RB's Formation Trading Process for Futures - futures io
futures io futures trading

RB's Formation Trading Process for Futures

Discussion in Trading Journals

Updated by rlbtrader
      Top Posters
    1. looks_one rlbtrader with 43 posts (41 thanks)
    2. looks_two COTtrader with 3 posts (2 thanks)
    3. looks_3 Quick Summary with 1 posts (0 thanks)
    4. looks_4 lsubeano with 1 posts (1 thanks)
      Best Posters
    1. looks_one tigertrader with 3.0 thanks per post
    2. looks_two rlbtrader with 1.0 thanks per post
    3. looks_3 lsubeano with 1.0 thanks per post
    4. looks_4 COTtrader with 0.7 thanks per post
    1. trending_up 4,759 views
    2. thumb_up 49 thanks given
    3. group 9 followers
    1. forum 50 replies
    2. attach_file 117 attachments

Welcome to futures io: the largest futures trading community on the planet, with well over 100,000 members
  • Genuine reviews from real traders, not fake reviews from stealth vendors
  • Quality education from leading professional traders
  • We are a friendly, helpful, and positive community
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts
  • We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

(If you already have an account, login at the top of the page)

Search this Thread

RB's Formation Trading Process for Futures

(login for full post details)
  #1 (permalink)
Newport Beach, CA
Experience: Advanced
Platform: TS
Broker: IB, TS
Trading: ES/YM
Posts: 43 since Jun 2010
Thanks: 4 given, 43 received

RB's Trade Journal
I have been an independent trader for the past 8 years and was an institutional trader for 12 years prior. I currently work at a prop trading firm trading equities, but my real focus is on the futures markets that I trade for my own account. The equity indexes cover much of my daily trade activity but I also dabble in rates, FX, and commodities (active recently in CL) under certain market conditions. My trading time frame is typically 5 minutes or the equivalent in tick charts (e.g. NQ 987tk), higher time frame is typically 15M to 2H (and equivalent in tick, e.g. NQ 3000tk), and lower time frame is 1 minute (and equivalent in tick, e.g. NQ 144tk). The current iteration of my process (seems to be forever evolving which itself is an issue) is just my own way of organizing good price action ideas taken from many other discretionary traders who have published their work in one way or another. As a note, I began as a systematic trader and spent a several years coding hundreds of systems before finally realizing that a systematic approach didn't suit my personality. I have gone down countless roads and have committed every novice error possible, and sadly I still do to some extent.

I have a number of personal goals for the journal. Even today I had problems with reactive, unplanned trading, and so accountability is a big goal. Complexity is another huge problem and I figure if I can't explain a trade in terms of my basic trade plan in a way that makes sense to others then my analysis is overly complex, if not flawed. Additional objectives are to draw feedback on my process and find others trading in a similar manner to possibly exchange ideas.

As for my process, I look at any market in terms of 5 different formations (structures), or Forms: 3 Directional - Trend (FmT), Channel (FmC), Spike (FmS), 1 Partly Directional - Wedge (FmW), and 1 Non Directional - Range (FmR). I define each of these uniquely based on specific conditions, and this likely differs significantly from common definitions of these terms. Simplified, one might describe the market in 2 basic conditions: Trending or Ranging. In a trending market, we are looking for pull backs to enter in the direction of the trend, and in a ranging market we are looking to fade tests of the edge of the range. The Form approach basically fine tunes how far the pull back should retrace or where specifically a test should be faded.

I arrived at this "Form" approach from finding common structural conditions that I use to define the setup (SU) area, entry management, stop loss, and target levels. Each Form has specific levels I call Key Price (KPx) that I believe represent important market decision points. I have a process for evaluating price action at these decision points for clues as to the next move, and this becomes the basis for every trade setup (SU). My thesis is that once a decision becomes objectively clear then an outsized number of traders will act in uniform fashion immediately after (area of imbalance, often called supply/demand zones) and price will be driven to the next KPx area. The stronger the imbalance, the stronger and more important this KPx area should be on subsequent tests. If that subsequent move away is quite different from preceding price action then this typically results in a new Form containing that KPx area that led to the imbalance.

