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Diary of a simple price action trader


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Diary of a simple price action trader

  #121 (permalink)
 Miesto 
Monte Carlo, Monaco
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Mich62 View Post
I am not there yet :-(

Thursday August 13th resulted in a loss of -47.75 pts after a roller coaster ride.

I went from 0.00 to -57.75 to +12.25 to -4.00 to +15.25 (highest of the day) to -13.00 to +1.75 to -21.50 to +1.50 to -57.75 to end the day with -47.75 pts.

Did one trade in the MES for +3 pts because I felt the MNQ was more volatile as normal (which wasn't) and I had a difficult time to read the price action of the MNQ. I hope a detailed review of all the trades tomorrow will reveal what mistakes I've made and why I had difficulties reading the price action. I also hope to find an explanation for the wild swings in PnL which I don't like at all.

I missed the webinar "Dealing with August burnout ..." with Linda Raschke but will certainly watch it later because I think I can use it.

200813 US session trading recap.

I am really convinced that learning by doing is the way to go with trading.

Thursday August 13th I experimented a bit with some things. I expect that to be (one of) the reason(s) of the losses:
1. I payed more attention to the 1m and 5m chart (for direction and HTF levels)
2. I scaled up and gave some (with-trend) trades more room in an attempt to 'manage' the trade (building and managing a position)
3. I scaled-up in contracts in an attempt to gradually increase position size.

Trades (quite a list):
1. Long PB. Good entry, closed too early. Stopped BE. (MFE=4.50)
2. Re-entry long. Late entry, sold at buy spot (-7.50) (MFE=2.75)
3. Re-entry long for (at least) a test of the high. Upthrust last swing high forming double top. Losses are getting bigger (-9.25) (MFE=3)
4. Re-entry long. In a range, after double top unable to reach the high, below ema20 (on a PB) after wide bear bar. Is really a short entry for a test of the open / low. Closed way too late (-23.25)
5. Long. Hold on and gave up 11.50 pts (-2.25) (MFE=11.50)
6+7. Short. Hold on and gave up 11.50 and 7.50 pts (-5.75 -9.75) (MFE=11.50 and 7.50)
Total for now after 7 trades is -57.75
8. Long ascending triangle
9. Scale-in (+13.00 +7.25)

In trying to catch a bigger swing (not very smart in a sideways market) I gave up more than 40 pts of paper profit (MFE = 40.75) in total on the losing trades. Instead of taking profit they ended with a loss. The loss would be (much) smaller if I would had taking some profits (and eliminated trade 4 below swing low for max 10 pts loss instead of -23.25).

If the trend does not continue (no newer highs, price is unable to reach channel line) then we are ranging! When ranging most breakouts and trend following setups like PBs will fail (to continue). Market just gravitates up & down. Mean reversion (MR) (back to ema20, mid-range or other side range) works better. So, it's important to keep an eye on market structure.


10. Entry taken from 1m & 5m chart without taking the 10s 'overbought at channel line' condition into account. It's okay to take entries off the 5m but then my stops are much wider (based 5m). I should use the 5m for direction (long or short) but time my entries on the 10s and possibly time my exits on the 5m.
11. Scale-in on PB
12. Scale-in. Building a position. I believe price ultimately will get higher (based on 9:40 5m PA)
Sweating like a pig. Price tests low of 9:40 5m wide bull bar. The trade is way out of my ordinary risk parameters (with 3 lots MAE = 33.00). Just trying to hold and manage (and hope I will not die of a heart attack).
13+14+15. Let's buy some more. Now 6 lots long.

Scaled-out for 0.00 -0.50 -0.25 +10.25 +14.00 +14.25 for a total of +37.75 pts.

A real trader would build a position but when it's in a profit would hold on and ride it all the way up (to at least ONH).

I, the pseudo pro, seeing my (unrealized) PnL in the green after -37.50 in the red closed out for a 'Cum. net profit' of 0.25 pts. Pfff...


16. Long trying to get back in. Closed too early (-3.50)
17. Re-entry long. Again closed too early (-4.25)
18. Re-entry long (+8.25)
19. Long BOF (with-trend). Closed BE
20. Re-entry, again closed BE (-0.25)
21. Re-entry (on PB and buying). Closed near channel line (+5.25)
22+23. Long 2-legged PB
24+25. Scale-in long on BOF. No follow through (-1.50 -2.00 +4.75 +5.25)
26. Long low range. Closed BE (MFE=3.50)
27. Re-entry long on test low range (-1.50)
28. Re-entry long (-2.25) (MFE=3.25)
29+30. Long 5m PB. No signal on 10s, too early (-6.25 x 2)
31+32. Long again. Better entry. No follow through (+4.00 +4.25)
33+34. Short for another leg down (5m). Closed near swing low (+4.00 +5.25)
35. Long 5m PB (+1.75)
36. Re-entry long BE
37. Long, sideways and near prior swing high (-4.50)
38. Re-entry long, sideways and near prior swing high (-8.25)
39+40. Short on PB for test swing low (-7.75 x 2)
41+42+43. Long 5m PB. Closed at channel line (+4.24 +5.00 +5.50)
44. Long 5m PB. Hold on for a bigger move (5m). Closed BE (-0.25) (MFE=6)

It's not easy to get aboard a bigger HTF swing. On the LTF price makes wide swings up & down, good for scalping but to catch a bigger move I think I will need a wider stop.

