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I recently decided to jump into price action trading. My trading/investing experience is fairly limited. I've essentially looked at technical analysis on and off the past 5 years but never really did anything with it. My goal is to be consistently trading profitably within 1-2 years and be pulling it at least $500-$1000 on average a day within 5.
I'm going to do simulation trading trading until I have proven that I can pull in consistent profit over an extended period of time. The criteria I have chosen is ripped directly off of Cadaver's price action trading blog: Nine Transitions
This is my first official simulation. I have done two prior but I didn't know that Ninjatrader losses history of replays between sessions. In any case I was just playing with the software during that time. Please correct me if I'm using the wrong terms in my evaluations.
Simulation 1
Date: 6/13/11
Notes: Before starting the simulated day I looked at the daily and weekly chart.
Daily:
Nearing possible low of a trending trading range. Previous day was a pullback so if trend continues don't short near low of range.
If range is not broken expect further down? Look at weekly for more information
Weekly:
Has been in an upwards trend since July. It looks like it is possibly forming a double bottom with a March bar. Ema also curving down. Expect at least two legs down if broken?
I accidentally erased the window that drew all the trades I made. However, I was able to get it to regraph from the ninjatrader performance result window... but it is in 1 minute format instead of my 5 minute time-frame (it wouldn't switch to 5 the option was greyed out). Next time i'm going to make sure I take a screenshot at the end of the session before doing anything else.
I created an excel sheet tracking my daily avg profit/loss and made a graph for profit over transactions.
Evaluation of session:
Went in with 2 contracts per trade. Generally scalped 1 for at least 1 point and attempted to swing the second. Had 1 tick stops above entry bars and moved stop if strong move to break even or lower to capture strong move points.
I planned on going into the session on only trading A2's (which i'm practicing) but I saw a lot of pullbacks and 2 legs down that appeared to have good chances of being successful.
I have a feeling I over-traded but I'm not sure what even a standard trading day is supposed to be like.
I'm going to try and write my setups on the chart next time it seems very messy.
Previous day was a major move down. Expect gap open. Still near possible low of a trending trading range. Don't short near low of range unless strong break.
Weekly:
Has been in an upwards trend since July. It looks like it is possibly forming a double bottom with a March bar. Ema also curving down. Expect at least two legs down if broken?
During session notes:
Had fun yesterday but did not follow 1 setup practice rule. Today's trading will focus only on A2.
Short for 2. (hindsight: you ignored your own don't short near low advice!) Stopped out -2.5
Looks like a2 failed.
Pullback and shaved bar near ema categorize as A2. In for 2 T1 +1 T2 +2
A22 formed second setup of day
P1 pullback day is most likely trend day for a few more hours
P2 & A2 enter in. T1 +1 T2+2
Another P1 and P2 in for 2. T1 +1 T2+2
Try to ride another possible A22 stopped out for -2
Looks like trend is broken lower high on second leg and trend-line dipped.
Short for second leg of a2 bear reversal... again ignored own advice to not short in this strong bull trend -4.
Saw another short down but this time i got lucky +1.25
Net Profit: 1.25
Evaluation:
Well according to the graphs it looks like i destroyed the first part of the day and then started ignoring my advice. I really have to keep a plan and stick with it. Keep watch of these bear reversal A2's in a strong trend. If their win prob is very low don't even attempt. That could have been one of the "oh well it doesn't work probs when it turned on you today". I think I need to work on the stops a bit more, risking a point per contract for a small move isn't worth destroying your earlier wins for the day. You were up 6.25 at one point and then even went negative for a short while!
Yesterday I didn't sim since I wanted to do some PA reading. Today I did a simulation
Simulation 3
Date: 6/15/2011
Trades:
1) Read about trading the open and considered I try to nab a first pullback move. First bar in hindsight was the actual 1PB but the following doji bar made me think a second leg down from the previous day was a possibility at the time. After the strong bull bar I entered. T1: +1.75, T2: 0.0 since breakeven stop was hit, meaning failed swing
2) Considered 3 bull bars up a W and shorted after the first bar bar. Not sure if this is second leg down attempt or shallow bear pullback, shooting for 1 pt per contract, T1: +1, T2: +1
3) Second push down at moving average makes it an A2. This could be a trading range day but second wedge bear follow through still possible. T1: +1, T2: +1.5. Hindsight: Should have swung second contract, bull bar scared me and I exited. I can think of two reasons for the strong bear bar. First there are probably shorts taking some profits on the bar down. Second, the bulls may have thought the higher low of the previous bar would trigger a bear breakout. However, if you simply just did textbook wedge approach you would have hit massive move down. Try not to be so conservative with such clear patterns forming.
