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Context Log:
Small bear OG. Day starts with a tight bull channel up to a new ATH and a test of the ON high. Strong bear BO spike for a PB to VWAP and then the bull channel resumes and continues for the rest of the day. This was the fifth bull trend day in a row.
Trades:
Trade 1 (long): + 4 points
Reasons for taking the trade:
1. The tight channel looked strong. Only 1 Tick PB so far.
2. The low of the bull spike that ended yesterday was not hit, so this was likely a PB
3. Target above (2340.00) and a retest of the ON ATH was likley
a) since we are in 4 day strong bulll trend
b) a retest of the ON high would be a possible HH Major Trend Reversal Pattern on the 60 min chart.
Trade Plan:
SL (below channel): 3,25 points
Target (ON high at 2340.00): 4 points
Reward-Risk-Ratio: 1,23
The RR is to low. Should have waited for a PB to get a better entry price and a better Reward-Risk-Ratio. I saw the channel go higher without me and entered just before the PB. (FOMO)
Trade 2 (short): - 5 points
Reasons for taking the trade:
1. Strong bear BO
2. Target (2340.00) hit and a retest of the ON ATH. So this was a possible HH Major Trend Reversal Pattern.
3. Possible strong bear reversal
The risk was larger than I usually would be comfortable with but the RR-Ratio was ok. This was also a trade where I saw the strong bear BO and thought that the market would rally down without me, so a bit of FOMO again. In hindsight there obviously was a strong resistance here and a fair chance of a strong reversal, but also a better entry price after several PB opportunities.
Trade 3 (long): +1 point
Reasons for taking the trade:
1. Strong bull BO in a strong bull trend
2. Failed reversal patterns = PB
3. No resistance above
Also this trade was a BO entry. And then PB came and offered a better entry price. FOMO again.
SL magament was incorrect and I was stopped out to early. Should have trailed the SL below the low of the bull spikes.
Conclusion:
These three trades that I took today would have given me 8 points instead of 0 points if I had entered on PB:s instead of the BO and correctly trailed the SL at the low of BO spikes.
Yesterday was a tough day to short for sure. If I'm looking at your chart correctly I believe I misread that area initially to be a bearish break down rather than a pullback within the uptrend; I later noticed my mistake. So rather than looking for continued weakness at that point there's actually a nice spot for a long entry either at that spot or a bit later when the ES retested that area.
I've been enjoying reading your journal. Hopefully the journal has helped you a bit - I know starting a journal has really seemed to be beneficial to me.
News:
Before opening:
- the Housing Start report was released and it was partly outside the consensus range.
- the Jobless Cliams report was released and it was within the consensus range.
- the Philadelphia Fed Business Outlook Survey was released and it was OUTSIDE the consensus range.
Higher TF charts Daily chart: Yesterday was another bull trend day in a bull spike and a new ATH. But now we have had five trend days and six consecutive bull bars in a row. We have hit the major TCL line and market is above the Bollinger Band of the SMA(200). We are probably very close to a target and it may be the 2360.00 level since this is a MM target on the weekly chart. This bull trend is climactic and it will probabaly turn into a TR before a reversal.
60 min. chart: Strong bull trend and market is trading above the weekly and monthly VWAP + 2 SD as well as above weekly and monthly R1. We are high but trend looks strong.
Overnight is within YD range and volume is normal.
Inital bias
We are in a strong trend but targets should be close. My inital bias is that we will continue the trebd or start to correct sideway. But I will read the PA carefully and reevaluate my bias if price action demands so.
Typ Of Day Bias: TR day or Trend Day
Directional Bias: Up
Context Log:
Two strong bear legs and then a test of the major TL on the 60 min chart (6 day channel on the 60 min ETH chart). Market then pulls back to VWAP.
Trade 1 (short): - 4 points
Reasons for taking the trade:
1. Strong bear BO spike (= Always In Short)
2. Obvious target below was the TL after the TCL overshoot (6 day channel on the 60 min ETH chart)
3. Rel. Volume was high
Trade Plan:
SL : 4 points (SL should have been above spike, but that would mean 5.5 points SL)
Target (TL): 6 points
Reward-Risk-Ratio: 1,5
Comment: I waited for a deeper PB but it didn't came before price did trade 1 Tick below the PB, so I entered on a market order, since I didn't want to miss the BO (FOMO). I got trapped in the deep PB .
Trade 2 (short): + 6 points
Reasons for taking the trade:
As above since i I entered again on the deep PB.
Reward-Risk-Ratio: > 2.0
Comment: Good decision to reenter. But exit managment was tough. I did exit 1 Tick above the strong bull reversal bar after the second bear leg, although I was convinced that we would need a stronger bottom before a likely reversal. Trailing a SL above those big bear bars feels very uncomfortable.
