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Salao's Journal--Skiff on the Gulf Stream


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Salao's Journal--Skiff on the Gulf Stream

  #181 (permalink)
 
Salao's Avatar
 Salao 
Los Angeles CA
Market Wizard
 
Experience: Beginner
Platform: TradeStation
Broker: Tradestation
Trading: GC/MGC, MCL, MES
Posts: 1,250 since Jun 2017
Thanks Given: 10,571
Thanks Received: 5,870

Today I took 2 trades on MES. 1 winner, 1 loser, +22t.



Trade 1: I entered short with 1 contract on the close of bar 5 with a 1R profit target. My thought was that we would get a test down before a reversal up. I was pretty bullish today. I ended up flattening this trade on bar 7. -14t.

Trade 2: I entered long with a 1 lot market order on bar 11. Bar 11 tested the EMA and was quickly bought up. I was pretty bullish and I figured there were buyers lower so I entered long clumsily, Dick van Dyke style. I put my STOP below bar 2. My plan was to scale in lower with 1 more contract if the opportunity were to present itself. And it did. The market went lower and there were buyers there. But I wasn't one of them. Unfortunately. I exited after the bar 15-20 rally had lost steam and the buying appeared to have dried up. 1R+, +36t.

Some notes:

*I'm happy with my read of the market this morning.

*I am disappointed with my inability to scale-in lower. Trade 2 unfolded as I had anticipated. But my index finger remained crook'd, hovering over The Button. It would not lower. I need to overcome the fear of doing this, or not continue to plan on structuring my trades this way.

*There was an element of FOMO during trade 2 that I should be aware of and guard against.

*Dick van Dyke style entry: An entry method employed by a trader that is inelegant in nature, hallmarked by a lack of guile. An antiquated reference to the Dick van Dyke Show where the eponymous figure famously trips over an ottoman in clumsy fashion while entering during the show's opening theme. .

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  #182 (permalink)
 
Salao's Avatar
 Salao 
Los Angeles CA
Market Wizard
 
Experience: Beginner
Platform: TradeStation
Broker: Tradestation
Trading: GC/MGC, MCL, MES
Posts: 1,250 since Jun 2017
Thanks Given: 10,571
Thanks Received: 5,870

Today I took 1 trade on MES, 1 winner, +8t.



The trade: I sold the close of bar 5. I only used one contract due to the amount of risk I needed to bear to take the trade. I set my STOP at 2851.75, one tick above the ONL. The best logical choice would be to set my STOP above bar 3 but I would need to assume 13.5 points risk. I wasn't very comfortable doing that. The STOP location I ended up choosing seemed reasonable. I was assuming 8.25 points risk and my trade could survive a failed breakout test. I set my profit target at 2830.25 (13.25 points), a measured move using the bear leg (1.6R--initial). I flattened my trade after the bar 3 STC Bears got 2R. +8t.

Some notes:

*I suspect the way I managed my trade today caused it to have a losing expectation.

*I'm limited on time to trade today, which should have also limited my profit target. There was just not enough time to reach the target I was going after.

*Trend from the open days are rare. My trade today was a bet that we would get one. Or it was a bet that we would get a really quick selloff...most likely a bad bet as well.

*There was an interesting post at @mgcharl's journal regarding position sizing. It is my new homework assignment to come up with my own answer.

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  #183 (permalink)
 
snax's Avatar
 snax 
Chicago, IL
Legendary Price Action Student
 
Experience: Beginner
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Great trading this week, @Salao!

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  #184 (permalink)
 
Salao's Avatar
 Salao 
Los Angeles CA
Market Wizard
 
Experience: Beginner
Platform: TradeStation
Broker: Tradestation
Trading: GC/MGC, MCL, MES
Posts: 1,250 since Jun 2017
Thanks Given: 10,571
Thanks Received: 5,870

Today I took 4 trades on MES. There were 2 winners, 1 loser, and a scratch for +30t.



Trade 1: I entered long with two contracts on bar 3. I thought the globex bars were forming a nice looking channel before the open. I realized later that this 'channel' was a wedge...haha! I took 1 lot off at 1R and the other was stopped out. +0t.

Here is a screen cap of the open and my globex 'bull channel' (wedge):



Trade 2: Bar 4 was a breakout test of yesterday's bar 77. I sold 1 lot on the breakout below bar 2. I covered on bar 10. +45t.

