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Zimmer's Journal: Naked Chart Reading


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Zimmer's Journal: Naked Chart Reading

  #71 (permalink)
 
mtzimmer1's Avatar
 mtzimmer1 
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Trying to follow my rules which include quitting at 12 but then I see this setup that just happened man!
That worked out really well.

ES and NQ at mid. YM lagging as ES and NQ move higher. Anticipating price to roll over and drop. Oh well. More opportunities to come as always.


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  #72 (permalink)
 TraderRich 
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mtzimmer1 View Post
Ok so this morning I had a bearish bias.

Hey Zimmer,

Thank you for posting a journal to shares your thoughts!

I am wondering, when you mention the quote above, which part of the chart give you this direction or how did you come up with this bias?

Thank you!

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  #73 (permalink)
 
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 mtzimmer1 
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TraderRich View Post
Hey Zimmer,



Thank you for posting a journal to shares your thoughts!



I am wondering, when you mention the quote above, which part of the chart give you this direction or how did you come up with this bias?



Thank you!



First thank you for reading my journal in such great depth! I appreciate that.
Second I am responding from my phone so please pardon the basic charts I will be attaching to this post.



Let’s look at the big picture. The day in question is circled in gray. We can clearly see that a long rally has rolled over at the top and begun to sell off.



From the high in question we had an impulsive swing lower. Then we had a retracement of this swing. (The days preceding the circled day.) now top this off with a gap up and that is a recipe for a great short in my book. Of course that didn’t end up playing out as I planned, which is why it is important to be flexible - a skill I will always be working and improving on.

Thanks for your inquiry and I hope I have answered it sufficiently!

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  #74 (permalink)
 TraderRich 
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mtzimmer1 View Post
Feel pretty bad about today's session.

Lets break down the trades:

Trade 1
Market gapped down big overnight, I expected to see bulls come in to at least partially fill the gap. As soon as we got a bullish break of the previous swing high I entered. Immediately stopped out. Price moved down so quickly that my stop slipped by 7 cents. -1.08R

Trade 2
Well the long didn't work, so let's reverse. Trade went in my favor initially but did not break the previous swing low, which is my first target usually. I tightened up my stops and got out of this one with a small loss. -.12R

Trade 3
I still believed in the long and we had some strong bullish action which broke the previous swing high that I had used for Trade 2's initial stop. I believed the bulls had the market by the balls here and entered at the 50%. Price meandered its way lower and tagged my stop. -.66R

Attachment 266126

What I did well:
Despite today being a tremendous losing day I feel that I did a few things well:
-I entered without hesitation. (maybe a little too trigger-happy today. I am prone to bouncing between extremes.)
-I trusted my trade and made no attempt to move my stops in a fashion that violated my rules. (I probably could have tightened my stops on Trade 3 to minimize the loss if anything.)
-Trade management side of things was dialed in today. (not much to manage when your initial stop gets hit.)
-Deciding to quit early after the equivalent of 2 full stop outs as per my rules: Daily Limit.

What I NEED to IMPROVE:
-Entry criteria. The past two days I have taken unwarranted trades with predictably undesirable outcomes in an attempt to eliminate my hesitation.
-The past two days have been my worst trading days in the past two weeks. I believe this is because there have been
no reference areas that price has interacted with such as low volume nodes or previous days highs/lows/closes.
-Deciding not to trade when my analysis is not accurate.

Overall I feel the past two days, while difficult, have been very valuable. My goal for tomorrow is to focus on a high quality setup and execute on that setup with no hesitation.

Results:
3 losses
-1.86R

Hi Zimmer,

Sorry to read you have such a bad day on this day.

I have another question.

You had bearish bias based on the correction off its high on the daily chart. Although it had a gap down, were any others thought that made you changed your bias? Shouldn't the gap down indicate your bearish bias still intact and should short on the pops?

Thanks!

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  #75 (permalink)
 
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 mtzimmer1 
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TraderRich View Post
Hi Zimmer,

Sorry to read you have such a bad day on this day.

I have another question.

