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Why journal now:
I have been reading FIO for quite a while. After another run of losses and lack of discipline took a break from trading.
Returned back recently, was testing ideas in SIM and had a good run.
Initially was going to start trading real money tomorrow, but after some thinking decided instead to try TST Combine. From my previous attempts to follow "gurus" I had a coupon code that would reduce cost of combine to $1. So I figured I might give it a try. Will not hurt, and in case if my "live" trading will be bad again, at least I will not lose any real money.
I am hoping that I am finally coming to understanding that it is important to concentrate on risk and money management, instead of profits. If I will manage my risk correctly, profits will come on their own.
I am also hoping that this journal will force me to make sure that I am taking only good trades and not chasing entries, as knowing that I will have to post it publicly will hopefully do its magic.
What and how I am planning to trade:
I am trading YM (Dow futures). I am trading YM mainly because I cannot afford to trade ES. I do not have a big account, and swings in ES will cost me more than in YM. I also started to like to trade more than 1 contract as it gives you more flexibility and allows to keep a runner.
I am using volume profile to get a sense of where the market might be going.
I am using order flow for my actual entries. Exits usually based on volume profile.
I am located in Los Angeles, so market open at 6.30am local time. I will not be posting anything before market open, as I usually do not have time for that. I am done by 9am usually (noon est time). I am planning to post my thoughts of the day and my trades around that time.
I was bearish overall on the day. I did not find the right setup off the open to enter short and once it dropped lower I was too late and did not want to chase it. So was sitting on my hands and waiting for another setup. After initial drop I started turning bullish slowly. First trade was a failure. Then I missed one good opportunity to go long. But managed to catch a chunk of upside on my second entry.
I finished the day in the green, which is always good.
You can see my entries with green (long) and red (short) dots and lines showing profit (green) or loss (red).
1) Saw that lower prices were not attracting activity, at least for the time being. I entered long shortly after that, but in hindsight a bit late.
2) At this point I had my scale out just two ticks above the high printed on that bar. Was hoping it still can get filled. Though my finger was on close button. In hindsight, again, once I turned into hoping, I should have just scaled out or exited. I ended up exiting lower for a loss.
3) That bar told me that we are potentially exhausted. At that point I was waiting to see a revisit of that level with the rejection showing lack of interest at that level.
4) I got it, but not as low as I wanted it. And then it took off almost right away and I was too late to enter.
5) I was looking to enter long and after it tried to go lower and found no interest in lower prices, I entered long.
6) and 7) lower highs with lack of interest. Showing that higher prices cutting off activity. During that time I entered one long at OR-L but it did not bounce off of it, so I closed my long position.
I entered one contract short based on 7) but at that point was mentally drained. It was chopping slowly around OR-L, I was targeting to exit at VWAP but gave up and exited for a small profit. 5 minutes later it dropped to -1SD.
I definitely need to work on my scale-in strategy. Right now i enter all in, and then scale out. It is for some reason very difficult for me mentally to add to position, as I am averaging up and any retrace potentially can turn winning position into losing. And I also don't feel comfortable adding to a losing position, since previously it ended up being a disaster.
Something that I will need to work on.
I also traded in my live account today as TST account was not ready yet. It was activated during market hours and I did not want to mess with it during that time.
Wanted to post my thoughts for tomorrow.
Here is volume profile that I use to form general thesis for the next day.
I remain bearish.
Today we pushed lower, not as aggressive as I thought we would though, but we did not find yet responsive\aggressive buyers.
So I think tomorrow we might push lower. I think there is an unfinished auction around 17880 price. In perfect world, I would love to see push to 17850, find aggressive buyer (that was there on October 13) and then we can explore higher prices.
If we will press to 17850 and will not find buyer there anymore... oh well, we might drop quite nicely.
Overnight we went higher. I was still bearish though as per my previous post. And higher overnight prices just meant more move to downside.
I also read a lot on FIO threads about scaling in and out and was trying to do the same today, with mixed results.
Here is my first trade:
1) When I see up move and then it builds over couple of ticks like that, it usually means we are about to retrace. At least that is what I have been seeing so far. So I entered 1 contract short, thinking to add at around 18150. Price quickly dropped though.
2) Opposite of 1), so I took my profits. If I would have two contracts here, I would have scaled out. It is also right on -2SD.
In hindsight, I should have been looking to re-enter shortly after, but I was too upset that I did not enter with two contracts.