Trade 3: There was a reversal near a bear channel line (the blue diagonal line in the left hand corner of the screen cap) AND at a measured move. The bar 22 close seemed like a good time to get long. So I did with a 1 lot. I used a wide STOP below bar 19. I planned to buy lower if I wasn't stopped out and if there was decent buying pressure. I put another 1 lot on long at the bar 27 close. I closed this trade for a tiny profit after ~45 minutes for simple risk relief. Unfortunately I missed the nice bull leg that followed. +1t.

Trade 4: I entered long on bar 40 within a bull flag. I messed up my STOP placement here and was stopped out immediately. -16t and off to work...

Some notes:

* I feel pretty good about this week. It feels like progress. But I can't get too stoked. Let's see what the numbers look like a few weeks from now. I've been trading better. But there is still lots of low hanging fruit to be had from the ol' Mistakes Tree.

*I was too early on trade 3. I ended up missing the best move of the day by being early. This happens to me often. Patience seems like the answer.

*I'm holding trades longer, but sometimes not long enough. Exit efficiency is 52% for the week. Seems low. I just started tracking this on a spreadsheet that I found on the forum. I'm not really sure what good exit efficiency looks like...I'll need to do some research and come up with a benchmark.

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  #185 (permalink)
 
Salao's Avatar
 Salao 
Los Angeles CA
Market Wizard
 
Experience: Beginner
Platform: TradeStation
Broker: Tradestation
Trading: GC/MGC, MCL, MES
Posts: 1,250 since Jun 2017
Thanks Given: 10,571
Thanks Received: 5,870

I took two trades on MES, 2 losers for -102t.



Trade 1: Entered long on the close of bar 2 with 2 contracts (instead of one on accident), STOP below bar 1. The bulls ghosted at bar 3 and it was harsh times after that...for me anyway . Stopped out. -82t.

Trade 2: Sold the close of bar 7, stop above 6. I really thought there would be quick follow through. But the market had strayed pretty far from the MA, so I was DREAMING! It was EMA test time and the market went sideways for awhile. I flattened the trade to go to work. -20t.

Some notes:

*I autopsied trade 1 in my head all day while at work. The obvious problem with the trade was that I was risking too much in the wrong direction for this gap opening. To get the math right we would need a bull trend day, or at least a bull trend morning...which, in my neophyte estimation, are lower probability occurrences when the market opens like this.

*The not so obvious problem with trade 1: Where was my focus this morning? I was in counter trend so I needed to be hyper-aware of the possibility of getting trapped here. And I spaced it...There was no follow through on bar 2, So I should have been out. Maybe I need to look at how I prepare in the morning? I don't know yet.

*I had no business being in trade 2. I had to get to work. I thought we would get some quick follow through but I got stuck in the pull back and had to flatten to get out the door. I know that some traders won't trade if they are limited on time. I think it's OK to place a trade if there is a ~1 hour minimum to watch it (5m chart). This would give time for a pull back and also some time to run to a profit target. I don't know yet. This needs to be part of the thought process before entering a trade when I have time limitations.

*Today was not great. But I paid the piper so I need to glean as much utility from it as possible to avoid another one like this...even though I can say with great certainty that there will be more like this. I just need to lengthen the frequency of occurrence as much as possible .

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  #186 (permalink)
 
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 Fluid Fox 
Bangor, Maine
Legendary Retail Failure
 
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Salao View Post

*I autopsied trade 1 in my head all day while at work. The obvious problem with the trade was that I was risking too much in the wrong direction for this gap opening. To get the math right we would need a bull trend day, or at least a bull trend morning...which, in my neophyte estimation, are lower probability occurrences when the market opens like this.

*The not so obvious problem with trade 1: Where was my focus this morning? I was in counter trend so I needed to be hyper-aware of the possibility of getting trapped here. And I spaced it...There was no follow through on bar 2, So I should have been out. Maybe I need to look at how I prepare in the morning? I don't know yet.

*I had no business being in trade 2. I had to get to work. I thought we would get some quick follow through but I got stuck in the pull back and had to flatten to get out the door. I know that some traders won't trade if they are limited on time. I think it's OK to place a trade if there is a ~1 hour minimum to watch it (5m chart). This would give time for a pull back and also some time to run to a profit target. I don't know yet. This needs to be part of the thought process before entering a trade when I have time limitations.

*Today was not great. But I paid the piper so I need to glean as much utility from it as possible to avoid another one like this...even though I can say with great certainty that there will be more like this. I just need to lengthen the frequency of occurrence as much as possible .

