Levels and ranges in action

Its the levels

Or is it? In this case it sure seems that way. I arrived at the market as it opened. I took a quick look around and I saw that ES,NQ,RTY & YM had all put in a strong move up in early morning trading. I then went back to the ES and marked up the levels in blue from previous OLHC's. What I saw now was price 'pausing', or consolidating at a level, pushed by strong buyer aggression. As price crossed the level just after putting in a new HL I bought a contract.



This screen grab shows 'the tale of the tape'. I was able to stay in this trade until it hit its profit target, but at one point I had to get up and go make some coffee! I did move my stop higher, then back down to below the that low. This trade would have been successful even with a 1:2 bracket. 1:2 is the goal for these trades, but I'm still fuzzy on how we get there. It'll probably be something like cut losers quick. Here is how I have my monitor and charts set up.



As you can see, the ES continues to climb higher, so why stop at 10 points? Why 10 points at all? The answer is twofold. One, I have observed that there is at least a 10 point move in the majority of legs formed highs and lows on the 5- and 15-minute charts. Two, my profit goals are based on 10 points a week. All of this becomes 'worth it' to me for at least $500.00 a week. Not only that, but if you were to compound 10 points a week, you would be a millionaire in less than a year, but that's not the plan. I envision making these 10-point trades at a 1:2 on the weekly. Maybe I lose 1 and win 3, or even lose 3 win 3, I'm still in profit. Something like that. I'm working on a scale where 10-points a week is good, 20-points is better, and 40 points is a great week. I'll probably not trade over those 40 points.



My plan is to spend the rest of this week, and December practicing making these kinds of trades. Maybe come New Year I'll be able to start in earnest on the micros and build out a small account from there. Maybe I'll go the Top Step route. This trade performance for the week looks good, but it means nothing unless I can do this consistently. This is why I do what I do.

RTY kill box

Finding localized support/resistance.
I'm putting this chart in my trade journal because today I noticed some things that I do not wish to forget.



1. After a strong move to the upside that finishes just before 8:00 AM price reaches what looks to be the high of the day.

2. I'm thinking that after such a strong move higher there's bound to be some profit taking, so I start looking for a trade.

3. As price comes down off the high I start out by getting my range with the R:R drawing tool. So I get that drawn and see that I don't have the 'room' to make a 10-point trade before we hit the level below. I had already made a successful trade this morning, so I don't make the trade.

4. The next candle forms, heads higher again and price begins to consolidate. Had I placed a trade here I would now be taking heat, and would have eventually been stopped out before price made its next move.

5. What's interesting to me here is that the bracket that I had drawn also formed what looked to be S/R. No, it wasn't the bracket, but there was clearly S/R being formed as buyers and sellers duked it out.

6. This is pretty much how the rest of the day goes. Price goes on to fill the space between my sell line and stop loss. At one point price does close beneath the sell line, but the next candle takes price back into consolidation. A little later price breaks above my stop loss, putting in a LH that practically screams trade me.

7. Finally price make one last attempt higher, fails, and as it does, I draw a new R:R, this time higher. Now I have the room I need to put in that 10-point trade. Price closes beneath my new sell line. Next candle forms. It wicks up to the sell line, and then falls, gaining momentum as it does.

What I want to remember
A. This all happened on the 15 minute chart. I don't need to drop down to the 5 minute chart to get a tight entry.

B. Consolidation can be my friend.

Change

Things seem to be coming together quite nicely. I still don't have a set-up yet, and my discipline is horrendous, but I think that I've just about my head around the basics. Something 'clicked' for me this week. I think it was a combination of adding previous day OLHC, a swing trend indicator, and an understanding of #thestrat style price action. Whatever it is, I'm now able to find trades. It's like I've got a map, and it seems to be pretty accurate. Finding trades is one thing, initiating and/or managing them is another. On this, I think that I'm just about halfway there.

Today's trades are what I want my style to be indicative of. Today I came to the market, I participated, I left in profit. None of my trades were good. I yolo'd one, but it worked out, but none of my trades were random in any fashion, clumsy maybe, here's what it looks like in numbers.



I like what I'm seeing here. like I said none of trades today were perfect, but I did take what the market offered. I think I was able to do so with mostly price action and support/resistance. For me these numbers are proof enough that these concepts work, and I know how to use them. I don't expect these results to be typical, but I aim for them to be, or even better. I know what the odds are, but I now know I have the skill it takes to trade discretionarily.

Its 12:06 and the markets still moving nicely. The ES is making nice structure. I could have kept trading, but I know in order to survive and profit, I must show restraint. I must be patient, and anyway, I need to sleep. This is all very much a work in progress, but I am happy to report that progress is being made.