45. Long 5m PB. (-1.75)
46. Long 5m PB (-3.00)
47+48+49. Short 5m bear bar for ema20 MR PB (-2.25 -1.75 -2.75)
50. Long 5m trend continuation (-6.00)
Market is sideways (on the 10s)
51+52. Re-entry long (+4.75 +2.25)

Scalping and trying to catch bigger HTF move (resulting in overtrading)

53. Short 5m, 1m and 10s PB. Confluence on 3 time frames. Great entry. Closed at swing low. This was the entry/trade to hold for a HTF target (+5.75)
54. Long 5m MR (-5.25)
55. Re-entry long 5m MR. Closed too early. Why close? This is not going to make up for the losers. Nice bottom picking though. (+3.50)
56+57. Long 5m buying tail and 10s BOF for MR (to 5m ema20). Against the trend. Bad entry, should wait for a PB (-8.25 x 2)
58+59. Short impulse/momentum down. Closed at swing low (+8.25 +7.25)
60. Long 5m MR
61. Scale-in on BOF. Closed early just above resistance (+4.75 +2.75)
62. Short PB. Not a good place to short near 10s and 5m channel line (just testing low). Closed way too late, why did I wait so long? (-23.50)
63. Short, bad entry near channel line, should wait for a PB (-15.75)
64. Long PB. Closed too late (-15.25)
65. Short, closed at swing low (+16.50)
66. Short, sideways (-5.25)
67. Long, sideways! (+2.50)
68. Short (-5.75)
66 t/m 68: Three bad (because sideways between 5m channel line and ema20) and unnecessary trades.
69. Short (-2.00)
70. Long (-0.25)
71. Long (-5.50)
72. Long (-4.00)
73. Long (10.00)
69 t/m 73: All bad entries in a sideways market, just trying, makes no sense.

Total loss for the day is -47.75 pts

Some thoughts, remarks and questions which came to mind while reviewing (to ask myself):
- I trade off a 10s chart to time my entry with a tight stop. The volatility on the 1m and 5m HTF is high(er) c.q. the range of the bars is too wide for my risk appetite.
- Trading off a LTF chart gives a lot of (false) signals, leads to overtrading, taking low probability entries etc. True or False? If true, how to avoid the pitfalls?
- Should I use wider stops? Or use stops based on volatility?
- I think my trading is good most of the time. What causes a loss (what am I doing wrong)? What causes a profit (what am I doing right)? And what can I do better?
- Which steps do I need to take to a) reach consistency, b) reach and maintain a positive expectancy, c) progress, d) to grow profitability?
- I believe markets are fractal. Based on what facts? What does this imply?
- How many trades do I need to make on a daily basis to be successful?
- By looking at the 10s chart I am looking different to the 5m chart in a sense that on the 10s chart break outs of highs/lows of 5m candles are more easily visible. The 10s chart shows more detail.
- To optimize risk/reward I want to experiment with LMT order entries near ema20 with extreme tight stops at the other side of ema20 or last swing high/low or channel line (10s chart entry timing).
- Which market conditions result in me being out of tune with the market? And which result in me being in tune with the market?
- How do I know when the market works for me and when not?
- How do the 10s, the 1m and the 5m chart relate to each other. Sometimes there is confluence between all 3 charts, sometimes not. Is confluence necessary (for a higher probability), for example an ema20 PB on all 3 time frames? Do I need all 3 time frames?
- Can I identify a best exit location?


Observations 5m chart:
- What strikes is the number of trades shattered all over the 5m chart.
- On the 5m chart there are some really good entries visible (see attached). In total some 15! Some I did take. I should examine these in more detail. Which trades were good and which weren't?
- How can I best time my 5m entry on the 10s chart?

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Attached Files
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  #122 (permalink)
 Miesto 
Monte Carlo, Monaco
Legendary Market Wizard
 
Experience: Advanced
Platform: NinjaTrader 8
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Trading: Futures
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Fractals

Nice example of a fractal market. Chart 1 is a 1m chart of the MNQ of August 14th, chart 2 is a 10s chart as part of the 1m with the same structure as the 1m.

One would trade both charts the same way. It really doesn't matter what time frame you trade, the only difference is the amount of profit and loss made.

