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Got several more contracts back tested yesterday, results were acceptable to good for each. There are 6 more contracts that I'm interested in back testing from 2013 to 2008; periods in the market that range from tight ranging to big intraday swings to frequent gap up and down's. Given my weekend outlook this won't be done by next week. This is fine as I'm okay waiting until after the US election to pick up live trading again anyway. So I'll probably just pick a few more contracts to look at and back test all next week too.
I have a ton of trades logged at this point (well more than I would actually take in a year) that cover a huge range of market conditions, some that are very extreme. In the Z2008 contract, it's frequent for my stops to be 10+ points. Given the price of the ES at that time, that's like having a 30-35 point intraday stop today. I've also back tested when there has been a 4 point range for the day. The point of doing this is to test my plan during much different market conditions to see if it holds up. I know that, on paper at least, it's performing fine in the current market environment and has done well in 2015 and 2016.
I know that I can back test all the way to the beginning of the ES contract and that won't mean anything going forward. I could start live trading this and have 4 straight losing months because there's something I've missed or I'm not able to follow my plan with real capital on the line or some other reason. But looking at the back testing, there is definitely some room for degradation in live trading. In running my Monte Carlo, I am giving myself penalties and the simulations are all looking good.
I also know that I need to do something a lot different than I have been doing. I need to get to a point where my confidence level in my trading plan is a given, is unshakable. I can't think of any other way to get there than by manually back testing like I am doing. If I honestly back test, and do it slowly so that I eliminate or at least minimize mistakes and missed trades, then there really isn't a reason why I can't look at the results and be confident in the plan. I also know from my back testing that I can have a period where I can have weekly drawdowns for months, but that eventually things will come good again. I know this because I have seen it happen. And if I have seen this happen, I should not be surprised when it happens again, and I should be able to understand that eventually market conditions will change to the point where my plan will be in sync with the market again.
Did a lot more back testing last week, many contracts worth of data. I have seen periods of draw down with my strategy, namely during tight and low range market environments. I have back tested periods where the daily range is 4-6 points and this is where my strategy is not good. There are some good days and bad days during these periods I have tested but much more bad then good.
We are not in one of those periods now and it does not look like we will be in the short term. My strategy does best in higher volatility environments where intraday ATR is higher. While continuing to back test last week I also paper traded live. It was a positive week last week but I only had 6 signals to trade, 2 hits, 1 loss and 3 scratch.
I decided to start live trading again today. I have a pile of what I think is good, clean back tested results going back to 2008. I have tested every type of market environment I could see and was pointed to. Through all of this I have a definite edge. It's not huge, but there's no doubt that there is an edge. I may have messed up results with my back testing, but I don't think I did. I took a long time to back test and did it over a long period of time. I didn't cherry pick and I didn't skip losers. I may have missed a signal here or there, but I tried my best to go slowly and look over each day several times to minimize or eliminate mistakes.
While I feel comfortable enough to live trade this starting today, there are things I need to work on. I need to find a few more narrow range periods and confirm what my back testing is showing so far, that those are times when my plan does not work well. If I can confirm this I can then work on trying to identify in some way these conditions so I can not trade them. It's easy to see them after the fact, but recognizing them as they are occurring I think would be more difficult. I'm thinking that if I can see the opening range as very narrow, and if there is no expansion by some predetermined time, say 12:00, then I would stand aside for the day. Or perhaps I would stand aside until there is some sort of range expansion if the range were less than X points. I think something like this would be a positive addition to my overall plan and would optimize what I already have.
Didn't feel quite ready to trade today so I just paper traded. I had 3 entry signals, 2 were stops and 1 was a hit. Total for the day was -7.50.
I did notice an opportunity to test the application of another filter for my trades. I spent the better part of the day applying this to the last 300 trades I have recorded. I stopped at that point to check out the statistics and while it did limit my trades as expected, it didn't limit the bad ones to any degree. The overall result was fewer trades across all types which resulted in an overall decrease in profitability. I decided to stop testing more than that.
Maybe I will trade tomorrow and maybe I won't...I'll see how I feel at that point.
Going to restart the journal here, I've been doing my journal offline for a while and been trying to figure things out. I felt it was helpful to journal here throughout the day so I'll put that back into my pre and post market routine. I'm trading around SR levels that I have identified through previous price and volume profile. I aim to limit trades to these areas, either trading around these areas or toward these areas.
ES popped premarket on poor news which seems odd. While price looks bullish I am skeptical. I'm going to take a wait and see approach off the open. It does look like we could get some volatility so that will be a nice change.
