Date October 13 Tuesday

Entry 2007.5 Short
Targets 4, 8, 12
Stop 8 points 2115.5

Why it may work - Value high area, Delta divergence
NYSE div and gap down & Friday low tested

Why it may NOT work - Stop is at obvious location. Breadth still +ve above 1

Emotional state Sleepy but restless NOT to miss a trade & less patience
Physical state Woke up late, tired with aches/pains – No coffee

All targets hit. Grade A day.

Sloppy entry actually. Got almost stopped out. Should have been more patient or alert this AM before entering. Another lesson.

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I have attached screenshot at the time of entry today.

That was a live picture at that time and the scribbling/analysis was live too.

Interestingly, I identified that 2015 was the likely target upside to clear the stops.

My own analysis from yesterday was this

Narcissus 

Though I am still looking at shorts at this value high area, I am mindful that we could spike up for few points above 2114 to clear the stops before taking the trip down to vPOC 1922.

Where did I place my own stop. 2015 & almost hit!



It may not be clear but you can see divergence 2/3 i.e Delta, NYSE tick but not the spread in the middle panel.

Though I am glad that I got away with my sloppy entry today, I should have been taught a lesson really. I will try and be more patient.

I will identify my stop FIRST and may use limit order if I have to leave early for work.

I was too early shorting Yesterday. Today it became too late. I was waiting for 2005 so that my stop will be safe at 21013 but we didn't get that far. That's OK. I will wait and miss this train.

No trade today. Even though I was right in my market direction and the target of 1982, ES departed without me.

I realised that I made an error in my upper target. I should have considered yesterday's HVN at 2003 rather than the previous day's vPOC 2007. That means, my confidence would have been higher to short the 2001 high today.

Though I had another opportunity to short the bounce, midday, around 1995, I didn't want to 'regret trade' as the odds of ES moving either direction were equal. It means my stops were more likely to be hit as my stops would have been just above HOD - Prime target for stop runs. In the end, the stops below 1985 were hunted.

One of those days when everything happens as you expected but without you on board.

Why would you consider the HVN vs the vPOC?

Because the 03 was lower/more achievable than the 07 target?

FABRICATORX 

Why would you consider the HVN vs the vPOC? Because the 03 was lower/more achievable than the 07 target?

HVN at 2003 was from yesterday (and hence more RECENT) whilst 2007 vPOC was from the day before.

Market has memory and it tends to respect recent areas of volume accumulation.

Narcissus 

No trade today. Even though I was right in my market direction and the target of 1982, ES departed without me. I realised that I made an error in my upper target. I should have considered yesterday's HVN at 2003 rather than the previous day's vPOC 2007. That means, my confidence would have been higher to short the 2001 high today. Though I had another opportunity to short the bounce, midday, around 1995, I didn't want to 'regret trade' as the odds of ES moving either direction were equal. It means my stops were more likely to be hit as my stops would have been just above HOD - Prime target for stop runs. In the end, the stops below 1985 were hunted. One of those days when everything happens as you expected but without you on board.

Excellent logical thinking, I suspect that you are further up the greasy pole than many.
Cheers John

grausch 

1. Regarding the small losses - I take them too easily. Quite often I find myself exiting trades that are not working, only to find that once I review my past trades, that these would have worked out. By exiting too early, a trade that would have been a winner turns into a loser. Also, by exiting earlier, I look for the next opportunity. What happens then is that I place another trade and again exit this one early. So rather than having one decent sized winner, it snowballs into numerous small losers. I trade stocks which means it usually takes time for my stops to get hit, but I have found that I need to give trades time to work and can't just exit because it is not working now. 2. Holding on to winners - this in itself can also be quite a source of frustration. Everything seems to line up and then the trade just reverses and stops me out at breakeven. Even worse, after dipping just below my breakeven point, sometimes the stock will just roar back and I will not be in the trade. If I am in the trade and it is showing large profits, there is always a need to sell in order to not "lose" the profits. Going for large winners can require sitting through large drawdowns. I notice you mention using trailing stops to help with this - trailing stops tend to cut profits short worse than profit targets. Do some testing of your own, but I found that they deteriorated performance in my systems. All of that being said, it is extremely nice when you do play a large winner perfectly. It happens enough to keep me interested in the game.

Excellent points,

Being out of the market is the most powerful position to be in, it is like being on the button in Texas holdem and having the opportunity of only having to pay the full price to play when you have pocket Aces, Kings, Queens, and the opportunity to play the lesser pockets for a lower price (risk/position size) when these opportunities show up, the rest of the time you pay nothing.
Being a discretionary trader, price targets for me are ranges for both entries and exits, I am never married to a fixed number, so I am constantly evaluating my RR and if I see potential stormy weather I will be quick to unwind my position. Dollar cost averaging the entries as I look for the turning point helps to minimize risk and unnecessary exits, which can become costly whilst loading up, although when I exit I unwind everything, if the environment is not good enough to have half my position on then it is unwise to have anything on, the RR has changed. Being dragged up and down, up and down indefinately which can often happen (this is the markets normal behaviour) when having fixed entry and exit targets is not only frustrating and costly (missed trades) it exposes you to much more risk with the 50% chance of the market moving against you, it is my view that time in the trade increases risk expotentially. Yes you may leave some of the money on the table by getting out a bit early, but the increase in account balance, subsequent larger position size now possible and additional winning trades more than makes up for this.
Cheers John