You've been doing excellent lately, so don't let this loss overshadow that fact. It seems to me that you weren't thinking straight this morning- I don't know how much you usually risk, but your first trades loss was major, and IMO, un-necessary (no offense, and I don't know how much capital you're trading either so I could be totally wrong here). There are some days when I wake up and I just cannot focus, so I made meditation part of my process to get my head straight before trading. It's been a great implementation as far as my performance goes and it might help you out too.
Morning prep/coming up with possible price scenarios gives me a head-start as well, and gives me more confidence in my decisions, because I've mostly thought everything out. I do have to adapt too, though.

I'm not trying to push you into anything or put you down, these are just some things that I value and they might help you. As a fellow trader, even though it's not my responsibility and it might even be uncalled for, I want to hold you accountable to your actions, your trades, and your mistakes, to possibly reduce (maybe even greatly) the learning curve of becoming consistent. With that being said, you know what to do, it's just a matter of doing it. Whatever the influence it may have, I'm holding you to your words!

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  #187 (permalink)
 
Salao's Avatar
 Salao 
Los Angeles CA
Market Wizard
 
Experience: Beginner
Platform: TradeStation
Broker: Tradestation
Trading: GC/MGC, MCL, MES
Posts: 1,250 since Jun 2017
Thanks Given: 10,571
Thanks Received: 5,870


Zachary Standley View Post
I'm not trying to push you into anything or put you down, these are just some things that I value and they might help you. As a fellow trader, even though it's not my responsibility and it might even be uncalled for, I want to hold you accountable to your actions, your trades, and your mistakes, to possibly reduce (maybe even greatly) the learning curve of becoming consistent. With that being said, you know what to do, it's just a matter of doing it. Whatever the influence it may have, I'm holding you to your words!

Haha! This is great and not uncalled for! You have a track record of being a straight shooter Zachary...and a well intentioned straight shooter! And I appreciate the feedback. You are spot on with your read...my head was not in the game this morning. I am usually at the screen at 500 PDT getting a game plan sketched out and watching globex. But this morning I didn't put much effort into my plan for the open--I was distracted by other stuff. And there was a reckoning. So I learned I have to be more business-like in preparation and I've already begun work to structure my prep work to a higher degree. These big losing days suck and are painful. But in the end, there are no better catalysts for self reflection and improvement. Not that I recommend it, but you know...

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  #188 (permalink)
 
mgcharl's Avatar
 mgcharl 
London, UK
 
Experience: Advanced
Platform: Sierra Chart
Trading: ES
Posts: 359 since Aug 2010
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Salao View Post
I took two trades on MES, 2 losers for -61t.



Trade 1: Entered long on the close of bar 2 with 2 contracts (instead of one on accident), STOP below bar 1. The bulls ghosted at bar 3 and it was harsh times after that...for me anyway . Stopped out. -41t.

Trade 2: Sold the close of bar 7, stop above 6. I really thought there would be quick follow through. But the market had strayed pretty far from the MA, so I was DREAMING! It was EMA test time and the market went sideways for awhile. I flattened the trade to go to work. -20t.

Some notes:

*I autopsied trade 1 in my head all day while at work. The obvious problem with the trade was that I was risking too much in the wrong direction for this gap opening. To get the math right we would need a bull trend day, or at least a bull trend morning...which, in my neophyte estimation, are lower probability occurrences when the market opens like this.

*The not so obvious problem with trade 1: Where was my focus this morning? I was in counter trend so I needed to be hyper-aware of the possibility of getting trapped here. And I spaced it...There was no follow through on bar 2, So I should have been out. Maybe I need to look at how I prepare in the morning? I don't know yet.

*I had no business being in trade 2. I had to get to work. I thought we would get some quick follow through but I got stuck in the pull back and had to flatten to get out the door. I know that some traders won't trade if they are limited on time. I think it's OK to place a trade if there is a ~1 hour minimum to watch it (5m chart). This would give time for a pull back and also some time to run to a profit target. I don't know yet. This needs to be part of the thought process before entering a trade when I have time limitations.

*Today was not great. But I paid the piper so I need to glean as much utility from it as possible to avoid another one like this...even though I can say with great certainty that there will be more like this. I just need to lengthen the frequency of occurrence as much as possible .

Don't beat yourself up, I don't think either trade was bad. One thing I do is to check Al's blog post the next day to see if my entries are marked up on his chart. You can see that both of yours were, that means that they were reasonable entries.

