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CL & GC Day trading use Indicators, Price action and Fibonacci


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CL & GC Day trading use Indicators, Price action and Fibonacci

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  #1 (permalink)
 cmmichaels 
London England
 
Experience: Intermediate
Platform: Metatrader
Trading: Spot $
 
Posts: 91 since Apr 2012
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Hello futures.io (formerly BMT) Traders,

This is my second journal I have started on futures.io (formerly BMT) my first one didn't last long because I realised the strategy I was using wasn't going to work for me. I decided I didn't want to start another journal until I have drilled down on the strategy I want to use to trade the markets. I want to have some consistency through the journal that I can learn from like @Profiler 's great journal so now I think is a good time to start.

Background:

I've been at this for just over 3 years but at first I was learning about stocks and fundamental analysis then I moved onto trading, I've read too many books like everyone, I've traded a lot now which is good I've had some fairly good runs and some very bad runs but now I need to refine my strategy. I was using too big stops and things like my r multiples for my trades were way off. I genuinely don't think I would have got as far as I have now without this forum so thanks to everyone on here it is an amazing place and most of all obviously @Big Mike

Some other people that have massively helped on my way so far and continue to do so:

Shopster
@BTR411
@mfbreakout
@babba
@xelaar
@Profiler
@Private Banker
@indextrader7
Trader Dante
Counterviolentmoves

There are loads more as well so again thanks to everyone here. I'm now in a position for the first time where I can trade for 3 days of the week right through the day before I was only trading the second half of the US Session after work. I know I'm a beginner and I'm trading CL & GC but I spreadbet right now so I can trade much smaller size and while I've been learning these markets have performed fairly well for me (I bet that will change now).

Strategy:

I trade using indicators:

Stochastic
MACD
Moving averages
Fibonacci pivots
Fibonacci retracement/extensions

Time frames:
Trading I use 5m as main time frame but have 1m & 15m up as well

Longer term I have 1h, 4h and Daily

I look for divergence on the indicators mainly on 5m/15m I then look for patterns forming H&S, DT/DBs, 3 push patters etc. I also do look at when the indicators are right overbought/sold at certain locations. I use a fib indicator that fibs out the whole of the previous day then projects extensions either side and I look how price reacts around them. I've studied a fair bit of Al Brooks as well so I use a bit of his candle/PA analysis while trading as well.

I've gone on long enough now so here are some examples of my trading charts and then below are my trades from yesterday. Any input anyone has at all will be really appreciated and hopefully I can keep this journal going for some time and make some significant progress.

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  #3 (permalink)
 cmmichaels 
London England
 
Experience: Intermediate
Platform: Metatrader
Trading: Spot $
 
Posts: 91 since Apr 2012
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This was my first day trading just CL & GC it wasn't bad could have been very different as I got in some good trades and closed way too early. Some good moves in both instruments that I nearly caught. Overall lessons learned let the trades run if they are playing out because 1 of these trades can change a whole day/week even.

Overall +44 ticks on the day

Again any feedback at all would be really appreciated.

All the best,

Mike

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  #4 (permalink)
 xelaar 
prague, czech republic
 
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Very good luck to you, Mike. Keep consistent with your plan!

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  #5 (permalink)
 cmmichaels 
London England
 
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xelaar View Post
Very good luck to you, Mike. Keep consistent with your plan!

Thanks a lot xelaar that is one of the big reasons for this accountability! I'm already feeling more pressure today in my trading(in a good way) knowing that I've got this journal.

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 TrendTraderBH 
Detroit, Michigan
 
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cmmichaels,

Great journal start so far. We both hang out on MFB's journal so I'm excited to see how your journal progresses.

There is nothing wrong with closing trades out too early unless of course it goes against your plan. Trading in real time is much different than hindsight, so these trades could have just as easily reversed and turned your profit into break even or a loss. As they say hindsight is 20/20.

What I am trying to incorporate into my trading is using smaller charts to enter but then switching to larger charts (ie. 15 minutes) to manage and exit. It's still a work in progress but I think it will help me manage the little wiggles better that shake me off my good trades and help me hold for bigger targets. My trade plan calls for 10-11 tick stops and at least 30 tick targets.

Wishing you much success and good trading!

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  #7 (permalink)
 cmmichaels 
London England
 
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TrendTraderBH View Post
cmmichaels,

Great journal start so far. We both hang out on MFB's journal so I'm excited to see how your journal progresses.

There is nothing wrong with closing trades out too early unless of course it goes against your plan. Trading in real time is much different than hindsight, so these trades could have just as easily reversed and turned your profit into break even or a loss. As they say hindsight is 20/20.

What I am trying to incorporate into my trading is using smaller charts to enter but then switching to larger charts (ie. 15 minutes) to manage and exit. It's still a work in progress but I think it will help me manage the little wiggles better that shake me off my good trades and help me hold for bigger targets. My trade plan calls for 10-11 tick stops and at least 30 tick targets.

Wishing you much success and good trading!

Thanks a lot for stopping by really appreciate it. Great advice, I'm actually in a trade in GC that I'm trying to do exactly what you just described got in off the 1m and now using 5/15m and trying to steer away from the P&L. Especially with these instruments as well they spike about a lot so managing it too tight isn't the way to go. I think a lot of it is confidence as well which only comes with screen time and consistent trading. I've reduced my size down to a 1 lot for me so hopefully looking to move back up to 2 lot after I've got some more consistency which makes it easier to keep a runner.

Stop by when you can would be great to hear your thoughts, all the best with your trading too.

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  #8 (permalink)
 cmmichaels 
London England
 
Experience: Intermediate
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Posts: 91 since Apr 2012
Thanks: 1,075 given, 149 received

Bad day today in the end, it had everything in it really, good trades, bad trades some trades that weren't that bad but didn't work out. I seem to find a lot of the time at the moment if I take all the trades I see I would end up profitable but I don't and the trades I seem to end up picking are the ones that don't work. If I actually took all the trades it would work out but I'm worried about digging myself a massive hole. I don't know if anyone else who's learning gets this as well?