Now that I can read the price action, my charts are telling me a different story. Today I was able to profit from it. On the higher time frame's, we were ranging higher, still inside of yesterday's already tight range, so I had a bull-range feel for the day. Whatever my bias was, I just took the trades I saw. You never know what the day might bring, but from the higher timeframe analysis, this was to be expected, and I think that really helps me not get freaked out when I'm trading.

Lock down Mode Engaged

Bringing discipline filters online @ 12:11 MT 12.11.2021. Engaged.

It's about to get real.

michaelroth 

Michael,

I am enjoying seeing you make massive progress with your trading!

I just want to share one idea with you that I believe will help in your trading now that you are thinking in terms of levels.

Don't wait for "confirmation" or for a level to look like it is holding before you enter your trade.. enter RIGHT AT THE LEVEL, short or long.

Be a part of the order flow that establishes the level. You will get the best execution and lowest risk of adverse movements (cut losers quickly). Don't be afraid to set a limit order right at the level or a tick or two before and be filled as price touches the level.

I am excited to see more of your trades Michael, I believe 2022 is going to be incredible for you.

Power levels

I took this trade today based off a good-looking level from the daily chart. I bought the level as we came back through it on the five-minute chart, and this is the result. I think the momentum of this move was derived from this level, and had I thought about that before I made the trade, I might have held longer. At last, I was shook from this trade at $771.12 in profit, so not a bad day. Here it is on the 5-minute chart.



Lessons learned

Not all support and resistance are the same! I'm thinking if I want these bold, beautiful moves, I should be targeting only the best levels. To this end my mark-up consists of making my 5-minute chart a 240-minute chart and then marking the prominent swing high and lows where these correspond to the highs and lows of the day. These levels seem to be highly respected, and I really like them because they aren't subjective, they are in fact completely objective. Here is what that mark-up looks like.



Buy the level, obey price action

Here you can see that I bought at the level. My stop loss was a bit steep for the day at $637.50, but I was never upside-down on this trade. I could have, and should have held this trade longer. There was no indication in the price action that it was going to go against me, so the reason I closed the trade was fear, and we can't be having that. Still, I would rather be closing my trades early than holding losers. which I still do. but I'm learning. Here is how my screen is looking these days.



Still looking for that set-up.

I was calling them T-ball trades, but what I'm really looking for is my set-up, and I think what I am looking for looks a lot like what I'm seeing here. I think the important ingredients are all here, so it comes down to making the recipe enough times that I know it well. Today showed me the importance of momentum.

Each candle is a range

At least that's what I was thinking as I traded this morning. What I was really trading was the range and direction of this daily bullish inside bar. I wanted to buy the low of the daily candle. It took me a couple of tries. As I type the market is making a strong move higher. I was a part of that move, still could be, but I want to be done for the day and this is a great result. $1,196.98 on 4 trades in 2 hours.



A strong level will help you avoid fake-outs

And that's what I was thinking as my third trade looked to be failing, but after seeing short term level of support on the 1-hour chart, I averaged down 1 contract as close to the level and waited. I'm on the fence as to whether or not this is risky behavior, but today it felt like I was just working the day and the level. In the future though I think I would rather not. Whatever it is, it worked today, the level held, profited.



The white line here is the short-term level that I'm talking about. I My trades today were basically an exercise in managing this fake-out, which is not something that I was thinking about during the trade but became apparent as I worked the position. This is still not my set-up, but it is giving me a good idea of some things that I need to be looking for as I develop my trading style.

Wow your trading seems logical and concise! Excellent journal great transparency!

Sent using the NexusFi mobile app

Hold, God damn you!


And by 'you', I mean me. Its 9:30. I'm done for the day, and that's what I was thinking when I cut this big-ass runner short at 6 points with 2 contracts on. What can I say? I'm literally doing this while babysitting grandkids right now. So right now, I'll take what I can get. Here's what that looks like.



Not bad, in fact, I think its kind of... good. I drew the white rectangle at my markup, and the premise for the trade was the break of this range. I got shook early but worked my position to a daily profit of $471.98. 4 trades in about 2 hours.



Once again, I used my second contract to average down, giving me a position closer to the level break when I felt surer of my position and closed my trade when I was in my usual margin of daily P/L. This gave me an acceptable result for the day, but I have to question if I am cutting myself short considering the size of the moves that I am often getting in nice and early. Its a very real possibility that I am cutting myself short further down the line, but I think this is something that I can correct if need be.

Finally, by starting out and trading like I only have about 5 points to lose in a day I think is working for me. I think there is a good possibility that a good set-up for me could be trading around active levels, getting in early at the level when a bias is apparent, and modeling my trades with that 5-point stop loss always in mind. I'm now ready to start tracking these trades and plan to do so in 50 trade blocks.