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You don't think that was a mistake?
The 12-16 currently has 55,269 contracts traded while the 09-16 has 202,524. I use Volume # and Volume profile a lot in my trading decisions so wouldn't having a thicker market = better volume data?
Well the contract rollover was a big curveball I was not expecting.
I didn't realize traders would be able to trade both contracts simultaneously. The whole morning I had my focus on the 12-16 but all the activity was going on in the 09-16. I just thought that the 09-16 would eventually become the 12-16 but that clearly isn't the case. This shows a gap in my fundamental understanding of futures.
I took 2 trades after the market opened. Both were emotional trades and both would've been winners if I kept them.
I felt disoriented and I checked the 09-16 so I placed my short order there. Then I thought, I didn't prepare on the 09-16, this is an emotional trade and I sort of panicked for no reason. I exited my trade within seconds.
I then went on the 12-16 and shorted there but my ATM strategy wasn't set up and I also panicked, no real reason to but I did. I also exited that trade within seconds. I then realized I was too emotional and in a negative state of mind because I did not see this coming at all, that I decided to step away for an hour or so.
This showed something that I hadn't thought about much before. I'm typically a person that thrives under pressure. A big curve ball is usually something I handle very well and my mind instantly goes towards solutions. However today I was a different person. The curveball honestly wasn't that big of a deal, move all your charts back to 09-16 and use the same trading plan. Or in the case where my atm strategy didn't work, just manually add a stop and a target - not a big deal. But I panicked, my mind didn't race to solutions. It just worried.
This shows me that I'm scared of something. Is it the market? Is it losing? Is it winning? What the hell am I scared of? It's clearly an illogical fear but it's a fear nevertheless that I need to overcome.
Either way, I came back an hour later and just moved all my charts back to the 09-16 and looked for opportunities there.
I took a short at the 4816.75 area which was a great entry point, stop at 4820.25 and target of 4801. The market was down to 4803 and I was feeling comfortable so I moved my stop loss down to 4810.75 - big mistake. The market pulled back to 4811.50 and then proceeded to trend down to 4790. I need to work on this.
After that I decided to take the rest of the day because I didn't feel I was in the right state of mind to trade.
The day itself $ wise wasn't that bad, I'm down maybe a couple of points as my losses were all small. However psychologically my day was not very good, but I learned something new about myself that I hadn't entertained before. Fear, I thought I was immune to it because I never felt it much in my job but I can't assume that it'll just magically translate to trading. I need to work on this.
I have nobody to blame but myself today. I should've been extra cautious this morning when I saw almost no volume on the 12-16. I should've considered just watching the market and not trading today to see how things would roll over. And that doesn't even include me thinking the day of an EBC announcement was going to be boring...
I should be thankful that my mistake was very cheap $ wise.
3 things I did well today
Walked away when I wasn't in the right state of mind
Took a rational trade an hour after I came back from the market
Walked away when I wasn't in the right state of mind
3 things to improve
Placing my lowered stops at a level that won't be hit as opposed than a point I would be 'ok with an amount $ wise
A pretty strong bear market during the ON session. 30+ point drop before market opens.
No big news today
Fastest drop from top of the balance area to bottom of the balance area yet - Shows volatility increasing which could indicate we are getting closer to a break-out / break-down
24 days of balance
Everything apart from the VIX and the USD on my watch list is red today
Everything looks bearish so far but honestly I feel bullish today.
My bullish reasoning
When you look at the longer-term picture and you are expecting no fed hike and the market to be positive coming in to the November election. A day like today where the market has dropped 60 points in 3 days with higher volume will give you good liquidity to take on a big bull order.
A lot of reports coming out next week and the fed announcement is the week after. Today seems like a good day to place your bets for the next couple of weeks
We might see a drop to ~4750 before turnaround though so watch this
However, if we do break-down hard, then we could trend to the 4725 area - so watch carefully
4800 zone - medium strength
LF short opportunities - if we make it up 40 pts today to this don't expect it to go much higher than that
Bingo! Futures traders don't make money on volume, they make money on price movement. Volume is only relevant on getting an order filled (and bid/ask spread the further out you go), but believe me, you won't have much of a problem no matter what you trade, unless it's maybe Class III milk or something, lol!
And while the price is different between the two months, the movement is identical. Here's a shot from a few mins ago of both Sep and Dec NQ..
They're identical except for price. If you looks close enough, Dec is actually a tad smoother. Note the left of chart on Dec, you'll see less of a pull back on that sharp down-movement than left of chart in Sep.
