I didn't really feel like trading today...but took one trade below value (or what I thought was below value). Again, first contract got to its PT, but last two got stopped out. I am continuing to keep track of my method as well as my AI/AO scenario. The two plans continue to show a vast difference in profitability.
I am getting the feeling that I am reading order flow pretty well for the entry (at least for smaller scalp type moves). As for reading the market in general, I am miles away...gotta hang in there and continue to interpret what I am seeing as it unfolds.
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A little late with the journal...had to see family, so didn't have much time to update.
Took two trades this day based on my setups. First one was a winner (legit winner). Met all of my PT's. As the trade was unfolding, I was adjusting the PT's based on the moving averages on my trend chart. First PT was met no problem, same with the second (which I had set to the 20EMA). The last contract I just managed myself and decided to take profits since it seemed like at the time that price was going to bounce off of the 20EMA.
Last edited by chungp2; October 2nd, 2012 at 11:52 PM.
The second trade ended up being a loser. Once again, the trade reached its first PT no problem, but got stopped out on its last two.
On this trade, the price at 1447.25 of the bar I was watching had bid and offer being very even. However the two prices above had the buyers lifting the offer. I usually pass on this as the order flow is not displaying enough strong conviction in my eyes, but the bar also had a "b" shape volume profile. I decided to pull the trigger based on that.
Last edited by chungp2; October 2nd, 2012 at 11:49 PM.
I think you're doing great. Catching the bounces off the 2nd std dev back to the vwap. 1 to 3 pts is good scalping already on the ES especially since these are the toughest days to trade with HFT all over the place. Eventually you can get better on new trends and trend continuation entries. Thanks.
Last edited by Cloudy; October 3rd, 2012 at 12:33 AM.
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I took two trades. Same ole story. PT met on first lot, then stopped out on the last two.
I gotta say that after all of the trades that I have taken so far, the 20EMA is a damn strong moving average (something I already knew, but seeing order flow react to it is very interesting). Whenever I fade a move, the 20EMA holds up very well. It bounces off it enough to stop me out on my last two lots and then some. Sometimes I feel like reversing my position at the 20EMA or when I get stopped out. I haven't done that obviously (and don't plan to since it's not in my trading plan), but it's tempting sometimes.
Any way...first trade I took today was "in value." Probably wasn't the best trade location, but all other signals lined up.
I made some progress on my AI/SO (all-in / scale-out) plan, as well as my AI/AO (all-in / all-out) plan. Both plans ended up in the green, which was encouraging.
The first trade I took came right before the 10:00am numbers came out (I went long). In hindsight it probably wasn't a smart move, as news can cause all kinds of volatility. In this case however, it was in my favor. I will have to be more cautious in the future. These kinds of trades can go in either direction. Had this gone the other way, I would have been furious at myself for making such a dumb move. Anyway, I was fairly conservative with both my first and second targets, first one being the 5 tick that I always use, and the second at the 20EMA. As soon as the second target was hit, I put my stop at breakeven, which was hit.
My second trade got stopped out pretty quick (went short). The footprint bar I was watching had three prices in a row that supported my hypothesis, however, the bar had not closed yet (which is something that I usually do). Once I entered, price went in the opposite direction and I got stopped out. Turns outs my hypothesis was WAYYYYY off, and price continued to go higher. Glad I got out.
My third trade I went short and met my first and second targets AGAIN! After the second target (which was VWAP) was hit, I was looking at the developing VP and was kind of noticing that we were at a LVN and it seemed to act as support. I wanted to exit my third target at that point, but decided to let the trade play out. At that point I had moved my stop to breakeven, so I wasn't too worried. I eventually got stopped out. Kind of regret not getting out earlier, but its nice to know that I am getting more comfortable with market generated level (or at least I think I am).
My fourth trade was a straight loser (went short). All the signals were there, but just no dice this time around.
My last trade (short again) was not too long after my fourth trade. This was my biggest winner thus far. Met my first target with not much effort. The second target however, I had set to the VWAP. Which was 5 points away (20 ticks). I was a bit concerned with setting the target there, for there was a huge LVN which I thought was going to act as resistance. However, once we entered that LVN area, the price popped down fairly easily. I'm guessing a lot of people had stops placed in those areas and it just fueled the move down. At that point I moved my stop up to breakeven, and had my third target at the VWAP 1st SD low. Price never got to that area, but an interesting thing that I noticed was that there was a bullish divergence signaling an up move. I probably should have exited my last contract when I saw that, but decided to let things play out and moved my stop past breakeven. I got stopped out on my last contract for 2 points.
I will continue to place my PTs at market generated levels, but at the same time look for divergences hinting at moves that may push price in the opposite direction.
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I took a stab at entering in on hidden divergences today. Not too much luck. Took two trades today. Should've been three...I'll explain more below
In my first trade, price was being supported by the developing VPOC. There was a significant amount of volume being traded and I had all of my signals to enter in on the trade. As a bonus, price was at the 20EMA, so I thought moving average traders were really leaning on that to hold. I entered in, and pretty much as soon as I entered, price went against me. I had my stop at my usual 5 ticks, but the VPOC was 3 ticks below my entry. So I decided that if price broke the VPOC, I would exit a bit earlier than my 5 ticks and get out with a smaller loss. Price did end up breaking the VPOC, and I went out with a loss of 4 ticks. Price did travel further than my usual 5 tick stop, so this time around it was the right exit to make.
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