I classify each form as strong form (SF) or weak form (WF). This is based on relative strength, a concept I call Relative Directional Strength (RDS), by comparing the current Form with the last occurrence of the same Form, which could be in the same direction (With Trend, WT) or opposite (Counter Trend, CT). Absolute strength is also important but I find the implications to be quite different. If the Form RDS is increasing or steady state then I label it SF Form and consider that Form's KPx levels as SF KPX. Likewise decreasing RDS would result in WF Form and related WF KPx. For example, if the imbalance cited in the last paragraph was absolutely strong but led to an extension that was smaller than the most recent similar Form say from the prior day, then this new Form would be WF, as would be that seemingly strong KPx. Absolute strength might have been great but relative strength was decreasing. The classification of WF or SF KPx drives my entry management and position management decisions.

Multiple time frame analysis is also a big part of my process. My assumption is that markets are fractal and so I can conduct the same analysis across time frames to stay aware of decision points derived from other time frames. My biggest losses typically come from impulsive trades in which I did not fully go through my analysis, missing an obvious KPx level on a different time frame and unknowingly trading against the market's clear decision and explosive follow through.

This is already too winded so I will refrain from getting into examples and more specifics about the plan. I will begin citing all of my trades from Monday and will include relevant plan details with each trade. If it would be helpful to others I can also post parts of my plan with details.

Reply With Quote
The following 12 users say Thank You to rlbtrader for this post:

Can you help answer these questions
from other members on futures io?
Where is the link to download GomiRecorder?
Stacked Imbalances.
Sierra Chart
T​​​​​​radestation datafeed (real time and historical) to NT8
MT4 Switch All Charts 1 click
Platforms and Indicators
Want to Go With Futures
Emini and Emicro Index
(login for full post details)
  #3 (permalink)
Newport Beach, CA
Experience: Advanced
Platform: TS
Broker: IB, TS
Trading: ES/YM
Posts: 43 since Jun 2010
Thanks: 4 given, 43 received

This is my first day of posting results. Sorry for the data overload - will get better at organizing. Any tips would be appreciated on format. All criticism welcome.

Finished down about $350 in an awful day of trading. I mismanaged big opportunities in CL and ES and really got off
my game. A series of impulsive, reactive trades set me back about $1500! I typically take 3-5 trades per day and today
I took 25 (the others were scratches, no significant PnL impact)! Had I stuck to those trades that met
trade plan conditions instead of getting caught up in volatility, it could have been a reasonable day. Likewise, had
I not had 2 big wins in CL, it could have been a disaster.

All PnL gross of commission/fees, all times PST
Format: Bought/Sold (B/S), #cts/shrs, Ticker, Entry Price, entry time, exit (S/D), Exit Price, PnL

1. B 1 CL 56.62 at 15:30 (Sunday after open), S 15:35 57.63: +$1010
30M dFmC (down channel), SU bull failed BO (ufBO) of TL
Setup (SU) area 56.58-56.88, Stop Loss (StpX) 56.13, Tgt 57.63
triggered on 89 tick up breakout (uBO)
-lucky - as planned

2. S 4 ES 2009.75 at 6:39, B 4 ES 2011.5 ($350)
5M dFmW (down Wedge - 3 push pattern), SU test distal edge of Wedge (dWd)
SU area 2007-2012, StpX 2013, T1 2002, T2 1993
triggered on 1m dBO
-complete mismanagement - tightened StpX after entry, stopped out, would have been winner

3. B 2 CD 0.8590 at 7:32, S 2 CD 0.8585 ($125)
3000 tk dFmW, SU ufBO of uS (Symmetrical Measured Move vs. prior dFmW) = 0.8592
SU Area 0.8590-8600, StpX 0.8574, T1 0.8615, T2 0.8626
triggered on 233t uSB (signal bar)
-tested down thru uKPx (Key Price) but tried in case there was sharp reversal, didn't happen so scratched

4. B 4 YM 17188 at 7:42, S 2 YM 17208, S 2 YM 17242 +$740
5M (day session) dFmW, SU ufBO of Previous Day (PrevD) Low = 17187
triggered on 144 tk uSB, StpX 17173, T1 17208, T2 17242
-tested exactly to uS (symmetrical move) so entered next LTF stall

