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lovetotrade's YM Breakout Journal
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lovetotrade's YM Breakout Journal

  #181 (permalink)
Student of the Markets
Cocoa, FL
 
Futures Experience: Intermediate
Platform: Sierra Chart
Broker/Data: Apex Futures/OEC/FXCM
Favorite Futures: YM, Forex
 
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Posts: 311 since Oct 2014
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trendwaves View Post
I wonder why the FTP is so hard to get through ? Is it just the new set of rules ? As @lovetotrade pointed out, the design of his strategy was influenced to fit into the original combine constraints. So a change of constraints (objectives) may disturb some traders in the FTP ?

It seemed to me in studying it, as a complete outsider to the TST experience, the FTP is designed to get the new trader calmed down and focused on controlling risk. It's like a 'mini-combine' focused on risk control.

Some folks here that got through the FTP then ran aground on the other side with a live funded account. I think I can understand that due to the potential for a higher emotional aspect influencing results. I think the TST 'Scaling Plan' is designed to help alleviate and smooth out the transition.

My suggestion here is first don't over think this. Just make sure your trading plan fits well (will still work) with the new constraints. Like a sanity check, will this still work given the new objectives ? This of course requires you make sure you have a complete understanding of the constraints and objectives for this phase (Bob's point). If so, then simply move forward and trust your plan.

Thanks, that is the plan. My biggest struggle right now is deciding whether or not to trade two contracts during the first ten days of the funded account(I know I'm getting a little ahead of myself here). I will only have one shot at this, so I am trying to balance getting enough profit built up vs. the chance market conditions are not good for my strategy and I just tread water, albeit more deeply with two contracts vs. one.

Fortunately I have some time to think this through.

@bobwest thanks for the insights, your remarks are always warmly welcomed here.

Wishing everyone a blessed and wonderful Thanksgiving!

The bottom line is this Ė if you donít maintain a level of consistency in what you do, you will never be able to make the progress and achieve the results you desire. This is why so many successful traders talk about the importance of consistency in approach as that has often made all the difference between their success and failure.
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  #182 (permalink)
Student of the Markets
Cocoa, FL
 
Futures Experience: Intermediate
Platform: Sierra Chart
Broker/Data: Apex Futures/OEC/FXCM
Favorite Futures: YM, Forex
 
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Posts: 311 since Oct 2014
Thanks: 789 given, 476 received

Some of my new work

Just a little something I have been working on. I find that most strong trends happen once the current price action starts trending away from the VWAP, on the same side as yesterday's VWAP close. I know this seems super obvious, but for some reason it didn't really click until I put this framework around it.

I have also developed a volume indicator, that works similar to the directional index, but uses directional volume to give you a visual heads up of whether bears/bulls are in control. And even though moving averages are lagging indicators, it can still give you a nice heads up that strength is shifting from one side to the other. All this is, is a combination of up/down volume on the same chart region, and then 15 period EMA's applied to each. The idea is that whichever side is trending tends to be in control.

Here you can see that price chops around as price churns in balance, in between current and y-day VWAP. You can also see in the corresponding volume rectangle below that the bears aren't making a very strong effort as up/down volume seems to negate each other. Shortly after, nice bull volume comes in and we get a strong reversal back through VWAP in the direction of the trend, this is your confirmation to get long where you deem appropriate.

Now you have several confirming cues to get long with conviction:

1. Volume is showing solid buying pressure
2. Broken VWAP with no consolidation indicating strength
3. Wind at your back as price comes back in line with the main trend.

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I have been researching when I should be looking for trend days, and I feel like I'm getting warmer. I feel like I am drawn to a certain level of discretionary trading, and I want to have a plan for when opportunity meets preparation on days like this. Keeping it simple and focusing on context and price action.

The bottom line is this Ė if you donít maintain a level of consistency in what you do, you will never be able to make the progress and achieve the results you desire. This is why so many successful traders talk about the importance of consistency in approach as that has often made all the difference between their success and failure.
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  #183 (permalink)
Student of the Markets
Cocoa, FL
 
Futures Experience: Intermediate
Platform: Sierra Chart
Broker/Data: Apex Futures/OEC/FXCM
Favorite Futures: YM, Forex
 
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Posts: 311 since Oct 2014
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Has it been that long?