The pit sessions on both markets today were tough but there were good trades before that I messed up for the most part.

-61 ticks on the day.... not ideal

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  #9 (permalink)
 KahunaDog 
Hawaii at the beach
 
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Good luck.
Which MT4 broker are you using for CL?

I also use MT4 for CL and Gold, but I do not trade on it. I use it for levels for planning.

What kind of triggers and orders are you using to enter?

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 xelaar 
prague, czech republic
 
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cmmichaels View Post
Bad day today in the end, it had everything in it really, good trades, bad trades some trades that weren't that bad but didn't work out. I seem to find a lot of the time at the moment if I take all the trades I see I would end up profitable but I don't and the trades I seem to end up picking are the ones that don't work. If I actually took all the trades it would work out but I'm worried about digging myself a massive hole. I don't know if anyone else who's learning gets this as well?

The pit sessions on both markets today were tough but there were good trades before that I messed up for the most part.

-61 ticks on the day.... not ideal

I had fought this issue before. My solution was to introduce filter that reduces number of trades to take and their quality. Try to incorporate significat levels and or volume profile and take trades only in specific zones on chart.

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 cmmichaels 
London England
 
Experience: Intermediate
Platform: Metatrader
Trading: Spot $
 
Posts: 91 since Apr 2012
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KahunaDog View Post
Good luck.
Which MT4 broker are you using for CL?

I also use MT4 for CL and Gold, but I do not trade on it. I use it for levels for planning.

What kind of triggers and orders are you using to enter?

Thanks KahunaDog, I don't use MT4 to trade either I just use it for charts. The MT4 Brokers I use though are FXPro, FXCM and GKFX for charting.

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  #12 (permalink)
 cmmichaels 
London England
 
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Trading: Spot $
 
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xelaar View Post
I had fought this issue before. My solution was to introduce filter that reduces number of trades to take and their quality. Try to incorporate significat levels and or volume profile and take trades only in specific zones on chart.

Thanks for the post xelaar, I do try to filter trades its deciding which ones are the good setups and which are bad they all obviously look slightly different and what I find is often the ones that I pass on are the ones that seem to work out best. I think with regards to trading in specific locations because I'm trading patterns rather than levels the patterns normally form at significant areas anyway but I appreciate your comments and look into what areas the patterns that work best are forming in.

Need to find a good way of analysing these setups.

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 cmmichaels 
London England
 
Experience: Intermediate
Platform: Metatrader
Trading: Spot $
 
Posts: 91 since Apr 2012
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Today was a good day, trade location was for the most part as good as it could be all the trades that worked basically had zero draw down think I was basically on a bit of a lucky streak there.

Trades for the day:
GC: +29, +44
CL: +9, -18

Total ticks on the day: +64

Again today my trade management wasn't up to scratch, if I had held the first 2 trades I took it could have been a 150-200 tick day but that would have made too much sense instead I closed them. I remember when I got in the trades and they started working out straight away I said I was going to hold them but just got shaken out again. I remember when I was just starting out trading I read that exits are the hardest thing and I remember thinking that can't be true just finding where to place a trade is impossible so it can't be harder than that... now I understand... Exits are like an impossible puzzle that will never be solved.

The pit sessions today were pretty choppy GC was basically punishing shorts all day, long side was the side to be on and luckily I managed to get some of that action. CL pit session was a bit of a mess and I didn't take part. I did miss some other good trades but I have another job that I have to do all day as well so I'm trying to do both and its quite tricky. I don't know if I would be trading a whole lot better if I was just trading but it would be slightly easier and less stressful!!!

I want to thank @xelaar again for your post about trading at important levels, my good trades today were setups I look for but they worked well because they were at important zones. My focus now is on the patterns and the areas and when I have confluence in both.

Positive week, I have to go into the office Friday and Monday so I'll be back Tuesday trading.

Hope everyone's trading well, any feedback at all would be really appreciated.

Just thought I'd add as well if sometimes it looks like I should have taken more points the arrows might be a bit out and I have to pay a 4 point spread on both instruments with my broker which is great!

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 cmmichaels 
London England
 
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Trading: Spot $
 
Posts: 91 since Apr 2012
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Just when I thought I had an alright week I go and have the worst trading day I've ever had.

-131 ticks on the day

Obviously the fundamentals were playing a massive role in the moves today and I did the typical try to fight the trend all day and got destroyed. I actually got in the trend right at the start closed it waaaay too early again for +48 and then fought it all the way up. Really not happy with today obviously especially as I was in the massive trend from the start always easier in hindsight though. Price couldn't break the 5 min 21 ema all the way I assume it was 1 time framing on a market profile shorts were a bad idea. I did actually place some longs but scratched them because I was doing the usual I'm sure it can't go any higher!?

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 cmmichaels 
London England
 
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Bit late posting it...

These are my charts from yesterday crazy day in the end, was up over 100 ticks within the first hour then lost it all bad trade management/trades and got slipped massively on oil, ended slightly up for the day quite a lot of trading. Basically the main thing I've realised is I need to produce some new rules for my trading and I massively need to work on my trade management. Looking over my results I'm thinking of trying out a 3 position take 2 off at my first target and then leave 1 for the runner, since I started this journal if I had been using this approach my results would have been much better. The all in all out approach isn't working for me at the moment. I've learnt a lot over the 2 days trading this week that I need to put into practice its been a pretty stressful couple of days but if I can build on what I've learnt it wont all be to waste. I'm going to work on my rules over the weekend and will be back on Tuesday trading until Thursday.

Total +44 ticks on the day

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 cmmichaels 
London England
 
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Again today could have been so different I was in the longs basically right from the bottom of the move, poor trade management and some really bad fighting the trend trades destroyed me again. Just GC trading today.

+8 ticks on the day

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 mfbreakout 
BOSTON, MA
 
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cmmichaels View Post
Again today could have been so different I was in the longs basically right from the bottom of the move, poor trade management and some really bad fighting the trend trades destroyed me again. Just GC trading today.