End of Day
Just noting that I am paper trading at this point, no real money on the line right now.
Kind of a difficult day to trade. The ES opened to test the premarket highs and was sold pretty hard, right into a support level I had marked (59.50). Given the strength of the move down I did not expect this support level to hold, but it ultimately did. There was a pullback trade available which I did trade, shorting at 2260.50, looking for a quick retest of support. I didn't like that price was stalling so I scratched that one.
The retest of support was quite weak and support again was met with demand. There was an even more bullish reaction off of the support level on the 2nd test, something I really failed to recognize that the time. I am finding that I am not reacting well to new information on my SR levels, that I am sticking to my prior bias and not considering what might be considered a counter trend trade when I should be. In looking back at this area though, there's really not a logical trade that I see that would meet a minimum 1:1 RR requirement. I can make a case for one but it would not be something I would realistically see without the benefit of hindsight.
As price retested the S turned R at 65.0 a little after 10:00 a nice short set up was available. I had left my office for a bit and did not see it real time. Being about 5 minutes late, I did log it as a trade that I missed and managed it from there.
There were a few other opportunities in the AM, the best being a pullback entry at 11:40 at 2270.0, this after price broke my 68.0 SR level with ease. My bias was bullish at this time and I was searching for a pullback for a long entry. This one wasn't glaringly obvious but was a good entry with a good RR. I managed the trade to the next SR level with an exit at 2272.50 for +2.50. As far as I can see, this was the best possible trade for the day based on what I'm looking at and looking for. Of course looking back it makes great sense to just buy the 2nd test of support at 59.50 and hold for new all time highs. Even reviewing and studying that area after the close, I don't really see a way that I could have or should have seen a good trade there.
My read of the market was not too clear today. I did switch my bias appropriately but I really need to work on reading price and making decisions around my SR areas. I have been good at identifying good spots to buy/sell on pullbacks within a trend but the counter trend type trades of SR failures have been poor. This is something I'll put more effort towards, along with focus on reading and reacting to price movement within my structural framework.
The biggest positive I will take out of today is sitting on my hands when I was unsure. Once the ES broke above 2273 I really didn't know what to expect. I was running through a few scenarios to watch out for, the first being a hard push under 2273 and the second being a hard push up even higher followed by a pullback to the 77 area. My preferred move was a hard push under 73, that would have set up the possibility of long or short and I would have re-engaged my focus at that point, reading price and looking for an opportunity. I'm not sure I would have done anything on another push higher, I know that I certainly was not going to try to fade a move up just because.
For next week, I'm going to continue to paper trade. I missed too many trades this week, mostly the ones that were positive. I seem to have no difficulty getting into the trades that scratch or are small losses but miss the trades that end up resulting in a profit. Until I can develop some consistency getting into ALL of the possible trades I see, or at least identifying the opportunities in real time, I'll be sticking to paper.
Overnight action looks bearish to me with a sort of 1-2-3 top on longer timeframe charts. Going into the open I'm short biased unless ES can move and hold above the 72/73 area.
I am paper trading today and will do so for the entire week. At the end of the week I will evaluate my performance on market read and trade recognition/management make a decision for next week based on my overall performance. I don't want to start live trading again until I can have at least a week of good performance (performance not measured by P/L but by trades following my plan).
Today is not setting up to be super-busy at work so I should have a lot of time to watch the ES today.
End of Day
I had a real good feel for the ES action today. Coming into the day I had a bearish bias and we got a nice drop off the open. I thought if price moved above the open price around 69.0 and held then we could get moving up, so I slightly revised my 72/73 area as far as changing bias was concerned. There was no trade for me on the initial move down but there was a nice pullback off the low for a short entry. There was profit in this trade even though it didn't move to new lows. The move up off the lows was not convincing to me. The ES broke through the 68.0 level at 10:50 but there was a lot of resistance overhead. I also felt this way on Friday, that there was a lot of overhead resistance but price moved up with much more strength on Friday; today did not look like upside strength to me. Even after taking out the IB high and making a new HOD, I wasn't impressed and my bias was still bearish, though I was not interested in shorting up in this area; I wanted to see a break lower first, I'd rather short a pullback off a break lower.
From 12:00 to 14:00 there were several chances to do just this, 4 good spots that I saw. The best perhaps was between 14:05 and 14:10. When the ES attempted to push lower but did not (at 14:45), I was on the lookout for a trade in either direction. I saw a nice spot to buy at 15:24 that worked well, a good RR value trade.