Wow can't believe it's been almost a year since my last entry here. I feel like my last post is still pretty in line with the trading I was seeking, but I sidetracked from that and created a mechanical system that seemed very promising. This journey led me to the British Pound and away from the Euro. Still can't believe I ever traded the Euro now that I have traded the Pound most of the year. It's like the equivalent of riding on a cheetah vs. a tortoise.

So over the last few weeks I have broken away from the mechanical stuff and leaned into discretionary, which is the way I have always desired to trade, but could never quite get the hang of and make it profitable. The mechanical system was essentially a B/O system designed to catch moves outside of the VWAP 1 standard deviation bands, as the theory was that no large move can ever happen without price making it outside of those bands, and kept me out of the chop that generally happened inside of them. Through the course of several months I traded and tweaked the system to be profitable, had a nice sloping equity curve, and through proper profit target and stop placement, minimal draw down. But something still didn't feel quite right even though I thoroughly enjoyed the process, and was much more in sync with that, than any other system I have created.

Which led me to the discretionary type trading I am doing now. Spending all that time watching price action on the Pound allowed me to take notes alongside my system, learning the ins and outs of how this particular market trades. And pretty soon I was able to start seeing the better moves before they started to happen as context, price action, and volume came in line. In essence, once I felt I had the contextual direction nailed, I could sense when and where money would come into the market to try and make another leg higher or lower. And that is when I had to leave the mechanical stuff behind.

The final aha moment for me was when I watched a few of @FuturesTrader71 webinars over again, and I saw him going over the theoretical average price(I believe it was called) as he scaled out quickly as price moved in his direction during a trade. Previously I was struggling with where I would place profit targets or exit a trade because I had so many good ideas floating around, that made a lot of good sense, were flexible depending on price action, and allowed me to capture the bulk of the move on large days. But on choppy days, shooting for the moon can eat you alive, and even full stop outs on a couple of trades can really eat into or even negate one large winner.

So after I watched the webinar again(I believe that one was about trading the hard right edge) and watching him explain the theory, I went to work punching in my own numbers and what did I find? That having a couple highly achievable targets would more than likely be the one thing that would allow me to succeed over the long haul. As he has mentioned before he likes to take more information risk over opportunity/price risk, and I can easily see why now.

More than likely a trade will move in my direction. How far? No one can know that. But I do know that if I take the first third of my position off at 5 points, and my stop is at 10 points, then even if the last 2 contracts get stopped out then my risk on the trade is still reduced by 50%. 50%!!!! And if I take the second third off at 10 points(which is also highly achievable) then I automatically have a winning trade/risk free trade even if my last third gets stopped out. Now I can let that baby run run run, and even add another third if the market is trending well and calls for it. This makes all the difference. And understanding that by putting more ticks back in my pocket through lower losses, allows me to not have to fight to get every tick on the upside. That makes my life so much easier, and I am ok with that.
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So now to the actual trading. A while back I created (what I guess you could call an indicator) something I call volume trend. It's actually a set of moving averages that follows the up/down volume individually, and basically gives you a visual aid in strength and direction of the volume trend alongside the price trend. At first I thought it might be the next holy grail! I mean this thing trends, has divergences, and crossovers to boot! And when I realized after trying to test it, it was inconsistent as anything else, I put it in the dustbin of Chris' failed trading experiments. But little did I know I was actually onto something pretty neat.

So I use a 120 minute chart for my largest context(essentially obvious support/resistance)
A 30 minute chart to determine daily and trend support/resistance
A 5 minute chart to determine intraday S/R
A 1 minute chart that I trade from and watch price action patterns develop
and a 30 second chart that I use the volume trend to help determine entries

VWAP is a huge part of identifying context for me now, along with the previous day VWAP close, and whether we are moving towards or away from it. Price action very consistently interacts with the daily VWAP and its standard deviation bands, and this provides many clues about what the market might do next.

I also watch volume profile very closely to see how well/not well the market is auctioning higher or lower. This also helps me determining whether we are getting closer to entering the market or not.

With all this information now at my grasp, I have no fears of missing out, or impulse trades anymore. Don't get me wrong I still have my fair share of errors to work through, but I am now starting to understand why the process of learning how to trade correctly takes so damn long. It's because it's a lot! There are so many moving parts, and psychological factors working against you, that there is absolutely no substitute for time. I realize that now, and it keeps me grounded when I get frustrated.

