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lovetotrade's YM Breakout Journal
Started:November 6th, 2014 (04:13 PM) by lovetotrade Views / Replies:11,148 / 187
Last Reply:November 22nd, 2016 (11:16 AM) Attachments:137

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lovetotrade's YM Breakout Journal

Old June 19th, 2015, 04:03 PM   #121 (permalink)
Student of the Markets
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Futures Experience: Intermediate
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Favorite Futures: YM, Forex
 
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Thanks: 729 given, 419 received

Today I feel like I traded well. Unfortunately my PnL does not reflect that, as I got a little whipsawed today. But I was committed, read the market well, executed my setups, and have to accept that today was just not a profitable day for me.

So I will touch on what I did wrong, then what I did well:
1. A couple of my targets were off by just a couple pips. I must remember that I need to look back over prior swing points and points of S/R that come close to my profit targets, and adjust them accordingly.

2. I should not reverse my position until trend has officially ended and changed direction. I got a couple decent entries, and were possibly legit in the immediate context, but ultimately were low probability, and unnecessary losses at the end of the day. Reversing a position is not part of my plan.

So what I did right:
1. I read the market correctly based on market structure.

2. I held my stops in the right places, and trailed it correctly allowing me to take advantage of the main trend.

3. As soon as I realized I was wrong, I took my loss and moved on.

4. I kept my emotions on an even keel all day, and read the market better because of it.

Ok quickly onto my trades. Today was a little confusing because we sold off after wednesday's good move to the upside, to the point that the hourly chart was in a downtrend. The five minute downtrend had obviously slowed way down after a couple failed moves to the downside. We were also at the breakout level from Wednesday that I thought could be strong support, and even though we were in an hourly downtrend, we were merely correcting on the 4-8 hour charts.

1st trade- strong bull bar breaks above previous high, enter 1/2 position. Immediately breaks down so I reverse expecting continuation to the downside, and scale into full position. Stopped out.

2nd trade- high confidence that this next breakout is the real deal. Pullback is very strange for a breakout, but scale in and out back to full size. The market takes off. I get two scales and miss the last scale by two points. After failed low, and strong bull bar at the top of the trend I enter another small position according to my plan. Small stop on that, and then quickly stopped out on the rest of the position.

3rd trade- Reversal. The market seemed to have reversed hard at previous day low, and so I was ready to ride that short to new lows on the day! Not so fast. Market stopped at DVAH and consolidated for a move higher. Reversed back to long and exited for lunch and friday EOD right as the market made another leg higher.

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Old June 23rd, 2015, 04:25 PM   #122 (permalink)
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Slightly profitable day, much more green arrows. The beginning of the day was moving smoothly lower and I got short after the morning report. Entry wasn't great, but I had to react quickly. After the second move down we got some ugly looking candles showing bull strength coming into the market so I took more profits. Shorted the rebound into the first and second sell off and scaled off a few more gains. Thinking about scaling a bit more aggressively, but I know that as soon as volatility picks up that will not be ideal. Maybe I can set some volatility conditions for aggressive/more lenient profit taking targets. Oh yeah, missed second scale out by less than a half tick. This is beginning to get ridiculous.

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Old June 24th, 2015, 10:09 AM   #123 (permalink)
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So after doing some more thinking, I realize that there are only two things holding me back from long term success. No revelations here, and they probably apply to most traders. I am a trend/momentum trader at heart, and so I must play to the strengths and weaknesses of my trading plan in order to fully capitalize.

1. I must take full advantage of large trend days, and I absolutely must not miss any of them. My trading plan gives me the full ability to exploit a trend that runs infinitely. The reason for my current draw down is because of missing the last two or three large moves, and that does irreparable damage to my equity curve as it completely misses its next leg up and continues to draw down.

2. Winning days/losing days during lower volatility. I should be very content with days that I even make a small sum of money or scratch when the market is not moving much. This keeps me in the green, and puts me one day closer to a trend day with no draw down. On losing days I must remember that my only goal is to limit those losses, so that I do no major damage to my account. My goal therefore is not to erase the possibility of a draw down, but to embrace it as part of the system and limit it.

If I had done this back in November(would have required me to understand the concept) then I could have successfully waited out the period of low volatility that caused me to stop trading, and been around when the large moves came back. But I do not regret any decisions I have made. I am a much stronger trader today because of that decision to go back to the drawing board and ultimately de-leverage.

But one of my major weaknesses back then was that I had no plan to deal with various market cycles, and as fully leveraged, had no way to reduce size when conditions were unfavorable. Smaller targets would have gone a long way though.

So with this information I can make a couple of small adjustments that should impact my account positively.