5. B 4 ES 1988 at 8:21, S 4 ES 1986 ($400)
3000 tk dFmW (Globex Low), SU ufBO proximal edge of Wedge (uWp)
triggered on 3000 tk uSB, StpX 1986, T1 1992, T2 2001
-bad trade - in emotionally bad state from mismanagement of trade 1, price breaking down too hard - wrong side of trade

6. S 4 ES 1986 at 8:23, B 4 1984.25 +$350
3000 tk - dBOp (bear BO PB, basically SAR last trade)
impulse trade - could have been good but not no real SU - scared - shaken out small gain, missed good move

7-12 5 impulsive trades in ES from 8:39 - 10:51 - net ($800)
Overtrading, got completely off game, focused on HTF (higher time frame) but PA (price action) far clearer at LTF

13. S 1 CL 55.83 at 11:19, B 1 CL 56.24 ($410)
987tk dBOp of prior failed uS (up Symmetrical Key Price)
Awful - the failed KPx level was 56.13 (0.30 higher!) but approaching pit close so "thought" might get meltdown
No basis for this costly trade, mismanaged exit

14-18 5 impulse/revenge trades, no basis, mismanaged in fast market ($820)

19 S 1 CL 56.17 at 11:26, B 1 CL 55.52 +$650
987t dFmW, dW5 (50% retrace of Wedge) = 56.21, SU Area 56.08-56.38, StpX 56.40, Tgt 55.35
finally - planned, valid trade - only problem was exiting ahead of Tgt due to very sloppy PA after pit close

Attached Thumbnails
Click image for larger version

Name:	121514 CL 987t.jpg
Views:	104
Size:	197.7 KB
ID:	169126   Click image for larger version

Name:	121514 CD 3tk.jpg
Views:	63
Size:	179.6 KB
ID:	169127   Click image for larger version

Name:	121514 ES 5d.jpg
Views:	51
Size:	250.5 KB
ID:	169128   Click image for larger version

Name:	121514 YM 5d.jpg
Views:	40
Size:	237.7 KB
ID:	169129   Click image for larger version

Name:	121514 ES 3tk.jpg
Views:	41
Size:	246.3 KB
ID:	169130  
Reply With Quote
The following 3 users say Thank You to rlbtrader for this post:
(login for full post details)
  #4 (permalink)
Newport Beach, CA
Experience: Advanced
Platform: TS
Broker: IB, TS
Trading: ES/YM
Posts: 43 since Jun 2010
Thanks: 4 given, 43 received

Be careful about what you wish for. Problem yesterday was overtrading and taking trades inconsistent with trade plan (TP). Committed myself to diligence today and had a positive day but missed tons of valid trades consistent w/ TP. Big problem was having a number of winners early on and then adopting overly conservative mindset. This is a disappointing in the sense that it tells me I am still applying subjectivity to the process. If there is any consistency in my trading it is the knack for selecting SUs that are prone to lose and the knack for ignoring SUs likely to lead to big wins.

Finished up $1,259, better than typical result but not representative of the string of clear opportunities (wrt my TP). I am finding more and more that days that cause me the biggest grief (cause frustration, leads to conservative trading) are often followed by days w/ the best opportunities. If only I could follow TP thru thick and thin...

All PnL gross of commission/fees, all times PST
Format: Bought/Sold (B/S), #cts/shrs, Ticker, Entry Price, entry time, exit (S/D), Exit Price, PnL

1. B 1 CL 54.18 at 6:20, S 1 CL 53.91 6:39: ($270)
3000t dFmC (dChannel), strong ufBO of dTL after pit open, entered uBOp (u BO PB)
For triggered I used pit session only ("Regular Trading Hours" RTH) 1 minute chart, uSB
Screwed up StpX - should have held below LOD = 53.60 but I tightened below 1m Swg Lo => 1 f***ing tick thru StpX (stop loss exit) then reversed. At least I dad sense to reenter as thesis remained valid (Px held above TL)

2. B 4 ES 1971.5 at 6:32, S 2 ES 1974 6:35, S 2 ES 1976.25: +$475
1m RTH chart, entered on close > uS (symmetrical swg) = 1969.25, T1 at PrevD (previous day) Low, T2 at dR5 (50% retrace of gap swg). Certainly exited way too soon given strength of buying pressure, but could have reentered on retest of PrevD low at 7:15. Got distracted looking at CL for reentry opportunity ( and missed that also)

