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Position size: 2 x US$50K Max risk per trade: 10 points (both parts) / 1% real money account size Daily time-out: -20 points Daily full stop: -40 points Physical state: Good, no problems except the fasting for 5:2 today and tomorrow Mental: Good Fatigue: With a week on my own I'm trying to cut the sleep debt down but failing to do so. Need to get to bed on time and consistently fail. Higher Time-frame: The picture of a swing high on the daily time-frame is still looking good. I can't work out a bias from it though. 20 day volatility: (10 year max 287) 78 20 hour volatility: (10 year max 96) 16 Asian Session: 26 point range, 3 points ATR. Quite active, quite bearish. London Session: 48 point range, 3.5 points ATR, no reversal of Asian session although rallied thro Asian high. Doesn't count as a reversal because market didn't get within 5 points of the Asian low. The market went flat early today at 10:00 and then started rallying during the normally quiet 11:00 to 12:00 period. Pre-Session Summary: Should have no HTF bias, although I tend to lean towards bearish today. Despite that, we've got a bull trend day so far. Got some nicely laid-out S/R levels if I ignore the Asian high and the similar 60min support level there from in the night. Pre-Session Psych Issues: following on from yesterday, hopefully I won't get surprised again by the volatility. Need to carry on reducing the chit-chat and focus on the whole chart, not just the current candle.
Session Review
Today was a day of distinct sessions, that's for sure. The bullish European session was totally negated by the American bears, but now it's coming back and looks like it might put in a doji on the daily chart.
My setup 1 was a plain old pull-back on the trend we'd had all morning. I was bullish only because of that and the fact that the market was mid-way between two levels, so why turn around now - more likely would be at least a spike up to the resistance at yesterday's high.
The only reason I had to be slightly sceptical was the fact that we'd just had a model pull-back 45 mins before, which for me puts the dampeners on the hope of exactly the same thing happening again, which turned out to be the right hunch.
However despite looking very hard at that 13:48 shooting star, recognising it as a change in direction and loading up an order, I never pulled the trigger. Basically I have a rule in my trading plan that says at this point in my development as a trader, I ain't allowed no fancy stuff - and a counter-trend failed PB is essentially 'fancy stuff'.
Classic double-think because I really wanted to enter the trade but was unable to pull the trigger. I consoled myself after the fact with the knowledge I would have broken my rules.
It is an issue, and cropped up later at each setup.
Then came setup 2 after a choppy drop down, initially I was still bullish because of that chop, but then I figured, there's too much happening right here to take the choppiness as a bullish sign. The US was waking up, and the market could be reversing, and that's going to look choppy on any day.
The bears put in enough good PA with a nice bar pushing down to the lower side of my support level. I allow myself to trade counter-trend when there's interaction at a level so my intent to go short here was fully legit following my trading plan. However the bar that marked the turning point at 14:33 just wasn't quite big enough for me and left me in a quandary, wanting to enter but wanting more evidence.
I missed 2 good pieces of evidence here - the market touched the upper side of the support level, which is often a reversal point, and the SMA50 on the 60min chart (thanks @mokodo - you introduced me to that) was just below - a magnet for the market after the big shooting star candle on the 60min.
Doh! I decided the colours on my indicator were too distracting and changed the red to more of a pink. Classic displacement behaviour.
Question arises: even if I'd been aware of those 2 facts, would I have pulled the trigger?
Price then dropped thro the overnight 60min support, the SMA 50, the Asian high and ran into a whole of load of volatility (question - what were the Americans doing up until now? They started over an hour ago)
As it calmed down, it steadied out above the low of the morning session and started looking bullish with those tails, setup 3. I wanted to go long but didn't get any sign of a change in direction. Instead it put in the nice bear bar at 15:42 - but again, it wasn't quite big enough for me.
I had the market order ready, just had to hit the 'Enter' key. It rose a point and came back down and it was now or never, and I failed to move my finger. It dropped down just past the bullish looking tails, damn it, now or never again and I hesitated. It ticked down another tick and I swear the stress levels has wiped out my memory of that minute. I think I hit the Enter key at 1.3515'5 but I got filled at 1.3513'5 - no way of knowing now, so no point in worrying.
Anyway, I put my stop at 1.3519'5 thinking I'd see bad PA if it didn't fall further immediately. Apart from a single 1-min bar, it did fall and took out both my really close targets on the next bar.
So that netted me 6.5 points on target 1 and 12 points on target 2. $7 commission.
If I thought actually getting one trade done would cure my hesitation, I was wrong. I was hoping I'd get some sort of immediately recognisible testosterone rush or something, and would have to battle to get my risk awareness back no track, but no.
The market barely stopped at 1.3500 but decelerated into the daily swing low put in last week at 1.3485 and commenced stabbing bullish looking tails down into the big support level that has accumulated there - setup 4. The bear bar at 16:18 had me looking to go short again, but there was no decent R:R since my first target was right under the bar already. There was no bearish continuation anyway.
The next bar was close enough to a down-up pair that I figured the market had reversed. I wanted to go long at the market when it broke the top of the down candle of the pair, but I fluffed it. Had my market order sitting there and caught myself at the point of entry because I was thinking '88 for my entry, but that was a candle high on the 1-min chart, not the break of the 3min down-up pair and I realised I'd lost the price by several ticks.
I double-checked everything but the moment was gone.
Lessons Learnt
Don't know whether I learnt any lessons but I definitely learnt or re-learnt how my memory doesn't work under high levels of stress. It was only a matter of about 10 seconds. The main thing though is to keep everything on the straight and narrow and keep on doing the same thing, with eye on my real-time risk assessment ability.