There's the quote summary from CME. See the near-identical price delta since open between all three months with volume? You'll notice this phenomenon with most instruments regarding price movement.
This will hopefully keep you from having panic days like yesterday. Knowledge is empowerment!
I had a bad day on Friday and emotionally I felt like I hit rock bottom. I needed to take a break Friday and Saturday from trading stuff to just think about things.
I will do my Friday end of day results last as I will combine it with a psychology-related moment. Overall I have mixed feelings about my performance this week. I'm not happy about the win%, expectancy or the PNL. I am also not happy with how I traded on Friday. However, I learned a lot about myself this week, specially Friday on something that I need to prioritize in changing if I want to have a successful trading career. I'll touch on this in detail with my Friday performance.
End of Week results
%PNL- -3.35
# of trades taken- 17
Win% - 18
Expectancy - -31.76
rational trades- 7
emotional trades- 5
mixed trades- 4
One trade was an error
excellent trades- 0
good trades- 1
ok trades- 6
bad trades- 6
really bad trades- 1
All days this week apart from Friday were neutral days with good and bad decisions but with bad market reading. Had very few winners but my losers were small. Friday was abysmal and it was the first time I've had to stop trading because I've come close to my max daily stop limit.
What is worrying the most is the trend I'm on. Last 2 weeks haven't been great, but overall my win% and my expectancy week over week are dropping. Now that we have broken out of the balance and are in September, we should expect more volatility and stronger moves. This means more opportunities for me so patience is going to be key going forward.
The biggest thing I need to focus on is to be confident. My trading plans are good and I need to stick to them, deviation from my plan leads to more emotional decisions, emotional stress, and revenge trading in some cases.
Define what is most important for me to perform well psychologically, turn that into goals that can be tracked and measured easily - Mostly there, but not 100%
Re-word my psychology prep from 'aggressive coach' to 'calm and logical, yet effective me' approach (credit to @iqgod for making me see the light on this) - Failed
Learn about time of sales and the DOM -Passed, I will be learning more on this in the following weeks through jigsaw trading
Yesterday's excellence is today's standard and tomorrow's mediocrity
We had a new all time high followed by a day that put us back in the 4600s
This week we could see a big bear continuation of this trend, or we could see a big correction. Do not expect either but be prepared for both
The market will be stronger this week and with more volatility. Entry points will be crucial as 4.5pt stops won't be as strong as usual
Investors will be looking for some certainty this week
Fed speakers on Monday
Big numbers coming out on Thursday and Friday
Next week is the FOMC announcement so we should see some players setting their bets this week.
Patience will be the name of the game this week as there will be lots of opportunities
Goals for this week
0 Emotional trades
0 FOMO trades
As we speak I'm fighting some FOMO on not shorting the market at 4655 but I have had no prep, and honestly it would be a gamble just hoping the market goes down.
Yes it could be very profitable and a 20+pt trade but it is a gamble. There will be lots of opportunities today and I have to remind myself that even though this gamble would be profitable, it destabilizies me emotionally and over the long-term gambles don't give me an edge.
Do not look at P&L until end of week, unless you feel you are close to a golden rule threshold
Write in journal every day
Continue to define what is most important for me to perform well psychologically, turn that into goals that can be tracked and measured easily
Re-word my psychology prep from 'aggressive coach' to 'calm and logical, yet effective me' approach
Continue learning about the jigsaw trading tools, DOM, and time of sales
One of the things I've noticed about my journaling is that I try and get my prep posted before the market opens and I've started to move away from hand journaling to doing it on the computer so I can meet this self-inflicted deadline.
I know that writing things down by hand has a stronger psychological impact than doing it electronically so I'm not going to be posting my morning prep before the market opens. I will instead be posting it when the market slows down and I'm in more of a wait and see mode. I will still be making sure my plan is done by 915ET though. Developing a plan is my #1 priority in the morning and posting it on FIO should not trump that.
Here's my prep for today
Break down out of balance after 20+day balance
ON session was bearish to the 25 area and then moved up, currently some bull signs but can't forget that we had a big bear trend
Big money will control the market today, don't expect a small range
Volatility will be high, entry points will be crucial
You can scale into positions but with at least 15pts in the positive
There's not much of a reference area today apart from the ON low and highs as we didn't meet much opposition when the market was at this level 7 weeks ago
This will put a bigger emphasis on volume and market sentiment this week and specially today
Things to watch in the open
Total volume- will traders place bets or will they be in 'wait and see mode'
Volume profiles - at what price points will long term players want to enter the market?
