Finished the day with a small loss...~$135. I took an embarrassing large amount of trades today...49!! So obviously there was some mental 'stuff' going on with me. Haha! My scalping trades went very poorly. I was able to swing trade pretty well which kept the loss small today. I won't display charts today...there were just too many trades and the screen caps look jumbled. But here are the final results. Lessons learned...on to tomorrow!

Back to trading today as work was slow today. I was able to capture a whopping +16t in ES and +5t in CL. Lessons learned were: Lesson 1. Still need to let winners run. Strong trends keep going even after being parabolic for the first hour and a half of the session. I took a step forward because I was able to let my trade run to my profit target even entering a trade late. Lesson 2. ROC divergences can last a few bars longer than initially anticipated. I definitely shouldn't use 60 minute 2ROC to time fading a strong move (as was done in trade 2, ES). Lesson 3. Less is more. Far fewer trades this time out (3) than last time (49). It's easier to stay focused and remain focused, feeling fewer emotions, with a simplified trading plan for the day.

So far I have avoided big losses but have avoided big gains. I can't imagine having a positive expectation, long run, without big windfall days. I suspect this to be the case, but I am not certain. I need to focus on this aspect of my trading, more than anything else.

Here are my charts:



Trade 1 was recognition of a major trend, maybe late recognition on my part. Hit my profit target, and was out. Trade 2 was a botched signal from crazy 2ROC divergences on the 60m chart. I exited knowing I f&%'d up real bad. And when I looked into I realized that those 2ROC divergences can go on for quite a while in a strong trending market.



Trade 1 was a long signal and I thought there was a good chance that crude could start trending heading into the end of the day. A few bars later I thought it was clear that the best I could hope for is a trading range. I pulled the ATM target to where price was and exited on a limit order.

Salao 

Lesson 2. ROC divergences can last a few bars longer than initially anticipated. I definitely shouldn't use 60 minute 2ROC to time fading a strong move (as was done in trade 2, ES). ... So far I have avoided big losses but have avoided big gains. I can't imagine having a positive expectation, long run, without big windfall days.

A note on interpreting momentum-type oscillators, like ROC: a divergence with price only means that the rate of advance/decline is changing, not that price will reverse. So on your ES chart you had multiple divergences, but price just leveled off a bit before resuming its trend. You will always want to take into account the trend, and look at the indicator as just showing you that it is slowing down or speeding up, which is all it tells you. This is valuable information, but does not really predict what will happen next. One thing that can easily happen in a trend is that price slows down into a range for a while and then resumes in the same direction, which is what happened here.

Also: fading a trend will eventually work (all trends eventually end), but is often not the best idea. They tend to run you over.

From a trading standpoint, the fact that you got only a piece of a big trend day can be exasperating, but (a) you got something, and (b) there were people who faded the trend every step of the way up, and got creamed. You were in group (a) and not in (b). This is a good thing.

Bob.

bobwest 

You will always want to take into account the trend, and look at the indicator as just showing you that it is slowing down or speeding up, which is all it tells you. This is valuable information, but does not really predict what will happen next. One thing that can easily happen in a trend is that price slows down into a range for a while and then resumes in the same direction, which is what happened here. Also: fading a trend will eventually work (all trends eventually end), but is often not the best idea. They tend to run you over. Bob.

Well put Bob. When swing trading stocks I would use these divergences more often with higher success. But with higher leverage, I am finding out that there are more nuances to all of these things. Thanks again!

Decided to trade on sim today because I was summoned into the office. But before heading in, I was able to do this for +4t on ES:



My morning read was a bias toward a trading range day, or possibly a slightly long bias. I was shaken out of this trade after that 600am rally did not take out the previous globex rally high (240)...and I had to head into the office so I closed. And I'm the weakest of weak handed traders. Charlton Heston would be ashamed. Lessons learned were:

1. A good entry is only materially good when you let it run and let the probabilities take care of the rest. I entered on what I presumed would be the lower part of a trading range. I based that on that large bull bar at 535 that had no follow through...maybe a bad read. I had also determined that if there was going to be a breakout, the direction would probably be up so this entry would be suitable for an upside breakout. It was also not a terrible spot to be in case it broke lower.