+8 ticks on the day

Good luck with journal and trading. Just be careful with shorts on A up days. On most A up days divergences, H&S etc. do not give much.

Shorts are OK if targets for shorts are relatively small vs targets for long positions. On most A up days we see that on pullbacks - trend traders are buying or adding to position.

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 cmmichaels 
London England
 
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GC is a crazy beast, huge trend day up yesterday then reversed it all with a massive trend day down today. Different day same mistake, got in at the start of the trend messed up the trade management managed to scrape through with a small profit. Just got to build my confidence in my trades more which will take time I guess. Today seemed different then yesterday just seemed like a load of stop runs where is yesterday seemed like intentional buying all the way up but that is obviously hypothetical.

+12 ticks on the day

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 cmmichaels 
London England
 
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Posts: 91 since Apr 2012
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Different day same errors, terrible first 2 trades but then got in the move right at the start messed it up some awful execution errors terrible stop placement I was all over the place. So much opportunity these past few days and I've seem some of it coming. I was even short before the huge sell off today and put my stop in such a bad place got stopped out and then it tanks about 150 ticks.... painful.

-83 ticks on the day

Need to work on:
More disciplined execution - limit number of trades per day could be good.
Stop placement

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 sandptrader 
Valdosta, GA. U.S.A
 
Experience: Advanced
Platform: Sierra , TOS
Trading: 6E, ES, CL, GC
 
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@cmmichael's.......I can see your trying hard to get your Trading Plan together based on your daily evaluation, and what you need to improve on.
I also trade both these markets and they are big movers, and not so easy to get your stops in the right place at times.
I usually use a smaller Renko bar size 3 or 4 ...for Entry and Stop placement and keeping an eye on the Larger Intraday charts, about the same as what you are doing here.
Your doing Great on your Evaluation, and all i can say is protect your capital best you can.
I am also continuing daily evaluation of trades, and what i miss.
Good Luck in your trading.

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 PandaWarrior 
In the heat
 
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@cmmichaels,

I have some thoughts....I was bored tonight so thought I would read some threads I normally dont and yours came up.

Hope you don't mind me sticking my nose in your business...but here goes...

1. I'm not sure what your rules are but it does seem like you are trading by the seat of your pants based on what I see on your charts....things like "I felt like it would do "x" and "I thought this looked like "x" set up". To me, it looks random....with little or no consistency.

2. Indicators. I like them too, and you have a lot of them...to many for me but I understand....now about those indicators. You've mentioned the MACD only once or twice, the stoch once, the pivot levels once or twice....and the fibs not at all. You have however, mentioned the Moving Averages quite a bit. Now the question, do you use all these indicators as input when deciding to enter a trade? If so, how often do you second guess yourself based on so many indicators? And now the real question, which one(s) can you live without and which ones would you kill to keep on the chart?

3. Moving averages: I have a suggestion regarding their use...take it for what its worth.....Stop shorting above the MA stack and stop buying below the stack and for god's sake, stop trading in between the stack.....just let the market come to you....truth is, MA's are the only indicators I've found any real use for and you don't need them at all once you get used to how price flows....but they are useful and I think you can make a killing using them....But obey some basic rules. Now you might say, But Pandawarrior, I think this huge spike is an exhaustion bar and its going to come off" and you might be right. But did you just make 80-90 ticks on the long that lined up correctly above the MA stack? If so, why fight the trend and sell into a long environment.....I recognize its a valid trade idea, but you are fighting the trend....and if you try to swing for the fences, you will eventually run into the larger buyers just waiting to buy the pull backs and the short you are sweating over will get ran over. Go with the flow baby!

4. Several times you have mentioned you screwed up your stops. I can only guess your initial stop is to tight, fix that ASAP by changing it to something much larger....then you can tighten it up if you need to, but never go into a situation that needs a 25 tick stop with a 15 tick initial stop.....you might get hit before you have the chance to modify it....so fix it immediately.

5. Quit trying to trade every damn wiggle in the market. You have an excellent MA set up.....use it. Don't buy until you can see the fear in the short's eyes...then buy with your maximum fire power.

6. Last but not least, learn to respect the idea of knowing when to quit....both for your stops....ie, don't let your largest losing day exceed your largest winning day...that really sucks....and also for your profits....a floor trader I know said he'd have made exponentially more money in his career if he'd stopped trading after the first two hours.....fully 1/3 of the days gains and sometimes more were given back in the afternoon....lots of reasons for this...too much to go into here but suffice to say, make 30-100 ticks in the morning and go home. Keep your cash. Its not about being right...its about making and KEEPING money.

Ok, thats enough from me...hope it helps and if it doesn't you can ban me from your thread...

Cheers.

Brian

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 cmmichaels 
London England
 
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sandptrader View Post
@cmmichael's.......I can see your trying hard to get your Trading Plan together based on your daily evaluation, and what you need to improve on.
I also trade both these markets and they are big movers, and not so easy to get your stops in the right place at times.
I usually use a smaller Renko bar size 3 or 4 ...for Entry and Stop placement and keeping an eye on the Larger Intraday charts, about the same as what you are doing here.
Your doing Great on your Evaluation, and all i can say is protect your capital best you can.
I am also continuing daily evaluation of trades, and what i miss.
Good Luck in your trading.

Hi sandptrader thanks for the feedback really appreciate it, I've never looked at renko bars so maybe I'll do a bit of research into them for refining entries. My stop placement has definitely been off but as you mentioned this journal can really help me review my trades and find a more optimal stop placement area. It's a tricky one when you are learning because when I am completely wrong which clearly happens the tight stops really help. It is obviously a work in progress at the moment. What sort of stop size do you use on GC mainly if you don't mind me asking? Before when I used to trade I used an emergancy stop but I found that the discipline to have to close the trade manually was difficult and it also meant my r multiples were really bad.

Good luck with your trading as well, and please stop by anytime.