Range- Volaility, will we see high volatility or does the market want more data before making decisions?
Today the name of the game has been go long and survive pullbacks. First time I'm trading what is expected to be a high volatile or very strong environment.
My inexperience as a trader and specially considering it's my first time trading a day as strong as today definitely shows.
Pullbacks are killing me as my entry points aren't good enough to weather them. This is most likely due to one of the following reasons:
Too slow on the trigger
Too fast on the trigger
Waiting for too much confirmation
Taking too little risk for this kind of environment
Exiting a good trade early because price is moving strongly against me
I definitely need work on all of the above but I'll have to see how things go in terms of what to prioritize.
I've had some very close trades as pullbacks got me by 5 ticks, 3 ticks, 6 ticks, and 2 ticks. On all those trades my 15-24 pt targets would've been hit except for one (which we have yet to see if it would've hit it)
I'm thinking that if I'm going to be aiming for 20+pts targets I should be comfortable with taking bigger risks. 2 of those trades I exited manually so maybe I also need to micromanage my trades less during more volatile environments. I'm finding that taking additional risk and not micromanaging my trades is more difficult when i enter loss aversion mode due to a drawdown.
I'm not sure if I'm up right now or down but I won't focus on that this week, although I think I am down a couple of trades.
We are currently sitting at a daily range of 103 so I'm wondering whether or not we will continue trending higher. I've set a short at 4729.5 if it does get filled as things have started to slow down. Looking at the ranges on the days post brexit it was 100-110 daily range and we are getting very close to that.
Either way, I'll set my order in case it does get filled but I'll be walking away as it's 12 ET!
Yesterday's excellence is today's standard and tomorrow's mediocrity
First time I'm trading what was expected to be an aggressive day and I'm speechless.
The market dropped 160 pts and then went up 140 pts in 2 trading days? what? I was not expecting this strong of a response today. From the ON session and the open you could sense a strong bull movement but 140+range day? Definitely did not see that coming.
I took a lot of trades today, too many trades and emotions played a big role (16 trades)
The first part of the day I was doing ok, but the 2nd part of the day I kept thinking 'this can't go any higher, this is the top, I should short here'. 7 out of my last 8 trades were shorts, and I found out the answer is yes. Yes it can go higher.
I learned a lot today so although I had a negative $ day, it was a great learning experience. I'll be using this post as reference in the future on a similar day.
See a big trend with huge volume behind it? Don't get ahead of it unless there are strong signs. Under normal conditions if I think the market will turn around at the 4740 zone I can enter preemptively, not under these conditions
Look for entry points where your stop can survive a pull back. Sounds easy but it'll take some practice. Ex, you expect to break the 4780 price point but you've noticed a bit of resistance. Try moving your entry point by a couple of extra points
Do not set an entry point and walk away unless it's set at a very strong zone
Try to avoid taking counter-trend trades. Only do so if at a strong resistance/support zone, strong volume profile shows change, volume# shows change, and candles show strong signs of a reversal. All of those must be met before taking a counter trend in a super trend day like today
Pullbacks today were typically ~10-14 pts. This emphasizes good entry points if you want to continue the trend
I'm still in loss aversion mode, and it's causing me to exit winning trades early, exit winning trades while in a pullback, and holding trades longer hoping for a flip. All of those are bad and it's good that I'm aware of it but I have to find a way to consciously get me out of loss aversion. I'll do some research on this tonight
Things I observed today that I should look for in the future I believe that days like today can be predicted if news allows for it (ex, Brexit) or if certain signs show up in the market. This is just a theory but here's some of the things I noted that happened either before or during the first 30 minutes that could signal a strong trend day.
Very high volume at open (at least double usual volume)
A volume profile that shatters through price levels eating up all of the contracts very quickly (see below - First 10 minutes today = ~29k contracts)
To my future self - If you observe these signss consider taking 1 trade with the trend. It should have an increased stop and no target. If after an hour or so the market is going up, look to scale in during a pullback and continue until big news announcement or end of day.
Do not look to take small profits and exit/enter continuously. Instead scale in and hold until the market shows STRONG signs of the move ending or a reversal. Be very methodical and careful of where you put your modified stop to guarantee a profit - you do not want to get caught in a pull back and miss out on a big win
Yesterday's excellence is today's standard and tomorrow's mediocrity
