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You sure you are not over trading?
I think you used to have 3-4 trades a day, and after elections night it is 20+ a day now.
I don't know if it is planned or not. Just wanted to ask if you are aware of that and comfortable with that.
100% I am, and it's somewhat 'planned'. My thinking last night was that if the market was 'normal-ish', I would trade as I normally do and limit myself to a # of trades. But if it was strongly volatile then I would be limiting myself to a % loss for a daily stop. Here's how I worded it in my weekly prep.
Today I 'adapted' to the latter, although I'm not quite sure if it was the right thing to do.
Right now the conundrum I'm faced with is as follows:
Do I limit flexibility in my trading style (max X trades per day) and slowly learn until the market conditions become more favorable for my trading style?
or do I allow flexibility and protect my account with a max % loss so that I can learn how to trade in this environment as fast as possible?
My goal is long-term growth so it seems that learning as fast as possible how to trade in this environment would be the right answer. But will over-trading in the short-term degrade my edge in the mid-term and possibly long-term?
Honestly, I don't know the answer and I'm going to be thinking about this all day as I want to make the right decision.
Any advice would be appreciated!
Yesterday's excellence is today's standard and tomorrow's mediocrity
I've had some time to think, and asked a question on the Paychology and Money Management forum. This helped me think about how I should trade for the next couple of weeks.
I've come to the conclusion that I will limit my trading to a certain amount per day, although I will allow myself to raise my risk a bit provided I stay below the 1% risk per trade, although I would not like to go higher than 0.75% risk per trade in the near future.
I don't exactly feel as I did when I started writing my post, but I am still going to post it because I know in the future I'll be thinking similarly and I will want to refer to this post for guidance.
Here's what I was writing.
To repeat, I've cooled myself off a bit from when I started writing this, and I feel different about how to approach these next few days.
See you tomorrow!
Yesterday's excellence is today's standard and tomorrow's mediocrity
Reaching a decision rarely makes a difference on its own, so here's my 2p as well:
In my experience over-trading never helps, but often neither does having a fixed number of trades.
For many of us, avoiding 'tilt' days still has to be numero uno to make for a good month. I have personally found most benefit from being able to walk away if I'm just plain wrong 2 or 3 trades in a row. I can be pretty sure my read is badly off, or I'm being stupid and fighting something obvious, usually caused by a prior married bias. The day can be saved just by getting outside the door.
Secondly, having an enforced time gap between trades works for me. Whether it's 5 or 20 minutes it keeps the head clearer and makes me remember that a day is long, so getting back into a trade faster than I held one is unlikely to be a recipe for success. Still my main work in progress, when I'm not digging.
December rate hike expectation at 94%, highest I've ever seen it so I'm sure the market will start to price things in once they get a good opportunity
Scenarios
Bull trend day - News drive up NQ and combined with the divergence with the ES, investors feel confident about buying into NQ again
Bear trend day - News sparks a bit of a bull rally, but the higher time frame sentiment on tech is bearish so they see it as a good time to sell, market continues bear move
Range between
Range day - Market opens up bullish and rallies until it finds a resistance area, market then bounces between that area and 4700 or 4690
Range day - Big correction on the open and the market drops to ~4700 or even 4690, the market then moves up and ranges between the 'drop point' of the bull rally
Setups I'll take today
Not a comprehensive list, but areas where I'm looking for changes / continuation in the market
~4780
LF Short
LF trend reversal
~4760
LF Short
LF Trend reversal
Stop behind 4760 is a must, target 4742 is safe, 4732 is stretch and if you do go for it you must secure 15 pts of profit at least
~4760
LF Long
LF continued break-out
Target 4777 but be prepared to exit at ~4774 if we see strong resistance
~4740
LF Short
LF trend reversal
Stop behind 4745 is ideal
Target 4726 at least, you can aim for 4721 but be prepared to exit
If the market is moving very strongly down, then you can target 4706 but you must secure a 15 pt profit
~4740
LF Long
LF break out
Bull rally must be strong to take, if not you might want to look at the later setups to see when the bull rally gets exhausted or reversed
Watch the 4750 area closely
Target 4769 if we break the 50 area easily
~4715
LF Long
LF strong support and a bullish sentiment
~4700
LF Long
LF trend reversal
Stop behind 4695 is ideal
Safe target 4714, stretch target 4723
Watch the 4715 area closely
~4700
LF Short
LF break down
4682 target
The first time getting into this, do not expect the market to break the 4680 mark, however if this is the 2nd or 3rd tiem, then you could aim for a target lower
~4680
LF Long
LF trend reversal
Target 4698
Unless big news, don't target past the 4700 mark
~4680
LF Short
LF break down continuation
If the market move is down and very strong then take this, otherwise pass
Always appreciate any comments on my journal, so thanks!
I do agree that limiting myself to a # of trades doesn't help much, as it only mitigates the # of trades I take, and the potential # of losses. However, it also prevents potential highly positive days, obviously not a good thing.