Despite the narrow range, I felt I had a good feel for what the ES was doing or trying to do today. Despite the narrow range I identified many low risk, higher reward trade locations. I felt good about all of the entries and the management of the trades; I was pretty quick to exit my trade if it stopped working for me. Perhaps I would feel differently if the ES were not so choppy and the trades would have run, or perhaps I would have been able to hold them longer in that event - I don't really know.
I've gone back through the charts today a 2nd time and I have spotted a few areas that I missed initially - areas for potential trades. The RR isn't spectacular in these areas but there are some 1 RR spots that I missed at the time. I've made notes of these areas for study tonight and over the weekend. However, I did spot the better trade locations today. My worst RR trade today was 1.4. While I'm okay taking a 1RR trade, I'd really rather have something over 1. My mind was very engaged today and my focus was also good. I was often spotting potential trade locations and calculating possible entries, stops and targets to see if the location made sense from a RR perspective, and if not, what would make it so. So...a good day in the books for me.
Interesting overnight action with price breaking lower and testing SR at 59.50 to the tick. However, there was obviously demand at that price as the ES rallied hard from that level. Based on the way price reacted in this area I'd expect the level to hold if price gets back there during RTH today. Even though the ES looks to open right around yesterday's close, my bias is bullish going into the open based on the test and reaction off 59.50. A break/hold below 62/63 will have me questioning this. While I do have an SR zone at 64/65 I'm more inclined at this point to play off the ONH and ONL areas for now. The 64/65 SR zone is based on price stalling in that region since 1/4 but there's also a great deal of volume there which would suggest it's not the best place to look for SR.
If we get movement beyond the ONH of 66.50 or beyond the recent ON swing low of 62.25 it would be nice to see a run to my SR zones above/below these areas. Given recent volatility and what looks like strength of these two zones, I see 70/71 and 59.0/59.50 as good spots for a reversal should price get there. Of course, news or something else could change this so I will not just place an order to fade the market at those levels, I'll be watching for clues of strength/weakness in price as it gets close to those areas and evaluate from there. At the same time, I would be interested in trading a break and a subsequent pullback of/to 66.50 long and 62.25 short. I don't think we'll just trade between those two prices all day long.
12:00 Update
In looking back at the morning, I clearly got too caught up in the ON level of 64/65. Yes, there was resistance here but there's also very little volume to support hit. As such, I should be aware but not place major focus on it.
There was a huge bullish reaction off of the test at 59.50 at 9:52. This area was CLEARLY rejected. What I should have been looking for after this information was to see if the subsequent pullback had strength or weakness. My thought at the time was that we'd have a sideways trend between 64 and 59 until further notice. The pullback off the reaction at 59.50 was weak and the market blew through the 64/65 area but stopped at 66.0. After 2 pushes to 66.0 the ES pulled back a bit and retested the SR zone at 64/65.
I was thinking that the ES was hitting a level of supply at 66.0, and I used the premarket resistance to support that line of thinking. While true, there was little volume to go along with the premarket supply at this level; I failed to take this into account and my context was off.
The next few minutes had the ES probing into this 64/65 SR zone but prices were bought with each test. I was so focused on this supply at 66.0 that I missed what was happening in the moment, that R was broken with strength and was now S which was holding. Even if I initially thought that R had been broken but that the break out was failing, this would have been (should have been) nullified with the new information; buying in the SR zone.
There were a couple of very good buying opportunities in this area. Long 65.50, stop 64.0, target 70.0 provides 3R trade. This would have worked, but whether or not it would or would not it's still a logical trade to take that I missed.
What did I do wrong? I got too caught up in the 64-65 premarket resistance and placed too much emphasis on this. While I followed price closely and focused on what was happening, I failed to take the new information on board and reanalyze.
What I should have done. I should have followed price as I did but not place as much emphasis on the premarket level, given the volume associated with it. I should have seen the ES retesting this SR zone that had been breached and recognized this for what it was, prices being attractive at these levels. The indication here is bullish; I failed to process the new information and put it into proper context.
I have noticed that I am slow to process information and react around SR zones. I have a plan and I have a list of things that I'm looking for. I am doing that but I'm not conducting my analysis with clarity. I believe that I'm getting better; that is getting closer and closer to real time but this is an area that I need more practice with. What seems to be happening is that I get confused and locked into a certain bias when I should be letting that go and focusing on price and being free to form new opinions as I get new information. I've been slow/reluctant to form an opinion, instead staying unbiased or confused. But, the information and answers are in the price movement; I just need to be more accepting of that information and be more accepting of changing my mind. I need to internalize (realize fully) that changing my mind does not equal being wrong.