2. Still need to hang onto these trades longer. I'm even weak handed in sim! I keep finding reasons to take these trades off early. Like: I have to go to work. But I had an ATM strategy deployed so I could have let the probability play out. My focus is on this.

And that's about it. Trading might be intermittent here...work's going to tie me up. But I'll sneak in a few trades here and there.

I had a long setup on ES that I took on sim before heading into work. There was a pullback bar (600) on the 30m chart that was followed up by a strong bull bar that went up over the March value area. The 700 bar on the 30m pulled back and then rallied up over the previous bar and the March value area. Price action on the 5m chart supported my rally thesis so I took a long at the 640 bar on the 5m chart. ATM strategy was in place before shutting down and heading to work. When I got back on my desktop at my home office my closing order executed at this time and not my profit target. I'm not sure why it didn't execute at my predefined profit target but it worked out OK. I'll have to look into why profit target order did not execute until I opened NT. The result: +39t.

Lessons learned:

1. What happened to my profit target order? I'll need to investigate this. So it's a lesson in the making.

The chart:

This entry is a day late. Too much trading put me behind at work...which put my journaling on the back burner. Trading range day's have been very tough for me. - 27t on ES.



I think trading range price action exploits three problems I have been having:

1. I feel too much emotion when trading. Large bars and long tails become a big problem when you are not thinking clearly.
2. Over trading. This is probably due to problem number 1. I think this can be over come by further study of trading range market behavior.
3. Lack of experience trading. Study and experience are needed to get through these type of days without the world's finest financial institutions handing me my a%! in a brown paper bag.

Even though I paid up today I became hyper-aware of these issues.

7 trades were taken on the ES, 5 winners and 2 losers, +28t. The morning trading range roughed me up a little bit but I came out of it pretty unscathed and up 2 ticks. Trades 2, 3, and 4 should not have been taken and pretty much represent my challenges in trading ranges (overtrading, emotion, etc.) The 850 breakout bar tested the October-November-December highs and provided a nice little rally to climb on. My last trade of the day was a short on low momentum and I figured the bulls were done for the week. After that I was done. I had made back my losses from yesterday (and gained a tick) and I wanted to be a winner going into the weekend .



Lessons learned:

1. Trading ranges are exploiting my emotional trading. If I can clean this up I might stand to make a few bucks.
2. Will study trading range price action this weekend.

Hey Salao,

hope everything is going well. haha by the looks of it; it is

so ive noticed something in your posts that i wanted to ask. it seems like your indicators are always changing around with the one exception volume. is there a reason for this? this is just out of curiosity on your style. because i mainly stick to stochastic and find that when i look at various indicators i get overwhelmed with info and was interested in how you keep your cool with all that info?

TravelingSalesmen 

Hey Salao, hope everything is going well. haha by the looks of it; it is so ive noticed something in your posts that i wanted to ask. it seems like your indicators are always changing around with the one exception volume. is there a reason for this? this is just out of curiosity on your style. because i mainly stick to stochastic and find that when i look at various indicators i get overwhelmed with info and was interested in how you keep your cool with all that info?

Hey TS...all is good it's friday! Now that it's DST I'm looking forward to my Friday ritual of backyard+brewsky+stogie! I am fairly new to futures trading so I did some experimentation with a variety of different indicators. Most of them led to absolute wreckage but some of them were interesting. I liked VWAP and the donchian channel, not together of course . But in the end I stuck with my 310 and EMA20 on a five minute chart. For context I look at the 60m, daily, and monthly. I also use volume profile on a 30m. Probably pretty standard stuff. I rarely get overwhelmed by analysis but I do get confused by what I see (fairly often). Enjoy the weekend!