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Large lot sizes is one criteria but the pros can break up their lots so I analyze the intensity and the momentum. I also look at what they're doing and how price is reacting to their activity and then mix in some statistics.
Can you help answer these questions from other members on NexusFi?
I think it's quite interesting that one could believe in a correlation of the two based on a single incident.
Earlier in the thread I posted about VIX calls being really expensive, hinting at a move up in the VIX which would be bearish for stocks. That was based on 8-9 occurrences. The VIX never really moved up so those calls are probably worthless. But I'm not sure when they expire.
Good to hear; I'll continue to ask questions occasionally when I think I could help in someway.
I will look again at the thread and post a reply where necessary. I see where you last asked about Mike not posting to his journal April 1st; I will keep looking.
1 - I only take a few swing trades per month so it's not a consistent source of income.
2 - The risk for swing trading is high (often > $1k although I need to work on limiting it)
3 - I see daytrading as a way to make consistent money daily and swing trading as a way to use that capital wisely. If I had 1 million I'd probably just focus on swing trading. If I daytrade & swing trade the same markets then there is a synergy there. Watching the market for daytrading can help with swing trading.
This thread is now 1 month old! 8000 views in one month is quite a bit. I want to thank those who have participated in the thread, especially those who have challenged me on my ideas and my trading, and to the lurkers who clicked the thanks button. Knowing people appreciate the posts really motivates me to continue posting.
This week I decided not to trade and spend my time learning and observing the markets. I must say it's been a breakthrough week for me. A paradigm shift.
I spent most of my time learning about market profile and balanced & imbalanced markets and how to tell the difference between the two. What I learned was that I was trading balanced & imbalanced in the same way, with a reversion to the mean type approach. That works great for balanced but doesn't work for imbalanced.
If you remember the two cycle setups that I wrote about in the cycles thread:
1 - cyclical turning point in 2 or more timeframes
2 - a breakout on the smaller timeframe in the direction of the cycle on the highest timeframe
The first is for balanced ("cycling") markets. The second is for imbalanced ("trending") markets. To be honest I've always had trouble taking the #2 setup. Always afraid of failed breakouts etc. And that meant I was favoring #1 even in trending situations.
We talk about psychology and I've even said an edge is more important. So which was holding me back? Obviously going "counter-trend" in a "trending" market is not going to have an edge. But at the same time the choice of trading "counter-trend" in a "trending" market could be considered a psychological problem. But for me a written plan takes care of that and either I can follow it or I can't (more on that below), which removes psychology from the equation.
I spent hours studying my charts, my trades, and market profile concepts. I also watched some trading videos and webinars that I found on the web (lots at eminiwatch & Market Delta's website and it's free). Instead of just trading and repeating the same mistakes, I took a step back to see the forest for the trees to use Richard's analogy.
The second change was trading 3 contracts was doing more harm than good. I'd scale out too fast and when I took losses even small ones the commissions hurt me. So I'm now trading 1 contract until that's consistently profitable. I find all in all out much easier, at least to start.
So the past few days I didn't trade I just watched but I did mark my charts where I thought a setup occurred and I mentally kept track of some possible entries etc. Not having trades on kept my mind open to all possibilities. It's that same openness that I now need to keep in my trading.
Now for the charts: After lots of testing and examination, I determined that the sine wave indicator works best for ES and does not work as well for more volatile markets such as Dax & CL. So I took it off for DAX & CL. I still think in cycles I just see them for myself. And for those markets I'll use an approach more geared towards orderflow & market profile. I also combined a few of my volume indicators into one paintbar and that replaces the eminiwatch pro am. Mine is similar but gives more professional activity signals. This simplified my charts quite a bit. I tried programming this into Market Delta with RTL but RTL is very limited (for example there are no loops!) so I was unable to do so. But I have my TS charts set up next to my MD charts so that I can see both and since they have different information I actually like it separated. Two platforms yes but to me just 2 different windows.
For ES I will continue the same method using cycles but CL has priority and for ES I'll focus on some of the bigger more obvious more reliable setups and also focus on higher timeframes looking to get into swing trades.