3. B 1 CL 54.05 at 6:40, S 1 CL 54.91 7:06: +$860
same as above. Tgt ahead of opposite TL but went way beyond

4. B 2 BP 1.5730 at 6:47, S 1 1.5754 7:07, S 1 1.5725 7:50: +$119
233t uFmC, entered LimE (limit order) ahead of uS = 1.5725. not great SU but given importance of overnight UK econ reports, and DXY weakness, though might take out HOD.
5. S 2 ES 1986.25 at 10:12, B 2 1984.25 10:26: +$200
3000t globex (I always use globex with tick charts), entered dBOp of uFmW failed uWd (base of up wedge that formed 8:00-8:30) - mkt pushed strongly thru this level, retested and held, so entered on next dSB. Mismanaged Tgt - obvious uKPx based on globex bear swg - projects to uS = 1978.75. whenever I see comparable size/strength swgs nearby I always look at possible symmetrical move (I abbreviate this KPx as "uS" or "dS") - think many algos use for entry/exit -> this is basis for channels I think. This trade is good example of trading scared - didn't want to give up early gains - huge opportunity cost.
6. B 2 ES 1984.5 at 10:35, S 2 ES 1989.75 10:42: +$525
3000t uS (this is sym move cited above) - entered on uSB (basically "spring"). Spring is great trigger but can result in having to use big StpX , in this case 6pts. Same problem as before - didn't want to give up $1200 if wrong (if used 4cts) so cut position size in half. Should have gone to 1000t chart - good u2RB (2 bar reversal). Exited ahead of dR5 (50% retrace) of swg down which was confluence with uS - take last uSpk from 8:11 to 8:29, project down from HOD = 1990.5 - note that the failure of this to hold on the way down was basis for push down to 1979.5, which is why 1990.5 was also dR5. ES seems to have many algos playing geometric relationships.

7. B 2 ES 1974.75 at 12:48, S 2 ES 1971 12:51: ($375)
3000t uFmW, entered LimE ahead of uKPx associated with uWd (distal edge of big uW from 7:00 to 8:30) but bt into clear trending PA.

8. B 2 ES 1971.75 at 12:54, S 2 ES 1969.5 12:55: ($225)
3000t uS = 1970.75 -> this mkt is going to go up if I can help it! losing discipline in face of clearly trending move down. I missed the 1st entry into this level and then was "hoping" mkt would make ufBO.

9. B 2 ES 1963.5 at 13:12, B 2 ES 1963.25 13:13: ($50)
3000t uS = 1962.5. Now this was actually a very strong uKPx - take the entire uFmW from 7:45 to HOD, project down from 11:15 swg hi. This is SF (strong form) b/c PA preceding this leg down was on increasing bullish strength while this leg down is smaller/weaker than last leg down. Px never broke thru, so why am I not still in this valid trade? b/c just had 2 losses and didn't want to give up more of my gains - if I didn't have these problems I wouldn't need to do this journal.

FWIW, in next post I include 2 charts I think illustrate an interesting PA concept - spk vs channel.

Attached Thumbnails
Click image for larger version

Name:	121614 CL 3t.jpg
Views:	35
Size:	225.4 KB
ID:	169234   Click image for larger version

Name:	121614 ES 3t.jpg
Views:	30
Size:	206.1 KB
ID:	169235   Click image for larger version

Name:	121614 ES 1m.jpg
Views:	27
Size:	217.6 KB
ID:	169236   Click image for larger version

Name:	121614 BP 233t.jpg
Views:	28
Size:	200.1 KB
ID:	169237  
Reply With Quote
The following user says Thank You to rlbtrader for this post:
(login for full post details)
  #5 (permalink)
Newport Beach, CA
Experience: Advanced
Platform: TS
Broker: IB, TS
Trading: ES/YM
Posts: 43 since Jun 2010
Thanks: 4 given, 43 received

