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What I want to do, Why I want to do it and How I'm going to do it before I set down at my trading station.
Then my job is simple, I wait for movements in price to tell me when to do it.
The what, why and how have absolutely nothing to do with the current price movements, those three pieces of the puzzle were studied, tested and verified weeks, months or years ago.
If I turn the list above into questions and don't have an answer for each of them, my chances for success are slim to none.
I think I may have gotten a little bit ahead of myself then. I should spend less time in front of the screen watching price movement and more time testing some strategies.
(edit: BTW no trading today. School is closed so home with the girls)
What came first, the chicken or the egg? I didn't want to insinuate that there is a right way or wrong way to achieve consistent returns when trading the market. We all travel our own path through the market and through life in general. The methods or systems that fit my personality may make another trader cower in horror. You posted, "...... I know (almost anyway) what I am waiting for which makes it easy to wait." I believe there's a hidden diamond in that statement, the diamond is trust in the method. That trust is achieved by identifying the method, testing the method and refining the method. Only then can I hit the bid or the offer and initiate the trade with calm confidence, knowing all along the chance of this trade being a successful trade is 50/50.
So what comes first, the chicken or the egg?
"I should spend less time in front of the screen watching price movement and more time testing some strategies." The time in front of the screen often provides the inspiration for a new system or further refinement for an existing system. e.g., Didn't I see that same price movement yesterday and a couple times last week when price approached the prior day's 50% line? Or, did my method/system FAIL AGAIN when the price action was rotating or testing an inside day's high or low?
There's not much new in the market, and "hitching your wagon" to a system developed by someone else is usually the starting point for most traders. I'm not talking about my little 2am trade, I'm talking about guys like, Taylor, Wilder, Arms and Steidlmayer, we all need a starting point or a little inspiration to start us on our journey.
As time goes by (and it will) you will probably sit down at your trading station sometime in the future and realize you have a small collection of "set-ups" you are waiting to initiate. The movements of price, the location of those movements on your chart and the time of day will determine which "tool" you chose to bring out of your tool box. Each of these "tools" will have been filtered through the What, Why and How and are readily available to initiate the moment price movement provides you with the When.
K.I.S.S. Movements in the market are made up of many moving parts and trying to find something to anchor to can seem overwhelming. Most indicators (given the chance) recalculate on every tick but there are stationary price levels that offer solid anchoring points for entries and exits, they are past price levels. The Big Three are Yesterday's High, Low and Mid (the 50% level) these three levels combined with previous POCs, UVAs and LVAs which are also stationary levels are the SOLID anchoring points for most of my set-ups. Today's price action might validate the point I'm trying to make. The stalling of price near Yesterday's UVA and the failure to reach for Yesterday's High. The bounce off Yesterday's 50% level and the sideways movement when price returned to that level. The drop from the 50% level to the whole number 1.3600 and then "normal" rotation lower with an eye on a test of Yesterday's Low. Are they just random rotations at random levels, that is our job the work of trading,,,, IMO.
No time to trade today. I have a few deadlines I have to meet at work (good thing I have things to do at work since I am not making any money trading ) and decided not to trade. I then remembered that I have to trade mon-thu this week in order to complete the 20 days of this Combine before the deadline.
I therefore opened my trading platform and against my better judgement entered a trade short after price hit .3545 and pulled back to .3565 (not that my judgement said "go long". More like "do not enter the market"). I was really just hoping that price would test the new low after pulling back. Did not happen and I stopped myself out at 1.3580. So -30 ticks (15 per car).
I know that I have to work on my method or rather come up with my method. I have received good advice from @Cashish and am grateful for that and hope I can use his good advice moving forward. This Combine is now just a formality I have to get out of the way in order to move forward.
I have mixed feelings though. I thought I were closer to being a profitable trader. Also I have to get into my head the fact that this will take time (well more time) and relax. I understand now that I have really not spent my time well trying to learn this trade that trading is. I think the time would have been better spent if I had just picked one thing and really stuck to it instead of being all over the place. This is irritating. The positive thing though is the fact that I think I have finally understood what I need to do. NOW JUST DO IT. Stop jerking around.
One trade today for the Combine's sake. Long 2 from 1.3569. Exited 1 @1.3579 and the other @1.3580 when price stalled there. + 21 ticks.
I have already started to develop my method for trading the 6E. That is write down how I am going to enter the trades and how I am going to manage them (exit, move stops etc). Rules that I will be able to measure and hopefully develop further.
Since I am preparing for my next Combine I've decided to keep track of my practice trades here in my TST journal since this is the best way for me to keep my practice organized.
I have only recently been able to find some time to trade after very busy few weeks. My dream is to trade so if I keep doing everything else I have to do before I trade I will never trade. So I will try to squeeze in some trading when I can. This will mean I will not be able to trade necessarily when I would prefer but rather when I can.
Lets see what happens. Whats my method? Go for first base and see what happens. Follow trend unless there is some reason to believe price will bounce or turn around. I would like to target around 10 ticks per contract. Take max 3 trades per day and trade max 5 cars (that is what I can trade in the 50K combine so I will use the same). Loss limit is $1000.
Why have I put MACD back on my charts? Because I am looking into divergences.
My trades today (of course all SIM).
Long around the pivot at 9:58 as per attached charts.
I'm going to hold your feet to the fire on this trade. I'm not sure I understand your last sentence, can you elaborate a little more, I'll refrain from commenting until you do.
What I was trying to say and thinking during and before the trade was: Price was in a range between 1.3466 and 1.3445. First I was thinking short because price was just below the pivot and the Y-Mid. I did not want to get whipsawed in the range however and also because we were near the xx50 number so I stood aside. Then price broke through to the downside and I was thinking that my next area would be 14-16 ticks below xx50. Before I took the trade I had put in a limit order[email protected] and [email protected]. Stop on both 15 ticks lower. I however decided to pull the orders because I did not want to get run over by the market. Decided not to rush into the trade. So when price consolidated @1.3434-36 I decided to go long. My thought was that price would test 1.3444-46 (the lower end of the previous range). If it would get back into the range and test higher I did not know. That is why I decided that my target would be 1.3445. Now of course I see that I should have stuck to my limit orders and had my target higher. But I am also trying to break the habit of always going against the trend without proper reason and also have my targets....well my targets are a work in progress. After the week I am going to go over what could have been and then maybe move them out further.
) and decided not to trade. I then remembered that I have to trade mon-thu this week in order to complete the 20 days of this Combine before the deadline.