End of Day
After a nice rally the ES made a 1-2-3 top and broke lower, I had 2271 as the point which needed to hold to keep prices either sideways or moving back up. Price started to break below this point right around 13:30 but I wasn't convinced. Again, I was very unsure around a key price level; I just didn't have a good sense of what was happening. Was this a fake out and the ES would move higher or was this really breaking down? I figured SOMETHING was happening, but what I could not figure out. Again, an area that I have clearly identified as a weakness that I need practice with. The move below 2271 itself was quite subtle; I recognized that at the time and I've gone back many times since to look at price during that time. Even with hindsight, there are really few clues that price would ultimately break just below 71, pullback to 71.25, stall then crash. So with this I'm not really bothered that I missed a possible juicy short trade in this location, unlike the long trade I wrote about above I just don't see how I could have read this in a way to catch it.
There was a great opportunity on the first pullback of this move, short at 68.75. The RR was 3.0 and it was in a logical spot. I saw it but chose to stay out for no good reason (even with me just paper trading!) I wrote quite about this offline already and used this as an example for reviewing and learning. Everything about this location ticked the boxes I look for, it really was a great spot to sell based on my criteria. There's just no good reason I should have not recorded it as a trade at the time. When I looked at it I thought that it was a lotto trade, that's exactly what popped into my mind. Really, every trade is a lotto trade! As long as it ticks my boxes and has an acceptable R I just need to take the trade. The thing is these trades that I see but just chose to stay out of generally end up being the better trades. The obvious ones, while some still work out, seem to work out less often than the ones that "seem" a little sketchy upon first look. The good thing is that I am seeing them real time, I am seeing them develop and I am seeing the entry. Many times I've been stalking it and have already calculated the R based on where an entry would be confirmed. So I'm part of the way there. I'm seeing the spots but I've not got the conviction or whatever to trade them all. This is why I am paper trading at this point. When I can develop the conviction to just take the trades that I find with consistency, then I believe it will be a good time to get back to trading live but not really before that point.
I did get into several trades after this, mostly looking to catch a short after the market made the swing low at 63.25. I really had my eye on 69 at that point, that was my pivot - price above that would signal a change in trend. Given how late it was getting I was skeptical that the ES would have the strength to rally past this point. I feel that I did well in recognizing good points to attempt to sell and recognized when it was time to give up and move on. I did short at 65.75 on the 2nd push up off of 63.25 and the trade went 1.75 in my favor; I was looking for it to move past the swing low but it did not so I scratched for break even.
A really nice trade came late in the day as price tested the 69 level but met heavy supply. I had to leave early so I was wrapping up and didn't catch it as it was happening but noticed it after it was underway (back down). I did review the area and I was aggressively taking trades after I missed the short at 68.75; this was really a great area; I'd say my ideal location to short that I would like to think I'd have taken the trade had I been watching/stalking at that time. But again, there's just no way to know for sure.
I again was pleased with the way I read the ES today from the structure to my bias. I didn't get into any out of plan trades but that's not been a problem for me really; it's the opposite. What I do need is some consistency in my pre-trade routine. I am doing a very good job so far selecting the trades and excluding those that don't fit into my criteria, but I'm skipping valid ones for bad reasons. I have a pretrade checklist that is developed (that is evolving) that I need to use more often. While I am using the analytical part of this checklist I'm not consistently looking at my psychological cues, my pep talk sort of stuff. I need to be more consistent in checking this as well to remind myself that each and every trade is an uncertainty, that anything could happen to any of them at any time, and that I need to just be consistent in applying the plan that I have.
I also clearly need some practice and focus around trading my levels. Some are easy but of course price chops around more times than not and I'm not reading it well. I know what I'm not doing and what I need to do, so I just need to continue to practice this live and work on it offline as well - these are things I'll definitely do.
I have really felt a lot more at ease since taking time off to reset. When I've been uncertain about the direction or whatnot of the ES I'll just sit back and wait for more information; I'm not stressing about it. I know that eventually I'll get some good trade opportunities and I know that I don't really need that many to make it all work. So in that sense I'm being very patient and just waiting for the trades to come to me, even though I'm really focusing hard and looking hard to find them. I have not recorded it but I'm guessing that for every trade I take (or should take) I'll stalk 6 or 7 that just don't end up panning out. I'm good with that as it's keeping me engaged which is improving my focus, both really good things for me.