So onto today's trades:
The first chart is the 120 minute chart, I have highlighted what looked to be the next good target since we started to trend well overnight and after yesterday's reversal. This ended up getting hit after I was done for the day, but could have easily happened on the third trade.
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Next we have the 30 minute chart where you can see we have started to move significantly higher, and I marked trend support with a black arrow. So we are well above yesterday's VWAP close(black line) and the 30 minute trend is up, so if price is finding support at VWAP today then I will be looking for longs.
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Next we have the various entries I took on the one minute chart, and how price action played out. There was an important eco report out at 8:30 so that trade got bailed on early, but both initial targets were hit.
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And lastly is actual execution on the FXCM platform.
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Now let me be clear, I am still trading quite small as I learn to trust my gut and my rules. But at least it feels like we are as one. Main problems I have had are small execution errors, which are well documented in my journal, and reviewed on a weekly basis. IF you do not treat this as a professional, you will never become one. Will slowly add size as I continue to trade well.

I probably still won't be around too often but I do get emails about replies and what not. Hope all you guys are doing well. I now have an 8 month old boy that is amazing, and a part of my drive to succeed. Love you guys, still don't think I would be where I am today without the Big Mike community.

Ciao

The bottom line is this Ė if you donít maintain a level of consistency in what you do, you will never be able to make the progress and achieve the results you desire. This is why so many successful traders talk about the importance of consistency in approach as that has often made all the difference between their success and failure.
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  #184 (permalink)
Student of the Markets
Cocoa, FL
 
Futures Experience: Intermediate
Platform: Sierra Chart
Broker/Data: Apex Futures/OEC/FXCM
Favorite Futures: YM, Forex
 
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Posts: 311 since Oct 2014
Thanks: 789 given, 476 received

Updated Trade Plan

Trade Plan

Start from Daily chart to make sure you are not near any major S/R, if you are mark it on chart

Then 480 minute chart for trend, also for S/R, but larger targets of profit taking as well

Next 120 minute chart for the same when 480 is strong

Then 30 minute trend structure, pivot levels, Y-VWAP, Weekly VWAP bands. Is the intermediate term trending or choppy, who is in control? Areas of confluence.

OTF will take trend above/below R1/S1, and outside of weekly +/- SD1 bands. This is important. Retail will typically keep the daily range in between R1/S1, if it breaks out of this we are looking for large targets to be hit, S2/480 structure etc.

5 minute S/R mark up in real time

Next we generate our trading thesis('s) for the morning, areas of interest where we want to trade, and how we think the day is going to play out.

Set 30 minute alarm to focus on context and update thesis.

Scale in and out as thesis plays out.

Adapt and conquer!

Notes:
Broken 1 min trend structure will likely reverse to 5 minute structure unless trend is strong. Keep this in mind. Also be mindful of what happens when VWAP/bands are in the mix of this PB.

After large S/R is tested what happens next is very critical, but trend is not reversed unless we break days VWAP with conviction. As long as the 30 minute trend is not broken we should still be looking for trend continuation. A temporary break of 30 minute trend signals caution to get too aggressive.

Can only reverse from opposite 1SD when in line with larger trend, otherwise always long above VWAP, short below it.

Choppy market, emphasis on 30 min structure targets. Trending, target structure further out.

The bottom line is this Ė if you donít maintain a level of consistency in what you do, you will never be able to make the progress and achieve the results you desire. This is why so many successful traders talk about the importance of consistency in approach as that has often made all the difference between their success and failure.
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  #185 (permalink)
Elite Member
Los Angeles, CA
 
Futures Experience: Intermediate
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Posts: 83 since Dec 2011
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I was hoping I will find another YM trader here.
Have you switched completely to currencies now?

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  #186 (permalink)
Student of the Markets
Cocoa, FL
 
Futures Experience: Intermediate
Platform: Sierra Chart
Broker/Data: Apex Futures/OEC/FXCM
Favorite Futures: YM, Forex
 
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Posts: 311 since Oct 2014
Thanks: 789 given, 476 received

Yes, sorry I have not traded the YM for some time now, and have no intentions to do so in the near future.