I use a lot of measured levels in my trading. The dilemma I always face is to wait for a signal bar and simply use a limit order. My general rule is to wait for a signal bar in the face of any type of counter trend market activity and use limits in the context of ranging market. I made the mistake today of doing the opposite. I was fading ES (took 2 questionable trades for losses then lost nerve to hold the 3rd trade that had real basis) and CL, and made the mistake of using limits on ES. Enclosed are LTF charts, ES 1000tk, CL 89tk. I thought about this in my end of day review. We are always looking for decision points in which there is an imbalance that will heighten emotion and result in predictable activity. Think about the traders who are selling in both these markets. In ES there are a steady stream of bases that form before each push lower. Easy trading - StpX beyond base, no emotion - repeat until stops working. CL is very different. There were no bases after the initial breakdown. Any entry after the BO basically had to be a market order. Traders are selling but have no basis for stop management so they are going to trail stop after every bar (or keep bar beyond initial BO for big risk) - serious emotion. Mkt gets very overextended into the uKPx and there are a stream of stops every few ticks depending on the bar high for an array of time frames. This is great RR b/c either those stops get flushed, or selling continues. That is why we like to see clean tests of KPx levels rather than zig zag stair step. Equally important is that the zig zag relieves pressure, sustainable, while the spk is climactic, generally unsustainable.

Attached Thumbnails
Click image for larger version

Name:	ES LTF.jpg
Views:	45
Size:	195.0 KB
ID:	169238   Click image for larger version

Name:	CL LTF.jpg
Views:	24
Size:	193.8 KB
ID:	169239  
Reply With Quote
The following 3 users say Thank You to rlbtrader for this post:
(login for full post details)
  #6 (permalink)
Newport Beach, CA
Experience: Advanced
Platform: TS
Broker: IB, TS
Trading: ES/YM
Posts: 43 since Jun 2010
Thanks: 4 given, 43 received

Finished up $679. Reasonable result but missing the core, structural trades, and end up taking too many LTF minor trades. Able to contain risk more, but RR is far better with the HTF trades. I find the LTF trades are typically easier to get into and they always "look/feel" better. The HTF trades require a leap of faith in trade plan, typically entering before any sign of WT strength develops. I realize this is still a big weakness in my trading.

All PnL gross of commission/fees, all times PST
Format: Bought/Sold (B/S), #cts/shrs, Ticker, Entry Price, entry time, exit (S/D), Exit Price, PnL

1. S 2 ES 1976.5 at 7:06, B 2 1977.5: ($100)
3000t FmR dfBO Glx SwHi 1981.25
missed proper entry at 1979.75 via dSB, used bad 1min dSB far away - knew it was bad management so no conviction - impulsively bailed out. bad start to day.

2. B 1 CL 56.61 at 8:18, S 1 56.96: +$350
89t FmR, uS held exactly so entered on uBO of minor cluster, StpX 56.42, Tgt top of TR
Trading LTF SU when context was HTF. On 2H chart, Px strongly holding above TL that had been touched many times. I was aware of this but didn't want to risk giving back first profitable trade of day if there was first a big PB. Shortly after exit, Px exploded 400tks

3. B 1 CL 58.29 at 9:04, S 1 58.07: ($220)
1m uFmW, uW5 (50% retrace of Wedge) =58.00. looked like Spring so entered on Stp above uSB

4. B 1 CL 58.03 at 9:06, S 1 58.26: +$230
same SU but used 89t chart - entered after 1st close back above 58.00. should have used this for last trade.

5. B 2 NQ 4113 at 9:25, S 2 4111.75: ($50)
987t uFmW, uW5 = 4113. entered on 144t uSB, but into too much selling pressure. NQ was significantly underperforming ES/YM and I should not have expected this to hold.

6. B 2 BP 1.5630 at 11:07, S 1 1.5651, S 1 1.562: +$81
233t FmR - demand zone 1.5616-27, sharply broken on FOMC but Px reversed as sharply back up, then held - entered on bar close. Exit T1 ahead of prev SwgHi, but mismanaged T2. Set T2 at 1.5691, just below round number 1.5700. But real dKPx was dW5 = 1.5688. tested up to 1.5690! costly mistake.

7. B 2 EC 1.2337 at 11:58, S 1 1.2354, S 1 1.2351: +$388
3000t FmR, uS = 1.2327, used 233t uSB for entry. Exit T1 ahead of 233t SwH, mismanaged T2. Set T2 at 1.2391, just below dW5 = 1.2406. As was also case w/ BP trade, selling pressure is still too strong so reactions are likely to be limited until weak retest to HL occurs.