Made a few small tweaks to some of the zones but didn't add anything major.
Premarket
Not a great deal to say about the overnight/premarket action. Price has mostly held below yesterday's close with the trend neutral/bearish. Again the 65/66 area has been overnight resistance, just like 1/10 ON. As I'm writing this price is pushing up against my SR zone at 63.25. If we open flat, I'll be looking at the edges at 65.50 and 60.75 for some direction. I'm going to keep an eye on these areas but not over focus. The bigger area to me is my SR zone at 63.25. I felt comfortable adding this zone based on the afternoon swing low from yesterday, it's also at the VA edge of many days going back to 1/5. From a composite volume perspective, the 63.25 is pretty close to the HVN and VPOC, so I would not be surprised if price didn't really react at this level.
I have a pretty light day at work again and I hope to take advantage of that by putting a lot of focus on my charts. I am going to review my psychological checklist throughout the day today, not just before a trading opportunity. My aim is to be able to take trades when I see them form. I've been pretty good at identifying areas, I've just been too passive in my approach. If I can continue good identification and be more aggressive then I'll have taken another step forward.
10:45 Update
Really pleased with my 1st trade. I didn't let what looked like a hard move down shake me out of my analysis and cause me to miss an entry that fits into my plan.
12:50
Really interesting morning after our president elect started talking. Next Friday should be YUGE. Trust me, you're going to love it, it'll be great. At this point it really looks like this 60/61 area is sort of a pivot, it's really stalling price when it gets into that area. I've been a bit distracted by work stuff so I've not been able to closely monitor the action but I did get into 1 good trade. Touched my profit target but no fill, then ran back to my entry where I'd moved my stop to break even...close one.
13:10
This is interesting, and I'm having a bit of a hard time coming to grips with what price is wanting to do here. The news reaction created a range between 69.50 and 55.0 but since that time we're locked into basically 68 to 58. For now I'm going to sit back and watch those edges for opportunity and stay out of the back and fill in between. 14:00 sometimes comes with some directional move or shift in trend so I'll watch the edges until at least that time and then stop to evaluate if I see something different developing after 14:00.
End of Day
Man, did I ever get slammed in the afternoon at work. This left very little focus for trading. I always keep my charts up no matter what else I'm doing so I can always at least glance to see what's happening but when I'm super-busy they just don't get the attention and level of focus they require.
I did identify and trade a short at 13:47 (short 2261.50), started to go my way so I moved my stop to break even and it ended up reversing on me for a scratch. I was happy with my identification, entry and management/exit on this one, the short was right up against my pivot and the RR was good as well, it just didn't end up playing out, too many bulls.
Once the market moved over 62/63 and then over 64.0 my bias switched to bullish. I identified 3 good entries. I've walked through my charts several times now and looked this period, basically after 14:15 and I don't see any others. The 3 that I saw were not quite real time, I noticed them a bit after. 1 winner and a few scratches. In my additional analysis I looked for possible areas that would have been stopped out but I don't see anything at all. I've been doing this type of walk through each day and I think it's been very beneficial - I'll keep at it for sure.
Again, I end the day in a very good place. I am not yet hitting all possible entries but my percentage improved to 75% today on entries that I could have seen. I did miss a really good one in the morning but I had to go to the bathroom pretty badly. Price was in a great area for me and I wanted to keep watching but I really couldn't hold it anymore and of course when I get back I see a really great opportunity. I would like to think I'd have taken that one; I had been having a really good morning.
I felt very comfortable with my market reads today. Today was a little more challenging with the Trump reaction and all but that did not cause me to enter trades that were not in my plan. I will admit that as I saw price tumble down from 69.50 to 55.0 I looked at all of that opportunity and I was getting none, but it didn't bother me at all. That's not something I'd have been able to just shrug off a few months ago. I was cool with it today I think because 1) I have confidence that good trades will come later and I will actually be able to see them and understand why they might work (I feel that I'm starting to see beyond the candles a little bit) and 2) I had already booked and seen some good opportunities before that so I'd gotten mine.
Another thing I'm happy about today is my performance/read around my SR zones. I was really focused on what price was doing and didn't lock myself into a certain bias. I let go a bit and just let price tell me what I should do, and I started over after the next candle - letting myself change my mind. This got me into trades that upon later review were good spots that maybe I would have missed before.