200814_Fractal_1m_Annotated

200814_Fractal_10s_Annotated

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  #123 (permalink)
 Miesto 
Monte Carlo, Monaco
Legendary Market Wizard
 
Experience: Advanced
Platform: NinjaTrader 8
Broker: NinjaTrader Brokerage
Trading: Futures
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Thanks Received: 1,150


Best week so far since the start of my journal.

Every setback learns me something and gives me an opportunity to improve. I am happy with the progress I've made so far. I only need to perform the same act every day, keep losers small and gradually scale up in contracts.


200821_ Weekly_Analysis_YTD

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  #124 (permalink)
 loantelligence 
Syracuse, NY
 
Experience: Intermediate
Platform: Ninja Trader
Broker: Mirus Futures/Zen-Fire
Trading: NQ
Posts: 218 since Jan 2011
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https://nexusfi.com/attachments/304081d1597391137

I also trade the MNQ....1 contract at a time but add to it if I see the direction of the move using different indicators...looking for a 6 to 1 profit....1 contract profit 6 2...12 3...18 and so on...want to look into what you are doing to see if we can develope something...check out the attachment...this is what I use...I am using unirenko bars much like your 10s but faster..i have to delve into your trades.....what determines and entry in your system....i use smahist and TDI...

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  #125 (permalink)
 Miesto 
Monte Carlo, Monaco
Legendary Market Wizard
 
Experience: Advanced
Platform: NinjaTrader 8
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Trading: Futures
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loantelligence View Post
https://nexusfi.com/attachments/304081d1597391137

I also trade the MNQ....1 contract at a time but add to it if I see the direction of the move using different indicators...looking for a 6 to 1 profit....1 contract profit 6 2...12 3...18 and so on...want to look into what you are doing to see if we can develope something...check out the attachment...this is what I use...I am using unirenko bars much like your 10s but faster..i have to delve into your trades.....what determines and entry in your system....i use smahist and TDI...

This is really fast. When I look at your chart it would be too much (indicators) to look at and to interpret for me on such a fast chart. Maybe after some practice.

My entries are defined by my setups (under Ad E).

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  #126 (permalink)
 doyalalexander 
Dallas tx
 
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Hey @Mich62,

I an not new to trading, but am new to being serious about trading. I greatly appreciate the time and detail of your journal and will begin making mine more verbose and annotated as a result.

Thanks and nice progress.

//Doyal

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  #127 (permalink)
 Miesto 
Monte Carlo, Monaco
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Experience: Advanced
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200821 Trade Review à la Wyckoff

I thought readers of my diary maybe would like to see an example of a (technical) in depth review (of a trade going wrong) using Richard D. Wyckoff's (1873-1934) time tested principles. No need to buy expensive courses. All available in public domain (or through reading books) for those who are willing to do the work and put in the time.

In this example we can identify (re-)accumulation, Spring, Upthrust and Higher & Lower Time Frame involvement.

Some might think the 10s chart is too fast to trade off but look at the details it reveals (compared to the 5m). The move (trend up) to the high lasted 10 minutes (with possibilities to enter on a pullback). The re-accumulation phase lasted some 20 minutes (with ample possibilities to trade the edges of the range). This is real price action trading or tape reading.

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  #128 (permalink)
 Miesto 
Monte Carlo, Monaco
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200821 Pullback entry on the 5m timed on the 10s

This is an example from last Friday (August 21th) of a winning trade based on a HTF 5m pullback (PB), also a First Cross Buy (Linda Raschke), with entry & exit timed on the 10s chart. Where would you get in when looking only to the 5m?

Wyckoff principles at work: Accumulation, SC, SOS, SOT, Spring.

Also nice to see the triggering of the buy stop orders from the bears above the swing highs (providing liquidity) resulting in a rally.

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  #129 (permalink)
 loantelligence 
Syracuse, NY
 
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What is that indicator at the bottom of your chart.....

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  #130 (permalink)
 Miesto 
Monte Carlo, Monaco
Legendary Market Wizard
 
Experience: Advanced
Platform: NinjaTrader 8
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loantelligence View Post
What is that indicator at the bottom of your chart.....

It's a 3/10 Oscillator which is a modified MACD developed by SMR (you can download a free trading guide from their site).

The orange line is called the Fast Line (FL) and is a 3-period SMA minus a 10-period SMA (the difference between a 3-period and 10-period SMA).
The white line is called the Slow Line (SL) and is a 16-period SMA of the FL.

The indicator is used by Marty "Pit Bull" Schwartz, Linda B. Raschke (that's why it's sometimes called the LBR310 indicator), Chick Goslin (" Trading Day by Day: Winning the Zero Sum Game of Futures Trading") and many others.

You can download the LBR310 indicator for NT8 from the NinjaTrader Ecosystem.

You can download the indicator for NT7 from this thread and also find a presentation with setups by Christopher Terry, business partner of Linda Raschke at the time. You will find more info in the videos and writings of Linda Raschke or via Google.

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