A minor point also is to keep the SMA50 and the 60min chart in mind, but not to over-emphasise it, which I've done before. Maybe a quick look at the 60min chart at 45 mins past the hour to see if anything's brewing.
The best set-up today?
It's close whether it's 2 or 3 but I guess 3 bags it due to the big bear bar it produced. Slight minus points awarded to 3 though because it never touched the support line - the pull-back was from 1/2 point above.
You can discover what your enemy fears most by observing the means he uses to frighten you.
Position size: 2 x US$50K Max risk per trade: 10 points (both parts) / 1% real money account size Daily time-out: -20 points Daily full stop: -40 points Physical state: Good although feeling kind of dirty because I just discovered and cleaned out a rat's nest under our bathtub, they are getting in through the hole for the pipework in the floorboards. If anyone out there is into pest control, give me a few tips please - this is the 2nd time they're there - they obviously broke thro my defences that I put in last time, or found a hole. Dirty rats. Mental: OK but expecting more of the moments of panic as I force myself to place an entry. Fatigue: Hopefully better. Got to bed at 10:00pm and didn't set my alarm Higher Time-frame: OK I have to think about this. Why is the Obama / Congress deal good for the Euro? International money pouring into the US to buy stocks, the dollar should go up. I guess I've forgotten why the US stock markets and the Euro/USD correlate so well. It is at this moment trying to break up thro 1.3650 which will put a higher high onto the daily chart - actually it already has by a couple of points. Demotes the nice looking swing high from Oct 3rd on the daily to a minor level and reduces the chances of a big down-trend. 20 day volatility: (10 year max 287) 82 - now pointing definitively up 20 hour volatility: (10 year max 96) 19 Asian Session: 40 point range, 3 points ATR, bullish. London Session: 100 point range, 6 points ATR, strong surge up at 08:00 and then ranged for 3 hours. Good setups at start, but shot straight thro 1.3600, stopping at the resistance from Oct 4th, rather than the big high of 3rd. Decent interaction at S/R, should not be impossible later. Pre-Session Summary: Nightmare trying to get Interactive Brokers to load the data to fill the gaps that Ninja keeps creating. Must have had 50 "pacing violations" from IB before I gave up and loaded IQ Feed. Wasted 2 hours effectively. Big bullish day so far, this morning's S/R levels didn't show much chop so hopeful of another trade today, if there's time left now. Bias - none. Now the Euro's come this far, it might stay here, or it might carry on up. Next R @1.3700 or just above from Feb 1st. Pre-Session Psych Issues: Pulling the trigger on the entry orders is the big one at the moment, although it would help if I cut down the random thoughts and concentrate on the analysis during the setups, so that I'm confident of my analysis when I have the order ready to fire.
Session Review
It was probably lucky that Ninja struggled to cope with the data today because I was pretty excited by the big trend in the morning. After dealing with Ninja and Interactive Brokers software from 12:30 to 14:30 before getting it to work, I was pretty hacked off though. Definitely brought my sense of anticipation back to reality after missing 2 hours of my trading session.
Ninja just keeps losing yesterday's data, which wouldn't be a problem if Interactive Brokers didn't have their stupid data download throttling. I guess I could get rid of a couple of my charts to make my data requirements lighter. It's typical of me to push my config to the limit. With my indicator loading hourly and daily bars in the background for establishing S/R levels, running on 2 charts, and an hourly chart, a daily chart, and 3 volatility charts, that amounts to 11 Ninja data series requesting EUR/USD.
If you keep a Ninja Market Analyzer window open, Ninja theoretically shares the data series, but I don't think it does all the time. Otherwise I wouldn't get those damn Interactive Brokers pacing violations.
I finally got the data loaded using IQ Feed which didn't make any fuss at all. Shame their spread is twice as big or I would ditch IB.
I started trading at 14:30 and the market was making a consolidation zone 3 points off the previous high, so this was my Setup 1 and analysed it to death. Basically it didn't look very bullish and I could work out why it was 3 points below the high from 90mins before, if it was going to go up more. Bullish weakness, also in the tails above - slightly balanced out by that spike down. It then dipped down to that spike's low but no further, touched the EMA20, paused and came back up, now looking much more bullish over 3 candles - theoretically just what I need to go long.
It had come up from below through its consolidation zone a couple of times earlier too. Didn't work that out til later - and I hesitated badly and gave it up. You look up 'Hesitation' in an illustrated dictionary, and they've started putting my picture in there.
It pushed up well to new highs and the volatility went up a notch, and I waited for another pull-back.
Sure enough it put in 3 big bear bars taking it down to a trend-line that I quickly drew in, for setup 2. I was nervous as ever but didn't get a chance to think it over since the 15:30 bar was a clear sign of a turn-round. Despite earlier fears, I just hit the CTRL+SHIFT+B and then Enter and got filled 6 seconds after the close of the bar.
My interpretation of bearish weakness was immediately put to the test as the market reversed in an up-down pair and had me hovering over the exit - but the up-down pair didn't form perfectly when the bar closed so I waited. Patience, patience. The plan is to give it a bit room when it's trending.
I had my stop initially below the entry candle tail at '64, so I had 5.5 points risk for 10 points reward, the first target 2 points below the high of the day - I figured the PA wasn't good enough to hold out for a break. The first target got hit just after I'd pulled both stops right up. When the bar closed, I closed the other half as well. Just looking at all the other legs up, by the time a red candle turns up, most of the move is done. Good call. It turned out as more of a scalp than a swing.