Mike

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  #23 (permalink)
 cmmichaels 
London England
 
Experience: Intermediate
Platform: Metatrader
Trading: Spot $
 
Posts: 91 since Apr 2012
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PandaWarrior View Post
@cmmichaels,

I have some thoughts....I was bored tonight so thought I would read some threads I normally dont and yours came up.

Hope you don't mind me sticking my nose in your business...but here goes...

1. I'm not sure what your rules are but it does seem like you are trading by the seat of your pants based on what I see on your charts....things like "I felt like it would do "x" and "I thought this looked like "x" set up". To me, it looks random....with little or no consistency.

2. Indicators. I like them too, and you have a lot of them...to many for me but I understand....now about those indicators. You've mentioned the MACD only once or twice, the stoch once, the pivot levels once or twice....and the fibs not at all. You have however, mentioned the Moving Averages quite a bit. Now the question, do you use all these indicators as input when deciding to enter a trade? If so, how often do you second guess yourself based on so many indicators? And now the real question, which one(s) can you live without and which ones would you kill to keep on the chart?

3. Moving averages: I have a suggestion regarding their use...take it for what its worth.....Stop shorting above the MA stack and stop buying below the stack and for god's sake, stop trading in between the stack.....just let the market come to you....truth is, MA's are the only indicators I've found any real use for and you don't need them at all once you get used to how price flows....but they are useful and I think you can make a killing using them....But obey some basic rules. Now you might say, But Pandawarrior, I think this huge spike is an exhaustion bar and its going to come off" and you might be right. But did you just make 80-90 ticks on the long that lined up correctly above the MA stack? If so, why fight the trend and sell into a long environment.....I recognize its a valid trade idea, but you are fighting the trend....and if you try to swing for the fences, you will eventually run into the larger buyers just waiting to buy the pull backs and the short you are sweating over will get ran over. Go with the flow baby!

4. Several times you have mentioned you screwed up your stops. I can only guess your initial stop is to tight, fix that ASAP by changing it to something much larger....then you can tighten it up if you need to, but never go into a situation that needs a 25 tick stop with a 15 tick initial stop.....you might get hit before you have the chance to modify it....so fix it immediately.

5. Quit trying to trade every damn wiggle in the market. You have an excellent MA set up.....use it. Don't buy until you can see the fear in the short's eyes...then buy with your maximum fire power.

6. Last but not least, learn to respect the idea of knowing when to quit....both for your stops....ie, don't let your largest losing day exceed your largest winning day...that really sucks....and also for your profits....a floor trader I know said he'd have made exponentially more money in his career if he'd stopped trading after the first two hours.....fully 1/3 of the days gains and sometimes more were given back in the afternoon....lots of reasons for this...too much to go into here but suffice to say, make 30-100 ticks in the morning and go home. Keep your cash. Its not about being right...its about making and KEEPING money.

Ok, thats enough from me...hope it helps and if it doesn't you can ban me from your thread...

Cheers.

Brian

Ban you... definitely not you have a VIP pass any feedback is really appreciated and thanks for taking the time to give such a detailed response. Same for anyone else reading the thread any comments whatever they maybe are all welcome. I'll try and address the points you've mentioned and give my thoughts.

Before I answer the questions I think I should put some context round it which I hope will mean my answers make a bit more sense. I think that right now I am in a phase where I can understand roughly what is going on during the day in the market and now with this new understanding comes a bit of over confidence its like another phase I guess that you go through. The transition from not having a clue what you are doing to being able to some days see a lot of the action before it happens has caused over-trading/trying to attack everything too much with out a refined execution strategy. My execution is terrible at times but I think I will soon get over this as the novelty will wear off but this is pretty much the mindset I'm in at the moment.

1. I'm not sure what your rules are but it does seem like you are trading by the seat of your pants based on what I see on your charts....things like "I felt like it would do "x" and "I thought this looked like "x" set up". To me, it looks random....with little or no consistency.
Fair point, to me this is the big struggle of trying to become a discretionary trader, I'm not a mechanical trader so I don't have rules that say if this candle closed hear and x y and z happens then place the trade. I'm trying to read each day as it comes and trade around the orderflow/price action. I have certain set-ups but every trade I take whether it works or not I'm still not 100% because they all look different and they all have different context so I'm just trying to find the right locations in the context of the day. Every successful discretionary day trader I've seen seems to see a set up and always be in some doubt around it and everyone gets stopped out. It never is crystal clear I think this is the part that just takes time, I'm not sure how I can go about refining this without simply putting in more screen time. Maybe there are better processes I can put in place to address these issues I'm not sure?

2. Indicators. I like them too, and you have a lot of them...to many for me but I understand....now about those indicators. You've mentioned the MACD only once or twice, the stoch once, the pivot levels once or twice....and the fibs not at all. You have however, mentioned the Moving Averages quite a bit. Now the question, do you use all these indicators as input when deciding to enter a trade? If so, how often do you second guess yourself based on so many indicators? And now the real question, which one(s) can you live without and which ones would you kill to keep on the chart?
This is very true and has become more apparent recently, I've realised that my focus has changed slightly over the past couple of weeks. For the previous few months I was hugely focused on the MACD then the Stochs. Recently I find I'm looking at them much less and really just analysing the candles more in terms of whose trapped and whose getting taken out next. Also the moving averages I definitely couldn't live without right now I use them massively, I analyse the context of the day around the averages really in every way possible, how far price has travelled away from the averages which one is price struggling to get through etc. I don't find I second guess myself much with the indicators I use them more as confluence so if its an area and then something is lining up with one of my indicators then things are looking good. I'm not really looking for them all to come together because that doesn't happen really its more they all have a purpose at certain times. The fibs I was using a lot but now I'm not at all because I wasn't getting them to work properly and there seems to be bigger things to focus on. It feels like when I'm learning you just sub-consciously just focus on one thing at a time because that's all your brain can digest.

So really to answer your question I'm not sure if I want to get rid of any at the moment because I don't find having too many is hindering me its more that I'm just not really using them all as much as I could but I think as my experience builds they will all play a role. Obviously I could be completely wrong and maybe I should just have 1 and I'm going to find this it out the hard way.

