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I started to feel a bit nervous when the market started pulling back and left some very strong bear wicks on the 5 minute
We touched the ~4830 area and then moved back down so I would be lying if I told you I was as comfortable as I felt 2 minutes before I took this picture
However, I took a look at things again and realized I had a good entry and a good stop. I set some alarms at the ~4830 area and the ~4820 area so that I could stop staring at it for now before I convinced myself to exit
Thankfully the market turned around and shattered through the 30 area this time around. I decided it was time to move my stop to guarantee a profit and potentially move my target to a better area, that was not too greedy.
Target was filled at ~4839.50. Of course there was a part of me who wanted to hold the trade for longer, but I would've been greedy.
I didn't touch it and the target was filled.
Trade grade - Excellent
It was in the plan
Observed signs of entry
Good target and stop
What makes it excellent is that I moved my target slightly to take on 3 additional points. It wasn't greedy, and it was right before an expected area of reversal / pullback.
PS- Currently it came down 10 points from my target so I am so glad I didn't get greedy on this trade
PPS
Business inventories came in as expected
Consumer sentiment came in as a lot lower than expected
Yesterday's excellence is today's standard and tomorrow's mediocrity
Exciting morning, and then not so exciting rest of the day.
I only took the one trade above, although I passed up on a couple of setups. In retrospect the exit on my one trade was just a couple of ticks above the day high so if I got greedy with my target on that trade I would've ended up losing the trade.
I'm not sure why I didn't take the short setup around the 4840 area, it was in my plan and the signs were there, but honestly for some reason my mind was focusing on bull setups and totally ignored it until it was too late. A bit of a brain fart there.
Price came down to the 4800 area a couple of times but every time we came to it I wanted to see signs of aggressive buying, and nothing.
Price came very close to it 3 times today but the signs weren't strong enough for me to take. Only one of those ran enough for me to say I could've gotten a good profit out of it.
The volume after we had the big bear move was so low, I wasn't confident in a reversal vs a creeping bear market.
One thing I'm noticing is that my plan only takes into account what to do on first contact. So if price breaks through that area and comes back, I'm not looking for any setups that could be good. Kind of a shame as I'm passing up on a bunch of opportunities simply by not having them in my plan
4 day trading week, I didn't catch any of the huge moves or had big blunders so I ended ~ neutral this week.
I still made some mistakes on Wednesday & Thursday, dumb psychological mistakes. But keeping things to a 2 trade limit makes sure I can learn from those mistakes without losing too much % and $ wise
0 FOMO trades - One day I wasn't sure if a trade I took was FOMO or not, let's not say pass or fail
0 Emotional trades - Fail
Engage deliberate thinking in all trades - Fail, wow!
Journal daily - Passed
Make progress on book - don't be lazy on this - ... Failed
Aim for 2 trades on most days, Friday can be an exception with major news - Within my daily specifications
Think of a good trade management rule that should give you flexibility should the market be very directional, but protect you from yourself most of the time - I'll be writing about this later
Abide by whatever micromanagement rule you create - Haven't finished my micromanagement rule yet
Do not get greedy with your trades - Fail
This week for some reason it feels like a blur lol, I wasn't able to recall some of my trades to be quite honest. Good thing I have a journal to remind me of things lol
I don't know why I felt the urge almost every day to look at my P&L, honestly the $ wins or losses don't matter, I'm here to grow as a trader. Doing this only makes me focus on how much money I can win / lose, and then I end up focusing on the wrong things
One trade I did not engage deliberate thinking on, and it's crazy that I didn't do it because it's starting to become a habit. This is good though because a month ago I almost always entered a trade through intuitive thinking, and now 1 doing 1 trade that way makes me shake my head and tell myself "wtf are you doing, haha"
Reading my book, oh jeez I am such a bad reader. I love to write, I love to watch videos, I love to listen to stuff, but I hate to read. Maybe I won't try to make progress on the book next week so I can focus on a couple of other things, and then the week after come back swinging?
I gotta keep working on the greediness, it definitely played an impact on Wednesday and Thursday.
Out of those trades:
Excellent trades: 2
Good trades: 0
Ok trades: 4
Bad trades: 1
Really bad trades: 2
More mixed trades than I would like, I'm moving away from being more mechanical so I have to come back to that.
2 really bad trades this week though? that's not good lol.