So that was 9.5 points and 6.5 points with $7.50 commission. About £48. For that amount of stress in any other job I would demand 10 times that much
After another 3 respectable bear bars, it flattened out into setup 3, another pull-back, but this time a lower low, a break-out failure of the previous swing low, if you like. The feint blue rectangle on the chart there, I put it in later to help trade setup 5. But the pull-back is a simple setup, I should have entered at the close of the 16:18 bar and definitely at the close of the 16:21 doji, but I was over-complicating it again.
I figured a lower low would be followed by a lower high and then it would come back down to try to break down past the low again. That's one of Lance Begg's YTC setups that he reckons is higher probability.
But at this point in setup 3 I was still banking on it putting in a 15 point swing, or maybe only 10 points - and that's what put me off.
It would have got my first target though. It went up 17 points, and shot back down again in a shooting star - I don't take a setup until it's got 3 bars - and the market waited nicely for me, put in a baby shooting star to create setup 4 with a perfect position above that candle for the stop and a scalp down. Should have entered but again, was this in the rules??? A counter-trend trade, we'd only had a single lower low so the up-trend wasn't broken yet. Whatever, I hesitated.
I then got my Lance Beggs-style complex pull-back for setup 5, but the market went quiet as the stall went on for ever.
Lessons Learnt
Not sure whether I should count myself really lucky picking my target and managing my other exit for the one trade I got. I guess it was good practice whatever, money made - well, enough for a few beers - and I should take whatever luck comes my way.
But this was pretty familiar behaviour actually for a trend topping out between S/R levels. I guess the trade was reasonable. Realistically though, I think I should have taken the whole day's chart into consideration more. I couldn't see how much the bull move had weakened off. So it was good that I essentially scalped that trade, but I did that out of fear when my analysis said it was a good trend and I should swing it, keeping the stops further away, not just targeting the immediate last swing high. So wrong analysis, wrong behaviour.
The lesson out of that is, keep the whole day perspective in mind, and don't flinch so much
The best set-up today?
Didn't trade it, but this morning's action was peachy:
You'd have to be bullish at that point coming up to 08:15, and it sets up a great break-out failure or pull-back whichever you want to call it, puts in a minor but definite hammer and then sky rockets. Probably not the best trading thoughts, but that really hits my pleasure centres.
You can discover what your enemy fears most by observing the means he uses to frighten you.
Position size: 2 x US$50K Max risk per trade: 10 points (both parts) / 1% real money account size Daily time-out: -20 points Daily full stop: -40 points Physical state: Got backache, haven't been doing enough physical exercise. Shouldn't be a problem, I've been managing backache for years now. Just need to do some little back exercises every hour. Mental: OK. Getting seduced by the idea of just jumping in, but managing to control it right now, despite lots of action on the chart that I loaded up early today in case it gave me more hassle with the data gaps. Got to stay on the straight and narrow, my current trading plan needs testing as it is, I need to put in 20 trades to get some stats together before I allow myself to change anything, like allowing myself to trade outside the carefully planned morning or afternoon sessions. At my current rate of 2 trades a week that is going to take a while - although the low frequency is the result of my current hesitation issue that I'm working on. Fatigue: None. Seriously. For the first time in years. I wasn't actually tired when I went to bed last night and I slept through until 8AM. New research just last year shows that one of the primary functions of sleep is probably to allow the brain to flush out all its waste. A drainage system has been discovered in the brain, and also it's been found that brain cells shrink in size during sleep, which researchers believe allows more plasma to flush through the interstitial space between the neurons - Waste disposal network discovered in the brain - health - 15 August 2012 - New Scientist - apparently the theory also makes sense from a mental illness perspective, and in relation to caffeine. Higher Time-frame: Case for a swing high followed by a serious drop run into the sand. I risked a Ninja melt-down by loading the weekly chart for the €/$ but it loaded fine - and it shows the Euro right in the middle of its historical range back to 2009. It's just backed off from 1.3710 to make a new year high. I guess after yesterday, it's my duty to be bullish - you don't get many double tops on the weekly, and it's a Friday. Talk about random stats. Sounds like a football match. 20 day volatility: (10 year max 287) 82 20 hour volatility: (10 year max 96) 19.5 Asian Session: 16.5 point range, 2.5 points ATR. Much quieter, following on with the doldrums that set in yesterday after the rally stopped London Session: Just about counts as a reversal of the Asian session, by 1/2 point. Sometimes you see a spike down to touch the Asian session limit and then the move off in the other direction. Today it just move straight off up and broke yesterday's high, I guess it was all those Germans focusing on the little consolidation floor at '62, just above the earlier low. Then we had a really poor rally up to the big R at 1.3710, ending 6 points short just past '00 where it fell back dramatically. That throws the cat in amongst the pigeons. Bias? Pre-Session Summary: Read the news to work out why the budget deal in Washington fired up the Euro. "Expectations the Federal Reserve will keep its stimulus in place for longer following the confidence-sapping U.S. fiscal impasse pushed world shares to a five-year high". I think to turn around the bullishness of the trend so far, we've got to see the Euro break back downwards through a support level and put in a reasonable lower high and lower low. Pre-Session Psych Issues: Got to concentrate on building a trade history and not get diverted by potential changes in trading plan or mental state. The unit of measurement is 20 trades, individual trades are irrelevant. I would like to see 3 out of 5 on average profitable trades, and a win:loss ratio of 1.5. That's the target, realistic or not.
Session Review
Started out as a trend day, but as the session went by, the promise of more up-trend evaporated.
