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This trade was taken in the context of the ES bouncing off a key level and starting down.
It was intended as a quick trade as I was already short and had just missed the pre-opening low to close two shorts carried over from yesterday. (As I was late getting up and dong my morning data collection prep)
(trade1a.png)
My key plan for today is to close those two - and I am looking for the level to maximize that.
I expected a bounce at opening given the support level and ES's multiday context = strong up.
A possible scenario is that the bounce fails at about the 2359.50 level and turns south to take the o/n low stops.
(that would be more likely on a trending day - not Friday)
As this is Friday - crooks day - a second - and possibly more likely scenario is a bouncing around the initial range and having a choppy sideways day. If this unfolds then I will be less aggressive at closing the two shorts from yesterday and accept less - ie a price higher that the low stop runs.
trade1.png)
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peace, love and joy to you
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Can you help answer these questions from other members on NexusFi?
9:48 AM 2/24/2017 gap range est 9.50
10.25 <=ATR,3d=> 9.50 Range est (default)=14.00
H/L est 2359 2345 14.00
High 2359.75
Low 2351.50
Given this context, a large gap down in the o/n and that the 3d ma = 9.50 as does the gap range est, with current HOD at 2359.75 and the time of day (later in the morning), it is looking like the choppy scenario is emerging "cabbage". AS the rng rule is 9.50-1.50 and the range so far is 8.25, it could be that bothe the HOD and LOD are in place.
If this does not change soon -- meaning a determined fall with momentum - I will be looking to close the two shorts from yesterday at whatever I can get. There could be a drop off around 14:30 so I won't rush the exit.
It sounds to me like a combination of a money management question and strategy question.
Strategy
1. In your example, what would have been your intial target?
2. Most trade strategy include context. For, example where the trade was taken in a muli-day context, the market tone, S/r levels etc. Do you mean your question without such context?
Money management
I know you are doing your combines.
As such the money management is very restricted e.g
a. losing more than $1,000 in a day
b. having a drawdown of more than $2,000
c. letting the account balance fall below $48,548
3. Do you mean your question in such a tight context for 3 contracts and with no prior trades giving you a profit for the day before the trade?
I was just speaking in generalities. Essentially I have found that CL likes to move in a 10 tick ebb and flow (give or take or 2) and that the ES likes to move in a 4 tick ebb and flow. Therefore, when I am trading these markets I like to take some profit off somewhere around 10 - 15 ticks on CL and 4 to 8 ticks on the ES. This puts money in my pocket as well as reduces my overall risk. I do this regardless of what my target is. I learned this from an individual who traded 24 contracts on the ES and took 20 off at 4 ticks and let the remaining 4 run and on CL he traded 12 contracts where he would take 10 off at +10 ticks and let the remaining 2 run.
Don't be controlled by GREED, Led by FEAR, or Puffed up with PRIDE!
So on an ES trade with this idea (take profits on majority of contracts at 4 ticks)
1. Where is your stop
2. how many would you trade eg 5 with 4 taken off at 4ticks or 1 point)
3. where would you close your runner
4. what would your W:L ratio be?
Journal Summary for trades on NT for the Journal Contest
Start=$25,000 (sim)
Day 1 - 1 Feb - FOMC Wednesday no trading.
Day 2 - 2 Feb - 3 trades all winners + 6.5 pts ============= $312.50 ===========$25,312.50 +2.17pts/trade
Day 3 - 3 Feb - 2 trades …
Strategy, Rules and Abbreviations for this journal:
I was very tired and got up about 1 hr later than my schedule. This means that my data-gathering before open was rushed. Also it means I don't have time to review the charts and gather the information from them about overnight price action, nor to check the financial news for the tone of the market. I did see that the o/n sell-off was thought to be attributed to traders reducing risk ahead of the weekend and Tuesday's appearance of Trump before congress.
I thought that given this risk reduction perhaps it would continue in the beginning of the morning before the inevitable "buy-the-dip".
I should have known better. This is a very good example of letting one's thinking be influenced by MSM explanation of market moves. This is always a bad idea.
The charts govern. The charts PROCEED the news. I know this but forgot it in my tiredness.
--------------
To give example of the charts preceding the news I give two examples:
1. my own write-up of the day before where I predict a push below the support of 2351 to take stops and then a rise. (I estimated the push below 2351 to be 2349.25. Now the limit order that fills 2349.25 is 2349.50, that is always add one tick, 0.25 for ES, to the estimate to give the limit price. The o/n lows was EXACTLY 2349.50!)
2. At another blog, a person who bases his calls solely on the charts wrote "Test of resistance, probably will bounce off it".
Following either I would have covered Tuesday's shorts somewhere in the 2349.50-2351.00 area and had about 10pts for each of the two. This would have increased Friday's profit by $1000 putting me in the $1,600 area.
So the lesson here is
THE CHARTS GOVERN
1. Don't let the mindless morons of the main street media cost you money.
2. Don't look for explanations of the moves in the "news". This leads to a false reliance on false information of causality that does not exist in a trade-able format and WILL COST YOU MONEY AND BLOCK YOUR TRUE PROGRESS.
Think about it. Think about how many people post things like:
I trade on price action.
I trade with the trend.
I use different time frames for context
I pay attention to action at key S/R levels
This is saying:
"I read the charts and use that information for trades"
Journal Summary for trades on NT for the Journal Contest
Start=$25,000 (sim)
Day 1 - 1 Feb - FOMC Wednesday no trading.
Day 2 - 2 Feb - 3 trades all winners + 6.5 pts ============= $312.50 ===========$25,312.50 +2.17pts/trade
Day 3 - 3 Feb - 2 trades …
Strategy, Rules and Abbreviations for this journal:
Good luck to all!!