Win%: 33
Weekly Expectancy: 27.78
This is because my payoff ratio was 2.86
Overall a slightly positive week $-wise, with a reasonable amount of trades. This is thanks to my wins being almost 3 times as big as my losses, but I do also want to be able to rely on my win% to keep up a positive expectancy.
My mind felt like it wasn't in the game this week and it showed when 3/9 trades were either bad or really bad. It's a bit weird because I felt very tired but this week I got an average of 7.1 hrs of sleep and I usually get ~5.8 hrs of sleep on average. Seems strange, so hmm...
Either way, survived another week, and slowly improving as a trader.
On to next week!
Yesterday's excellence is today's standard and tomorrow's mediocrity
Aim for 2 trades on most days, and 3 if the market is volatile and you won at least 1 of previous trades (ON trades don't get counted on this, but max 1 ON trade her night)
Make sure you watch FT71 webinar live, the topic is very relevant this week
Abide by your new trade management standard
Do not get greedy with any of your trades
Make formal changes to your rules
Update your personal tracking spreadsheet to refer modifications to your rules
Ensure you are at your desk 75 minutes before market open every day - don't sleep in
Yesterday's excellence is today's standard and tomorrow's mediocrity
ON activity mostly balanced between ~4800 and ~4780
No huge spike in volume apart from an initial strong bear 10 minutes after Sunday open
Empire state manufacturing survey came in a lot lower than expected, seems that it didn't have much (if any) impact on the market
16 day VA between ~4886 and ~4816
News
Industrial production @ 915 - Came in ~ consensus, shouldn't impact market
Fed speak @ Noon
Netflix earnings @ 1500
Scenarios
Range between Sunday open (~4806) and ON low - very boring day
Trend bull @ open until you find strong resistance either at ~4820 or ~4830, then range between that an ~4800 or ON low
Trend bear similar to previous Tuesday - Strong volume at open with trend-day-esque profiles
Trend bull - Start this week off with a big bull correction opposite from last week
Range between ~4815 and ~4890, very low range day and potentially 0 trades from me
Setups I'll take today
~4840
LF Short
You want to see strong signs of exhaustion or aggressive selling
Stop behind 4840 is a must
Target ~14 pts depending on time should be safe, ~4821 stretch
If we had a trend bull day getting us here, don't take unless it's near the end of the day
~4830
LF Short
You want to see strong signs of exhaustion or aggressive selling
Stop behind 4832 is a must
Target ~13 pts, stretch target is 4812
Watch the ~4820 closely for strong signs of a pullback
Watch ~4815 for signs of reversal
Be prepared to pass up on this setup - specially if the day so far has been a trend bull day
~4820
LF Short
You want to see strong signs of exhaustion or aggressive selling
Watch the ES to see if there are any strong areas that we are getting close to
Ideal stop is behind 4825.50
Safe target ~ 4806, stretch target is ~4798 - must watch ~4801 closely though and be prepared to exit
You might be tempted to take a break-out trade here - don't
The only exception is if today looks to be a bull trend day and we sliced through the 4810 area
~4800
LF Short
You are looking for reversal signs or signs of bear continuation if we open higher than this
You want to see signs that high prices aren't being accepted
Ideal stop is behind the ON high
Safe target ~ 14 pts, stretch target ~ 4776, but you need to watch ON low very closely
Watch 4790 area for any signs of a strong reversal, and exit if you see them
Don't get too greedy with this. It'll be tempting to hold until 4760, only do it if it looks like we are having a bear day
~4800
LF Long
You are looking for a break out trade here
You want to see aggressive buying
There shouldn't be any exhaustion signs
The Sunday high was ~ 4806 so you want to make sure this move is strong enough to destroy that
Be prepared to exit this at ~ 4804 if you see strong selling
Ideal stop is behind 4795 but might be hard to get, don't take more than 5 points risk in here
Target ~4813 is safe, ~4819 stretch
You need to watch the ~4805 area strongly, as well as the ~4810 area, if you see strong signs of reversal make sure that you exit
Do not get greedy with this trade
If this is the 2nd or 3rd time hitting this, you are looking for similar signs although your stop / target areas might change depending on what's happened in the RTH
Open of the day
LF Short
You are looking for strong bear signs
You want to see aggressive buying or orders being absorbed bearishly
You will most likely pass up on this setup - so prepare yourself for that
If this is ~ the 4800 area, focus on one of those 2 setups instead
~4780
LF Long
You are looking for signs of a reversal
Exhaustion signs might be good enough to enter
Ideally you want to see some aggressive buying
Stop behind 4774.50 is ideal
Safe target is 4797, stretch target is 4809
Be prepared to pass up on this if the bear move down is quite strong
Look at volume # and get a good gauge of who is playing in the market today
~4780
LF Short
You are looking for a break-down trade here
You want to see strong bear force
You want to see that 4790 was sliced through easily
I won't be updating my plan above as I've already taken my 2 trades for the day
First trade opportunity - Passed
I looked to see if we could get one of the 2 setups I was mostly looking for ~ 4800, but the first 5 minutes looked quite balance and I didn't see strong signs for either way. A short probably would've win, a long would've been a loss
Second opportunity - Taken
Quite quickly we see things start to turn bearishly and I see enough signs that I enter
The market moved down quite fast so I had to get in with a market order unfortunately, but I was expecting a break-down
Then we get to a point where I need to make a decision as we are seeing some strong resistance on the volume profile. I modify my stop to ensure I don't take a loss on this trade, and I keep my target, decision made and now I sit and wait. Honestly the 15 minute wicks are showing a very strong bear move so you would need a very strong bull move to stop this and completely turn it around.