Got stuffed by Ninja again - well, it was my fault this time. By adding in some script to log some info for the Ninja support guys, I inadvertantly disabled my bar time checking so I didn't notice for a while that my indy hadn't loaded yesterday's data and so yesterday's high didn't make it into my S/R levels on screen. Managed to make do with a plain ol' horizontal line instead, and fixed the indy just now afterwards.
The steep drop at 12:00 looked promising, but then things started to grind, and this isn't the kind of interaction at a support level that I can trade easily. My setup 1 was basically a down-trend-channel and when it broke through support at 13:51, I was overcomplicating stuff again. At 14:00 it started out back up, but I could only see the top of the trend channel as a long target - or thinking of it alternatively as a break-out failure, I wouldn't have entered until it got further up than the top of the support zone there. So confusion there.
The trend channel carried on down, and the big bear bar at 14:21 looked seriously bearish, but was big enough to mess up the R:R. The next few bars provided a decent setup but I fudged it. The 14:36 bear bar started out on the 1min chart with a shooting star spiking above the EMA, so that should have been my entry. Would have been a loser or break-even result, but the failure to enter is still a failure.
At 14:51 immediately after that, my previous bear signal bar had actually turned out to be a higher low and the next couple of bars were adequately bullish to get me to enter - failed again. Three bars signalled it, 14:51 with its higher high, and then the two hammers at 14:57 and 15:00.
The problem was the same as earlier - couldn't see good R:R. My target was highs from an hour ago at 13:39, 13:45 and 14:03. That was way too close for good R:R.
Maybe if I hadn't been confused by the trend channel I was looking at from 12:15 to this point and considering whether the price was breaking out its upper boundary (which it was) I would have realised that the S/R level from yesterday's high at 1.3681'5 was actually cancelled out by the earlier high.
A bit too much going on for my pre-frontal cortex. Target should have been 1.3690 and 1.3700 or 1.3710.
At 15:21 there was a chance to get in long on a pull-back (setup 2) but the hammer on that bar wasn't good enough and it didn't get down to the EMA to bounce - but in hindsight that's not a reason not to enter - that's only half a reason.
At 15:45 the same sort of thing, good PA, a reasonable 3min bar, good R:R.
Then came setup 3 as it looked more and more like the market wasn't going to go above '00. The higher lows and failure of any kind of bearish signal to follow through made me bullish right up to 17:00, by which point I'd put the two feint blue lines on the chart to show the flag, and was trying to play both the long break-out setup and the short failed test of 1.3700.
I was looking at the 1-min chart, and up until 17:00, we'd got 5 tiny dojis in a row. I should have bracketed it and turned the screen off but I could only watch as it suddenly dropped 2.5 points and begged me to short it.
Lessons Learnt
My problem with hesitation stems from plain anxiety that it's going to go wrong and come January, I'm going to be looking for paid work again. I need to do some serious re-wiring because that in itself isn't so bad. I guess it's the people I feel I'm stringing along for the n'th time that this trading stuff is going to work. Something to think about.
There is also the problem of over-complicating stuff. I should stick to having one bias and try to find an entry on that basis, rather than like for setup 3, try to keep both on the cards.
NB: Just discovered Log4Net for logging files. My chosen debugging method - some people plug in Visual Studio, others log everything and work it from there. That's what I do. With Log4Net I can roll over the logging file. At the moment I ignore it till it gets out of hand and is impossible to work with.
You can discover what your enemy fears most by observing the means he uses to frighten you.
Position size: 2 x US$50K Max risk per trade: 10 points (both parts) / 1% real money account size Daily time-out: -20 points Daily full stop: -40 points Physical state: Fine Mental: Still nervous just thinking about making an entry. Might be the strong coffee I just had too... Fatigue: First night the family are back and I lose 90 mins sleep. I might start sleeping in a tent outside. Higher Time-frame: On my new weekly chart, it doesn't look like it's about to launch a strong break-out to the upside. The daily and the hourly don't give away too much either. A bit of weakness on the bulls' part for sure here. So that would make it likely we'll get a break-out failure or a small retreat and then another shot at it. So not helpful selecting a bias when subconciously I just want to see bullish strength. 20 day volatility: (10 year max 287) 79 20 hour volatility: (10 year max 96) 15 Asian Session: 18 point range, 2 points ATR, slightly bearish session but only just and a bit choppy too. London Session: Also 18 point range, 3 points ATR. Drifted quickly up to almost the top of the Asian session and promptly fell to the Asian low and then ranged for the rest of the morning. Pre-Session Summary: Guess I'm bearish after checking the action so far today. At least down to 1.3650 but I think there's a range day in the making after that. Interaction at S/R so far today looks a bit rocky, no-one was getting any free lunch this morning. Pre-Session Psych Issues:
Making those entries
Keeping things simple - no flipping my bias without going over the whole analysis, keeping one bias in forefront
Staying on the straight and narrow to get 20 trades under my belt
Session Review
For setup 1 at 14:06 I'd finally decided I was bullish and was ready to go long, but the market reversed and put in a strong drop down to the level 2 down. I couldn't reverse my bias quick enough and I had problems with the R:R trying to get short with that target at 1.3659, only 5 points away max. Of course I had no idea it would dive so fast.
At setup 2 I stayed bearish, and got a trade on too but messed up the exit - there were 2 good PA signals to exit, but I hung on in there which was not what you want to do on a range day.
So I missed the rally up to 1.3675 again, didn't know what to make of that PA after the spike.
At 1.3675 it still looked bullish and I got the trade going for setup 3, but just got stopped out without any major negative PA.
In mid-session it might have been OK to reverse straight into a short from there, which I did, but at the end of the session I have to admit making some kind of avoidable error. At this stage in the day, the only strategy that will work is going for a swing trade with a big stop to avoid the random meandering as it goes into the close.