My goal tomorrow will be to go through my psychological pretrade checklist much more often. I'm printing it out and sticking it in front of me so I'll see it more. I did go through this more often in the morning today and I think it was helpful. In the afternoon I was busy and didn't. Some of the trades I didn't catch real time and reviewed later, I put myself in the mindset of taking the trade at that moment. Without consciously thinking about risk, that every trade is a lotto trade, etc. I really got this slight uneasy and heavy feeling in my gut. Had I been engaged in the market during those times and not consciously thinking about my psychological pretrade queues I may well have hesitated to the point of missing the entries.
Another goal is to stay aggressive. Being more risk averse makes me rather passive in terms of entry. I really need my psychological checklist/queues here to kind of give myself a pep talk. I don't believe I'm very close to being at risk for over trading at this point; my big issue is under trading. If I get so far as to continue to follow my plan and be at the point of over trading, I'll be exuberant. I'd love to be guilty of over trading while sticking to my plan - what a interesting change that would be.
More study and review tonight for me. Tomorrow at works looks mostly light so it I should have most of the day to give attention to my charts.
I'm just going to post the lower end of the zone. Each zone is usually between 2 and 4 ticks.
2228.0
234.50
239.50
2247.75
2254.0
2259.0
2267.0
2269.25
2273.25
2276.0
Premarket
The ES kept running higher after the cash close yesterday but has tumbled in overnight trading. The 8:30 economic news didn't cause much of a reaction and we look to open around 5 points below yesterday's close. Going into the open my bias is neutral/bullish. This could change before the open or quickly after the open so I'm certainly not locked into a bullish bias for the entire day, just at this moment.
We're starting to get a little range expansion going. I look at this using a 40-minute IB and look at the range expansion thereafter. I keep these numbers in mind as the day develops though I don't use them as a trading tool by itself. Given the expansion the last couple of days I'll be looking for more of the same today and tomorrow.
My goals today are to read my pretrade psychological cues often, every 15 minutes would be good and to be aggressive in my entries. Since I started back trading last week I have 1 full stop and a few losses that did not reach full stop (just a couple of ticks). My hit to stop rate is high so I can certainly afford to be more aggressive (I don't want to use the term "take more risks" as that would imply either I should trade outside of my plan or that the planned trades are not themselves risky - neither is true). I really want to make a little more progress today, even if it's just an inch along this marathon.
10:30
I'm posting my first 3 trades from the open, +2.25 net. My first was a stop loss on a long. I reversed to short and scratched and then reentered at the same spot and hit +4.0. Right now the ES is trading below 54.0 SR and I expect a little consolidation from here given the strong moves from the open. We've already done yesterday's range and are 2 ticks off of Tuesday's range and while I would not be shocked to see additional movement lower today I'm not counting on that being soon.
I'm very happy with how aggressive I was off the open. I was locked in and focused and not fearful. I just processed price movement and traded based on my interpretation of the information. In a way, I was too focused to be fearful - I just didn't experience any of the psychological effects that I generally do.
10:45
Price tested the underside of my SR zone at 54.0. I wasn't really expecting a move lower this quickly but price stalled at 54.0 and I got a nice entry short at 53.25. I had a more modest target, just looking for a touch of 51.0 again, 1.3R trade. Once the ES moved lower I moved my stop to BE and just waited...got stopped out for a scratch. Again, I'm happy in all areas here; good recognition, aggressive and well managed based on my plan.
If price holds here I will be bullish biased. At the moment I'll be looking for some sort of weaker move down to buy.
12:35
Had some late morning meetings in my office so I was watching my charts but not focusing on them or able to trade. Once I had time I went back over and looked at where, ideally, I would have liked to trade based on my plan. Nothing too much, just a couple of shorts at 54.0 R that would have scratched. Clearly there's demand lower around 51/52.
Price is now testing my 59.0 SR zone so I'm watching closely to see how price handles this area. Bias is long but I'll consider a short if price can't break the zone. My target would be the 57.0 area so even if it does fail I might not get an opportunity that meet my RR parameters. If not, that's fine, there's plenty of afternoon left and I know I'll get more opportunities.
End of Day
I'm shutting it down a few minutes early and starting my review. Today was very active for me, lots of trades. In total, I made 9 trades for +2.0 profit. I missed 4 trades that I did record; 2 were while I was in a meeting and 2 were while I was looking back at an area from earlier today (I should have been focusing on what was going on now and review that later). Of the 2 I saw late and were signals that I would have seen (maybe taken given I was doing well today), 1 was a scratch and the other was a winner for +2.50.
