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Papa's Trading Journal
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Papa's Trading Journal

  #541 (permalink)
Elite Member
Wake Forest, NC
 
Futures Experience: Intermediate
Platform: Sierra Charts, Investor RT, Ninja Trader
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papa15's Avatar
 
Posts: 527 since Sep 2009
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One of the issues I have had trading with pivots has been which pivots to use (Floor, Camarilla, Woodies, etc) and then which pivot level will be support and which will be resistance. I keep yesterday's high, low, close on the chart as well as a couple of other things....the chart very quickly becomes overcrowded/cluttered looking.

I am simplifying it yet again. I only have on the trading chart yesterday's high, low, and close, plus the overnight high and low, and the high and low of the first hour. It certainly makes things cleaner looking. I use a daily chart with a 13 ema of (H+C+L)/3 to determine the trend. I mainly am a trend trader and want to go with the flow.

The types of trades I look to take include:

1. A gap trade. Not on Mondays. The gap must not be too large (this is subjective), and ideally yesterday's close is between current price and today's pivot (although not on the chart I do know the location of the pivots). Wait 1-2 minutes after the open, and enter based on price action. Exit prior to gap closure (at least 1-2 ticks before).

2. A fade of the open price. Price must open and go with the daily trend, then pull back to the open price.

3. A fade of a key price level from yesterday. Similar to the fade of the open, but use yesterday's high, close, or low.

4. A break out from the first hour high or low. Want a confirmed break with a close outside the first hour range, and perhaps a second candle confirming that....you often see one candle close outside, but the next one closes back inside the range...don't want to get caught in a false breakout.

5. A fade of the bullish or bearish target zone. I don't trade above the bullish zone or below the bearish zone as on a normal day price will not exceed either of these levels. Price will often enter one of the zones and then pullback. The pullback can be scalped. Do not enter until a confirmation candle closes below the red candle that closes below the bullish zone or above the green candle that closes above the bearish zone.

Looking back at today's trades, I really, really should not have taken the second trade. The ideal trade was to fade the pullback to yesterday's close that occurred around 10 am. I know news gave the market the jump it needed, but the overall trend was up, the market had showed it was following the trend, and it pulled back to yesterday's close. To be honest, I was watching for a pull back to today's open, but should have had a buy stop above the red candle as it approached yesterday's close......lesson learned.

I intend to plan my trades based on the above. I want to know before hand where I will enter and how the market should behave before the entry....if its behavior deviates, then don't trade.. For instance, today price opened below yesterday's low, but the market quickly rejected that new low value and turned back up. If the first candle had closed red and below yesterday's low, then the market would not have been following expected behaviour and I should stand aside until price turned around....after all, the overall trend is up and I should follow the main current......

I have attached a screenshot of my trading chart. It is in sim mode since I stopped cash trading after the early trades......the black dashes show the overnigh high/low, the blue high and low are for the first hour, and the white line is today's open....

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
Attached Thumbnails
Papa's Trading Journal-screenshot-2012-05-01-13-29-01.png  
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  #542 (permalink)
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Posts: 527 since Sep 2009
Thanks: 586 given, 1,244 received

Thoughts for tomorrow

Looking at today's price action gives some pause as to what to expect tomorrow. On NQ there was a big run up in price of over 40 points from the day's low. At the high, it came close to closing the 2 remaining gaps (they are still open by a couple of points, so in the grand scheme of things they probably can be considered closed). Price then dropped fairly rapidly, and actually closed lower than yesterday, givng a red daily bar. The daily bar is still above the 13 EMA (so there is an overall uptrend), but the 4 hour bar closed beneath its EMA, so the daily up trend could be coming to an end. The overnight 4 hour bars will give some confirmation about that.

If price in the RTH opens below today's low, then market sentiment may have changed. In that case, I would look for a pull back to today's close, and then look for a short opportunity. If price opens a good distance below today's close, then the entry point would be today's low.

If price opens above the low and goes up, then the entry point would be a pullback to either today's close or low.

After an hour, I will be looking for a potential break of the initial balance (opening hour) high/low.

Other factors to consider are the overnight high/low and the target zones.