Lessons Learnt
Swapped entry hesitation for incautious leaping-in. I guess I was aware of the danger of distorted risk awareness after a loss, and managed to keep it at bay after the first loss, but I think I got me after the second trade and I would never have put that trade on if I hadn't just had a loss.
I also need to bear in mind that I have to bail on bad PA when I'm trading a ranging market, and not give it a lot of playroom. I was expecting it to reach the level it was already at, so I guess I'd also forgotten about my HTF bias.
I was just thinking about it more after going to bed. The first problem with the trade at setup 1 was that I didn't deliberately tell myself that I was going to manage the position as a swing trade with lots of playroom, or as a scalp with tight stops. I hit that decision point about whether to bail out on the bullish break of the doji with a short position but no plan.
So I decided in that split second not to give it playroom, which was easy because I wouldn't have to do anything. I didn't look back and work out or re-analyse what the situation was, or even better, what I should have done is just have the analysis in mind already.
I had decided pre-session that it was likely to be a range day and the limit of bearish action was probably the support level where the market was right then. I'd had no evidence that it was going to turn into a trend day, i.e. I had no reason to give the trade room.
In fact, I thought that the stronger bearish move into the low of the day was likely to be the climactic last move of the down-trend.
On setup 3, I can see it's probably worthwhile looking at the market differently from 4:30pm and figuring out whether it's worth putting on a swing trade with a set-and-forget stop/target bracket. Even though it's a range trade, the more random drift in the afternoon requires bigger risk, but if my experience is representative then normally the market trends to the next S/R level. That would be homework - looking back at 20 or 30 charts to see if this is vaiid. Of course the other advantage to taking that approach is that it would keep me out of low probability trades like trade 2 and 3.
You can discover what your enemy fears most by observing the means he uses to frighten you.
Position size: 2 x US$50K Max risk per trade: 10 points (both parts) / 1% real money account size Daily time-out: -20 points Daily full stop: -40 points Physical state: Good Mental: theoretically all seems good too Fatigue: slight sleep debt again, should be manageable - no fog of tiredness expected Higher Time-frame: definite consolidation zone could develop here between 1.3650 & 1.37 but then there's some bullishness to the daily bar yesterday. Slightly offset by the complete lack of life so far today. 20 day volatility: (10 year max 287) 77 - taken another dip down to a new low 20 hour volatility: (10 year max 96) 12 Asian Session: 19 point range, 2 points ATR, bearish but choppy, with the longest sequence of consecutive one-point bars I've ever seen. London Session: 17.5 point range, 3 points ATR, pretty choppy, a brief bit of life around 09:00 to 09:30 but otherwise dead. Possibly waiting for the non-farm employment / unemployment numbers. Don't know where the volatility's gone or what's driving the volatility cycle. Pre-Session Summary: Excepting a blip at 13:30 for the US data although my theory is that all the HFT machines are off-line with this out-of-schedule release. So flat-lining except a blip at 13:30, although it could spark a break of 1.3700 if the numbers are weak enough / than expected. Pre-Session Psych Issues: re position management, have a plan! Not having a plan = freedom to make mistakes.
Session Review
It's slightly challenging writing this review since I put on a set-and-forget trade for the remainder of the day but I'm having a hard time forgetting it.
Setup 1 was in the direct aftermath of the 73 point candle on the employment data. I was looking at the 1-min chart which was wild enough as the market ebbed and flowed on the volatility. It formed a triangle that put in an apex on the right hand side which I often figure I could trade for a break-out. This is not an official setup according to my rules so I left it but it did drop out of the triangle's apex with a clear signal. Could have gone the other way of course, presumably also giving a signal on the way out. The move didn't get far though.
Setup 2 was a plain pull-back, to go long at candle 14:00, there were a lot of bullish signs - tails and a doji break, but I hesitated badly rather than put a stop just above the doji and wait to get filled. Would have got out for B/E probably if I'd entered.
Setup 3 was another pull-back chance, on the break of the 14:21 bull candle, which I got in on, but I was too nervous to risk any more than a couple of ticks, and I bailed out when the bulls weakened off a bit immediately, and it looked as if it was the bears' chance.
It was literally a matter of one tick under candle 14:27 that put me off, and the bear move died and the bulls moved it up.
This then consolidated around 1.3745 just below the high of the day so far. I was playing this as a test of 1.3750 which I figured would fail and lead into a drop back to 1.3700. In fact I stayed too bearish for ages.
With hindsight, the 14:57 move comes after a down-up move breaks the preceeding doji. Maybe another time I'll be more ready to take this kind of break-out move that starts well below the point of break-out.
Setup 5 was a good pull-back, I was still bearish, ignoring the hammer.
Setup 6 also a pull-back long - and the rally strengthened. After this one I started thinking OK perhaps it might get to 1.3800.
Setup 7 though was my last trade and I had developed a plan from looking at a few old charts this morning to put in a swing trade at the end of my session to catch a late trend. I got in short quite well allowing me quite a close stop, but the bears failed to break the previous swing low and it ended prematurely.
Lessons Learnt
Hmmm... exiting for the sake of stress relief only served to give me more stress today in terms of missed opportunities, but I am busily avoiding regretting it. It did look like it was turning against me, but then I could have given it 2 points more which is nothing really, and got a totally different result. At a decision point where I seek to enter, there are bound to be a huge amount of PA that will look bad, but I need to be a bit more accepting of it. Otherwise my trading results after 20 trades will consist of a series of 2 point losses.
The end of the session trade needs more historical research to back up the plan.