However, thinking about my past psychological issues, it forces me to be strategic about the trades I choose to take a day. This slowly psychologically reinforces that FOMO = BAD, and Emotional trading = BAD, 2 things I've struggled with significantly since I started trading.
The way I see it is that I'm aiming to be an olympic swimmer, but I have just learned how to swim. I just got over the fear of water,
Limiting myself to a maximum depth doesn't do much to make me an olympic swimmer, but it does ensure I won't risk drowning and decide to exit my career path.
I think as I grow as a trader, I will move away from a # of trades per day, to a system similar to what you've proposed.
As for the time gap, I really like that idea. I've bene building a hypothesis lately that taking a trade within a couple of minutes of exiting one loses me more money than it makes me.
I have a lot of data that I've been tracking in the hopes of proving this and then making a change on it, and I honestly just haven't gotten around to it. I'm not one that likes to make systematic changes without the data to back it up, so I have to put this on the 'hopper of good ideas'
Yesterday's excellence is today's standard and tomorrow's mediocrity
Well, it feels like I am slowly walking back to the path that will make me a consistent trader. I set out the setups I was going to take, I looked for the signs, I read the market, and then acted. I wasn't greedy, but I set good targets. I didn't watch the market every second but I set alarms. I followed my rules, and once I hit my maximum # of trades that I set as part of my goals, I stopped trading.
Emotionally speaking today was very calm. I didn't get crazy adrenaline rushes, I didn't get angry, I just felt good. This led to good decision making for the most part.
I took a fat finger trade in the pre session which annoyed me a bit, but I was able to get over it fast
First RTH trade Technically this trade was taken in the ATH but since it carried into the RTH I count it as one of my 'RTH trades'.
I was looking for the market to continue trending from the retail sales data as it came in 0.8 vs 0.6, quite a nice surprise. I figured this would be nice fr a bull rally because of the divergence we've seen between the ES/YM and the NQ in the last few days. However, I also mentioned it could go either way so I watched for signs of both around the open
With hindsight I can also see that if I get into a 2nd contract, I would've regretted it. The market came down to the 39 area and I would've gotten a buy fill around the 47 area, I most likely would've been stopped out with a fraction of the profits I made.
Can't quite say how I would've acted, but if I acted according to how I tell myself I should've acted, then not getting greedy here was good.
Trade grade -Good
It was in the plan - This one was not on my FIO plan as I took it before it was complete, but retail sales almost always impact the NQ and I plan to take a trade on really good / really bad data
Observed signs of entry
Good target and stop
Second RTH trade
I was looking for things to continue moving up, potentially we could have a bull trend day and I got into another long trade.
This was an intuitive decision and I didn't really think about any potential pullbacks or anything like that, which I realized shortly after I took the trade.
I might've still gotten into the trade if I thought about it, but I didn't lol
Trade grade - Ok
It may or may not have been part of the plan
Some signs were there, but it felt like a 51/49 gamble
Decent (but not good) target and/or stop
Third RTH trade
So I was looking to go long on the pullback and I was looking for an entry point.
Initially I set my point ~ 40 area but I didn't get a fill, I didn't chase it at the 45 area or anything like that in case we saw another pullback.
Once I felt comfortable that we weren't going to pullback I filled myself at not as good of an entry at the 40 area, but hey information risk right?
Trade grade -Good
It was in the plan - This one was not on my FIO plan as I took it before it was complete, but retail sales almost always impact the NQ and I plan to take a trade on really good / really bad data
Observed signs of entry
Good target and stop
Fourth RTH trade taken
I said I could only take a 4th trade if losing it would still put me positive at least 0.75%, and I was up a good amount so this would be certain so I started looking for a setup.
I think my problem here was that I went looking for a setup, as opposed to waiting for the setup to come to me.
Maximum 4 RTH trades. However, you can only take a 4th trade if losing it would still net you 0.75% for the day- Passed, I did take a 4th trade (unsuccessfully) but even with that I'm ending more than 0.75% up
Do not get greedy, watch the market and set targets based on that - Do not set targets based on 'hope'- Passed, even with temptation
Engage deliberate thinking in all trades- Failed, on the trade where I went long at ~ the 50 area expecting a break out I didn't really think it through and I got in fast. I corrected this when the market came back up to it but I still took 1 intuitive trade
Overall day could've been better, but I honestly felt like I was in control the most out of this last week
I'm happy with today's outcome.
See you tomorrow!
Yesterday's excellence is today's standard and tomorrow's mediocrity
4780 held strongly ON, although we did stay around it for a couple of hours
After that we had a relatively small bear rally (small in comparison to last 2 weeks :sarcastic)
ATR is @ 90, we are currently at 40/90 pre market
On the daily wicks we see a volatile market that has been slowly inching up, creeping bull? I don't know that I'd call it that, but I don't know what else to call it right now
Honestly the NQ feels like it's balancing on a needle, so I need to be prepared for blast off at any time, although it may wait until the numbers come in tomorrow morning?