Attached Thumbnails
Click image for larger version

Name:	121714 CL 2H.jpg
Views:	24
Size:	219.8 KB
ID:	169420   Click image for larger version

Name:	121714 CL 987t.jpg
Views:	20
Size:	136.0 KB
ID:	169421   Click image for larger version

Name:	121714 ES 3t.jpg
Views:	18
Size:	210.8 KB
ID:	169422   Click image for larger version

Name:	121714 BP 233t.jpg
Views:	18
Size:	180.5 KB
ID:	169423   Click image for larger version

Name:	121714 EC 3t.jpg
Views:	19
Size:	190.8 KB
ID:	169424  
Reply With Quote
The following user says Thank You to rlbtrader for this post:
(login for full post details)
  #7 (permalink)
Newport Beach, CA
Experience: Advanced
Platform: TS
Broker: IB, TS
Trading: ES/YM
Posts: 43 since Jun 2010
Thanks: 4 given, 43 received

I find it very helpful to keep track, among SPY/ES, YM/DIA, NQ/QQQ, and TF/IWM, which is the leader (either up in bull mkt or down in bear mkt) and which is the laggard. Enclosed is a 5m percent change chart from tradestation. I reset it to start at the open of the current day. I read about this some time ago and find it incredibly useful. In a rotating mkt, look for the leader to turn up/down thru last SwHi. For example if mkt moving up, look for leader to turn down, then short the laggard, and vice versa in down mkt. Not only is this helpful, but I also find that PBs in the leader hold key price levels very well while the laggard usually pushes well thru any clear KPx.

Attached Thumbnails
Click image for larger version

Name:	121714 multi index.jpg
Views:	25
Size:	167.3 KB
ID:	169425  
Reply With Quote
The following 3 users say Thank You to rlbtrader for this post:
(login for full post details)
  #8 (permalink)
Newport Beach, CA
Experience: Advanced
Platform: TS
Broker: IB, TS
Trading: ES/YM
Posts: 43 since Jun 2010
Thanks: 4 given, 43 received

Finished up about $200 gross, but due to the many trades, net of commissions drops to $20. As poorly as I traded I guess I consider it a victory, or just dumb luck, that I did not lose money. I like to tell myself that the poor trading is OK because it was a strong trend day in my primary market, the indexes, and I typically struggle when the market begins to have consecutive strong trend days. But that is BS. I become overly influenced by strong PA and end up focusing on the last few bars or on LTF PA rather than conducting proper analysis and waiting for my edge. Days like today highlight all the errors in my trading -> not planning trades in advance using my edge, not waiting patiently for that edge, managing CT trades for swings when they should be scalps, managing WT trades for scalps when they should be swings, and not sticking to the plan after entering the trade. I am happy that my approach theoretically works but depressed that my execution and management stinks. Seems so simple...

FWIW, I do find this process of posting trade activity to be helpful as it forces me to collect my thoughts afterward. In the past I conducted end of day review but it largely looked at net results and the broad markets rather than reflecting on each trade.

In addition to the above, today's takeaway is 2-fold. Market conditions provided for a handful of clear trades, not dozens. Rather than staring at the market slowly creeping higher I should have been more proactively identifying edges along the way instead of impulsively reacting. Second, it seems there is always one of the 3 indexes (I treat TF/IWM separately) driving price. For example, today there was a clear dKPx in ES tested exactly to the tick at 7:15, and NQ and YM both sold off as well even though I didn't see clear dKPx in those markets. Likewise, YM held much better through the midday chop, so when it finally broke out of its tight range at 12pm so also did NQ and ES, likewise with no obvious catalyst.

All PnL gross of commission/fees, all times PST
Format: Bought/Sold (B/S), #cts/shrs, Ticker, Entry Price, entry time, exit (S/D), Exit Price, PnL

1. B 1 EC 1.2292 at 23:15 (last night), S 1 EC 1.2292: ($0)
3000t FmR, left order overnight to buy ahead of confluence of uKPx in area 1.2273-82. Normally I would trade 2 cts and exit 1 at near KPx but I when I leave blind orders overnight (and don't see PA develop on test swing) I typically stick to 1 ct. Decided in my genius to leave it open, only protective Stp, no Limit for the Tgt. I thought I was buying at bottom of TR and so could be big trade. Disgusted that it went 58tks in my favor overnight and came all the way back. What? Oh yeah, it is in a clear bear channel on the daily chart so, yes, I should have expected a contained reaction.