My trade management plan currently has me taking profits over a wide range. This causes profitability issues when only half the targets are hit and the other half are stopped out. Resulting in most successful trades to be break-even while all losses continue to be full stop outs. This automatically puts my equity curve at a disadvantage.

So for now I will consolidate my targets to two levels and continue to keep a runner vs. 4 targets and a runner. I will also take profits more aggressively by setting my targets lower, automatically raising my profit for each trade. Doing this also increases the size of my runner should I end up in a nice trend, which will also have a larger impact on those days.

This will also boost my confidence as winning trades will make more money as well now. Looking forward to the changes.

Peace

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Old June 24th, 2015, 01:27 PM   #124 (permalink)
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Alright, well off to a good start. Nothing has been a bigger boon to my current success than learning to read context and market structure correctly. It puts my mindset in gear to focus on the proper direction, and quickly becomes obvious whether things are lining up correctly for me or not. Still working on patience for better entries and I think that paid off well today. @Private Banker had mentioned in his webinar that he likes to track his progress by monitoring how many points/ticks/pips he took out of the days range, and that resonates pretty well with me. We all have limited opportunity in the market each day, and if you are pulling out more points than the whole day provided(from top to bottom that is) then I'd say you are doing pretty well. I think I did that today and it feels good.

So today things looked to head lower after a mediocre bounce overnight, and good consolidation on the hourly and 15 minute charts. Unfortunately the daily and weekly chart are in a wedge. So not sure what it's gonna take for us to break out of there, but I'm ready for it to

Simple trend trade to the downside this morning after the 8:30 report. Got one scale out, exited second third on ugly looking bull momentum, third stop at end of trend.

Second trade is my first successful RTM trade. When the trade first started the VPOC was above the VWAP, so I targeted the VWAP. Pretty obvious rejection off the low of the day and moved swiftly in my direction. Well I wasn't paying attention to the fact that the VPOC shifted lower and stopped on a dime there. Once I noticed it I was able to get half off on a rebound, and held the other half in case of any follow through to the upside. No such luck.

Minimal heat today and no losses! Today's range(from 8:30 report) 1217-1180 =37 points. Total points today =40.

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Old June 29th, 2015, 04:15 PM   #125 (permalink)
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Futures Edge on FIO
Today we finally got some movement! Of course most of it happened during lunch, which is usually pretty quiet for the Euro(especially on a Monday). I have been reading a really good old trade journal by indextrader7. He's not around anymore as it looks like he fell off the deep end, but man did he leave some great stuff behind. Still on his first journal: https://futures.io/trading-journals/19591-short-term-tf-russell-2000-futures-contract-trading.html

It has given me some inspiration and a few good ideas. One of the more important things I have learned is that it pays to really focus on the immediate trend until it has clearly reversed. I realize most of my revelations are basic things, but it has really helped seeing it in action and produce positive results. A positive shift in confidence can do wonders for trading performance. I am also using a smaller 250 tick chart with a momentum oscillator to help time my entries a little better. I love the 5 minute chart, and it will probably forever be my main trading timeframe, but the 250 chart helps me see whats going on at S/R a little clearer, and gets my trade on a little faster than a 5 minute bar close, thereby reducing my risk. All while adding two extra bits of confirmation. Pretty happy with the results so far.

So besides a little chop at the beginning of the session, today was a pretty easy day to make money if you had your head on right. My last exit before lunch was the reversal at the previous day's high. I was able to squeeze out one more trade during the baby's nap at the end of the day. For missing the bulk of the move I still pulled out a decent amount of ticks which I am very happy about. Fumbled my first trade but got out quick, still struggle with my first trades some days.

Hopefully the dollar has shown it's hand today, and we have broken solidly out of this wedge. With all the crap about Greece, who would have thought that it was going to be to the upside after a large gap down? Trade what you see, not what you think. Thanks @Big Mike

Today's range: 176
Ticks taken: 107

I'll take it, and if I had been at the computer I know I would have been in at least one of the big afternoon moves, if not both.

Today's charts
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Old June 30th, 2015, 05:17 PM   #126 (permalink)
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This morning's trades went pretty good. Nice little trading channel. I originally thought today would be an RTM day so I shorted the previous peak a couple of times, and then reversed when the market became obvious it wanted to head higher. Got out my last bit when the trend characteristic changed. You can't see this so well on the 5 minute chart, but the 250 chart it becomes pretty obvious.

Took a second trade for higher, then I realized that we had fallen all the way back to value and that any extended moves to the upside were limited. Quickly got out.

Today's range- 130 ticks. Ticks captured - 55 So I actually got 55 out of the 80 ticks of the morning range I traded.

Arrows mark points of entry.

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Getting back into a groove and I like it!