Range has been steadily decreasing since election night, will that trend continue today? We'd have to stay under 90 range for that trend to continue - very possible
PPI came in lower than expected, but this isn't a number I've had time to learn to understand yet, so I don't know how/if this will impact the NQ RTH
Major NQ components are down ~NQ, except for FB which is down 2%
News
Industrial production right before market opens - this could tilt the NQ either way so let's watch closely - came in just barely below consensus, enough to tilt the NQ? I don't think so
Housing market @ 10
Treasury @ 4, never seen this one before so I wonder what it's like, not that it'll impact the RTH at all, but curious
Some FED speakers today, will they move markets or will we just get fed talk from them?
Scenarios
Market corrects itself from the ON session and moves up bull, we test the 4780 but can't break it, so we move down for a pullback until we find some strong support, we move from that area and break the 4780 area and look for the next level of strong resistance either @ 4800 or potentially 4815 might be at play again
Market moves bear until it finds strong support, 4740, 4720, or 4700 are all strong candidates, we then trend bull for the remainder of the day
Low range day - Market finds some support either at the 4740 area, or 4720, then we see balance between that and ON high / PDH
Bull trend day - "Hey NQ is quite discounted still vs some of the other major indexes out there, let's BTFD", if we break the 4780 easily on the first try during the morning session, this could be an indication that we will have a bull trend day
Bear trend day - "Trump and tech don't mix very well, let's get out before the market corrects itself a couple hundred points"
Setups I'll take today
~4815-4830
LF Short
You are looking for a strong market reversal here
~4800
LF Short
Ideal stop is behind 4806, although that might be hard to get
You want to be sure that we aren't going to have a bull trend day in order to take this
Be careful about the entry point
4783 target is safe, stretch is 4764, but you must secure a 10 pt profit to go for the bigger target
4800
LF Long
You are looking for signs that we are continuing a break out
Be careful not to enter this too early as we could see a reversal 5 points above this
Stop behind 4796 is ideal
Do not get greedy on a target here, 14 pts should be enough unless we have some crazy news and a super strong bull trend day
~4780
LF Long
Break out trade
~4780
LF Short
Reversal trade
Stop behind 4783 is needed
~4750
LF Short
Very weak area, so keep that in mind
~4750
LF Long
LF Strong bull continuation
Very weak area, so keep that in mind
~4740
LF Short
You are looking for break out signs
Stop behind 4745 is ideal
Be careful about when to enter this though
Target 4731 as safe target, 4726 as stretch, and 4716 as super stretch - secure 15 pt target for super stretch and only take if the bears are out in full force
~4740
LF Long
You want to see the market being comfortable with this being support for the day, or at least for the next couple of hours
Stop behind 4740 is a must, behind 4736 is nice
Target 4758 as safe, 4764 as stretch, and 4773 as super stretch but only if conditions call for it, but you must secure 15 pt profit to aim for the super stretch target
You must watch the 50 area closely though and be ready to exit should we see some strong selling there
~4725 (RTH PDL)
LF Long
You want to see the market slow down a bit before this
You shouldn't have seen all the zones before this being completely sliced
Be careful about this, we have sliced this every day on the ATH for the last 5 days, so it's not that strong of a reference area
Stop behind 4722 is a must, behind 4725 is ideal
Target 4739 is safe, 4744 is stretch, and 4749 is super stretch - guarantee 15 pts profit to go for 3rd target
~4725 (RTH PDL)
LF Short
You are looking for a continued break down
Bears should be out in full force
Target 4703 but look for strong support ~4710 area - be prepared to exit around there should the market reverse
~4710
LF Long
Look for reversal setup signs
Stop behind 4705 is ideal
Target 4723 is safe, 4734 stretch, 4737 if bears have gone home
Watch all the areas above closely, a small pullback is expected on most if not all of them, but if you see reversal signs then be prepared to exit
~4710
LF Short
Should be some strong bear continuation
You should feel that bears are pretty hungry if you are to take this, as the 4700 could see the trend reverse or even just have a major pullback that could take you out
Target 4792, and don't get too greedy on this
~4700
LF Long
Reversal setup
Potential for good targets here, but don't get too greedy and take into account time left in the session
~4700
LF Short
Only take if you expect a bear trend day or at least a very strong bear day
4680 area has held 3/4 last days, so keep that in mind
A note about my setups today - Be careful when the market is looking for a support zone, you have a lot of potential areas from 4740 to 4700 (more than usual, and it's due to not one zone showing too much strength, you will want to see some strong signs on them if you think the market has found support.
Around these areas exercise what @CenFlo said yesterday:
Also, watch to see when the ES hits a certain area that could be strong support, will be more important than last few days as NQ starts to normalize from its last few days divergence of the ES
