very nice thread and a gob well done.
i have one question my friend about the es contract you
put and lost.(i lost some money myself as well.).
you placed the contract at 1141.00 and the ES moved
in you favor at around 1145.00.then it turned down and stopped you
out.what is your profit target?5 points?

and if it is so,then seeing that it moved all the way to 1145.00 but
never had the power to go up why didn't you close the contract
with a smalli profit?

thanks in advance for your reply.

327trader 

very nice thread and a gob well done. i have one question my friend about the es contract you put and lost.(i lost some money myself as well.). you placed the contract at 1141.00 and the ES moved in you favor at around 1145.00.then it turned down and stopped you out.what is your profit target?5 points? and if it is so,then seeing that it moved all the way to 1145.00 but never had the power to go up why didn't you close the contract with a smalli profit? thanks in advance for your reply.

I was targeting 8pts but the "normal" entry would have been a 6.5 pt target having entered right above the 1st hour highs. At 3+ points above the 1st hour highs (the little blue line) I would have cut my stop in half but it never made it that far.

Tuesday, September 27th, 2011 - No gap trades today, we opened well above yesterday's high (U-H zone) and that was not a favorable looking setup so I avoided taking a losing trade.

The first-hour guides looked good on a break of the morning lows, target would be about 1/2 gap fill, which is very realistic. I put in a sell stop order to enter short if we break the first-hour lows, but today is so bullish I doubt we'll ever get down there. We'll see if it works out. Meanwhile, the high breakout looked positive too, but not as strong as the low breakout as some of the ETFs did not confirm the odds in the futures and the TF favored a high fade instead of a high breakout, so there were too many conflicting factors to take a high breakout. However, that would have been a winning trade.

...later...

I forgot to cancel my trade before I left for lunch. Just my luck it looks like all of the intraday gains were wiped out in the last hour and it came all the way down below the day's range, filled me short, then it exited when the market close for a loss after an MFE of 25 ticks (target was 46, had I been watching the trade I would have tightened my stop for a smaller loss, grr)

TF: - 40 ticks

Wednesday, September 28th, 2011 - Gap guides were weak in the D-OC zone and the gap was small so I didn't fade the gap.

Still upset with my poor execution yesterday, I decided to continue with my plan, just to execute better.

Today I did short the TF below the first-hour lows. I missed the initial breakout but re-entered on a retracement. I got 90% of my target reached but was eventually stopped out and break-even + 1. Amazingly, the low of my move was 1 tick above RTH highs of 2 days ago. Need to watch these levels more I guess. I'm not happy I had a +43 tick trade turn into a +1 trade.

TF: +1 tick

...later...

I saw later that it eventually was a winner, without hitting the original stop. I'm not sure I want to trade these totally mechanical, the losses are psychologically damaging, probably because I am trading too large of a position size in this account, even with just 1 contract.

Thursday, September 29th, 2011 - No gap trade, I didn't get an open in a zone I wanted. The gap did fill nicely though without me.

The FHGs in the TF looked pretty good for a low breakdown, and the NQ confirmed the TF, but the QQQs contradicted it with a low fade, so in my mind that cancelled it out, so I didn't trade it because no other futures market supported it. It did the same thing as yesterday: broke down, almost hit the target, retraced all the way to 1 tick from a 60 tick stop out, then turned around south for another winner that I missed.

I did a SIM S/R trade in CL. It was near the close so I was hesitant that the support would not hold into the close as CL traded inside of it's overnight range all day and we usually get a big move into the close that could break through. I entered long after it went into the support zone and exited, with a poor entry, then it went back in and made new lows, stopping me out. I didn't execute it well and I haven't really formulated a trading plan for these types of trades yet so I'll be SIM-ing this until I do.

NO TRADES

The webinar on Wednesday went well. Thanks for all of those that attended and asked questions. And I kept it at 90mins!

Friday, September 30th, 2011 - The gap guides in 3 indexes (except the ES) were very favorable, and the end of the quarter is usually bullish due to usual "window dressing". However, with the current climate, being in stocks, even good stocks, must not be popular right now, so there was no big demand to put cash to work before the end of the quarter like we'd normally see. Therefore, I never got a strong enough bull move to fill the gap, and it rolled over into the close to stop me out.

This left me with a small loss for the month. This was not how I wanted to end my month. I seriously considered stopping trading on the 13th and 23rd, when my monthly gains were over $1,000, but I didn't want to give up the chance of being in the middle of a string of winners. Do any of you guys have monthly equity stops, where you will stop trading for the rest of the month if you reach a certain equity level for the month?

NQ: -81 ticks

shodson 

Do any of you guys have monthly equity stops, where you will stop trading for the rest of the month if you reach a certain equity level for the month?

Equity based trading isn't a bad idea. If you look at the Ducman thread there was a reference that I posted on there a few weeks back about equity based trading.

Basically you throw on a moving average of so many days and if your equity curve drops below this 20-day (or whatever) then you go sim until it works out.

I believe no matter what system you trade, you will have conditions that are not 'the best' until you adapt to them. If you follow the 20 day MA of equity curve, then you will end up stopping the large drawdowns.

Aren't you equally at risk of being whipsawed by the MA, just as it can happen with normal trade entries?

Monday, October 3rd, 2011 - I had trouble with my trading server late last night and I was too tired to drive down to the co-lo to try to fix it so no gap trade. The gap trade was a 5pt winner (ES) but per the gap guides I would have avoided the trade.

I was stalking AAPL into the close today. I was tempted to buy a call spread ahead of the Oct 4th Steve-note re: iOS 5 and iPhone but the market was so bearish. However, if it gets down to 353, which is where the 200MA and major swing low have confluence I'll buy without blinking. I was considering getting out to the November strikes. That gets me through earnings in a couple of weeks and a good chunk of the Christmas rally. However implied vol was 50+% and you had to get pretty far out of the money to get a 1:2+ risk/reward and that's hard to envision when the market is dropping like a dead weight.

Tomorrow night is our Meetup's Book Club.

Adamus 

Aren't you equally at risk of being whipsawed by the MA, just as it can happen with normal trade entries?

Possible, but it is a risk worth taking in my opinion. What I have seen when developing mechanical systems is that they tend to go into 'not working any f-in longer' stages.

These stages can be temporary or they could be almost permanent (rare) but by employing the 5MA or 20MA to your equity strategy then you will most likely eliminate strings of losers.

I believe that market conditions are constantly mutating and very fluid, so when you go to SIM after 3 days of bad trades, and you have one good day, one bad day, one good day, one bad day, then that could be enough to whipsaw you, but I believe it to be unlikely.

Usually you have win, win, lose lose lose, win, win, win, win, win, win, lose, win, lose, lose, lose (or something like that)

I Like the concept for mechanical trading and believe it could make all the difference in the world for some systems.