3. Moving averages: I have a suggestion regarding their use...take it for what its worth.....Stop shorting above the MA stack and stop buying below the stack and for god's sake, stop trading in between the stack.....just let the market come to you....truth is, MA's are the only indicators I've found any real use for and you don't need them at all once you get used to how price flows....but they are useful and I think you can make a killing using them....But obey some basic rules. Now you might say, But Pandawarrior, I think this huge spike is an exhaustion bar and its going to come off" and you might be right. But did you just make 80-90 ticks on the long that lined up correctly above the MA stack? If so, why fight the trend and sell into a long environment.....I recognize its a valid trade idea, but you are fighting the trend....and if you try to swing for the fences, you will eventually run into the larger buyers just waiting to buy the pull backs and the short you are sweating over will get ran over. Go with the flow baby!

This is great advice and something I've been journaling about and monitoring the position of the MAs to my trades, certainly reviewing my journal if I had just traded in the overall direction I would be in a better position. I think the reasons for this are probably back to the first thing I said about the mindset I'm currently in and also I think I just do the usual beginner trader error still of always looking for the market to reverse and catching the reversal. This needs to be one of my main priorities now. By the moving average stack I assume you mean when the averages are converging? Did you have this problem? Is that how you filtered all your bad trades by only trading with your MAs?

4. Several times you have mentioned you screwed up your stops. I can only guess your initial stop is to tight, fix that ASAP by changing it to something much larger....then you can tighten it up if you need to, but never go into a situation that needs a 25 tick stop with a 15 tick initial stop.....you might get hit before you have the chance to modify it....so fix it immediately.

Yes you are absolutely right this doesn't happen that often but Thursday it did a lot the whole day I was just off making careless mistakes etc again this needs to be addressed but you are right get the stop wider then bring it in is definitely the right way round.

5. Quit trying to trade every damn wiggle in the market. You have an excellent MA set up.....use it. Don't buy until you can see the fear in the short's eyes...then buy with your maximum fire power.
Yes again this is the focus and I think this will naturally calm down a bit after the excitement of understanding things a bit more has worn off at the moment when I predict a move and it happens and I don't capitalise I feel worse than I do when I lose money. I think this is part of this period I am in at the moment, I'm so glad that I predicted the move and I'm finally understanding things I'm devastated I missed it, I'm sure this will wear off as hopefully my understanding and consistency improves.

6. Last but not least, learn to respect the idea of knowing when to quit....both for your stops....ie, don't let your largest losing day exceed your largest winning day...that really sucks....and also for your profits....a floor trader I know said he'd have made exponentially more money in his career if he'd stopped trading after the first two hours.....fully 1/3 of the days gains and sometimes more were given back in the afternoon....lots of reasons for this...too much to go into here but suffice to say, make 30-100 ticks in the morning and go home. Keep your cash. Its not about being right...its about making and KEEPING money.

My losing days have been bigger, I have a full stop out level that I slightly went over on Thursday but other than that I've kept below by trading small size. I think with regards to reviewing when I'm trading at my best will come later when I have a bigger sample size but I will keep on this.

Thanks again for taking the time to give me so much excellent advise hopefully what I've written makes some kind of sense I don't know if you can relate to maybe this phase I am in at the moment, hopefully I'll be able to move past this soon.

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  #24 (permalink)
 sandptrader 
Valdosta, GA. U.S.A
 
Experience: Advanced
Platform: Sierra , TOS
Trading: 6E, ES, CL, GC
 
Posts: 498 since Sep 2010
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Well when i Trade GC i use 15 ticks and for CL 12 ticks, i can do this with the smaller Renko type bars.
I am looking at sizes 3 and 4 to get my Entries,
On another note, i am trying to view too many size charts on my current monitor, as i switch from one market to the other GC & CL with all the size charts i have set up to view them both causes me to miss many trades and that brings me to this point.
I need more monitors to see a Complete view in my opinion of the 2 markets.
This is my current situation.
Just like you are working on getting everything in order for your Trading, i am also working on my issues i would like to improve on.
We have to keep improving what we can to be Successful.
It is a Challenge for everyone i believe, to get it right.
Try BetterRenko or any type Renko here at futures.io (formerly BMT) for this purpose, and test it out till you get use to the Renko bars as they are not time based.
Here are 2 charts of CL using size 4 Renko bars, and you can see the Entries can be tight stops.

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 sandptrader 
Valdosta, GA. U.S.A
 
Experience: Advanced
Platform: Sierra , TOS
Trading: 6E, ES, CL, GC
 
Posts: 498 since Sep 2010
Thanks: 1,881 given, 472 received

I was just reading the above post, and i do agree if you use tight Stops you could get hit real soon.
i have to say Entries with tight Stops are not easy, and it is a Dilemma we are facing to what we are willing to risk on the particular setup we are looking at entering.
So that's why we have to initially tru trial get this figured out.
All these posts from everyone are to be viewed as helpful, no matter how it may sound.
View everything as Technical.
We are all friends trying to help one another.

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 PandaWarrior 
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cmmichaels View Post
Ban you... definitely not you have a VIP pass any feedback is really appreciated and thanks for taking the time to give such a detailed response. Same for anyone else reading the thread any comments whatever they maybe are all welcome. I'll try and address the points you've mentioned and give my thoughts.

Before I answer the questions I think I should put some context round it which I hope will mean my answers make a bit more sense. I think that right now I am in a phase where I can understand roughly what is going on during the day in the market and now with this new understanding comes a bit of over confidence its like another phase I guess that you go through. The transition from not having a clue what you are doing to being able to some days see a lot of the action before it happens has caused over-trading/trying to attack everything too much with out a refined execution strategy. My execution is terrible at times but I think I will soon get over this as the novelty will wear off but this is pretty much the mindset I'm in at the moment.