Second and third trade:
1) At this point, my thinking was that there is rejection of lower prices (very little volume traded there and was not spending time at those levels). So I entered long two contracts. But then I started to doubt myself. Because, if it is such a great value for buyers, why we did not move higher already? Why price is just sits at those levels and doesn't move. It told me that buyers are not very eager to buy yet. Even though when I entered trade I told myself that stop will be below recent lows. I should have maybe stayed with the trade. It was emotional exit. But it was also counter-trend trade, so has high chance of failure. Anyway, I think I over-analyzed my trade there.
2) Same setup as in my first trade and with the trend. It would have been also my first scale out of my long trade that I exited too early. Who knows if I would have entered it if I would still have been long. But I entered again only 1 contract.
3) Same as in first trade. When price stops and builds after move like that, usually we re-trace. Considering that it was also -2SD I exited.
My last trade and the trade where I think I scaled in quite nicely and if it would have worked, it would have been a solid profit. I was going to short all the way to above VWAP:
1) Entered short at -1SD with one contract.
2) This was rushed entry. I should have waited just a tad longer. But oh well, in hindsight it is always clearer.
3) Entered another contract short at VWAP.
Reason for all those entry is that buyers were very slow. There was no rush to buy prices. It felt more like short covering (profiting), rather than new longs entering market.
4) Took one off at -1SD.
5) At this point I was starting to get tired, and the fact that it did not break through -1SD, I really did not want to get it above my breakpoint. So when price started to move against me, I just clicked close and was done for the day. I usually done by 8am, it is 8.30am and I have to go.
Prices did go up after that. As I am writing this, prices hit 18100, which is right at OR_L. I still think we going lower.
But I know that I probably would have bailed out before that.
Today we found sellers off the open, but they fizzled out fairly quickly. Range is bit a smaller than average (105 vs 132). It feels like sellers are no longer all that confident.
There is no strong buyer yet.
But I feel like if buyer will show up, we can push higher relatively easy.
I am looking forward to night session to see if it will bring any new clues, but currently I am leaning slightly toward bullish thesis.
I will be looking tomorrow for clues in price action to see who is prevailing.
Potentially we can start balancing until end of next week, when GDP numbers will come out. It might be that big players could be waiting on that. At least that is what crossed my mind today.
Anyway. I will keep my mind open and look for clues tomorrow. This is more like food for thought, to be cautious that we might be turning bullish, as previously I was bearish.
Two trades today. Not happy with both.
On first trade accidentally clicked close and missed good chunk of the move, and on second one did not have enough guts to stick to my guns.
I finished day in the green though, but it could have been a much better day.
My bullish thesis from yesterday night so far have proved correct, though as of right now I still don't see a strong buyer, and leaning towards side way action. Possible that market awaits ECB tomorrow morning.
First trade:
1) Was looking to go long. Once I saw what I call now "rain drop" formation, I entered long. So far it has been a good clue for retrace incoming.
2) At this point I really wanted to take profits, but hesitated. It went lower after that. I still holding bullish thesis though.
3) After seeing that lower prices are not attracting activity anymore, entered another contract long.
4) Took profit, originally wanted to take it at 18110, but moved it lower when price spiked (don't like sudden spikes).
5) UGGGH. We were about to get oil report at 7.30am (my local time), so I was looking at price and ready to close if it would drop below VWAP, but then accidentally clicked on my mouse, and closed it. Lesson: don't hover your cursor over close button.
Second trade:
1) Even though I am bullish overall, I had a feeling that we should retrace back to OR-H and maybe even VWAP. So I took short after seeing reverse "rain drop".
2) It went against me a bit and made me nervous. But at this point getting another short contract was low risk vs high potential reward.
3) And this is where my emotions took hold of me. Price was moving very slow. I have a problem with slow moving price. Something that I need to work on. So I exited this trade for a few ticks profit. 15 min later (!!!) it went below my first scale out (had limit buy at 18135). My second target was at 18120 area.
Prep for tomorrow.
In the morning we have ECB announcment that can wreck a havok, potentially.
But looking just at price action, here is what I see:
1) Sellers were present at 18180 level.
2) Sellers showed up at that level again, but appeared slightly weaker.
Also today was a slight change in character, we spend majority of the time above opening range, while in previous days it was below.
3) So I think we have a really good chance of breaking 18180 area and should test all the way to 18300.
Unfortunately, ECB press conference can scramble all of that. I have a feeling that they not gonna say anything new and market reaction will be weak, in that case my plan will remain intact, otherwise we can potentially have hard sell off or rip up.
Lesson: don't hover your cursor over close button. 