For anyone who doesn't have a written trading plan I highly recommend it. I used to write out lots of elaborate criteria for entering trades, trying to make it as mechanical as I could. That didn't work. So your trading plan could be as simple as this (I'm making it up just as an example):
Voilà. A simple trading plan. Mine is more complicated but that's a good start as an example. If you don't have at least that, then I highly recommend working on it. If you need help let me know, either in the thread or via PM if you are shy.
So to sum all that up:
- more knowledge about context and trade location
- a written plan describing an edge
- discipline & patience to stick to the plan
- less info on the charts to prevent information overload & second guessing
I felt, no I knew I was ready to trade again so I started today, one day early. There were lots of trades I'd "normally" take but today if it wasn't in the plan I didn't trade it. I took 3 trades on the dax for +1 0 & +6 ticks for a total of 67 euros after commissions. This was actually all one setup it just took me a couple tries to get it right. My goal is 250 euros for the dax session so I don't meet that but today was not a good day for trading so I'm happy to meet my 2nd goal which is to not have a losing day!
I missed a trade while writing this so I plan to scale back my posting a bit. In general I post when things are slow but then there is a breakout while I'm not paying attention and I miss it. I asked for feedback and what you all like and/or don't like and what you want to see and I didn't get many responses so I'll just post on what is useful for me. Which right now is sticking to my trading plan and monitoring my performance so that I can get to real money trading again. If you want to see something else just let me know.
In the mean time I plan to spend some more time visiting other threads and learning from others. benbrooke, fiki, david_r are all sharing great information and setups so I should spend more time learning from them instead of rambling here.
Thanks again to everyone who participated, this past month has been a huge learning experience and I hope to learn as much or even more over the next month.
As we say in eXtreme Programming: "Embrace Change!"
Change is good. If you're not successful then continue changing until you are. Just try to change one thing at a time. Don't keep repeating the same mistakes over and over. If you make changes, make them to your plan first so that everything comes from the trading plan. Eventually you'll get something that works for you.
But if you never dare to change anything you may be stuck in a rut forever and end up like the dinosaurs. Change your market, change your method, change your platform, change your tools, change your plan, change your stoploss, change your profit target, change your daily goal, change your trading time, change your desk, change you ideas about the market, change your wife (just kidding on that one!), change whatever you can just do it step by step and measure your progress to make sure you're moving towards your goals.
I continue to enjoy this thread, thank-you, Cunparis.
Your comments above remind me of the Buddhist admonition not to keep trying different meditation techniques : the analogy is that if you want to find water, you have to dig a single well deep enough, otherwise you're left with many unfinished, dry holes. The best trader I know, someone who makes >$5k / day after day after day, is using the same simple indicator setup he was using 10 years ago (interestingly, I cannot copy him, although I have tried - he has an uncanny chart reading ability).
So I think that especially when one is making quite some winning trades, as you appear to be, it is better to make very few changes, one at a time. I find this hard to do, but at least it's what I always keep in mind (I excuse what I call cosmetic changes, as I like the visual of my charts to "fit" & enjoy the constant process of improvement).
Btw, I think a trader must be able to clearly & simply define his/her edges(s) to be able to trade confidently...
...and lastly, I'm in the "Psychology First" camp.
CL was pretty tough today. Not a lot of order, mostly chaos and lots of "dumb money" driving the market. ES is in a narrowing range so no trading there.
I hit my goal of $200 for CL so I stop trading, but still watching.
I made a new spreadsheet, it's real simple either I hit my daily goal or I don't. The trade stats I just keep in ninjatrader & i do screenshots. I also take screenshots of my charts while trading so I can review them. it's important when having multiple platforms.
Overall there were lots of CL trades that were in my plan but went too fast for me to get in. So that's my focus next week: be more alert and quicker to click on the DOM. Just 1 missed trade is worth $100 so it has a huge impact on my performance.
Have a good weekend.
PS: My goal is without commissions. I just do that so I can say my goal is two winning trades. Commissions makes it more complicated.
If I daytrade & swing trade the same markets then there is a synergy there. Watching the market for daytrading can help with swing trading.