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
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  #543 (permalink)
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Kent, England
 
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Mickey Caine's Avatar
 
Posts: 196 since Jul 2009
Thanks: 1,607 given, 347 received


Hi Buddy

Looks like you are doing well, congrats, I agree, a nice clean chart is the way to go. I too use sierra, just to settle my curiosity, could you please, when you have a moment post a screen shot of your background settings for that chart you just posted. Just in case that is not clear I attach mine for reference.

Best wishes

Chris

Attached Thumbnails
Papa's Trading Journal-2012-05-02_08-47.jpg  
 
  #544 (permalink)
Elite Member
Wake Forest, NC
 
Futures Experience: Intermediate
Platform: Sierra Charts, Investor RT, Ninja Trader
Broker/Data: VanKar
Favorite Futures: NQ
 
papa15's Avatar
 
Posts: 527 since Sep 2009
Thanks: 586 given, 1,244 received

Chris
Good to hear from you. Hope all is well in jolly ole England. I have attached my SC background info. Basically it is a derivative from Mike Winfrey's background. I find the color pleasant on the eyes.

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
Attached Thumbnails
Papa's Trading Journal-screenshot-2012-05-02-08-30-01.png  
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  #545 (permalink)
Elite Member
Kent, England
 
Futures Experience: Intermediate
Platform: Sierra
Broker/Data: Infinity
Favorite Futures: Oil
 
Mickey Caine's Avatar
 
Posts: 196 since Jul 2009
Thanks: 1,607 given, 347 received

Cheers Buddy

I knew I had seen that background somewhere before, good old Mr Winfrey. Things are good in the Mother country thanks

Thanks for your speedy response

Chris

 
  #546 (permalink)
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Posts: 527 since Sep 2009
Thanks: 586 given, 1,244 received

Green Day; Discipline Green (+3)

Two trades today. Market did go down overnight and opened the RTH session below yesterday's close and low. The daily trend is still up, although weaker. Today's pivot is higher than yesterday's close. I let the opening few minutes go by and then put in a buy stop to go in the direction of gap fill. Took a portion of the move up to yesterday's close. I had a sell stop waiting at the close price and took a portion of the pull back from that level. Quit cash trading for the day as I expect a tug of war between buyers and sellers as they fight over establishing a new trend. Either we will go up and continue the bullish trend we have been in or the sellers will force price down and close te daily below the ema, starting a new down trend. This battle may be choppy, so I will stand aside.

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
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  #547 (permalink)
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papa15's Avatar
 
Posts: 527 since Sep 2009
Thanks: 586 given, 1,244 received

The buyers pushed price back up. Both the 4 hour and daily charts are above the EMA, indicating a continuation of the uptrend. Will look to see what the overnight action does.

If tomorrow's RTH opens above today's high, there could be a potential for a gap fill play, followed by an entry long on a pullback to either today's high or close. If price opens beneath today's close, will be very cautious as that would indicate a change in market sentiment against the uptrend. I would wait for price to go above the close and today's high, and then look for a pullback. If price does not pullback in that case, I will pass on trading.

.

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
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  #548 (permalink)
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Wake Forest, NC
 
Futures Experience: Intermediate
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Posts: 527 since Sep 2009
Thanks: 586 given, 1,244 received

Green Day; Discipline Green (+3)

We had a good weekly unemployment claims number, although the productivity number was weaker. In a normal week, this unemployment number would light a bit of a spark in the market, but with the monthly number coming out tomorrow, the market seems to be holding its breath until then.

Pre-market was relatively tame overnight, with prices staying fairly close to yesterday's close and high. I started looking at the charts around 9 am, and saw the market was pulling back from its little spike after the 8:30 news reports. I shorted, targeting just above yesterday's close. Reached the profit target just before the open. Price touched yesterday's close, bounced up and then started back down. I shorted again and exited right at yesterday's close. I quit cash trading and decided to watch how the market moves.

