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Well, we are all guessing every time we take a trade. We cannot manage where the market will go next, but with a good entry location we can minimize our initial risk, and then manage it more effectively. All we can really have a say-so about is when we get in, and when we exit.
I will show you my chart with entries from this morning, but it won't be very helpful because it's what's on your screen too. By the way, I trade ES so that's what you're seeing. I do not know the Russell and would not dare trade it without observing it for several months first.
And this last sentence is really the key for me. I have improved steadily, though I've had my moments where I felt utterly clueless, largely because I am simply more familiar with my market. I know what it likes to do. I have learned by watching my charts, the DOM, and the tape, when she's ready to do her thing. I am often a little wrong, as you can see from the first trade here. But when I'm wrong, I'm usually wrong small. I had 1320 to 1322 marked as an area I may want to buy, through simple analysis, though my preference at the close yesterday was to be short today; unfortunately the market did it without me overnight so I could only trade what was there today.
But a good location is only half the story. As you can see, I tried to buy 22 but was early. So it made a 2 tick new low to 20, then tried again, only 1 tick lower. Watching the tape and DOM I saw the bids holding, the volume present to support the market, and thus the market had shown me enough to take the small risk to find out if I was right or not. Enough volume at the new lows to indicate trapped shorts, yet not enough vertical movement to justify it. What I did not do was attempt to identify a "setup," quantify the trade with an indicator oversold or other plug-in-a-number method. This works for some people apparently, but it does not for me. I do not like to try to bottom-pick, but if you pull up a 15 minute chart of the opening this morning, you will see overlapping bars moving down. For about an hour the market was essentially auctioning for buyers. This was not vertical development, it was down-sloping horizontal. Good short opportunities early, but the mood of the market was a methodical searching for buyers, not a true selloff of the kind we want to be in on.
I'm a little embarrassed that this is the only long I took. I missed the bulk of the opportunity. Yet, I took 2 ticks of heat, had a 4 tick stop, and made 14. It's a good trade-off, but I can do much better. I did short near the end of the day, but again, risk was quantified and very small, and I tried 3 times, losing only 6 ticks total, before a decent winner on the 4th try. I could have been totally wrong, but even if I had been, the loss would have been very manageable.
In short, know your market (the Russell I presume). Anything else is, for me, fluff and excess to satisfy the ego.
Ryan, I asked IT7 this same question in late May via PM. He told me that he would help me in any way he could, but that he highly recommended building my own. I thanked him, and while I did not want to start from scratch, I took his advice.
His advice was full of wisdom, because being forced to create my own caused me to think of the purpose of what I actually need to see on a spreadsheet. I actually wrote down with pen and paper, "What do I need to know?" This included things such as "Am I risking more than I need to in achieving my returns?"
Had IT7 simply given me his spreadsheet, I would never have really benefited from the purpose of it, which is to be aware of the purpose of keeping the records in the first place. So, I will give you the same advice and answer that he gave me: I will be happy to help you in any way I can, but you will actually benefit if you create your own. Then you own it; then you can make changes to it, you can add what you want, and remove what you want. You will come up with good ideas that I have not had, and you will be able to implement it. None of that is possible if I share mine. But anything you need, just send me a PM and I'll be happy to help you with it.
So, I thank IT7 for "teaching a man how to fish" instead of simply feeding me what I wanted, and I guarantee you will feel the same way. For the record, I was not an excel guru, but I have become very capable in the last month at it. All you need to be found is on google, and this is a web site I found where I based most of my stuff on. You can download his sample and use the ideas. It seems like a lot at first, but give it a couple of weeks of steady work and it will be very nice:
Excellent work my man! It shows a lot about you that you had the dedication and took the time to put it together, and it's paying off for you. This really makes me happy to hear.
Good looking spreadsheet. Looks like you've really tightened up your losses as of late, well done.
This is something I have considered adding to my stats but have just not done it yet. I do not do an NT export, as I typically have fewer than 5 or 6 trades on average per day, and I only care about the risk, drawdown, profit, time in the trade, max size during the trade, and time of day the trade is taken (and not even using those last two data points at this moment). NT sometimes does not calculate some of this the way I would like it to so it's easier for me to take the 1 minute per trade to enter it, and then I can have an intraday up-to-date picture instead of having to do an export.
First entry today was on the first pullback after the breakout. Got a bit lucky on the great timing, as I went in "blind" (without much confirmation of a continuation starting).