So a lot of trades today. I was really hunting for areas to enter, and was managing all my trades very closely. Maybe this could be called over trading. However, I did not take 1 trade outside of my plan; nothing did not meet my checklist parameters. It was just one of those days where price was hitting a lot of my SR zones and that created opportunity. I made a note, "a lot of work for 2 points profit but I'll take that every single day". Hell, I'd work twice as hard for 2 points; profit is profit.
Again, I walk away from the trading day very pleased with my performance. I didn't read my psychological cues as often as I intended to do. I could really tell this in the afternoon as I became a little disengaged and I could feel my nerves when I put on a trade. These nerves were not there this morning. I did well with aggressively entering trades; no hesitation at all. I also did a good job stalking areas and looking at potential RR ahead of time. I also see that I made some mistakes and could have done a much better job reading strength and weakness around my SR zones. This is especially pleasing because while I've done quite well this week, I have also identified technical areas of weakness that require further study and focus. Lastly, I'm very happy with how I handled my first trade of the morning, which was a loser. I have reviewed that sequence again and entering there was an error. There was an entry available a bit earlier which would have scratched. The reaction off of support was not strong and while my entry wasn't flat out wrong, it wasn't great given the context. At any rate, I started off the day with a nice loser and was in the red 20 minutes in. I reacted by reversing bias (very quickly and logically) and taking a short trade that didn't work. I followed that by by shorting again at the exact same level and watching it quickly hit my target for a good profit. I didn't pout, sulk or let self-doubt creep in; I just moved onto the next one and the next one after that. That's a good response that I've not always been able to come up with.
Going into Friday, I'm profitable for the week and I've been able to identify real time and enter an increasing percentage of trades as the week has moved by. Monday was 40% and today was 82%. Tomorrow I will aim to finish the week strong in terms of entering trades and being aggressive. If I can do this, I'll put myself in place to make a hard decision for next week - paper trade once again or get back to live trading. I would like to get back to live trading as soon as possible because that's where the psychological issues are really going to come into play. Technically, I've been improving and I don't expect to be technically perfect before I live trade; if that were my expectation I may as well close my account and do something else with the money because I'll never be technically perfect. I'm really looking to be technically good enough while being able to at least prove to myself that I can get into and out of entries on paper according to my plan. I don't want to extend that paper trading out too long, only just long enough.
I have had periods of live trading profitability so I know it's possible. The big difference between how I feel now interacting with the market versus before is that I really feel in control. I'm gaining trust in myself and my plan. The level of trust that I have is deeper than at any time in the past. How I am entering and exiting the market makes sense to me, much more so than in the past. I know that there will be periods during the day where I'm unsure or confused, but I also know how to sit back, observe and figure it out. This is something that's pretty new to me. I know what I'm looking for price to do and why, and if it does something else then I know to reevaluate everything based on what is happening.
I'm just going to post the lower end of the zone. Each zone is usually between 2 and 4 ticks.
2228.0
234.50
239.50
2247.75
2254.0
2259.0
2267.0
2269.25
2273.25
2276.0
Premarket
Not much of anything going on overnight but there was a reaction to the 8:30 economic news, nice being relative to the reactions/non-reactions lately. Just after 9:00 and the ES is pushing up against SR at 67.0. I have a lot of resistance overhead so if there's a move up I would expect some back and fill and I'd expect it to either be slow or ultra fast, like 1 or do giant white candles on a 30-minute chart. I am not expecting an orderly move higher with lots of nice looking spots to buy.
Bias is currently sideways. I'll initially be looking to sell 67 and buy 59.50. It seems that my premarket plan lately has dissolved within 5 minutes of the open and I've had to adjust. I'll continue to try to be flexible and not get locked into a bias and let my mind absorb the new information I'm presented with.
Goals for today. I'd like to read my psychological notes more often today. I've re-positioned them so they're in a better spot for me. I'd like to maintain my focus until 15:30, allowing a break between 11:30 and 13:00 unless the ES is in a key location where there will be potential opportunity. And I'd like to maintain my aggressiveness both in entry and management. I have made much progress this week, it's been a big step in the right direction for me.
I'm ahead profit wise this week. I've been here before and been challenged mentally to risk the profit that I have which has resulted in me just not taking trades. Maybe this is a good mindset for someone well seasoned with a good track record but that's not me. I need to just trade my plan and get practice in. Segmenting things into weeks, days, months or whatever is really not important; deliberate practice and screen time are at this stage so if I have a negative P/L day but I traded my plan then that's a good day - that needs to be my mindset.