We do end up getting that bull move
At least I modified my stop so I didn't take a loss on this trade.
In retrospect, if I had a better entry point the trade could've gone differently, but I didn't see strong signs to get in earlier.
Trade grade - Initially Ok --> Upgrade to Good Okay trade because the entry wasn't very good, but it was part of my plan
However, I upgraded it to good because I managed the trade pretty well and ended up not losing money on it due to that
Third Opportunity - Taken
I honestly didn't really want to take a break-out setup so soon after my first trade but the signs were pretty strong and my job is to read the market and act based on what I see, and not let any preconceived notions force my trades.
Volume looked strong, this move stopped a big bear move, the wicks looked strong on 5 and 15min. I was confident we'd break through the ON high of ~4806 (which we did), but I didn't think this would turn around at ~4810.
Trade Grade - Good
It was in the plan
Observed signs of entry
Good target and stop
Looking at things right now, it seems like scenario 1 is the most likely, so then the ~4800 area ends up being a low volume area where price just slices through up and down and not a great indicator for where the trend will go.
It's so early and it's a Monday but I took 1 point on first trade and lost on 2nd trade, I don't meet the requirements to take a 3rd trade.
There's a fed speech soon so that could be why the market isn't moving too much but there'll be more opportunities that I can take during the week.
2 trades max today - unless trend day and you won at least 1/2 trades - then 3 trades max - Passed. Technically I 'won' one trade, but when I write this I'm assuming a 12+ pt win, not a 1 pt win
Abide by your new trade management standard - Passed, it actually saved me 6 pts today, so that's good
Do not get greedy with any of your trades - Passed
Good day psychology wise I guess, it's just weird to step away from my trading desk so soon. I've done this before so it's not the first time, but it's usually because I've taken so many losses and I am trading emotionally, and not like ~4pts down and trading well.
Rules are rules though.
See you tomorrow!
Yesterday's excellence is today's standard and tomorrow's mediocrity
Everything on my watch list is strongly green, with nflx being up 18% pre market
14 day VA between 4810 and 4887
Should be close to 50K contracts before open, so quite high
Goldman sachs profit up 47%, that seems like it's a lot but stock is up only up ~1.5%?? what? lol
News
GDP came in ~ expectations
Housing market index @ 10
UK data ON came in ~ expectations
China information tonight
Intel reports @ 17
Yahoo reports today, but when?
Obama and Italian PM talking today, will that move markets? I don't know to be honest , never seen this before so I'll keep close watch
Scenarios
Trend bull day - Continue the big bull move until ~ 4880 or even until ~ All time highs of ~4900
RTH scraps from ON move - RTH finds a resistance area and then balances between that area and 25-30 points below it, boring day
Trend bear day - We see a huge correction from the ON activity and we strongly reject the ~50 area and trend bear until ~ 4800 or the end of the day
We trend bear off the open until we find strong support, then we trend bull for the rest of the day
We trend bear off the open until we find strong support, we then find a strong resistance area and range between those 2 areas
Setups I'll take today
~4880
LF Short
You want to see strong signs of exhaustion or aggressive selling
Stop behind 4880 is a must
Target ~14 pts depending on time should be safe, ~4861 stretch
If we had a trend bull day getting us here, don't take unless it's near the end of the day
If you haven't taken many setups yet, you might be tempted to take a break-out trade if we pass this - do not do this as 4890 and 4900 are very strong areas - you can take those setups instead
~4855
LF Short
You are looking for strong signs of aggressive selling
Exhaustion is not good enough to take this setup
Ideally look for signs that higher time frame players are stepping in
Ideal stop is behind 4863
Target ~ 4843, but watch the ~50 area for signs that you just took a pullback
Ask yourself - are you confident that the current trend is now bear?