The best set-up today?
the one I bailed out, for sure.
You can discover what your enemy fears most by observing the means he uses to frighten you.
I'm going to start putting these Al Brooks quotes in again - or any quotes - because they're so good:
Position size: 2 x US$50K Max risk per trade: 10 points (both parts) / 1% real money account size Daily time-out: -20 points Daily full stop: -40 points Physical state: OK Mental: OK Fatigue: OK Higher Time-frame: Bull trend 20 day volatility: (10 year max 287) 81 20 hour volatility: (10 year max 96) 14.5 Asian Session: 26 point range, 3 points ATR. Strangely rallied up to steal a new high by a tick at 4:00am but then dropped back and sold off sharply at 5:00am and got seriously choppy at the end. London Session: 37 point range, 4.5 points ATR, carried on the Asian sell-off. Not easy, a bit choppy and irregular at the setups. Pre-Session Summary: probably a lot of buying power around making today's sell-off so far quite ugly. Pre-Session Psych Issues: late to work and lots of things to do coming out of yesterday's session and this morning's analysis so time pressure building. Probably end up with no trades today.
Session Review
Like I said above I started over an hour late due to lack of sleep and needing to catch up, where a short sleep turned into a major 2.5 hour slumber. That had the effect of making feel awake but guilty in a sort of lazy teenager way.
As I started the market was testing and looking as if it would fail to break the resistance set up by the Asian and London interaction, after climbing 25 points from midday. That was my setup 1.
Didn't have to wonder long as it broke up thro and hung around at the break-out zone until 14:30 for setup 2, but didn't give me anything tradeable. The bulls took it up straight up through without leaving any chance to get in at good R:R and hit the 12 month high, almost, within 10 mins, making it setup 3.
Should definitely have taken setup 3 but I was fussing about whether I was allowed to go counter-trend or whether it even was counter-trend, but a range day boundary trade. It moved too fast for me to work it out in time, or better said to get my nerves under control in time. It's both a range day, and if it had broken through, it would have been a trend day, so both were valid.
Just for the record and not because I figure I'll be able to handle this sort of entry real-time for a long time to come, the way the market screeched to a halt without touching the level and left a big spike was climactic, and then the 14:57 candle was the entry flag - should have got in on the 1-min chart's 3 bears signal.
Anyway, a rookie trader is a rookie trader so I'll note this down to experience. Wonder how many times I'll miss trades like this.
The following drop-off interacted at the levels OK but too fast to do anything with, since I need 3 candles at the level to allow my entry by my rules.
The spike down at 15:15 combined with the rest of this preceeding PA (which looked good but was too fast) had me leaning towards this being a trend day - justifiable mistake or not, I'm not sure yet. If I'd figured it was a range day I might not have taken the following trades.
Back at 1.3775, setup 4 turned into a drawn-out drama. I was thinking 'trend day', and I think we had a range day, if unusually so. I figured the up-down pair at 15:30 had failed well enough and got in long. The retrace clipped my generous stop but failed to make me bearish. I entered again as it looked like the retrace was over - although in hindsight, it looked nothing like that. There's no evidence that the retrace was just a retrace and in fact the bulls were getting weaker. I should have re-entered 5 points lower as the apparent retrace was turning back to bullish.
I did then become bearish and had a stab at the drop out of the setup zone. Good entry, good exit, minimal damage, just slightly dubious whether I should have allowed myself to trade this setup again after that last almost invalid trade.
I thought it had tried twice to break away upwards and failed so I gave it go going short and that also failed. It then occurred to me that I was in fact wrong to be expecting nice behaviour on a day like this. I started planning to get in again as the bulls became more obvious, but I wanted to get in at a good price on a limit, and the market wouldn't go near my limit - behaving nicely again (for those already long).
Lessons Learnt
Seemed to have conquered the entry fear, if I have a nice loser first.
more on this tomorrow. Got a load of learning on the list, and need to sit down and learn it rather than sleep without an alarm clock during the day
You can discover what your enemy fears most by observing the means he uses to frighten you.
Having a closer look at the lost opportunity on Tuesday.
It was a shake-out.
The candle before the entry was a decent show of strength, breaking the lower of the highs from 4 candles earlier on the 3-min chart (on the left).
The stall on the 1-min chart though just after my entry on a level with the higher of those highs from earlier - that's bullish weakness. The bears were obviously active. I was watching the 3-min chart and instead of my entry candle pushing away upwards, I got a short candle, a stall on the 1-min and the next candle was red. On the next bar I decided (a bit too slowly for the record) that the tick down that broke below the red candle was too much bearish strength, and by the time I'd exited, the market had come back a bit.
A lot of rallies consist of candles just rising with higher lows (or dropping with lower highs) and this broke that pattern.
However what I had suddenly forgotten is that this was not just a pull-back setup, it was a break-out of the big triangle - I only drew the upper side on but I had seen it coming earlier and was waiting for it. So I should have realised that this bearish action was the pull-back after the break-out and maybe I should have given it that leeway.
You can discover what your enemy fears most by observing the means he uses to frighten you.