1. I'm not sure what your rules are but it does seem like you are trading by the seat of your pants based on what I see on your charts....things like "I felt like it would do "x" and "I thought this looked like "x" set up". To me, it looks random....with little or no consistency.
Fair point, to me this is the big struggle of trying to become a discretionary trader, I'm not a mechanical trader so I don't have rules that say if this candle closed hear and x y and z happens then place the trade. I'm trying to read each day as it comes and trade around the orderflow/price action. I have certain set-ups but every trade I take whether it works or not I'm still not 100% because they all look different and they all have different context so I'm just trying to find the right locations in the context of the day. Every successful discretionary day trader I've seen seems to see a set up and always be in some doubt around it and everyone gets stopped out. It never is crystal clear I think this is the part that just takes time, I'm not sure how I can go about refining this without simply putting in more screen time. Maybe there are better processes I can put in place to address these issues I'm not sure?

2. Indicators. I like them too, and you have a lot of them...to many for me but I understand....now about those indicators. You've mentioned the MACD only once or twice, the stoch once, the pivot levels once or twice....and the fibs not at all. You have however, mentioned the Moving Averages quite a bit. Now the question, do you use all these indicators as input when deciding to enter a trade? If so, how often do you second guess yourself based on so many indicators? And now the real question, which one(s) can you live without and which ones would you kill to keep on the chart?
This is very true and has become more apparent recently, I've realised that my focus has changed slightly over the past couple of weeks. For the previous few months I was hugely focused on the MACD then the Stochs. Recently I find I'm looking at them much less and really just analysing the candles more in terms of whose trapped and whose getting taken out next. Also the moving averages I definitely couldn't live without right now I use them massively, I analyse the context of the day around the averages really in every way possible, how far price has travelled away from the averages which one is price struggling to get through etc. I don't find I second guess myself much with the indicators I use them more as confluence so if its an area and then something is lining up with one of my indicators then things are looking good. I'm not really looking for them all to come together because that doesn't happen really its more they all have a purpose at certain times. The fibs I was using a lot but now I'm not at all because I wasn't getting them to work properly and there seems to be bigger things to focus on. It feels like when I'm learning you just sub-consciously just focus on one thing at a time because that's all your brain can digest.

So really to answer your question I'm not sure if I want to get rid of any at the moment because I don't find having too many is hindering me its more that I'm just not really using them all as much as I could but I think as my experience builds they will all play a role. Obviously I could be completely wrong and maybe I should just have 1 and I'm going to find this it out the hard way.

3. Moving averages: I have a suggestion regarding their use...take it for what its worth.....Stop shorting above the MA stack and stop buying below the stack and for god's sake, stop trading in between the stack.....just let the market come to you....truth is, MA's are the only indicators I've found any real use for and you don't need them at all once you get used to how price flows....but they are useful and I think you can make a killing using them....But obey some basic rules. Now you might say, But Pandawarrior, I think this huge spike is an exhaustion bar and its going to come off" and you might be right. But did you just make 80-90 ticks on the long that lined up correctly above the MA stack? If so, why fight the trend and sell into a long environment.....I recognize its a valid trade idea, but you are fighting the trend....and if you try to swing for the fences, you will eventually run into the larger buyers just waiting to buy the pull backs and the short you are sweating over will get ran over. Go with the flow baby!

This is great advice and something I've been journaling about and monitoring the position of the MAs to my trades, certainly reviewing my journal if I had just traded in the overall direction I would be in a better position. I think the reasons for this are probably back to the first thing I said about the mindset I'm currently in and also I think I just do the usual beginner trader error still of always looking for the market to reverse and catching the reversal. This needs to be one of my main priorities now. By the moving average stack I assume you mean when the averages are converging? Did you have this problem? Is that how you filtered all your bad trades by only trading with your MAs?

4. Several times you have mentioned you screwed up your stops. I can only guess your initial stop is to tight, fix that ASAP by changing it to something much larger....then you can tighten it up if you need to, but never go into a situation that needs a 25 tick stop with a 15 tick initial stop.....you might get hit before you have the chance to modify it....so fix it immediately.

Yes you are absolutely right this doesn't happen that often but Thursday it did a lot the whole day I was just off making careless mistakes etc again this needs to be addressed but you are right get the stop wider then bring it in is definitely the right way round.

5. Quit trying to trade every damn wiggle in the market. You have an excellent MA set up.....use it. Don't buy until you can see the fear in the short's eyes...then buy with your maximum fire power.
Yes again this is the focus and I think this will naturally calm down a bit after the excitement of understanding things a bit more has worn off at the moment when I predict a move and it happens and I don't capitalise I feel worse than I do when I lose money. I think this is part of this period I am in at the moment, I'm so glad that I predicted the move and I'm finally understanding things I'm devastated I missed it, I'm sure this will wear off as hopefully my understanding and consistency improves.

6. Last but not least, learn to respect the idea of knowing when to quit....both for your stops....ie, don't let your largest losing day exceed your largest winning day...that really sucks....and also for your profits....a floor trader I know said he'd have made exponentially more money in his career if he'd stopped trading after the first two hours.....fully 1/3 of the days gains and sometimes more were given back in the afternoon....lots of reasons for this...too much to go into here but suffice to say, make 30-100 ticks in the morning and go home. Keep your cash. Its not about being right...its about making and KEEPING money.

My losing days have been bigger, I have a full stop out level that I slightly went over on Thursday but other than that I've kept below by trading small size. I think with regards to reviewing when I'm trading at my best will come later when I have a bigger sample size but I will keep on this.

Thanks again for taking the time to give me so much excellent advise hopefully what I've written makes some kind of sense I don't know if you can relate to maybe this phase I am in at the moment, hopefully I'll be able to move past this soon.

I'm on my phone reading this tonight. I'll have to respond later on when I get back to my keyboard. There's to much to type with my thumbs!

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #27 (permalink)
 PandaWarrior 
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cmmichaels View Post
Ban you... definitely not you have a VIP pass any feedback is really appreciated and thanks for taking the time to give such a detailed response. Same for anyone else reading the thread any comments whatever they maybe are all welcome. I'll try and address the points you've mentioned and give my thoughts.