Look to see where ES is at, and if they are near a strong resistance area
~4860
LF Long
You are looking for a break-out trade here
The 50 zone should've been shattered
There's little sign of slowing at ~4855, and 4860 is offering little resistance
Stop behind 4855 is ideal
Target ~4874 safe, ~4878 stretch
Entry on this will be very important
Be prepared to pass up on this setup
~4840
LF Short
You are looking for a break down trade
Signs need to be very strong that we aren't going to continue with this bull move
Be careful of a short squeeze at ~ the open, signs could be similar
There should be aggressive selling getting us to this point, you want to see more of it
Stop behind 4845 is ideal
Target ~ 4831 is safe, 4826 is stretch
Be prepared to pass up on this trade
~Open
You are looking for some very strong signs of either trend reversal or very strong trend continuation
You want to see high volume
You want to see very bear or bullish profiles
You want to feel very confident that the trend is going one way, somewhat confident is not enough
You shouldn't feel nervous taking this setup, so if you do then analyze things quickly
Don't look to get into this setup, only take it if the signs present themselves bluntly to you
~4830
LF Long
You are looking for signs of reversal
You want to see strong volume
You want to see higher time frame players stepping in to buy
This area is very close to the 4820 area, so be very careful
Safe target is ~4834
Stretch target is ~4839
Be prepared to pass up on this
~4820
LF Short
You are looking for a continuation of a strong bear trend trade
You don't want to see anything slowing
40 and 30 zone got shattered pretty much, not much resistance is shown
Stop behind 4825 is ideal
Target ~4811 is safe - keep in mind when looking for an entry point
~4804 is stretch
~4820
LF Long
You are looking for signs of a reversal
Exhaustion signs might be good enough to enter
Ideally you want to see some aggressive buying
Stop behind 4820 is a must
Safe target is 4834, stretch target is ~4842
Be prepared to pass up on this if the bear move down is quite strong
Look at volume # and get a good gauge of who is playing in the market today
~4800
LF Long
You are looking for signs of a reversal
Exhaustion signs might be good enough to enter
Ideally you want to see some aggressive buying
The later in the day the better this setup is
~4800
LF Short
There should be some very negative news
Do not take this if later in the day
Hold until at least 330 Ramp up or strong signs of reversal
Be prepared to pass up on this
~4780
LF Long
You are looking for signs of a reversal
Exhaustion signs might be good enough to enter
Ideally you want to see some aggressive buying
The later in the day the better this setup is
Things to watch @ open
Total volume - are we seeing any higher time frame players stepping in to take advantage of the open liquidity?
Volume profiles - how will they look off the open? will we see any signs that point towards a trend day?
Potential of short squeeze- will it happen? be careful not to get caught in the trap both ways
As I was doing my market prep, I wanted to take a short at ~4840 before the market opened as I had marked it as a resistance area
However, I did not see strong enough signs of a reversal, after a 40 point move with very little resistance
Would've been a loss
Second trade opportunity - Passed
Passed short pre open at ~ 4843 area
Things were moving down and the volume had accumulated above quite a bit, and things looked bearish
I just didn't like the entry point, it was too low to be able to place a stop behind the 4850 area which I would've wanted - if I only knew what would happen next
Would've been a loss
Third trade opportunity - Taken
Things started to look bearish and so I took a trade off the open
The price was at ~ 4848 when I clicked the sell market button and the price I got filled at was 4843.50, wow
I was expecting a ~4848 or ~4847 fill, at worst a 4846.50 fill but all would allow my stop to be behind the 50 area
I don't think that I would've taken this trade if I knew my fill was going to be this bad
This is almost a 5 point difference in a matter of seconds, that is huge lol
I'd love for my stop to be behind the 4850 area but I don't know that I want to take such a high stop on such a bad entry specially if it does end up just being an inventory squeeze
I think I might need to consider not using market orders to enter, unless it's a break-out or break-down trade
I was a bit shocked when I looked at this to be honest, this bad fill was the first time I either experienced this, or noticed it
But things started to look good right away, so I decided to hold it and not focus on my bad entry but be positive about the potential upside
Looking at this it is very hard to justify staying in this trade without increasing my risk. I would've had to increase my risk at least 3 points so it'd be a 7.5 risk vs 13.75 gain, which isn't even 2:1
Also, around this time my mind started to see us balancing between 4840 and 4846, which could get me very close to my stop with just 1 move. The risk is no longer in my favor, and although I still feel confident about the market moving down, my entry point is bad enough that I feel I need to exit the trade.