Sent from my iPad using futures.io futures trading

The bottom line is this Ė if you donít maintain a level of consistency in what you do, you will never be able to make the progress and achieve the results you desire. This is why so many successful traders talk about the importance of consistency in approach as that has often made all the difference between their success and failure.
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  #187 (permalink)
Student of the Markets
Cocoa, FL
 
Futures Experience: Intermediate
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Favorite Futures: YM, Forex
 
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Posts: 311 since Oct 2014
Thanks: 789 given, 476 received

Alright, so this morning I had one of my best trades ever. Still left a bit to be desired, but that serves as a desire for me to constantly improve, so I am ok with that.

I did not use a hard stop, and am getting more comfortable with that. I do keep a trailing stop for my additional add ons, and there is a reason for that, but for my initial position/contract which is also my runner I am focusing on closing manually. When I no longer want to be long/short I will just get out.

So the range has been decent, but nothing crazy on the pound. ADR @80. So this mornings large move, with essentially no scheduled news came as a bit of a surprise. Either way, I had my plan and executed it pretty well I think.

So the daily trend has been down for a little while now, and after a nice pull back in the daily trend, momentum has started to shift to the downside. Probably has something to do with the dollar's move higher since the election, just a guess lol.

Next, monthly VWAP has just shifted seemingly from support to resistance, and the monthly VWAP close of the previous month seem to be offering decent support.
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This is a little better view, and where I start to get an idea of where it might go. The arrow to the right, points out the LVN which also just happened to be right above S1. So this looked like a good final target, since it was around other previous support as well. The other target that I did not think of till after was the monthly VWAP -1SD, the market actually reached this point on the sell off, so this is now on my radar for future potential targets.
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Next is my 30 minute chart with a weekly VWAP focus. Here I could see that we had broken down to the -2SD before the current pullback to the -1SD. The 30 minute trend looks to be up, but we just re-tested previous support not so successfully, weekly VWAP is sloping down, and Yday VWAP close is above us as well. All pretty bearish. The weekly -1SD was actually sitting right on top of the daily VWAP, so I thought it prudent for my thesis to be essentially long above/short below VWAP depending on price action.
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This is my 30 minute with pivots, mainly just to check on OTF action and potential target levels. I mentioned S1 looked good earlier.
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I marked my entries and exits with arrows just as a point of reference with my FXCM execution chart. Took some notes at 7:30: Short from VWAP, only got to 2/3rd position after a fairly quick breakdown with weak retrace. Just broke ON Low and M VWAP close. S1 could be in sight. Selling pressure seems good, though volume is pretty light. Market finding -2SD as resistance showing strong trend, market can't get back to -1SD but market stabilized VWAP well this morning.
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Will have to look and see if FXCM allows a change in entry/exit order, as of now I can't keep the runner on, just have to keep an eye on my overall average, and continue to scale.
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End of morning recap: Pulled the plug on the trade right before S1 target at LVN. Not sure whi I got spooked, another 30 seconds would have resulted in 20 more points. I managed to capture 89 points out of the 110 offered, feeling pretty good about that. Although the key to aggressive account growth is making the most out of days like today, must keep this as a forethought when the trend is pretty. The fact that the majority of the trend was outside of the -2SD should have been a good heads up to push the trade.

The bottom line is this Ė if you donít maintain a level of consistency in what you do, you will never be able to make the progress and achieve the results you desire. This is why so many successful traders talk about the importance of consistency in approach as that has often made all the difference between their success and failure.
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  #188 (permalink)
Student of the Markets
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Posts: 311 since Oct 2014
Thanks: 789 given, 476 received

So part of the struggle so far in sizing my trades correctly, is that I haven't had a losing day since I started trading my morning thesis through scaling, instead of trading setups within that thesis. What a great problem to have! LOL. But seriously, until I get an idea of what an average day's loss looks like I don't know how to optimize my size. FXCM allows such a drastic range, I can go from literally 10 cents a point to $10,000. Even the typical 1-2% stop loss rule no longer applies because my trading is so fluid with scaling in and out, that I have yet to take a full stop(this will happen I am sure). I will start playing with that next week.

This morning was a bit tricky, I really thought it might be a losing day after the first trade didn't go so well, and I started losing my way a little bit. I think I kept just enough of the larger picture in my forethought that I was able to trade through it, and turn it into a profitable day. Which felt really good as the last half of the morning went spot on. I also let those first losses go out of my mind, and focused on trading what was in front of me. Pretty sure that made all of the difference.