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Old July 1st, 2015, 04:28 PM   #127 (permalink)
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Ok so I have a quick confession to make. I am in practice mode to try out for TST. So today I was playing around with trading one position vs. the three that I have been trading. My goal is obviously to get funded, but the first goal has to be conquering the combine requirements. From what I understand, it will require me to basically trade one contract until I have built a cushion, and then scale up to 2. By this I mean my avg stop size vs daily DD for the 30k combine will require me to start with one contract.

Today I was focusing on using trend lines along with S/R to identify trends, increasing momentum, and exit points. The market seems to have some interesting tendencies when trend lines are broken, and I'm looking to exploit those tendencies. Also accelerated momentum by a new, more vertically sloping trend line allows for a reliable exit when broken. Looking to incorporate this into a multi contract scaling trade management, but for one contract it gives an obvious area for profits.

The general idea will be to enter the trade at a structurally significant area, and let the trade develop. Ultimately exiting with momentum. So more room for movement in the beginning, with less forgiveness towards the end of the move.

-----------------------------------------------------------------------------------------------------------------------------------------------

Ok so on to today's trades. Pretty easy to see we have a downward trending market. The morning report broke things to the downside as I was looking for. Got in during the initial 5 minute bar, and exited when short term momentum died out.

A few more singles in and out of the market, trying to go with the flow. Trying to get used to slightly different execution with the one contract, so was just trying to get some live experience. Nothing ground breaking today, although I am very happy with development so far.

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Old July 3rd, 2015, 09:55 AM   #128 (permalink)
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Holy smokes! Adam Grimes on the Hero's(insert trader here) journey. Very thought provoking and awesome read.

The Trader's Journey: The Hero's Journey - Adam H Grimes

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Old July 6th, 2015, 12:31 AM   #129 (permalink)
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So many awesome thoughts over the weekend, can't wait to get them into the notebook tomorrow. All about trend lines and momentum, don't know how I have missed these things up to this point. Game changers for me.

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Old July 6th, 2015, 04:41 PM   #130 (permalink)
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Alright so I have some good examples today of what I'm looking for. This has put all new confidence into my trading, and truly allows me to focus on the right market cycle, direction, and price action.

Through periods of balance and imbalance(consolidation and trend), I can also use acceleration and deceleration of momentum through trend lines to help me read the market better. Like most of my trading, when I have found something that was a building block to my next level of understanding and intuition, it was not some major revelation. It was something simple that had been there all along.

So the general idea is that during trends, a sustainable trend is one that is not too steep, and has pullbacks to draw in fresh buyers and sellers. During unsustainable trends, each leg tends to accelerate more so than the last, until all participants have entered in one final blow off move. Then the market must either consolidate before continuing, or reverse. Also the market has a tendency to re-test the most recent level of support/resistance once the trend line is broken. So I feel that given all this information, the approach to the market becomes a bit clearer. So it leads me to a few theories that I have applied to my chart reading.

1. Trend line deceleration during a solid trend is a healthy observation for trend sustainability, as long as the actual trend(of HH,HL,LL,LH's) is not broken.

2. Trend line deceleration during a counter trend, accompanied with any new failed highs or lows should signify imminent trend resumption. This gives us one more thing to watch for, possibly giving us an edge over those waiting for price action to confirm the change.

3. How the market reacts with the S/R once the trend line is broken, gives us insight into whether to continue to believe in the trend, or that we should proceed with caution. And if it breaks the trend line, but never even tests previous S/R gives another indication of trend strength or weakness.

4. Once a trend line is broken, I want to see failure on the third attempt higher/lower within the previous swing. If there is continuation on that third attempt, I assume the trend to be over for the time being.

Now I am not trying to convert anyone, just trying to show and explain the best that I can how it has helped me see the market in a different way.

So the first chart is my hourly chart. I do look at larger charts and the context the hourly is in, but I never fight the flow of the hourly chart. Here you can see it looks like we have the down trend resuming after the gap lower Sunday night, and then a re-test of resistance before attempting to head lower. This sets my focus for the day until price action disproves this. I boxed in the important price action.
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The next chart is my main 5 minute chart. The first three arrows point to entry options to get in with the downtrend. The three numbers label the three attempts counter trend once the trend line was broken. You can see that we had a very nice failure at point three, but the report out at 10a.m. completed the trend reversal. The bottom two arrows show price action once the trend lines were broken. The consolidation at the high of the move on the first arrow was pretty bullish in my opinion, possibly signifying the breakout to the upside in advance. The light dashed lines are the accelerated trend lines, and the heavy lines end up as the main trend lines as they are moved with the price action.
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My execution still left a bit to be desired, but it wasn't because of a lack of my understanding of the market conditions. Today was the clearest my mind has been during a trading session ever. I was in when I was supposed to, let the market develop when it needed to, added when the market conditions called for it, and scaled out and exited according to my plan. I will just have to fine tune with practice.

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