Thursday Jan 5, 2012

Late start again this morning.
Estimates made last night were off - usually I adjust them in the morning before opening - of course I was sleeping.

Yesterday, I settled on how to manage the barcharts portfolio -so that's done.

I was a bit disappointed that the gentleman I worked out the options strategy for on the high yield stocks didn't reply of say thanks - as it took quite a bit of time. However, this morning I realized it was a good strategy and therefore perhaps the work I did has come back.

I need to get better at time management. I'm getting too scattered again.

I'll go for a walk and collect my thoughts.

Sunday evening 8 Jan 2012

I slept for 12 hours last night - that makes 7 nights of 12 hrs.
I guess my body is recharging!

I am looking forward to this New Year.
On the 23rd of January the Chinese celebrate the start of their New Year. This year is the year of the Dragon and within the 60 year cycle this is the water Dragon.

Monday marks the beginning of week2 of 2012 and will be the first real full trading week.
I'm expecting volumes to pick up and the RTH ranges to expand.

With the holidays and other factors I'm really not sure where we are in the larger cycle but as mentioned if we top out in this area we should then be starting down with a head and shoulders formation.
However, there is so much manipulation in the markets we are better off waiting until the market confirms this.

Consolidation breakdown would measure to 1241

Wednesday 11 Jan 2012

Time management is my problem right now.

My New Year's resolutions included 5 points one of which is a walk each day.
A friend has kindly made me an old Xp computer - so as time permits I hope to get my important prgs installed and running. Many of my mainstay prgs don't run on this windows7 64 bit laptop and it won't allow me to load XP into a separate partition.

Everything seems to take so much longer on the laptop - and the Windows brand USB mouse is hurting my tendons - there is more clicking required and the clicks spring is too strong. Also this Microsoft USB keyboard isn't as good as my old one - one that someone had thrown away! LOL!

Grin and bear it!

Year of the water Dragon starts on the 23 of Jan!! Once every 60 years

The sequencing for the Taylor seems to be broken right now - in this high level choppy market.
Of course he made it for the grains market and before computers and globex so to apply it to ES might be a stretch.

Wed 17 Jan
I have found that there is only one thing that heals every problem, and that is: to love yourself. When people start to love themselves more each day, it's amazing how their lives get better. They feel better. They get the jobs they want. They have the money they need. Their relationships either improve, or the negative ones dissolve and new ones begin.

Loving yourself is a wonderful adventure; it's like learning to fly. Imagine if we all had the power to fly at will? How exciting it would be! Let's begin to love ourselves now.

Here are 12 Commandments to help you learn how to love yourself:

Stop All Criticism.
Criticism never changes a thing. Refuse to criticize yourself. Accept yourself exactly as you are. Everybody changes. When you criticize yourself, your changes are negative. When you approve of yourself, your changes are positive.

Forgive Yourself.
Let the past go. You did the best you could at the time with the understanding, awareness, and knowledge that you had. Now you are growing and changing, and you will live life differently.

Don't Scare Yourself.
Stop terrorizing yourself with your thoughts. It's a dreadful way to live. Find a mental image that gives you pleasure, and immediately switch your scary thought to a pleasure thought.

Be Gentle and Kind and Patient.
Be gentle with yourself. Be kind to yourself. Be patient with yourself as you learn the new ways of thinking. Treat yourself as you would someone you really loved.

Be Kind to Your Mind.
Self-hatred is only hating your own thoughts. Don't hate yourself for having the thoughts. Gently change your thoughts.

Praise Yourself.
Criticism breaks down the inner spirit. Praise builds it up. Praise yourself as much as you can. Tell yourself how well you are doing with every little thing.

Support Yourself.
Find ways to support yourself. Reach out to friends and allow them to help you. It is being strong to ask for help when you need it.

Be Loving to Your Negatives.
Acknowledge that you created them to fulfill a need. Now you are finding new, positive ways to fulfill those needs. So lovingly release the old negative patterns.