Ended up taking 1.75pt loss, which isn't fun for my first trade but it's better than staying in a bad trade.
We'll see whether or not that was the right decision
Edit: The market went up and got 1 tick below what would've been my stop before moving bear. It then came 5 ticks before what would've been my target. After that, it moved up and would've taken out my original stop of 4848, and the stop I thought of maybe taking of 4851.
Hard to say whether or not this was the right decision $-wise, but I do feel that this was the right decision discipline wise.
In summary, if I let the trade ride without changing anything I would've lost more than I lost. The only way I would've won is if I exited the trade earlier while it was moving down.
Yesterday's excellence is today's standard and tomorrow's mediocrity
I've summarized the loss above, here is the win play-by-play
This market was showing strong signs of cooling off, and I wanted to capitalize on that.
Volume was being absorbed and it looked very likely that we were about to have a reversal. It looked as if we had some high volume limit orders being filled slowly
I was expecting an aggressive reversal after a creeping 50 pt bull move, but that didn't happen
My entry wasn't ideal so I had to target lower than the 4843. I aimed for ~ the bottom of the RTH VA for my target
There were so many times when I just wanted to get out of this trade. The strong reversal signs that got me into the trade were no longer there, but there were now strong signs of exhaustion in the market. I like seeing things moving my way and THEN slowing down, not slowing down just around where I entered . I decided that I had a good entry and exit point and to walk away and set an alarm a couple of pts above my target in case I decided to move my target.
3 hours later
My alarm is hit and things are looking good.
I took a quick look to see if I should raise my target for bigger profits, but honestly I would be hoping that we'd see a strong 330 bear ramp up, and 'hoping' that something will happen when you don't see any signs of it, is not reason enough to stay. So I kept my target and it was filled
Funny enough, 25 minutes later we got a big bear move that brought the market 15 points lower :Sarcastic:
2 trades max today - unless trend day and you won at least 1/2 trades - then 3 trades max - Passed
Abide by your new trade management standard - unsure about pass/fail on this one. I don't have anything in there about the scenario I faced today, so I'll leave it empty
Do not get greedy with any of your trades - Passed
Overall a decent day $-wise today. Great day psychology wise.
Yesterday's excellence is today's standard and tomorrow's mediocrity
Strong bear move until ~ 4780 or even ~4760. Zones would be shattered quite easily and we'd have a high range at the open
Trend bull strongly from the open, and trend bull until ~ 4880 or the end of the day
Setups I'll take today
~4880
LF Short
You want to see strong signs of exhaustion or aggressive selling
Stop behind 4880 is a must
Target ~14 pts depending on time should be safe, ~4861 stretch
If we had a trend bull day getting us here, don't take unless it's near the end of the day, unless signs are very very strong
If you haven't taken many setups yet, you might be tempted to take a break-out trade if we pass this - do not do this as 4890 and 4900 are very strong areas - you can take those setups instead
~4860
LF Long
You are looking for a break-out trade here
The 50 zone should've been shattered
There's little sign of slowing at ~4855, and 4860 is offering little resistance
Stop behind 4855 is ideal
Target ~4874 safe, ~4878 stretch
Entry on this will be very important as the zone is quite large - don't be too eager if the market isn't very strongly moving up
Be prepared to pass up on this setup
~4860
LF Short
You are looking for strong signs of aggressive selling
Strong exhaustion signs could be good enough to enter this trade
Ideally look for signs that higher time frame players are stepping in
Ideal stop is behind 4865, but could be very hard to get
Target ~ 4843, but watch the ~50 area for signs that you just took a pullback
Ask yourself - are you confident that the current trend is now bear?