You had bearish bias based on the correction off its high on the daily chart. Although it had a gap down, were any others thought that made you changed your bias? Shouldn't the gap down indicate your bearish bias still intact and should short on the pops?

Thanks!

When I state my bias in this thread I am referring to my bias for that particular session only.
In this case we did gap down big but it was still above the previous swing low. I fade gaps by default when the market is in a range because the gap fill plays out so often. Occasionally it doesn't and you get stuck with a day where you're on the wrong side of the market. It happens.

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  #76 (permalink)
 
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 mtzimmer1 
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I feel both upset and frustrated with today even though I know I need to keep my emotions out of my trading. July is not off to a great start. 4 losses and one break-even despite following my rules with better adherence than I did in June. It is discouraging to start the month with this loss streak but I need to remind myself that it is most critical to stick to the rules during periods of drawdown.

Today's trades were both great setups. Huge R:R. Stopped out of both. I'm upset because my rules didn't work. My rules work really well in mean reverting markets. Ex: market trades up in the morning, runs into a key level I have driven and then reverts to the mid of day. Those are the types of market where this system will really make money. My problem in the past few days has been these persistent trends. I do not know how to forecast the likelihood of trend continuation. I don't allow myself to buy late into a trend because I feel I am getting a bad price and the action is more likely to change direction the longer the trend persists.

Trade 1:
-Screenshot chops off the overnight session where the beginning of my fib tool is drawn from.
-Bat pattern happened to complete exactly at the ATH on NQ today. This seemed like a no brainer to me....
-Had a trigger and took the entry.
-Price stopped me out by 2 ticks and the plunged. Always irritating when this happens but you have to put the stop somewhere right?

Trade 2:
-I expected price to really drop here.
-NQ failed to make a new HOD but both ES and YM did. Maybe this should have been an indication not to short.
-We got a trigger and I entered as the first setup was still intact.
-Stopped out and price proceeded to rally all day into the close.



Results:
2 losses

Self-Eval:
Both setups were valid and both entries were good. Could I have exited the second trade for a profit on the first leg down. Yes. But I was expecting a large move down. Maybe I should actually try the whole aggressive trailing strategy. It would certainly increase win rate, but decrease the avg win size. 75%

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 mtzimmer1 
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Watched the session today. Had some setups but no triggers. Oh well. Ending the week with a perfect losing record!

Next week I will continue to adhere to my rules and kick some ass!

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  #78 (permalink)
 
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 mtzimmer1 
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The loss streak continues. This one was mostly my own fault.

Trade 1:
I had the 830 level on the chart as a potential entry point. Boy would that have worked out. I still don't trust my levels enough, and I have no idea where to place stops, so I don't enter blind at my levels but instead watch and see what happens there. If I get a trigger then I enter. I didn't get a trigger and this sucker plummeted. I felt FOMO and entered the next setup I got even though the move was over. Got what I deserved on this one.



Trade 2:
Impulsive. The fact that this impulsive trade was my first win in July is kind of a bad thing. Oh well.

Trade 3:
This is a continuation trade, that is now part of my rules. Problem was we were trading into the LOD as well as a low volume node on both NQ and ES. This was silly. I bailed at BE per my rules.


Bad day. The only way I can end this loss streak is by adhering to my rules strictly.
1 win, 1 loss, 1 BE, -.2R

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 Fluid Fox 
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mtzimmer1 View Post
The loss streak continues. This one was mostly my own fault.

Trade 1:
I had the 830 level on the chart as a potential entry point. Boy would that have worked out. I still don't trust my levels enough, and I have no idea where to place stops, so I don't enter blind at my levels but instead watch and see what happens there. If I get a trigger then I enter. I didn't get a trigger and this sucker plummeted. I felt FOMO and entered the next setup I got even though the move was over. Got what I deserved on this one.

Attachment 267648

Trade 2:
Impulsive. The fact that this impulsive trade was my first win in July is kind of a bad thing. Oh well.