So I started off the day seeing that we seemed to be digesting yesterday's large reversal. Was on board the 100 point 1 minute bar yesterday, although didn't catch as much as I would have liked. But it looked to be a trend reversal on the larger time frames. Today we had come back to support and bounced, although initially broken.
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Next couple charts show lots of support. Monthly VWAP close, Monthly VWAP, Weekly VWAP, etc.
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You can see where it got a little tricky, but I knew once we broke the triangle I no longer wanted to be long, and if we broke support then I wanted to get short.
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Still profitable and took a few things away from today, what more could you ask for?

Have a happy Thanksgiving everyone!

The bottom line is this Ė if you donít maintain a level of consistency in what you do, you will never be able to make the progress and achieve the results you desire. This is why so many successful traders talk about the importance of consistency in approach as that has often made all the difference between their success and failure.
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  #189 (permalink)
Student of the Markets
Cocoa, FL
 
Futures Experience: Intermediate
Platform: Sierra Chart
Broker/Data: Apex Futures/OEC/FXCM
Favorite Futures: YM, Forex
 
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Posts: 311 since Oct 2014
Thanks: 789 given, 476 received

Just making note of my new work station. Hope everyone had a great Christmas!

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I have seriously ramped up my journaling, and I am finding that it is exponentially speeding up my learning curve once again. I probably write three pages now per day, and end up with 2 or 3 notes on what I can improve on or look into. Then I do a weekly review of the good and the bad, and at the end of the month, I review all the weekly reviews. It has truly been great. Most of what I write is just my thought process for the day as I am stalking trades, reading market movement, and working my trades.

I had a thought last week, and I have been trying to keep t in the forethought of my mind. I have been reading the market better than I ever have, and working on getting my execution to match the read. But the thought was this: Rangebound days or at least days with little range expansion, my goal is to make a little income, break even, or have a small loss depending on how tough the day was. On trend days it is my job to let the market do its thing and capture the lions share of the trend, and make the most out of the move. These types of days are for account growth.

Should be ready to try out for TST again in another month or two, trading in an entirely different way than before. Previously I was mechanical with some discretionary, this time will be purely discretionary. Can't wait.

Looking forward to 2017.

The bottom line is this Ė if you donít maintain a level of consistency in what you do, you will never be able to make the progress and achieve the results you desire. This is why so many successful traders talk about the importance of consistency in approach as that has often made all the difference between their success and failure.
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  #190 (permalink)
Student of the Markets
Cocoa, FL
 
Futures Experience: Intermediate
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Broker/Data: Apex Futures/OEC/FXCM
Favorite Futures: YM, Forex
 
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Posts: 311 since Oct 2014
Thanks: 789 given, 476 received


I think I have finalized my trade rules as I head closer to my next attempt with TST. We have vacation next week, and moving at the end of the month. So looking at mid-end of February for that. Will probably be going with the $30k account this time, as risk parameters should be fine, and profit target more easily attainable. And it looks like the perfect time as well, now that they just changed their FTP guidelines. I do believe the new rules set you up for success.

So I have two separate guidelines. Trade Plan, and execution. Hoping others might be able to get something from them as well. Even though these are quite detailed, I try to keep things as simple as possible once I take all the information in. Going over all this stuff is important mainly because it covers all the bases, and then puts me in sync with what the market is doing, and/or attempting to do.

Once I start trading, I let the market tell me what it wants to do, and I just try to tag along for the ride. Keeping that big picture in focus is a must, and still my biggest struggle. I have found though, the better I continue to get at that, the better trader I become. Now it is all coming down to the grind. Trading the full session day in and day out, taking notes, and learning from mistakes. By no means am I near perfect, but you do not have to be perfect to make money in these markets. You must be willing to grow a little bit every day, and you cannot do that without having complete transparency and honesty with yourself about your trading. I have "entered the zone" as Mark Douglas called it, where every mistake is a valuable tool that lets me know exactly where I am at as a trader, and what I need to do to get better.

I am happy to say that I am as close as I have ever been to trading professionally, and I love every step along the way.

-------------------------------------------------------
Trade Plan

Check news!!