2. S 1 AD 0.8133 at 00:43, B 1 AD 0.8144: ($137)
3000t dFmC (bear channel). Used overly aggressive dKPx for entry, frustrated about the reversal in EC, and let emotions get the best of me. My StpX was at 0.8163 but I simply exited at market b/c price moved slightly differently than I expected (dang traders), rather than following plan.

In ES there were 2 KPx levels I was focused on: 2033.5 (dS) and 2041 (dX6 - 161.8% Fib Extension)
3. S 4 ES 2033 at 6:32, B 2 2031.25, B 2 2034: +$75
4. S 2 ES 2039.5 at 7:16, B 2 2039.75 at 7:16: ($25)
5. S 4 ES 2039.5 at 7:17, B 2 2037, B 2 2034.5: +$700

That is the end of any real planned trading in which I actually conducted proper market analysis and planned trades in advance. These following trades were largely impulsively based on LTF PA inappropriate for the context.
1 NQ trade ($100), 3 YM trades ($200), 10 CL trades ($100), and 3 other ES trades ($150)

Attached Thumbnails
Click image for larger version

Name:	121814 AD 3000t.jpg
Views:	20
Size:	191.5 KB
ID:	169551   Click image for larger version

Name:	121814 EC 3000t.jpg
Views:	23
Size:	215.1 KB
ID:	169552   Click image for larger version

Name:	121814 ES 5m.jpg
Views:	19
Size:	244.9 KB
ID:	169553  
Reply With Quote
The following 2 users say Thank You to rlbtrader for this post:
(login for full post details)
  #9 (permalink)
Newport Beach, CA
Experience: Advanced
Platform: TS
Broker: IB, TS
Trading: ES/YM
Posts: 43 since Jun 2010
Thanks: 4 given, 43 received

Finished up about $150 gross but only $50 net in another day. Still struggling with unplanned trading driven by my expectations rather than planning SUs according to my Trade Plan (TP). My TP approach is to classify the trading environment in 1 of 5 formations. SUs and SU areas are dictated by factors related to those formations, as are stop loss and target levels. This means that, with few exceptions, trades can be planned well in advance of price entering SU areas. In either very choppy/erratic PA or in very strong moves I get off task and focus my attention completely on developing bars rather on planning and preparation. In unplanned trading I am extremely consistent since nothing is planned and all decisions are made on the fly: late entry well beyond SU area, tight stop based on entry price rather than beyond current PA, big target at clearest distant KPx level. Lots of bad trades. Starting Monday my goal will be to have at least 50% of my trades planned according to my trade plan and will note the results in this journal. Each week I will increase the goal by 10%. I have been focusing on profit instead of process and this needs to change.
All PnL gross of commission/fees, all times PST
Format: Bought/Sold (B/S), #cts/shrs, Ticker, Entry Price, entry time, exit (S/D), Exit Price, PnL

1. S 4 YM 17735 at 6:31, B 2 17722, B 2 17704: +$440
1m uFmW, SU = dfBO (failed BO, short), according to plan, StpX above HOD, T1 at PrevD last Swg Lo, T2 at uW5 (50% retrace of wedge). All according to plan except T2. Saw the strong dPA and held beyond planned exit ahead of uW5 = 17686, and this cost me about 15tks or $150. Am finding that with my style, the times of greatest uncertainty such as the day session open, while at times confusing, provides best results on average. My theory is that in times of greatest uncertainty or strongest activity the algos take over and tests of technical levels become the primary driver of PA. I have gotten a lot more active w/ CL at the pit although I missed a good opportunity this morning.

2. B 1000 NKE 94.34 at 6:40, S 500 94.66, S 500 94.23: +$105
5M FmR, uS = 94.27, entered LimE ahead of this, StpX 94.15. T1 ahead of Wednesday HOD = 94.76, then tightened StpX after strong bear trend bar. Big dMo so playing for the unlikely sharp reaction up.