Trade 1, I also considered buying the close of b2 but a couple of things concerned me. Obviously, the big gap down, but more so the fact that the low of b1 was just a tick above the globex low and 2 ticks above yesterday's low. They're magnets and so if you get close to them, you usually test through them and then either get a successful or a failed breakout. Also, whilst b2 was forming it retraced 50% of b1 as you can see from the tail. Sometimes if the signal bar is too big, trader's will wait for the 50% pullback to enter but if traders are convinced this is the start of a bull trend from the open, why would they risk missing out. So, I think if the low of b1 had pierced below yesterday's low and there had been little or no overlap between the bars 1 and 2, it would have been a much stronger buy. However, it was reasonable and you can bet Al bought it for a scalp. Now, trade management, Al would have gotten out below b3 if he were swing trading, and some other's may have gotten out below b4 but I don't think you have to and as we know getting out below every disappointing bar kills a lot of good trades early. So, I think you took it, it was a reasonable buy, your stop was in the right place and it was a loser, sucks but it happens!

Trade 2, perhaps this was a bit of a FOMO trade? You were probably frustrated by the outcome of trade 1 and by the close of the b7 you said to yourself, ok, this looks like a strong bear trend! I need to get short quickly as I only have an hour or so left to trade and I need to make up the loss from trade 1. Considering the 1R STC bears b5, there was still room to their target at 2807.50, so that's good, but one concern I had was that this was a parabolic wedge. The first push down being the gap, the 2nd being b3-5 and the 3rd being b7. Again, it was a reasonable entry but I think the problem on this one is where do you put your stop? You said you put it above b6, but really I think you'd agree in the cold light of day that it needed to go above b3, which was a long way away! So I think when you're entering late in a trend like this, if you do take it, you need to be prepared to use a wide stop and scale in.

Just my feedback, hopefully it's helpful but I know it's much easier to see these things in hindsight. I lost money yesterday too btw and only one of my 3 entries was reasonable, funnily enough that trade was the only winner! Take it easy.


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  #189 (permalink)
 
Salao's Avatar
 Salao 
Los Angeles CA
Market Wizard
 
Experience: Beginner
Platform: TradeStation
Broker: Tradestation
Trading: GC/MGC, MCL, MES
Posts: 1,250 since Jun 2017
Thanks Given: 10,571
Thanks Received: 5,870


mgcharl View Post
Trade 2, perhaps this was a bit of a FOMO trade? You were probably frustrated by the outcome of trade 1 and by the close of the b7 you said to yourself, ok, this looks like a strong bear trend! I need to get short quickly as I only have an hour or so left to trade and I need to make up the loss from trade 1. Considering the 1R STC bears b5, there was still room to their target at 2807.50, so that's good, but one concern I had was that this was a parabolic wedge. The first push down being the gap, the 2nd being b3-5 and the 3rd being b7. Again, it was a reasonable entry but I think the problem on this one is where do you put your stop? You said you put it above b6, but really I think you'd agree in the cold light of day that it needed to go above b3, which was a long way away! So I think when you're entering late in a trend like this, if you do take it, you need to be prepared to use a wide stop and scale in.

I think you are right about trade 2, although your entire post is spot on. Trade 2 was very much influenced by trade 1. From bad STOP placement to bad management. I like the idea of checking Al's blog to help put things in perspective, I'm definitely doing that! I was having a hard time figuring yesterday out...maybe because the size of the loss. But your analysis was clear and very helpful and very appreciated! I'm probably going back to read that post all day today! Thanks again! Trade well today mg!

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  #190 (permalink)
 
mgcharl's Avatar
 mgcharl 
London, UK
 
Experience: Advanced
Platform: Sierra Chart
Trading: ES
Posts: 359 since Aug 2010
Thanks Given: 951
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Salao View Post
I think you are right about trade 2, although your entire post is spot on. Trade 2 was very much influenced by trade 1. From bad STOP placement to bad management. I like the idea of checking Al's blog to help put things in perspective, I'm definitely doing that! I was having a hard time figuring yesterday out...maybe because the size of the loss. But your analysis was clear and very helpful and very appreciated! I'm probably going back to read that post all day today! Thanks again! Trade well today mg!

You're welcome. Regarding the size of the loss, try to think about it in terms of R rather in ticks, points or currency. It's just a 1R loss, right, no big deal. Almost all your losing trades should be 1R losers. Having said that, given the stop size, I think I would have put it into the excessive risk category and therefore it would have been prudent to halve your position size. Try not to be afraid to trade big bars, often those BTC/STC bars are the highest probability trades if the context is good. Again, easier said than done!

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Last Updated on May 19, 2019


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