10:30
ES has really lost some steam here, just oscillating and churning around in a tight range. My premarket bias was again changed within minutes of the open as there was a lot of bullish strength early. I stayed focused and watched price around my SR zones carefully for clues and potential trades. I ended up taking 2 trades in the span of 15 minutes, the first long and the second short. Both were good trade locations and on both trades I feel that I read ES strength and weakness well. I don't just say that because both trades were profitable either, I really was focusing and analyzing price closely. As usual, I'll conduct a review of these areas post market to look for errors or areas of opportunity but right now, having looked at these a few times, I feel pretty good.
ES is stuck sideways for now and I can't imagine I'll place a trade unless we move above 74 or below 69. My bias is still bullish for now until a break and hold below 69.
12:00
Really choppy here. I've been keeping an eye on my charts but getting some things done at work at the same time. Although there have been some opportunities at the edges of this range (only 1 with acceptable RR) I'm not really inclined to trade here. I'll be curious to see the strength of a break of this range, and whether or not it will be a head fake.
13:30
Just not a lot going on. Price at 70/71 is now in an area of interest to me but the ATR on my 1-minute chart is now under 2 ticks...just too slow for me to consider a trade at this point. I want my trades to work fairly quickly and I want price feedback within a few minutes so I can have something to evaluate and decide if I still want a trade on. That's impossible at the moment so until some volume or direction comes in I'll be sitting on the sideline. I did place focus on my charts as we broke out of the 70-72 range around 12:15 and I was stalking for an opportunity until 13:00 but I really didn't find a good spot. Hopefully something will happen in the next 60 minutes.
The real problem with this price action isn't finding a low risk entry, those are everywhere; it's finding a low risk entry with a logical target to get a trade with a potential profit of more than 1R.
15:10/End of Day
I'm shutting it down early; I'm just not interested in trading this. I suppose everyone is doing a 4-day weekend or something. I did take a short at 14:40 that stopped out for -1.0. I'm okay with the entry but I goofed on the management. I knew right away I should be managing it more aggressively by moving my stop to BE once price went my way. Price moved down for me and I left my stop where it was. I could feel this mistake but I did not take action. I was trading on the hope that my target would be hit and not trading based on what price is telling me and my plan. I'll take it as a learning opportunity and move on; I realized the mistake as I was making it so that's good.
My overall thoughts for this week are positive. While today was pretty crappy from a trading standpoint, I handled it well. I made 3 total trades and even though I watched and stalked a lot I did not take unnecessary trades or risks outside of my parameters; I was really disciplined both today and this week. I'm getting better about taking my signals and staying focused as well.
I've thought about how I'll handle next week a little bit today and I'm torn on sim or live. I might live trade the open and sim the rest of the day, or live trade until I reach a profit target and sim the rest of the day, or I could just sim trade the short week and see what happens. Whenever I do go back to live trading, I do think I'll just live trade a portion of the day or live trade until I hit a profit area and sim trade the rest of the day from there. I think that slowly working my way back to live trading might be the better way to go.
I'm looking forward to Monday. Although the markets are closed I'll be at work. I'll take the opportunity to do some additional review; I'll make good use of the free time.
Did a lot of work over the weekend when the NFL was not playing. I was communicating with a trader a few weeks ago and they suggested looking at the YM for trading as opposed to the ES. I spent a lot of time over the weekend mapping out SR zones on the YM and going through a similar process of post market review like I do with my ES trading now. I mapped out trades on the YM as I do with the ES. I found that my RR on the YM trades was actually better than my RR on my ES trades, about 30% better actually. There were a few more trades on the YM over that period as well. The sample size wasn't that great, but I liked what I saw.
So, tomorrow I will take the week to watch and sim trade the YM and see how I like it. I will be using the exact same process that I use now. What I think I will potentially like about the YM is that the price movement can be seen on the chart more than with the ES. While price might move between 2 or 3 ticks on the ES, that same move on the YM 7 or 8 points. Where a lot of the battle with the ES is only visible on T&S or the DOM, that same battle is visible on the charts with the YM. And since I'm not trading off the DOM or T&S but using charts, I may well be better suited to trading the YM. In terms of general movement, the ES, YM and NQ move mostly in the same direction, so I don't think it would be like wanting to start trading gold, oil or currency pairs in terms of a learning curve.
Today I am doing a little more study on the YM and converting my spreadsheets and things to YM.