Before I answer the questions I think I should put some context round it which I hope will mean my answers make a bit more sense. I think that right now I am in a phase where I can understand roughly what is going on during the day in the market and now with this new understanding comes a bit of over confidence its like another phase I guess that you go through. The transition from not having a clue what you are doing to being able to some days see a lot of the action before it happens has caused over-trading/trying to attack everything too much with out a refined execution strategy. My execution is terrible at times but I think I will soon get over this as the novelty will wear off but this is pretty much the mindset I'm in at the moment.


Fair point, to me this is the big struggle of trying to become a discretionary trader, I'm not a mechanical trader so I don't have rules that say if this candle closed hear and x y and z happens then place the trade. I'm trying to read each day as it comes and trade around the orderflow/price action. I have certain set-ups but every trade I take whether it works or not I'm still not 100% because they all look different and they all have different context so I'm just trying to find the right locations in the context of the day. Every successful discretionary day trader I've seen seems to see a set up and always be in some doubt around it and everyone gets stopped out. It never is crystal clear I think this is the part that just takes time, I'm not sure how I can go about refining this without simply putting in more screen time. Maybe there are better processes I can put in place to address these issues I'm not sure?

Context is always the same. It might look a little different but the successful trader looks for certain clues, places them in the context of what they know about how price moves and develops guidelines for operating within those guidelines. You should as well. The trader that tries to "wing it" will not succeed.

2. Indicators. I like them too, and you have a lot of them...to many for me but I understand....now about those indicators. You've mentioned the MACD only once or twice, the stoch once, the pivot levels once or twice....and the fibs not at all. You have however, mentioned the Moving Averages quite a bit. Now the question, do you use all these indicators as input when deciding to enter a trade? If so, how often do you second guess yourself based on so many indicators? And now the real question, which one(s) can you live without and which ones would you kill to keep on the chart?
This is very true and has become more apparent recently, I've realised that my focus has changed slightly over the past couple of weeks. For the previous few months I was hugely focused on the MACD then the Stochs. Recently I find I'm looking at them much less and really just analysing the candles more in terms of whose trapped and whose getting taken out next. Also the moving averages I definitely couldn't live without right now I use them massively, I analyse the context of the day around the averages really in every way possible, how far price has travelled away from the averages which one is price struggling to get through etc. I don't find I second guess myself much with the indicators I use them more as confluence so if its an area and then something is lining up with one of my indicators then things are looking good. I'm not really looking for them all to come together because that doesn't happen really its more they all have a purpose at certain times. The fibs I was using a lot but now I'm not at all because I wasn't getting them to work properly and there seems to be bigger things to focus on. It feels like when I'm learning you just sub-consciously just focus on one thing at a time because that's all your brain can digest.

So really to answer your question I'm not sure if I want to get rid of any at the moment because I don't find having too many is hindering me its more that I'm just not really using them all as much as I could but I think as my experience builds they will all play a role. Obviously I could be completely wrong and maybe I should just have 1 and I'm going to find this it out the hard way.

The question is which ones can you live without...not are they hindering you. If you don't use them, for God's sake take them off.

3. Moving averages: I have a suggestion regarding their use...take it for what its worth.....Stop shorting above the MA stack and stop buying below the stack and for god's sake, stop trading in between the stack.....just let the market come to you....truth is, MA's are the only indicators I've found any real use for and you don't need them at all once you get used to how price flows....but they are useful and I think you can make a killing using them....But obey some basic rules. Now you might say, But Pandawarrior, I think this huge spike is an exhaustion bar and its going to come off" and you might be right. But did you just make 80-90 ticks on the long that lined up correctly above the MA stack? If so, why fight the trend and sell into a long environment.....I recognize its a valid trade idea, but you are fighting the trend....and if you try to swing for the fences, you will eventually run into the larger buyers just waiting to buy the pull backs and the short you are sweating over will get ran over. Go with the flow baby!

This is great advice and something I've been journaling about and monitoring the position of the MAs to my trades, certainly reviewing my journal if I had just traded in the overall direction I would be in a better position. I think the reasons for this are probably back to the first thing I said about the mindset I'm currently in and also I think I just do the usual beginner trader error still of always looking for the market to reverse and catching the reversal. This needs to be one of my main priorities now. By the moving average stack I assume you mean when the averages are converging? Did you have this problem? Is that how you filtered all your bad trades by only trading with your MAs?

Beginners always look for the next reversal because they missed the last one. They "predict" something, the market validates them and they fail to execute. If you think somethings going to happen, act on it. With regards to the MA stack, I mean, if you are a trend trader, then a MA stack is great...trade only when all the MA's are in the correct order. Shortest MA on top, followed in succession down to the longest MA on bottom....its a common and accepted way of trading trends and I find it usually occurs just as stops are getting ready to be puked out. Not always of course but often times it will....and you get the stop orders fueling your initial run. Very pleasant when it happens. As to filtering out bad trades, I need to make some points here:

1. Stop worrying about so called filters. You can filter yourself into not taking any trades.
2. There is no such thing as a bad trade. There is however, very bad decisions to trade or not to trade within the context of your trading plan. Losing trades happen no matter how hard you try to filter them or how good your trading plan is. A bad trade is one you took or did not take outside the context of your plan. If your plan says take the reversals and you don't, thats a bad trade.


4. Several times you have mentioned you screwed up your stops. I can only guess your initial stop is to tight, fix that ASAP by changing it to something much larger....then you can tighten it up if you need to, but never go into a situation that needs a 25 tick stop with a 15 tick initial stop.....you might get hit before you have the chance to modify it....so fix it immediately.

Yes you are absolutely right this doesn't happen that often but Thursday it did a lot the whole day I was just off making careless mistakes etc again this needs to be addressed but you are right get the stop wider then bring it in is definitely the right way round.

Have you fixed this yet?

