Weekly recap

Though it's a profitable week with MES, my position sizing was conservative. I will ramp it up next week and I will also add SPY.

Have a good weekend everyone.

Missed profits are more harmful than losses.

I pay special attention to this as there are no metrics to identify missed profits in my P&L. Quantifying is even harder.

Example from yesterday.

1. My original profit tatget for short was 4131. Instead I pre-maturely got out @ 4135. That's 4 pts missed profit. Since I grabbed 31 pts in total, its very easy to overlook this lost opportunity. I am very mindful of this and working hard to fix this.

2. There is an even more hidden aspect to this theme. Easier to describe with a picture. My trading result from yesterday will help.



The blue horizontal line @ 30 was my expected Low of the Day and hence my profit target. However, ES went down another 20 pts and that's missed profits too. Hence, my homework involves re-analysing my thesis. In this case, my assumed ATR of 30 was wrong. Its based on my observations like low Relative Volume, flattish NYSE tick, seasonality aka Friday, +ve options gamma in a low VIX environment before opex. Now I have to go back to the drawing board to see all the tell-tale signs I missed.

My profit should have been 50, not 30 points.

Hope it makes sense

ATR based profit targets Vs Time based profit targets.

I have been battling with this dilemma for eons now. Since I was unable to resolve it, I have been doing both.

My SPY entries are from RTH open to close. i.e Time based exit or End of Day EOD exit.
My MES entries/exits are ATR based. (Limited success in the past but seeing huge improvement lately)

This week would have been brutal for my EOD exit strategy for SPY. 3 Doji days out of 5. Even the other 2 trend days have big tails, meaning, I would have given up a big chunck of my paper profit.



To get the best of both worlds, I'm in the process of developing a new execution method where I would enter/scale up quickly to 3 MES contracts. My 1st 2 exits would be based on 5 Day ATR, perhaps @ 50% and 80%. My final exit would be 150% or EOD to hit home runs. This is based on my observation of few patterns described below.

1. When price is oscillating around important pivots like 20 DMA, 200 DMA or big round numbers, chop is expected and hence ATR based exits would work better.

2. When VIX is accelerating or at elevated levels, then trend days are more likely and hence Time based exits would be better (on the assumption that trend days tend to close at extreme).

3. Breaking out from congestion zones (like the one we are in now for months) is likely to lead to trend days and hence time based End of day exits has advantages.

My signs are mixed today. This is mainly due to the fact that price oscillates around 20 DMA and the pinning effect of 4150.

I'm slightly leaning towards bears mainly because it was working last week and they are putting up a decent fight. However, still expecting choppy range and not married to my bias. May even reverse to bullish if ONH is taken out.

Long 4129.

Though I started the day with a bearish bias, my limit order @ 4150 was NOT filled. Once ONL was tested, my bias flipped to bullish as the risk reward became favourable for longs.

My desired entry for short @ 4150 is now my planned exit for my long.

Since NYSE is very bullish, it's actually tempting to double down on my longs. Perhaps, I will consider this once I bank some profits later in the day. Let's see how that plays out.

I'm dissappointed with myself for taking early profits.

Long from 4129 and just got out @ 4141 for +12 points. I know that my real target of 4150 is highly likely to be reached due to strong internals and was very patient during the long chop. However, boredom got the better of me and got distracted by cnbc news.

I know many traders follow news feeds and even trade on that basis but I have learnt after several years of misfiring that it doesn't work for me. I will never watch cnbc or Bloomberg.com when I am day-trading. Better stick to hub.com

What a sweet revenge

Long from 4137 and got out @ 4147 for 10 points.

I was surprised with the pace with which ES moved from 40 to 55 and then back down to 35. Not complaining as able to grab 22 points in total.

Probably end of the day for me.

Nice! I am still in a long in MYM from 33310, but price reversed just below my current first target of 33379 so I am still monitoring. I am thinking that price may try to make an upward move this afternoon, but was being impeded by a contradiction in moving averages between timeframes.

HumbleTrader 

What a sweet revenge Long from 4137 and got out @ 4147 for 10 points. I was surprised with the pace with which ES moved from 40 to 55 and then back down to 35. Not complaining as able to grab 22 points in total. Probably end of the day for me.

richw 

Nice! I am still in a long in MYM from 33310, but price reversed just below my current first target of 33379 so I am still monitoring. I am thinking that price may try to make an upward move this afternoon, but was being impeded by a contradiction in moving averages between timeframes.

Hope you were able to hold on to your winner. The reversal from YM 34450 (ES 4155) was pretty swift. However, once the 34300 mark was taken out, to shake off weak longs, it's clear that slow grind up to test the highs was the most likely option.

Despite missing the EU session downmove, I am glad that I got the bigger picture right in terms of choppy range with bullish bias. My initial long entry was at a decent location but my 2nd limit buy order was not triggered. Yet, the trade idea worked until a brief lapse of judgement which cost me 10 points in missed profit opportunity. However, I was able to get back my composure and I made it up in the final bullish leg. I liked the fact there was no revenge trade and 'really' liked the small MAE in my running P&L chart.

Nice work! We both had similar trading days today. It would be highly unlikely to trade every day perfectly, but we do our best. The most important things are to be consistent, be profitable, and continue improving.

HumbleTrader 

Hope you were able to hold on to your winner. The reversal from YM 34450 (ES 4155) was pretty swift. However, once the 34300 mark was taken out, to shake off weak longs, it's clear that slow grind up to test the highs was the most likely option. Despite missing the EU session downmove, I am glad that I got the bigger picture right in terms of choppy range with bullish bias. My initial long entry was at a decent location but my 2nd limit buy order was not triggered. Yet, the trade idea worked until a brief lapse of judgement which cost me 10 points in missed profit opportunity. However, I was able to get back my composure and I made it up in the final bullish leg. I liked the fact there was no revenge trade and 'really' liked the small MAE in my running P&L chart.