Trade 3 (long): + 4 points
Reasons for taking the trade:
1. Two legs down below VWAP - 2 SD
2. Target hit + ADR reached
3. LL and two attempts to reverse is a 2nd entry long
Higher TF charts Daily chart: Yesterday was the first TR day after five trend day in the bull spike and it's an inside bar. The correction may have begun and it will more liekly be sideways than down.
60 min. chart: Yesterday was a test of the TL of the strong 6 day bull channel. Weekly VWAP is close below and it's a likely target.
Overnight has tested the low of yesterday and traded futher sideways below the TL. Relative volume is high.
Inital bias
We are in a strong trend but targets should be close. My inital bias is that we will continue to correct sideway. But I will read the PA carefully and reevaluate my bias if price action demands so.
Typ Of Day Bias: TR day
Directional Bias: Sideways
I whipped through your journal and I have to say I don't like many of your trades. They don't make sense to me. I believe you are following an entry model, with some exit discretion but the model has to have a reason for working. What I mean by that is you need to stand back before you enter a trade and ask "Where do I want to enter?", "Why do I want to enter at that point?", "Where do I exit if I'm wrong?" Do that a number of times THEN look at indicators that pick that optimal point for you. You biggest advantage as a trader is that you can choose when you want to take risk, so do it only at those optimal times. The advantage of a model is that you don't have re-invent the wheel every time you want to trade. You do the research and work and then let go. It frees up your mind and reduces stress. It also allows you to test your ideas on a back test. You don't have to program you can do this manually with historical data thus speeding up your learning/development process. If you find that after 100-300 trades that your model is profitable you can determine draw downs and other stats. if you find your model is profitable, but isn't capturing all the trades you want then you have the beginnings of another model. Your model isn't supposed to capture everything, just capture one little edge.
I understand part of your trading is discretionary, but your entries need to be buying on support or selling into resistance levels with some form of momentum kicker. I see too many trades that are selling into support, buying into resistance, no clear trend, holding positions too long with no or weak momentum, and stops that are too far away. Ask yourself "What am I trying to capture?" You have main 3 choices break-out (i.e. a break outside of a range), trend following (i.e. buying into weakness and support on an up-trend), mean reversion (i.e. selling on an extreme up move for retracement)....I see no consistency in your entries in this regard. the point being a more formal model approach might help you define your objectives better.
Context Log:
TR Day. Tight TR around VWAP and then tight bull channel. DB bull flag on the 60 min ETH chart.
Trade 1 (short) : -3 points
Reasons for taking the trade:
1. Strong bear Reversal Bar at HoD (at ADN), so possible opening reversal
2. Targets below (Weekly VWAP, 60 min EMA20, Low of Yesterday)
3. Rel. Volume was high (=increased chance of a big move)
Comment: Three consecutive bull bars was too strong CT momentum, so I should have waited for a stronger top. That came 3 bars later, but a SL above this DT would also have been hit. Reward-Risk was to low. Entry around VWAP on a TR day is a bad idea, but at this time I was yet not convinced that this would be a TR day.
After that I put a buy limit order at LoD so I missed the channel up by 2 ticks. I was rather sure that the market would go lower and at least test Low of Yesterday and the obvious DB on the 60 min ETH chart before going up. So I was a bit disappointed.
Trade 2 (short) : -2 points
Reasons for taking the trade:
1. TR day, HoD and above VWAP + 2 SD
Comment: I entered the limit order at HoD when i relized that I had missed the move up and left the screen. This was a bad plan. RR was to to low. Entry price should have been 2 points higher where the SL was. (This entry would also have led to a loser.)
@Northernlimit, thanks for taking the time to read my journal and for the feedback. That is of course one of the main resaons for me to write this journal. I really do appreciate that. Obviously my trading has not been very succsessful so far.
I have spent plenty of time programming and backtesting various setups without finding anything worth trading. I start to realize that there is a big difference in the methods that automated strategies use and that discretionary traders use . So I thought that I instead try a discretionary approach. My main idea is to take mean reversion trades at VWAP + 2SD on TR days and PB at VWAP on trend days. I'm aware that I have made a lot of misstakes that I have documented here. Two main problems for me are that I take trades with low Reward-Risk-Ratio and that I enter trades to early in fear of missing the big move. I'll try to work on this. My plan is that I reduce my SL to no more than 3 points (during normal volatility) and that I stop trading BO:s and try to patiently wait for a PB instead.
I would be greatful for more feedback from you in the future, preferably on specific trade examples.
Regarding trade 2, it is similar to what I mentioned last time, taking notice of subtle HLs (even the DB today was 2 ticks higher) as clues for pressure.
I also like what NorthernLimit mentioned here. Support and Resistance levels should be key considerations. There were also other confluence of factors against a short position for this trade, like range being smaller than usual increasing chance of a Breakout and Yesterday's close and Measured Move targets being magnets. In fact, I happened to take the exact opposite of your trade.
It is good that you realize missing out of a prior move caused urgency to enter. It is more important that you consciously try to minimize such occurrences moving forward.