Trade 3:
This is a continuation trade, that is now part of my rules. Problem was we were trading into the LOD as well as a low volume node on both NQ and ES. This was silly. I bailed at BE per my rules.
Attachment 267650

Bad day. The only way I can end this loss streak is by adhering to my rules strictly.
1 win, 1 loss, 1 BE, -.2R

I see the "markets always right" (~= "Got what I deserved on this one") attitude in your first paragraph. Not that this is the case for you at all, but it reminds me- and I want to get my thoughts down before I forget and feel like philosophizing a bit; I developed a weird, distorted attitude with my trading where I thought that if I was wrong, it was totally my fault- and in some contexts and respects, it was- but now I think that that's a fallacious way to look at it. Now I see it as: I have a strategy that is consistent in and of itself and I apply it to the market, and it either works sometimes or it doesn't- whereas before, I vaguely traded and left the door open for my emotions to take hold, because I was lazy when it came to establishing a strategy and behaviorally it was satisfying to get that occasional winner. So, If I lost a trade, I thought I did something wrong, and I would change my actions with the next trade unconsciously via emotions, and sometimes downright by my own word. To be accurate and fair, I traded terribly because technically I was off, but there were periods of time when I did well and felt on top of the world. The nature of this game doesn't respect that element of your experience, and it seems you're doing well in that regard: "The only way I can end this loss streak is by adhering to my rules strictly."- But, losing streaks can and will distort your thinking, and will cause you to do things you ordinarily wouldn't do. Not because you're stupid, but because you're wired to react that way. This is where the impulsive trades come in, this is where simple rules get broken, and where bad habits become the norm.

The most important thing is, don't make a habit of breaking your rules. The more you do one thing, the stronger the proclivity to do that thing gets. You can say or establish that you're not going to break your rules, but the habit of doing the wrong thing can and will out-power the higher idea in the moment, if it's strong enough. If you've done it enough. I think the best thing a person can do while on a losing streak is to take a break, but I'm not going to recommend that to you because it's not my place as I'm a noob, it's the beginning of the week, I can't read your mind or your emotions, etc. Just be aware that the downward spiral is a real thing, and it happens to the best of us, so stay mindful and truly act with reason. We're right behind you!

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 mtzimmer1 
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As always, I thank you Zach for contributing your insight. These interactions build the strong community we all benefit from!


Now I see it as: I have a strategy that is consistent in and of itself and I apply it to the market, and it either works sometimes or it doesn't- whereas before, I vaguely traded and left the door open for my emotions to take hold, because I was lazy when it came to establishing a strategy and behaviorally it was satisfying to get that occasional winner. So, If I lost a trade, I thought I did something wrong, and I would change my actions with the next trade unconsciously via emotions, and sometimes downright by my own word.

I have been lazy in adhering to my strategy. Before tomorrow's session I will re-write my trade plan explicitly, to allow no room for discretion. With clear and stringent rules, I will have no excuse to blame rule-breaking on a loose interpretation of my trade plan as I have subconsciously done since I began trading. Winning trades always felt like I did everything right where losing trades made me think "well there must be a reason it didn't work." With a strict trade plan, hopefully I can eliminate this problem. Both losing AND winning trades should begin with indistinguishable setups. As you said, some work and some don't, but I should not fault myself for the losses and congratulate myself for the winners.



The nature of this game doesn't respect that element of your experience, and it seems you're doing well in that regard: "The only way I can end this loss streak is by adhering to my rules strictly."- But, losing streaks can and will distort your thinking, and will cause you to do things you ordinarily wouldn't do.


This is extremely true. I need to actually adhere to my rules. Not sure how many times I have to say that before it becomes true.



The most important thing is, don't make a habit of breaking your rules. The more you do one thing, the stronger the proclivity to do that thing gets.


This is gold. The downward spiral is a very real thing. I haven't run the stats yet but I believe that over 90% of my losing days begin with a losing trade. Clearly my judgement becomes clouded when I feel pressure to get out of the hole. This shouldn't matter. My job is to execute my edge every time that it appears and allow the results to take care of themselves.

Thanks again Zach. I will write my trade plan and post it here in the thread as an additional accountability measure.

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