4) I thought this was turning into a W reversal and decided to buy. T1: +1, T2: -1. Hindsight, I probably shouldn't have made this trade. If there was going to be a bull breakout I should have waited for a better confirmation. If I just stuck with my initial A2 analysis I would have caught a great move.
5) I wasn't sure with the massive sell off at the time. However, looking back I recall that most trends seem to have 2 legs before showing any strong sign of reversal. I waited until I saw a possible W and took that entry. T1: +1 T2: +2.
6) This was a stupid trade. I thought that bear doji was a buy signal since it was a double bottom. But take a look at it; we are in a bear trend, at the moving average with a small bar top. You can clearly see that each bull bar the bull reversal trend is losing a ton of momentum. Most likely that move was just shorts taking their profits. T1:-1, T2:-1
7) Classic A2 short. I took a little more risk on the bar since I thought there was some more short covering coming but bear trend was likely to make second leg down. T1: +1, T2: +1.25. I should have let the second contract swing more. I let that bull bar scare like the earlier A2 move.
8) Trend losing steam, thought doji buy was good, however lost confidence in my read so I exited early and took my profits. T1: +.5 T2: +.5
9) I didn't notice that the day was coming to a close. This was clearly a trade I should have not taken. T1:-1, T2: -1
10) Doji, not sure if this is a good entry. Bulls and bears in equilibrium. Did hit the ema exactly though. Look for A2 buy.
11) Double bottom with 10 but another doji. Still possible a2 but not good entry bar
12) Lower high breakout from double bottom. Probably bull profit taking from first big move up of the day.
13) double bottom, at ema, A2 buy T1: +1, T2: +2.25
14) Doji, exiting T2 swing since possible reversal
15) another doji low high, lower low
16) Looks like a W has formed and is beginning to pull back, short. T1: +1, T2:+1.5
19) uptrend seems to be resuming exiting T2 swing.
20) Large bar up. In hindsight i should have probably longed at 19 since a possible trading range was forming and near ema. Not exactly 100% sure if trader’s equation called for it though. Will research
22) Trading ranged has formed
25) Strong bull bar looks like we might break out. T1: +1, T2:-.75. Hindsight I'm not sure if this was a good entry, a wedge was still forming so i took a risk at its top.
26) Looks like top of trading range possible wedge short. T1: .5, T2: .5
27) Triple bottom formed EXIT! Wedge contracting a lot!
28) Weak bull lower high
29) bar broke double bottom so could be a short entry. T1: -1.25, T2:-1.25. Hindsight, why did you do this? You kept mentioning the wedge and contracting range but you still shorted here. I suppose you could have thought this was a wedge entry. However even that logic it wasn't an entry. A wedge is typically 3 pushes in the same direction that was 2.
61) Broke double bottom
67) Strong bull bar. Buy. T1: 0, T2:0. Why did you exit? Two strong bull bars after two legs down, this could have been a more profitable move.
72) Seems to be creating a second leg up. Let’s try it. T1:1, T2:2.25
Profit: 7.75
4 Days in a row up? This is seems too good to be true. Probably getting lucky here.
if you want to learn PA, why not just do PA from FX (not futures) with a live account ($20-100) trading $1 or less.. if you can be consistent with that, then you can make it with the rest.. I mean, PA is PA after all.. and trading in sim is, well... trading in sim.. anyhow, good luck.
I've been debating that. Maybe i'll start that in the near future. However, it seems the debate between replay data runs and real money is a pretty hot topic anyway.
I'm pretty sure that replay data from ninjatrader is tick by tick data of a previous session. While it probably doesn't emulate slippage I should be getting a similar experience. I suppose calling it simulation was the wrong term.