Price closed yesterday near its high for the day. The market is in an uptrend, but price as I write this is acting as if it wants to go down. The pivot point is less than the 3 day pivot average (PP + PP + PP)/3, which to me is a bearish indicator. But the price is above the EMA on the daily chart. I trade what I see, but my gut is telling me the market is about to go down. I don't have any more plays for today as long as price is not going up with the trend, I have 2 profitable trades, so it is an easy decision to now stand aside.

I have attached both my RTH 5 min trading chart and my ETH 15 min chart (the first trade was taken off this). I don't show the trades on the charts.

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
Attached Thumbnails
Papa's Trading Journal-screenshot-2012-05-03-10-04-33.png   Papa's Trading Journal-screenshot-2012-05-03-10-05-45.png  
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  #549 (permalink)
Elite Member
Wake Forest, NC
 
Futures Experience: Intermediate
Platform: Sierra Charts, Investor RT, Ninja Trader
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papa15's Avatar
 
Posts: 527 since Sep 2009
Thanks: 586 given, 1,244 received

Well, for once my gut won out over my eyes. The market did drop today, it dropped so much that both the 4 hour and the daily chart are now bearish (price is beneath the ema). However, the NFP report for April comes out tomorrow, and it will control market direction. Who knows what the number will be or what the market's reaction to the number will be? It really does not matter.

Being that the market is now showing a down bias, I will look for short opportunities for the most part.

1. If the market gaps down at the open, there could be an opportunity for a gap fill play, depending on gap size, price action, etc.

2. Price would need to go below tomorrow's open and then pullback for a fade of the open. Same for a fade of today's close/low.

3. Will look at the initial hour high/low to see if any short opportunities occur. This could be the best play since it will be 2 hours removed from the NFP news.

4. The bearish/bullish target zone trades may come into play.

After such a big drop, normally I expect something of a pullback the next day. However, the season (sell in May....) kind of leads me to expect a continued drop. On the daily chart, this latest up move resulted in a lower high, so if things hold, we should at least go for the most recent swing low around 2625....if not lower.....

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades
Attached Thumbnails
Papa's Trading Journal-screenshot-2012-05-03-21-21-15.png  
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  #550 (permalink)
Elite Member
Wake Forest, NC
 
Futures Experience: Intermediate
Platform: Sierra Charts, Investor RT, Ninja Trader
Broker/Data: VanKar
Favorite Futures: NQ
 
papa15's Avatar
 
Posts: 527 since Sep 2009
Thanks: 586 given, 1,244 received

Red Day; Discipline Red (-3)


How can you be so right, yet execute so poorly? The market gapped down at the open and I let it go for the first 15 minutes. It then showed 2 bullish 5 minute candles. Although not on my chart, the Camarilla L4 was at 2666.5 and that seemed to be the support area. It also was inside the bearish target zone. My criteria is to wait for a close back above the bearish target zone before entering, but I convinced myself in real time that just the once the right decision was to enter and target just beneath the L3 area at 2679 or so. I entered, the market peeked above the bearish zone and rolled over. I was stopped out. Market was playing around the bottom of the bearish zone, and I was frustrated over the prior loss and wanted it back in a hurry, so I tried to place a buy stop above the L4 area again. I mistakenly put in a limit order and was filled well below where I wanted to be in.....the correct course of action was to exit instantly, but I did not do that...instead on to another loss...., putting a damper on what otherwise was a great week.

I like my new charts and setups. They are fine. I still must focus all my energy of execution...it is still my weak link. The market is clearly in a down trend. All charts indicate that. My criteria has been publicly stated....on a close above a bearish zone, look to do a quick scalp, if anything. I think for the foreseeable future I will drop this trade as really it is truly a counter trend trade and I need to focus on just going with the trend. That means I will also only trade gaps that go with the trend.

One thing I have noticed over the last 2-3 months is how NQ will often make a quick move in the morning to an extreme of the day and then just sit there and grind away. Look back at a daily chart and notice how many candles close above 80-90% of the day's range....there are quite a few. It pays to identify the trend early, find an appropriate entry and go with the flow.

My focus is on:
1. Avoid the opening chop.
2. Honor stops
3. Ensure reward > risk on all trades

Last edited by papa15; May 4th, 2012 at 04:31 PM. Reason: grammar
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