Start from Daily chart to make sure you are not near any major S/R, if you are mark it on chart. Are we in chop or trending? What did the market do overnight? Is the trend strong and we are looking for trend continuation? Then market should be seeking value away from overnight H/L. Or did we consolidate overnight after a large move previous day, then we should be looking for intraday S/R to get aggressively long/short from for a trend day.

If the daily trend is up we are looking to fade potential levels from the pivot point through S1. and vice versa if the trend is down. Be very aware of this when the market is trending but we are pulling back on the daily charts.

Update all volume composites

Then 480 minute chart for trend, also for S/R, but larger targets of profit taking as well. Use vol profile composite to determine potential auction destinations.

Next 120 minute chart for the same when 480 is strong.

Then 30 minute trend structure, pivot levels, Y-VWAP, Y-Day VPOC, Weekly VWAP bands. Is the intermediate term trending or choppy, who is in control? Areas of confluence.

Mark up composite volume nodes. The market will trade to and from these levels, very important. Use a different color than for structure.

OTF will take trend above/below R1/S1, and outside of weekly +/- SD1 bands. This is important. Retail will typically keep the daily range in between R1/S1, if it breaks out of this we are looking for larger targets to be hit, S2/480 structure etc.

Mark up 30m S/R on 1m chart, and also on 5m chart. Remember this is where we will be looking for important trend contination or reversal cues. The more important the S/R, the more likely we may get a reversal. So if we are breaking these levels easily then the trend is very strong and you must be in the move.

5 minute S/R mark up in real time, or at least be aware. Remember 5m DT/DB are important to watch for as well, break of 2m S/R will more than likely bring the 5m S/R test.

Next we generate our trading thesis('s) for the morning, areas of interest where we want to trade, and how we think the day is going to play out. Draw previous day's vol profile and see what might be tested or become intraday S/R.

This is our final piece of the puzzle, we are looking for the daily and and 30 minute trend to line up. Our entire focus should be on 5m S/R and 30m S/R failure tests to get in on the intraday trend. Regardless of any counter trend movement we should be focused on getting in on the trend.


------------------------------------------------------------
Execution


Focus on 30 minute trend, strongest is when the daily lines up with this, but our main focus is on the immediate 30 minute trend. We always trade in this direction until that trend is broken, and the market shows us it wants to reverse.
We always want to be looking to fade levels that fall in line with this trend: 30 minute S/R, 5 minute S/R, VWAP, W VWAP, etc.

Our goal is to get positioned well to ride the duration of the trend, holding a contract behind 5 minute S/R/or VWAP trying to capture the bulk of the good trends.

When we hit the 30 minute S/R levels what happens next is critical. We should see signs of trend continuation, as this test will cause deep pullbacks in the trend if continuation does not happen right away. But as long as the 30 minute trend is not broken after a 30m S/R test, then we should be looking to fade all VWAP levels, and any large swing points. And remember that any level broken is likely to bring us to the next area of interest, so we must be nimble.

Currently we are trading two contracts. We scale into positions as we move into these predefined levels, specifically three and one points before we hit the level. Although VWAP may require a little more finessing, always be willing to fade any moves that jump over the VWAP.

Our stop is currently 3 points above/below that level we are fading, this is subject to change, and must be willing to jump back in if level ultimately fails. But for the most part this has proved to be a good distance.

The first target is at the next 5 minute S/R, as an income target.

We add an additional single contract after the first contract has been scaled out, and as we approach the next reasonable level. Again scaling out the same, although on smooth trend days, we may hold that additional contract until the next 30 minute S/R or CVN(Composite Volume Node).

Our focus is to get a core position going for the duration of the trend, all adds, scales and focus should be on maximizing that position. This reduces trades, and allows us to capture most of the trend.

If we only get one contract on, this will act as our core for the time being. If we are trending well then we will look to add to that position, and scale out as necessary. IF we are within the daily /overnight range, and we get a large move with no pull back potential, then we can capture those profits at a suitable level. This would be any 30 minute S/R, overnight High/Low, S1/R1.

When large countertrend volume comes into the market we must be a bit more cautious, especially around 30 minute levels where we might need to be more agile, in case of trend reversal.

These rules will continue to evolve as we learn, and continue to gain experience.

The bottom line is this Ė if you donít maintain a level of consistency in what you do, you will never be able to make the progress and achieve the results you desire. This is why so many successful traders talk about the importance of consistency in approach as that has often made all the difference between their success and failure.
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