from my computer and stay away for 20 minutes. I'll set a timer.
Goals for tomorrows trading:
- Focus on breathing / calming down as price approaches good entry locations.
- Establish profit target before entering, walk away from computer and stay away for 20 minutes.
+1 point on the day. Not the best trading, but I learned from today.
"Daily chart analysis: We're pushing all time highs / we're looking pretty bullish. We just reached 3027.25. I'll be trading from the long side today. The closest LVN in the daily is 3018.75, and based on the candle sticks alone, ~3023 may be a good buy given it becomes support.
30 minute chart analysis: 3018.75 (LVN) is the bottom of the current balance. A safer potential buy location, given a range extension is 3017.50 or a point or so below it. As of now (8:13), the VAL is 3019.75.
Potential good buy prices: 3012.50/3013 (LVN, needs to be tested once before entry), 3015, 3016, 3017, 3017.50, 3018, 3018.75, 3019.50/75.
I'd like to see a balance develop above and on ~3023-3025. I'd possibly buy on the second test of support."
Price action was much more volatile at the open than it has been in the past two weeks, and it sold off down to my best entry price (LVN 3012.50) 4 minutes after the open. It was too hectic for me to trade at the time, so I waited and watched as price went sideways around that LVN. I noticed price didn't want to breach 3012, until finally it broke that level and managed to reach 3011. Right as this happened, it was bought back up pretty dramatically, so I established next time price gets back down to 3011, I'd go long there. That's what ended up happening except I was too slow and entered at 3011.50. I walked away from my computer and stayed away for 20 minutes, then came back and saw that I was stopped out. We went all the way down to 3004.25:
I realized I missed an opportunity to buy at 3005 in my abscence. I stuck around watching price, thinking perhaps we could get back down there again. It took 2 hours since my last trade to reach that price again, be at least we got there . At the time, this was a no-brainer trade given the volume and volatility was low, and it was the low of the day. Good conditions and environment for responsive buying. I went long again but at ~3005, put my earphones in and went for a 30 minute run. When I came back, the trade was 2 points in my favor, but then I watched as price sold off, hit lower lows of the day and price was dramatically bought back up. What followed was crazy volatility from both sides, and the bears ended up winning. I was stopped out at 3002:
Lost 3 points.
-5 points for the day. 1 point away from hitting my max daily loss limit.
Besides it being a losing day, I accomplished the goals I set for myself yesterday:
- I looked away from my screen and breathed when I had to / when I felt my heart rate pick up.
- I executed to the best of my ability for both trades. I was more organized mentally.
- I walked away from my computer and stayed away for at least 20 minutes for both trades.
- This may sound stupid to some of you who go by "cut your losses" philosophy- but that doesn't work for me. If I'm being honest about my weaknesses, I have a hard time differentiating losers from winning trades. It's best for me to get stopped out, or to have my profit target get hit in the long run.
- I re-added the "Individual outcomes do not matter. Hold the trade no matter what" caption to my chart. It's more than helpful.
On a superficial level, it certainly sucks losing 5 points, but if I can behave the way I did today consistently overtime, I think I can become profitable. Knowing this is keeping me positive. On another note, if I'm going to lose like this, I gotta be damn sure to hold my trades. I think I can do it.
Hi Zach
I noticed you've been watching the Unfinished Auctions on your charts this past week and I hope you don't mind but I have a couple of observations (regarding that indicator) that you may find helpful.
I like to think of Unfinished Auctions along the same lines as the way price action traders watch for HH & HL or LH & LL to help them think about "Near Term" trend direction.
It's not 100% certainty, but it can help when you're trying to make a directional trade decision.
I've marked up the attached screenshot of an MES Volume Ladder (Footprint) around the same time as you went long this morning.
Hopefully the notes will be of some use to you.
Trade well,
John B (aka TGN)
R.I.P. John Bottomley (Botts), 1956-2022.
Please visit this thread for more information.
You know, in the past, I never had an issue with trading against the trend. Now that I've changed my strategy and don't trade breakouts anymore, I find myself trying to catch the bottom based on pre-determined technical levels without considering as much as I should of what's happening in the moment (..that we're in a downtrend). I'll set myself up for tomorrow morning so I'll be conscious of this. I understand the indicator, I just had tunnel vision and wasn't paying attention to what mattered most at the time. Thank you for explanation too, though.
I know what's at least partly contributing to these kind of poor trading decisions (I'm mostly referring to the 1st trade, the 2nd trade was certainly better): I already established that I was only going to trade from the long side today, before the session even started: "I'll be trading from the long side today", I wrote in my pre-open analysis..
Alright, so I won't be concluding anything or on what direction I'm going to trade in in my pre-open analysis anymore. The market isn't nearly static enough for that.. Getting rid of that along with keeping my eyes peeled to the irUA should keep me straight.
- Be objective in pre-open analysis. This means not concluding what side to trade. Write down tradable levels- that's it.
- Be objective in real-time trading. Acknowledge what's happening in the moment: How is volume and volatility? Is there an OTF player in the market / is there directional conviction? Narrate what's happening [<-- narration keeps me out of trouble].
- Breathe deep and slow as prices approaches an important level. Look for signs of exhaustion or absorption.
- If I enter, I must let my profit target or stop get hit.
That's all I wrote. I didn't want to put any ideas in my head, because todays goal was to stay objective in my pre-open analysis and during real-time trading.
The open was surprisingly volatile. 5 minutes in, we breached the value area high of the time (3017.25). This was a pretty bullish signal. Price managed to push up to 3019.50, yet when we got there even the first time, the buyers stopped buying, and I noticed some relatively big selling at those higher levels. We ended up rotating down 4 points, and I thought perhaps I missed the responsive move. Nope. Bulls came in at the 15's, 16's and 17's which drove us back up to 19. Once again- time dragged on without bullish follow-through, and the sellers stepped in and brought price back down to 3016.50. This is when heavy buying ensued: price breached 3019.50 and hit the 3020s. What followed was the silence in price action that I like to see. In the 30 minute chart at the time, we hit the bottom of yesterdays ON range (~3018.75) and we were deciding if we were going to continue higher. I didn't think so and went short at 3020.25:
+2.75 point gain.
What I did well:
- I was objective in my pre-open analysis, and I was objective in my real-time trading. I consciously paid attention to what was happening because I had to- I wasn't concerned or occupied with entering at a pre-determined level.
- I was oddly calm today. The difference is, I skipped breakfast. I noticed a couple of days ago during my meditation before trading that my heart rate is faster and pounds a little harder if I eat before. Yesterday, I didn't eat before and my meditation was effortless. This is probably due to simple digestion. I didn't even have to calm myself down in my performance.
What I did poorly:
- My profit target was too big (6pts) so I closed the trade out of common sense (take what you can get on Fridays).
It was a very good trading day. I've finished this first month of live trading 1 point in the green (I started on June 28th). I'll be doing a monthly review of my performance this weekend; I'm most interested in how much I'd be in the green if I simply held my trades until my p/t or s/l was hit with every trade. After I do the monthly review and find out where I stand, I'll be posting my goals for next week. I've found that the weekly goal format helped me grow a lot as a trader in the past, so I'll try it again.
I should work on staying away from my computer longer. 