Position size: 2 x US$50K Max risk per trade: 10 points (both parts) / 1% real money account size Daily time-out: -20 points Daily full stop: -40 points Physical state: Fine Mental: Fine although I'll be happier if I get a chance to internalise some of the stuff about my last couple of days trading that's going through my head at the moment. Fatigue: tired again despite the warnings to myself about when I was getting to bed last night. I'm effectively waking up at 5am when our youngest wakes up most mornings. The clocks change at the weekend here in the UK so hopefully that will change to (and stay at) 6am. The fatigue is not so bad at the moment so I'm going to risk it without having a sleep - although I'd love a 2 1/2 kip like yesterday Higher Time-frame: A new 12 month high made in the morning makes thinks look bullish. It wasn't even news-generated, in fact the news had the opposite effect. The hourly chart is choppy today, really ugly. I suspect the 2 or 3 news items coming out this afternoon will have a bullish effect though. Yesterday's daily candle put in a long tail down so a continuation of the rally looks likely, only the 60-min chart casts doubt on that. 20 day volatility: (10 year max 287) 80 20 hour volatility: (10 year max 96) 14.5 Asian Session: 35 point range, 2.5 points ATR, bullish and quite choppy again with the Chinese news pushing it up, and then whatever it was at 6:45 put it into overdrive into the close of the session, like yesterday quite unusual. London Session: 57 point range, 5.5 points ATR, pushed the big high up even further and then sold off to completely reverse the Asian session, but the bearishness faded and it's been bounced up off an up-trend line until now, putting in some chop ahead of the 13:30 US employment data. Pre-Session Summary: if yesterday's example is anything to go by, the daily time-frame is clearly trending but the lower time-frames are fighting it. Seems advisable to buy pull-backs and enter at good prices at other setups (i.e. not late) as long as the bias is clear, and be wary going either way, not just short. Pre-Session Psych Issues: yesterday presented a bigger chunk of costly teaching to learn than Tuesday did.
I made a trade that I should never have made (trade 2 yesterday) - not a great loser but it just shows I made a couple of psychological errors and I can see why. It was yesterday's setup 3, I had just taken a loss on the setup, trying to get long. It then bounced off the support but never gave another trigger to get in - didn't stop me though.
Major mistakes:
trying to trade other people's plans. The fault was having the idea in my head that I had to nail this setup. Had I put my initial stop too close on that first attempt? Undoubtedly. Did it still look valid? Would I have the cojones to get back in on the setup? Of course! Bravado.
didn't want to miss out on a good profitable trade like I did Tuesday.
humans always suffer a rise in risk-seeking behaviour after a loss, which can't have helped. Another factoid that my brain failed to compute.
there's the entry nervousness I'm combating as well - if I'm putting brain power into trying not to hesitate, then something else in the mix is not getting the attention it should.
maybe the reason behind the other reasons, but of course I need to make money at some point, and losing it is bad, and missing out on getting it back is almost as bad
I had too many messages in my head and the analysis went to hell. It was just enough that the market rose a few points - I dived in. What to do about it, I'm not sure. I could put a 1-attempt limit on each setup I guess, until I'm clear that I can handle it better.
Session Review
Got 15 mins sleep. Had to do it. The fog was closing down my pre-frontal cortex.
Started on setup 1, the market was pulling away from 1.3800 but having problems at the Asian high, which I figured was a useless resistance level today anyway since the market was rising steeply through 7:00am and it made it more of a random point in time than the legit session boundary. But the market was there, fluctuating around it.
Putting in the lower trendline up from the day's low made more sense, and considering that the market was waiting for the US numbers to come out. The PA after the news release was much more obvious but I wanted something bullish to be safer so I didn't have the chance to try an entry.
The sell-off pulled back and reversed mid-way down to the next support, that's setup 2 and I was pretty keen to get long especially with the PA right on 14:00 but I was also keen to get in at a good price rather than on the break of the candles. I hesitated on the entry because of uncertainty whether I should trade in the middle of a range.
I hoped that the break-out of the big resistance level as it shot up would lead to a massive rally but it reversed sharply, too quick for a decent setup, but it did build a typical triangle shape and then broke out downwards for setup 3. This had good PA on the 1-min chart to allow an entry, but I was hesitating to go short.
As it got down past 1.3800 it put in a big down-up pair which for reasons unknown I always give too much credit. It's more a sign of chop than a reversal I reckon now. So for setup 4 I tried to get long at a low price as the market fluctuated around for a couple more bars, but I found it seriously difficult to convince myself to leave a limit order in place as the market dropped towards it. I guess I just wanted one more bullish factor in my favour.
1.3800 exerted some kind of magnetism on the market and it chopped around that level, but I was still bullish enough to hope that a dip below 1.3800 would result in another rally back up. That happened at setup 5 but again, I was unable to take the trade. Amazingly the market then gapped up six clear points. Damn lucky I wasn't short with a stop in the gap there.
Lessons Learnt
Again, I had the right bias and wanted to get in at the right place, just didn't have the conviction. It's difficult to say whether I needed more guts or more info.
You can discover what your enemy fears most by observing the means he uses to frighten you.
Not that I'm guilty of watching TV but I do spend a lot of time reading other people's stuff, to the extent that I have a psych awareness bullet point on my trading cards stating: "Stick to your own plan, make sure you're not experimenting" which refers directly to other people's way of trading that I read about and consider worth trying.
That's another point. When something is worth trying in trading, I know I have to put the work and the time into finding out from checking the history, but how often does something like that ever get to the top of my list of priorities? I cause so much carnage trying to implement my trading plan that I have enough to do just sorting out execution of the current plan.
