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ES momentum trading Journal


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ES momentum trading Journal

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  #1 (permalink)
New York, New York /USA
 
 
Posts: 8 since Feb 2015
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Had a good day today, took one trade early on before the open at 8:32 short @ 2120.25 1 contract. Sold short at the pull up to the 21 bar and followed the momentum down to 2112.
I had the market refusing to convincingly penetrate the 21 bar and the dual stochastic signals putting sell signals. Once the smaller stochastic dipped below the larger, it showed a nice setup for a short. Using 3560 tick chart as a cousin to the 10 min. the 356 tick chart for entries which is a 10th of the size of the 3560. Tick charts express the momentum and the 10 m in and 60 min are for a contextual basis while using the tick charts for entering in momentum. Sometimes you are giving up price for momentum, but you deal with little to no draw down and the trades produces results very quickly.

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  #3 (permalink)
New York, New York /USA
 
 
Posts: 8 since Feb 2015
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As with most traders with small to medium size accounts. Accounts between 5k and 20k, draw down as well as time spent waiting for the trade to work out is the most important aspects of trading. The last thing I want is to sit in a trade for hours with draw down before I see profits. I have found when giving up pricing for momentum, both can be achieved. When entering with the momentum, the perceived risk is always more than the real, actual risk. You might be entering in a spot that feels compromised but if there is momentum, the chance for drawdown is slim. If the market is reaching a top and you sell that top in a place that "feels" like the buying is over, there is always a chance for the market to do some more probing before the eventual sell off comes. If entering a short a little lower, but where there is now momentum building, you might "perceive" your entry to be low, but in essence you are hitting the momentum, thus realizing little drawdown and the market moves in your favor rather quickly which is better than trying to capture the very top.

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  #4 (permalink)
South America
 
 
Posts: 3 since Mar 2014
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I dunno about these theories, but what I can see is, that you have very complicated chart setting. I barely see the price candles.


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  #5 (permalink)
New York, New York /USA
 
 
Posts: 8 since Feb 2015
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They are tools that will get you into a 90% probablity with a 0-4 tick drawdown with results in minutes to seconds. I use dual momentum charts. I overlay a short term stochastic over a longer term stochastic as well as cci's and adxs. The basic premise is, the real momentum DOES NOT show up until the shorter term signal links up with the longer term signal. This will always keep you in the line of movement of the other traders. There is no longer a reason to try and catch corners or bottoms or tops. These dual signals will keep you trading in the path of least resistance. If the 2 signals are in conflict, that means the market is conflict and you will be subject to choppy ranges or corrections. It isn't until the dual signals start to move together is when the market will have momentum and you are hitting the core area of energy with little to no resistance.

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  #6 (permalink)
New York, New York /USA
 
 
Posts: 8 since Feb 2015
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This is the first trade of the day. I had just gotten to my desk and missed the first entry closer to the top and kind of sold into the hole, but momentum was in my favor and only sat in a few ticks of drawdown. This chart is my 356 tick chart and used for entries only. The entry came off the green moving average which is the 21bar. Even selling into the hole, due to the downward momentum, this trade only had 1 pt of draw down. As you can see, when my shorter term stochastic (Orange/yellow) linked up with the already moving longer term stochastic (green/red) which was in the line of movement on the contextual charts, the market moved within minutes with 4 ticks of draw down. The better entry came up higher around 8:00, had I been at my desk, that would have been my entry. If you notice at that time, the smaller stochastic comes up and meets the larger falling stochastic and turned down with it. This is the syncing of stochastic signals that hits the momentum areas rather than trying to trade when the 2 stochastics are in conflict with one another which leads to choppy trading ranges and conflicted markets.

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  #7 (permalink)
New York, New York /USA
 
 
Posts: 8 since Feb 2015
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Many traders feel as if they have to lead the market. Meaning, they have to be able to hook onto a trade BEFORE everyone else does. This creates enormous pressure for the trader. When studying momentum, we let the traders first show signs of agreement on direction and THEN we hook onto to a move. Traders sometimes think by putting on a trade, it feels as if they can make the market do something. We should be patient and let "THEM" tell us that a direction has been decided upon, THEN we get involved. This will limit draw down as well as time in the market waiting for a trade to work out. Being able to separate yourself from the market is key. This is not about "you"! It is about you figuring out what "THEY" are trying to do. Only when it is clear to you what the traders are doing is when you are supposed to trade. Attempting to trade in the "house of pain" I.E. trading ranges only leads to frustration and chopped up accounts which leads to the death by a thousand tiny cuts. The market is made up of periods of indecision and chaos followed by mass agreement and momentum in one direction and then back to confusion. With the right chart setup, we can distinguish between the two and more importantly than know WHEN to trade, we know when NOT to trade. Remember, just because the market is open, DOES NOT mean we should be trading.

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  #8 (permalink)
New York, New York /USA
 
 
Posts: 8 since Feb 2015
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This is a trade using dual stochastic. The smaller time frame signal is bouncing off of the larger signal sending the market higher.

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