I did terrible today on everything, ES & Currencies. I finally decided to drop everything but Euro & ES. CL and other currencies were just a distraction. Then I decided I was going to study previous trades and setups instead of watching the market crawl along. I said I'd only take good trades.
Results since the lunch break:
Trade 1: (hit 1st target and then stopped out when I moved stop to -4 for BE total)
Trade 2: (hit both targets)
Trade 3: (hit both targets)
What I'm learning is the key is for me to be really pick and only take the choice trades. Also Jeff's comment about a confluence of events was really helpful. The trendlines are very helpful.
I still have a hunch we can remove the two moving averages and the eco but I will keep them for the time being to see if I can continue picking out the most probable trades.
The following user says Thank You to cunparis for this post:
That's on my list for this weekend. When trading on tick charts I use 3 timeframes each 3x apart (233/699/2097). I trade the middle and use the lower for timing entries and use the higher for direction. But 3 timeframes is a lot to keep on top of and sometimes I spend 30-45 minutes "out" just because I'm waiting for the higher timeframe to line up with the middle (and missing potential trades during that time).
Then I read the feb thread and they're successful using 1 timeframe. So I'm thinking I'm complicating things.
Your anchor seems to be a good compromise. I watched a few minutes of a Viper video (they really got torn up to pieces in the my pivots forums, that was hilarious. and one of the guys doing the shredding is from here I think, not sure who).. anyway, their anchor idea seems to be similar to yours. So I've got some work to do.
I just read a gem from Feb and he said that you don't let your stop get taken out ever. He says that your success (using his system btw) is due to getting a runner which for him is 21 ticks. His trailing stop is 20, so that's basically 1:1 ratio but it's better than 1:1 due to the trailing stop. Anyway, he said the edge comes from cutting losers short and the runner makes up for all the little losses. I'm not sure how this translates to ES at least on our timeframe. He said 20 ticks profit & stop was used on ES too. He must be on a higher timeframe for that.
Here's the link to his post, he can say it much better than I:
There must be something messed up in my head because I lost money today and thought it was great. It made me look at what I did wrong and really focus. I did two things wrong today. First, I didn't focus on quality setups and second I did not obey my rules. I'll address my second mistake first because it is an easy one to discuss. I made a quick trade on CL. My setup for CL has been to trade breakouts/breakdowns for a quick trade (aiming for 10 ticks) and get right out. If the breakout/breakdown doesn't move in my direction virtually right away then I get out as it may just be a little shake n bake. Well I got in on a breakdown it moved a couple ticks in my direction and then just kinda floundered around my entry. I should have been out right there, I didn't, I lost money, nuff said.
The first mistake I made today was not focusing on quality setups. For me the setup is all about trading a breakout/breakdown into the wave of a trend. The most key part in my book is gauging the strength of that trend. I decided that I really need to look at the charts and design some more hard rules for what I look for in a trend that precedes a trigger. For the 6A, 6E, 6J, etc, etc the rules I require for a preceding trend are:
1. The move must be 30 ticks or more
2. This 30 tick move must be comprised of at least 3 candles. I don't want some single candlestick news driven monster.
3. The move must be dominated my the appropriate color. If not it is more of a sluggish move and not a powerful trend (I want to elaborate more on this rule but I haven't done so yet)
4. The pullback after the move must be at least 2 complete candles
5. The pullback must have at least 1 doji or candle of the opposite body color then the preceding trend
Btw, I switched back to 5 minute charts. Though they can get a little gross at times I do believe they prevent false setups.
Stops: I am still toying with this one. I will either use a 20 tick trail stop up until I hit my profit target or I will keep my 150 tick chart up and use swing points for stops. Or a combination of both.
I'm also working on similar rules for instruments such as NQ, GC and CL.
That's all I got right now. I don't expect these rules to prevent losers. Losers will happen no matter what but I do think they'll improve the quality of my trades, minimize losers and ultimately increase my bottom line. Much thanks to feb2865 at forexfactory for the thread he started on this very trading style.
The following 2 users say Thank You to Blz17 for this post:
We never had your rules as detailed as we now have them. That's very good and useful. Now, I have two questions;
1. After the 30 ticks move has been established, the "red dash line" is drawn at this point (i. e. at the level corresponding to the HIGH or LOW of the last candle/bar), which you refer to as the "Initial level I'm watching for breakout". If this line is broken (i. e. probably the first breakout), then the "red dash line" is accordingly adjusted; to reflect a new "level I'm watching for a breakout". Am I correct ?
2. What criteria do you now use to draw the corresponding "red dash line" in the OBV panel ? Is it the volume of the candle at the "level I'm watching for breakout", or some other parameter(s) ?