Take Care of Your Body.
Learn about nutrition. What kind of fuel does your body need in order to have optimum energy and vitality? Learn about exercise. What kind of exercise do you enjoy? Cherish and revere the temple you live in.

Do Mirror Work.
Look into your eyes often. Express this growing sense of love you have for yourself. Forgive yourself while looking into the mirror. Talk to your parents while looking into the mirror. Forgive them, too. At least once a day, say, "I love you, I really love you!"

Love Yourself... Do It Now.
Don't wait until you get well, or lose the weight, or get the new job, or find the new relationship. Begin now—and do the best you can.

Have Fun.
Remember the things that gave you joy as a child. Incorporate them into your life now. Find a way to have fun with everything you do. Let yourself express the joy of living. Smile. Laugh. Rejoice, and the Universe rejoices with you!

Do you wonder why I included the above in a trading journal?

Living life is a holistic process.

Each aspect of you combines together to from your life experience. It is from this framework and your currently state of being that you enter into each acitivity in your "external" world. Trading is one aspect of that.

You are a spiritual being, energy being, physical being and intellectual being.

The latter is in context of the other 3 aspects of you.

If you eat poorly and don't get exercise this impacts the electro-chemical enivronment of you, impact your emotional being and impacting your intellectual being.

This is how the above connects to the holistic you, and to a subset of that, your trading.

Friday 20 Jan 2011

Below is a 5 min chart of ES for today with price by volume (horizontal red bars on the right).
Today's range was 7pts < yest 8pt range.
This narrow range action is normal when teh ES pushes above a long-time resistance in into "New" high ground. "New" because in mean new in the last few months (we advanced past the round number of 1300 on Wednesday).

I have drawn horizontal lines for the HVA1310.75 and LVA 1306.75.
You can see that today it spent a lot of time in this area.

I don't use MP in my trading.
However, if I was to try a trade a narrow range day like today -then here is an idea.

1. Wait until 1 hour after the open to see if it will be a trending day.
2. If it isn't then wait for a price exploartion to be rejected. (Today the price exploration was to the down side and after making a low at 1304.75 it started to climb back up towards the value area - confirmed by the opening range).
3. After the trendline is cut by one full bar (indicator bar), enter (long in this case) at the high of the inidcator bar on the next price bar.
4. Use the middle of the VA (MOVA) as T1 and the HVA level as T2.

You can reverse with the same rules.
Stop would be the low of the indicator bar. When price advances to MOVA move stop up to VLA.

Steps in Daytrading
1. Pick one system suited to your personality and learn it well.
2. Create a replicatable trading plan.
3. Progress through 3 phases of trading
4. The necessity of an edge.
5. Money management - Stops, drawdowns and leverage
6. Trade failure
7. Understanding the parameters of your system and endogenous change - why it works - when it will fail.

5. Money management - Stops, drawdowns and leverage
Assuming you have established your trading system and you have determined that you do indeed have
an edge, then connection to money management is next.
Gann writes that you should never risk more than 1/10 of your capital on any one trade.

For the ES at the current time (Jan 22, 2012)
IB [AUTOLINK]Contract[/AUTOLINK] Information Center?
action=Details&site=IB&conid=81918684&detlev=2&sess=1327289759
Intraday Initial Margin 2,500
Intraday Maintenance Margin 2,000
Overnight Initial Margin 5,000
Overnight Maintenance Margin 4,000

Let us imagine a $10,000 account.
If we used the average daily range of 17 pts and a stop at 7pts max -> 7/17 (or 41%) then each
stopped out trade is a max of 7 * $50 =350. 10 stopped out trades is $3,500.
With initial margin of $2,500 + 3,500 = $6,000 we can use a rule of 6/5 * o/n initial for RTH
trades.
For O/n trades we might need 10pts max stop. 11 * $50 = $550. $550 times 10 trades = $5,550. Plus
the initial = $10,500 or approximately 2 times the the initial o/n per contract traded.