5. Quit trying to trade every damn wiggle in the market. You have an excellent MA set up.....use it. Don't buy until you can see the fear in the short's eyes...then buy with your maximum fire power.
Yes again this is the focus and I think this will naturally calm down a bit after the excitement of understanding things a bit more has worn off at the moment when I predict a move and it happens and I don't capitalise I feel worse than I do when I lose money. I think this is part of this period I am in at the moment, I'm so glad that I predicted the move and I'm finally understanding things I'm devastated I missed it, I'm sure this will wear off as hopefully my understanding and consistency improves.

Predicting moves is for losers. As traders, we forecast probability, not certainty. Get used to operating in the dark. Have a plan if price does "X" and a plan if it does the opposite. If you stop predicting, you'll stop beating yourself up over missing it when you are "right". Which incidentally is not always a good thing. If you begin every trade with the idea that you are wrong and the market must prove you right, you will go a long way towards securing longevity in this business.

6. Last but not least, learn to respect the idea of knowing when to quit....both for your stops....ie, don't let your largest losing day exceed your largest winning day...that really sucks....and also for your profits....a floor trader I know said he'd have made exponentially more money in his career if he'd stopped trading after the first two hours.....fully 1/3 of the days gains and sometimes more were given back in the afternoon....lots of reasons for this...too much to go into here but suffice to say, make 30-100 ticks in the morning and go home. Keep your cash. Its not about being right...its about making and KEEPING money.

My losing days have been bigger, I have a full stop out level that I slightly went over on Thursday but other than that I've kept below by trading small size. I think with regards to reviewing when I'm trading at my best will come later when I have a bigger sample size but I will keep on this.

Thanks again for taking the time to give me so much excellent advise hopefully what I've written makes some kind of sense I don't know if you can relate to maybe this phase I am in at the moment, hopefully I'll be able to move past this soon.

Of course I can relate, thats why I'm here, trying to save you some pain....up to you to listen or not.

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #28 (permalink)
 cmmichaels 
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Its been a wild week mainly bad then today I hit a crazy trade that I was actually in double size to normal and made back everything I'd lost since I started this journal and more. It was lucky really someone must have hit the market with a massive sell because GC just tanked over 100 ticks in a second. Overall my trading has been bad I need to review at the weekend read @PandaWarrior 's advice and try and get some more structure and rules to my trading. Glad I've got this journal so I can go back and review everything very helpful.

Results

Tuesday -82
Wednesday -60
Thursday +166

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  #29 (permalink)
 PandaWarrior 
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cmmichaels View Post
Its been a wild week mainly bad then today I hit a crazy trade that I was actually in double size to normal and made back everything I'd lost since I started this journal and more. It was lucky really someone must have hit the market with a massive sell because GC just tanked over 100 ticks in a second. Overall my trading has been bad I need to review at the weekend read @PandaWarrior 's advice and try and get some more structure and rules to my trading. Glad I've got this journal so I can go back and review everything very helpful.

Results

Tuesday -82
Wednesday -60
Thursday +166






Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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 cmmichaels 
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Thanks again @PandaWarrior for the excellent feedback I really appreciate it, even just hearing someone say good trade really helps as learning how to do this can be a fairly lonely endeavour so getting this advice is priceless. Thank you.

So I thought I would start to do some stats. for my journal so far to try and drill down on what's going wrong and after the advice from PW have a look at just how much the counter trend trades are hurting me. I'm pretty blown away with the results, first of all I found it a really enjoyable process and something that I am now going to really develop on in the future. I've started to do stats. for a lot of different aspects of my trading, I knew that the counter trend trades were hurting me a bit but I had no idea to this extent. Below I've attached just a couple of charts that I put together just using some simple trend defining techniques. One is slightly longer term one is a more shorter term trend definition but either way the results are pretty clear, you down need to be a qualified statistician to see what's going on here. Now I can see why FT71 is so hot on this subject when you see the results laid out like this it makes such a difference.

Lots more work to do but I'm happy with what I'm finding so far, thanks again PW. What it basically spells out to me is what I want to be focusing on is good trade location in line with the current trend with a reasonable stop, if I keep hitting these trades the profits should take care of themselves. Also with my stats a lot of the with trend losers were from bad stop placement and would have worked out I would say around 50% of them. Then the rest of them were when I was trying to get short with the trend but it went in to a really tight channel got to a certain point then tanked. I was trying to short it all the way up but again it just shows you need to be patient for the right location then hit it.

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 BTR411 
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Good to see you are still grinding things out Mike!

Panda Warrior had made some great points and suggestions.

You definitely seem to be fighting the overall trend and the trades appear to be indecisive, like shorts immediately followed my longs or vice versa, That is great if you are scalping, but I don't think that is what your goal is.

A 10-15 minute chart will help to clear things up in regards to the medium term trend and direction.

Like PW said, you are trading against the trend by trading into the moving averages (ie. trading into resistance) as opposed to trading away from and then back to the moving averages (a sort of reversion to the mean).

On the divergences, you are trading without "follow through" from the MACD...meaning the MACD many times has not flipped over the moved strongly in the direction of your trade. Other times, you are trading against the momentum divergence (annotation in your chart below). Also, it is helpful to look where the stochastic are in terms of OB/OS levels. Keep in mind, the stochastic are telling you where we currently are in the price range over the past X number of bars.

Gold can be a very tough chart to trade. I will usually trade it only a few times a week when the choice setups are there (especially on big news days like FOMC). This can go back to the "rules" people have mentioned. Even discretionary traders have rules and a firm idea of EXACTLY what they are looking for on a chart. If the setups are not there, then you don't trade. Sometimes the best trade is no trade. Why? Because that was the only trade.

Good trades take a fair amount of time to develop and play out over the course of the day. Try to get the direction of the move and looks for signs of strength or weakness.

The chart tells all and is the only thing that matters. The news, what the price did yesterday, this morning, etc. is all irrelevant to what is going on right now in front of you!

I annotated some of your charts below, hope it is helpful. If you have any questions, just holler.





If you can keep your wits about you while all others are losing theirs, and blaming you....The world will be yours and everything in it, what's more, you'll be a man, my son. - Kipling
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