Position size: 2 x US$50K Max risk per trade: 10 points (both parts) / 1% real money account size Daily time-out: -20 points Daily full stop: -40 points Physical state: as normal Mental: hacked off that I can't spend 12 hours a day at this, but then, I also get hacked off that I can't spend more time with my family too. What is this? Impatience or just annoyance or frustration, I don't know. Fatigue: Some still no doubt. Only slight improvement with sleep overnight - so not enough although I don't feel it right now (but then you don't unless you try thinking hard about something) Higher Time-frame: Bull trend continues. Not sure if it's predictive of hard-to-trade range days that in-between the big pushes they keep pushing a couple of points over the resistance level. So consolidation expected. Another range day unless the resistance level breaks and stays broken. 20 day volatility: (10 year max 287) 78 - still on the decline 20 hour volatility: (10 year max 96) 16.5 Asian Session: 48 point range, 3.5 points ATR. They pushed the resistance level up a bit more. Weird. Probably just proof that the market can do anything - and probably will. It kicked in just before 5:00am. Who are these traders? Is this India or Dubai or Russia or what? There was no news until 9. London Session: 50 point range, 5 points ATR. For the record, it reversed the Asian session but the Asian session wasn't normal. The indicator on my chart has re-aligned the support level already but it looks like this session was still paying credence to yesterday's high even after breaking it 3 times. At the resistance it looks pretty untradeable but at 1.38 and 1.3780 it seems predictable. Pre-Session Summary: A triple top at the new resistance level makes me think it's unlikely we'll go there again today, with the market already making new lows for the day. The general difficult market conditions will no doubt continue, unless the 13:30 news event changes things. Pre-Session Psych Issues: Didn't put anything down here pre-session. In hindsight I think it was because I was just having a hard time concentrating.
Session Review
Setup 1 was the break out of the day's earlier low and some of yesterday's swing lows. The BO failed with a massive reversal candle, putting a spike down to the low almost. I missed it, not at my desk. I would have been bullish after 3 1-min bull candles in a row, and then the spike down would have warranted an immediate entry on a stop as it came back.
It immediately got very choppy though as the bears sought to keep the trend on track. It broke out downwards again but very weakly as I was watching it at candle 14:06 - and it reversed, offering a long entry. There were 3 bull bars again on the 1-min chart but I just couldn't take the entry, despite the low risk and the good entry price. That's setup 2.
Then at setup 3 there were 2 chances to get in on a pull-back but this was a range day and I wasn't sure if that's a legit high probability trade, coming right after an attempt at the low of the day. Both offered easy low-priced long entries at the same level as the lows at 11:15 and 12:45. I had a problem with bearishness I could see on the 60-min chart though, with the 50 period SMA looking like resistance in addition to the 1.3800 line.
At this point I accidentally entered a trade without any intention to do so - I had the 'confirm market order' dialog sitting there as I waited for completion of a formation I was watching. I just rested my finger too heavily on the space bar and that triggered the 'OK' and I was suddenly long. Fortunately the market was going up so I got out quickly without any loss.
After it broke 1.3800 to the upside, I lost the plot to a certain extent. I was trying to let my subconscious tell me anything at all about the market and suddenly on a tick to a new high, I just entered long - it took me half a second to realise the only subconscious process had been the reaction to the green bar rising. What I'd wanted to feel was something good about the whole setup, so I exited. Well I tried to exit at a lower commission by selling $100K outright instead of using the Ninja 'close' button - that just turns both stop orders into market orders so I pay commission on 2 orders instead of one. I don't know what I did wrong, I'll have to look at the hot keys, but the end result was that I actually reversed into a short position. Not too clever, but it only cost me £15 in all so no worries.
At least, no worries on the surface of things but my mental state continued slightly out of kilter with the market and even while looking at the price action at the end of setup 4 knowing it was bearish after the failed down-up pair and then the high doji, I figured it was worth fading for some reason. The 15:45 doji said 'no more progress upwards' and then the next bar said 'I agree' and then on the 1-minute chart, I sat there waiting for it to reverse back up long.
At setup 5 I started looking for evidense to get into a swing trade one way or the other. It signalled bearishness after all that chop with tails up above, and looked good on the 1-min chart for a short entry. Because it's a Friday, there's also a chance there'll be some unwinding of trend-follower positions, i.e. short pressure. I also figured the choppiness was a sign of trend reversal too, i.e. the new long trend turning back short again.
But I didn't take it.
Would have gone short at 1.3797 with a stop at 1.3803 and that looks like it would have got hit. Needs much more investigation on historical data.
Lessons Learnt
Still trying to work out what's holding me back at the point of pressing the 'enter' button. I seem to have an intense dislike of wide stops, so while I allow myself 10 points in my plan, I think it will be a while before I manage that.
I spent a lot of the time waiting to get good entries and identified 4. OK I didn't take them but I'm satisfied that I spotted them. For a while I had been thinking negatively about it, I thought I might even be imagining the whole premise that I can spot these entries. But I was watching myself today more carefully so I was quite conscious of wanting to enter and then missing the move, and so I don't have to worry that I was just imagining my abilities.
A small positive to take in the face of the intractable problem of getting an order in when I intend to legitimately.
You can discover what your enemy fears most by observing the means he uses to frighten you.
You should be looking in the exact opposite direction - think maybe a maximum of 1 or 2 three hour sessions at most, with a good break ( I watch old episodes of Spooks, lol), exercise (I walk loads) and food in between. Reducing hours has made a far bigger difference for me than I could have believed (I thank @GFIs1 for his influence in this regard) and I still spend far too much time on screen but that's mostly because I remain a saddo futures.io (formerly BMT) addict.
Notice the connection. Drop the screens out of your face and the sleep and hesitation might improve too. Spend the time with the family while you have the chance, my two put on 20+ years each in what now seems like 5 minutes. In particular the excess blue wavelengths from most monitor setups are the worst, most stimulating sleep disruptive that you can find. At the very least warm the monitor settings up but best of all switch them off tea-time latest and read or play with the wife or kids.
Finding five setups that you don't take is never going to be better than finding one or two that you do.