Am always at odds with stocks because much lower liquidity (except for mega caps) results in much more noise. Traders I work with who do well with stocks are very disciplined about waiting for specific triggers that allow them to limit risk. I struggle more with my structural approach because I have to use far larger stops due to the noise factor. The tradeoff is that the moves can be huge relative to the necessary risk but this volatility also means that when a stock goes, forget it, pile on, nothing measured about it, only option is to keep hitting buy button. Hard for me to mix trading both futures and stocks b/c they behave so differently.

3. S 4 YM 17758 at 7:06, B 4 17763: ($100)
1m FmR dS = 17759. Entered LimE just ahead of the dKPx. Didn't account of the measurement based on globex trading (see 144tk chart) that resulted in dS = 17771. Need to measure both, enter on proximal, StpX beyond distal, if RR sufficient.

4. S 4 YM 17760 at 7:09, B 4 17764: ($80)
Reentered same trade, but still unaware of the distal KPx.

5. B 1000 BBRY 9.46 at 7:14, S 500 9.48, S 500 9.46: $10
5M uFmW, uW5 = 9.43, entered LimE just above. Tgt 9.90 ahead of PrevD LOD, StpX originally 9.38 but got nervous and tightened when Px came back to test the uKPx for the 2nd time. The stock ran to tgt w/out me even though never hit my planned stop. Still struggle emotionally with the increased volatility/noise of stocks. Moved up and down 3% over a period of minutes, but that was reflected in my trade size.

6. EC B 1 1.2244 at 8:07, S 1 1.2260: +$200
233tk dFmW (weak form WF), uS = 1.2240. StpX 1.2234, Tgt ahead of dW5 = 1.2263. lucky to get out. better trade was to short ahead of dW5, or SAR, for possible 3rd larger push down (HTF dFmW).

7. YM B 4 17746 at 8:18, S 2 17743, S 2 17728: ($210)
144tk, impulse trade, "expected" big move up after uW5 finally held.

8. ES S 4 2061.5 at 9:04, B 4 2062.5: ($200)
1m dFmC, entered dBOp of PrevD HOD. reasonable trade, simply mismanaged Tgt. Originally planned to scalp out at 2.5 pts, 2059, just ahead of uTL = 2057.50, since this was dFmC (bear channel), but then impulsively decided to hold entire position for swing trade. Makes sense right? Every swing for last 2 hours reversed sharply after 2-3 points so why not expect THIS swing to be completely different. Turned $500 winner into $200 loser.

Attached Thumbnails
Click image for larger version

Name:	121914 EC 233tk.jpg
Views:	29
Size:	185.0 KB
ID:	169650   Click image for larger version

Name:	121914 NKE 5m.jpg
Views:	21
Size:	245.6 KB
ID:	169651   Click image for larger version

Name:	121914 YM 144t.jpg
Views:	27
Size:	233.2 KB
ID:	169652   Click image for larger version

Name:	121914 BBRY 5m.jpg
Views:	22
Size:	223.9 KB
ID:	169653   Click image for larger version

Name:	121914 ES 1m.jpg
Views:	18
Size:	280.8 KB
ID:	169654  
Reply With Quote
The following user says Thank You to rlbtrader for this post:
(login for full post details)
  #10 (permalink)
Experience: Intermediate
Platform: thinkorswim
Broker: TD
Trading: futures
lsubeano's Avatar
Posts: 213 since Jun 2010
Thanks: 65 given, 163 received

great thread! congrats on journaling here! much appreciated!

you wrote:

'Still struggling with unplanned trading driven by my expectations rather than planning SUs according to my Trade Plan (TP).'

I'm sure most of use feel that many times.....do you feel it's an 'intuitive' feeling of market movement or just impulsive, markets looks good?

Also I find the charts a little hard to follow.....but it just may be me.....if they're zoomed in a bit more it might be easier to see where you entered/exited.

Follow me on Twitter Reply With Quote
The following user says Thank You to lsubeano for this post:

futures io Trading Community Trading Journals > RB's Formation Trading Process for Futures

February 23, 2015

Upcoming Webinars and Events

Dealing with burnout w/Linda Bradford Raschke

Elite only

Copyright © 2020 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts