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Zach's Log

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  #291 (permalink)
Legendary Market Wizard
Bangor, Maine, U.S.
 
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I decided not to trade today because I've done well this week. May as well end such a good week on a high note.

I re-learned that holding trades really isn't all that difficult, especially with a 4 point profit target (..as long as I walk away). What's hard is execution / getting that perfect entry. The way I look at my trading now is: all I need to do is focus on my execution and let the market take care of the rest. That's the main thing I've taken away from this week. My pre-open analysis isn't rocket science, and neither is reading price action (if it's too complicated and/or volatile, no trades). However, it's psychological rocket science to enter at the scariest price at the time under the load of information risk. You're really going to sell the "top"?

I should be looking to thoroughly develop my execution, and to treat it as my niche versus everything else (I suspect my exits will always be automated, but this may change with more experience). I'd like to get to the point where it's not nearly as stressful as it has been going into a trade, and I think operating without that stress would undoubtedly increase my win rate (I think there were 2 trades where I entered too early this week, both would've been winners). The bottom line is, I want to be able to execute effectively in my sleep- that'll take countless hours of experience trading live, though.

For what it's worth, I'll be practicing my execution in the simulator. I particularly love exhaust plays, and that's what's been doing the trick for me, so I'll hone in on that.. Anyways, it's been an amazing week, and I thank you all for your support. I can't wait for next week, tbh.

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  #292 (permalink)
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Zachary Standley View Post
I decided not to trade today because I've done well this week. May as well end such a good week on a high note.

I re-learned that holding trades really isn't all that difficult, especially with a 4 point profit target (..as long as I walk away). What's hard is execution / getting that perfect entry. The way I look at my trading now is: all I need to do is focus on my execution and let the market take care of the rest. That's the main thing I've taken away from this week. My pre-open analysis isn't rocket science, and neither is reading price action (if it's too complicated and/or volatile, no trades). However, it's psychological rocket science to enter at the scariest price at the time under the load of information risk. You're really going to sell the "top"?

I should be looking to thoroughly develop my execution, and to treat it as my niche versus everything else (I suspect my exits will always be automated, but this may change with more experience). I'd like to get to the point where it's not nearly as stressful as it has been going into a trade, and I think operating without that stress would undoubtedly increase my win rate (I think there were 2 trades where I entered too early this week, both would've been winners). The bottom line is, I want to be able to execute effectively in my sleep- that'll take countless hours of experience trading live, though.

For what it's worth, I'll be practicing my execution in the simulator. I particularly love exhaust plays, and that's what's been doing the trick for me, so I'll hone in on that.. Anyways, it's been an amazing week, and I thank you all for your support. I can't wait for next week, tbh.

I've been following your thread for a few weeks now and given the comment you made on Friday (in quotation marks in the title)

I'd suggest you try to write out a list of the criteria you want to see collectively, that would give you the entry signal you are seeking.

If you can document that "list" someone could likely help you automate the entry.

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  #293 (permalink)
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"The daily chart is clearly in a downtrend."
Daily LVNs: 2868, 2877.50, 2904.25, 2911, 2919.75, 2929.75
Daily [lesser] levels: 2914.25, consolidation in the 2890's.
30 minute chart levels: 2911-~2915, 2933.50.

------------------------------------------------------------------------------------------------------------------------

Today was insane. Price sold off right out of the open, but I remember that there were some moments of surprisingly strong buying given the status of the daily chart. By the time price got all the way down to LVN 2868, I considered the market "over-sold" and thought it would be a great idea to go long on a re-test. Price ended up testing the 2868-2870 level 3 times before continuing to the downside, and I bought what I thought was a range extension on the 4th test, which turned out to be a minor breakout:



-2 points.

Had I waited another 3-4 points to enter, or generally, had I waited for the breakout (or fake-out, or move, whatever you want to call it) to happen then lose it's steam, this trade would have worked out.

I almost ended the trading day after that, but I didn't want to miss an opportunity. So I waited and watched the market, much like I did last Thursday. Intention-wise, I wanted to possibly take advantage of a re-test of the new low, ~2861. So I waited and watched patiently until price revisited that level. When it got there, price made new lows by a couple of points, and the action was too hectic for me to take advantage of. The market did exactly what I wanted, but I wasn't in the trade. I waited longer for price to re-visit that new low again, and when it got there, price in the footprint slowed down by quite a bit- and that's something I love to see. I perceived sell-exhaustion, so I entered long at 2958:



-2 points.

-4 points for the day.

I know, I know, I'm an idiot. Today I traded against the trend, and I was a laggard. The responsive opportunities to the longside that there were, I couldn't take advantage of because I was too slow. I was looking for confirmation as if I were trading lower volume and volatility conditions. To be honest, I was scared to trade against the trend as well the whole time, which kept me from effectively executing. I was scared for good reason. (@TopGunNote the irUA was working at the time, I took these screenshots later on in the day so the lines aren't there. It still works). So yeah, it's all on me today.

What I did well:
-

What I did poorly:
- My trigger finger wasn't fast enough for these conditions. There were 3 short opportunities at ~2877.50 that I really could have traded, but I was conflicted because the market was so short. I thought we'd get a reversal soon.
- I traded "expired edges", meaning after I missed an opportunity for either being too slow or confused, I was set on re-trying to make one work- particularly with the first trade, and the trades I could have taken at 2877.50.
- I wasn't being objective. I was looking for the reversal.


I will say, going into the trading day, I said to myself that there was no way I was going to trade against the trend (the implications of such a statement mean no trading for the day, which sucks when the market moves 50-100 points). When I saw price bounce off of LVN 2968 multiple times, I was like yeah- this is my kind of trade. I just bought the wrong/very last test. As for the second trade, I was convinced we were at the end of the trend given the lack of selling, and a minute or two after I entered we broke out to the downside.

I realized I don't really like trading these kind of dramatic days, because I don't have the trading style or skill set to utilize such moves right now. I feel much more in my element when volume is lower and when we're in a balance, because responsive moves are more likely to succeed. Also, not that I didn't know this before, but this kind of activity reminds me of how much I like trading exhaustion compared to trading absorption. I think I like it more because price action is much slower.

What do I need to do now?:
- First thing, tomorrow I need to be on the lookout for more initiative selling and higher volume. I really thought there was no way we were going to go lower today (we went 30 points lower than I thought), but we really could just keep going lower.
- Second thing, re-focus on responsively trading LVNs that experience exhaustion, in accord with the daily chart.. I fucked up in this regard with both trades, and simply bought what I thought was the bottom- not a particularly important level.
- Third thing, don't feel forced to trade even when there's plenty of opportunities, and don't trade market conditions that are too fast. I know what I like to see, and I didn't like the market today, tbh.


Clean slate tomorrow. I'll trade right.

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  #294 (permalink)
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I have a tendency to avoid trading with the trend because I always feel I am getting in 'too late.' When I trade counter-trend I am really aiming to get in at the beginning of the new trend, thus getting the best price. These past few days have absolutely punished any sort of mean reversion/counter-trend system and rewarded trend traders handsomely.

Context is key, and I know you are aware of context because you determining that the Daily view was very bearish. Something I have been doing recently is asking myself if I have any reason to believe the current trend will stop. If my answer is "no" then I look for an entry to join the strong force.

How did you determine the levels at which you expected price to reverse? Have you looked into labeling LVN's that correspond with previous swing highs/lows on a longer term-chart? I wonder how price responds in these areas.

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  #295 (permalink)
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mtzimmer1 View Post
I have a tendency to avoid trading with the trend because I always feel I am getting in 'too late.' When I trade counter-trend I am really aiming to get in at the beginning of the new trend, thus getting the best price. These past few days have absolutely punished any sort of mean reversion/counter-trend system and rewarded trend traders handsomely.

Context is key, and I know you are aware of context because you determining that the Daily view was very bearish. Something I have been doing recently is asking myself if I have any reason to believe the current trend will stop. If my answer is "no" then I look for an entry to join the strong force.

How did you determine the levels at which you expected price to reverse? Have you looked into labeling LVN's that correspond with previous swing highs/lows on a longer term-chart? I wonder how price responds in these areas.

I stated in my post that price bounced off of the daily chart LVN 2868 multiple times (first trade), which was a decent reason to enter- but probably not by the fourth test. As for the second trade, it wasn't technically sound at all, I was just trying to capture the bottom based on exhaustion from the OrderFlow alone. Not my best trade.

But yeah, my whole strategy revolves around daily LVNs and I generally look for how price reacts to them when they've been reached. Sometimes there are clear "lesser" technical levels in the lower time-frame charts (like the 60 min. or 30 min. charts) that aren't necessarily LVNs that are "trade-able". This kind of day on top of TopGunNotes last post makes me want to reel it in, and to just focus on trading around LVNs exclusively, in the direction of the daily trend, while only trading exhaustion. I think the reason why I've deviated from trading with the daily trend is because I've had some recent success with trading whatever direction, regardless of the daily- but in different contexts than what occurred today.

We have a very similar strategy or approach at least, I remember talking to you about it a month or two ago. I was just as weak as the market today, is all.

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  #296 (permalink)
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I tried something different and didn't do a pre-open analysis. Instead, I just noted the daily charts LVNs right at the open (as price was going nuts), and I noted lesser levels in the 30 minute chart. Anyways, I pulled off a nice little responsive trade in accord with the daily, and went short at ~2870 (2 points above daily LVN 2868, always 2 points of risk):



+4.25 points.

So far, today has been a good day for responsive traders like me. With that being said, I'm going to walk away right now. Volume and volatility is still too high for my taste, and I grabbed my 4 points for the day.

What I did well:
- Execution was solid.

What I did poorly:
- I could've grabbed another 4 points out of this trade, tbh. (I am glad that my minimum take profit lately has been 4 points, though )

What do I do now?:
- The same thing again tomorrow.

Today was so simple that there really isn't much else to say. It should always be this way.

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  #297 (permalink)
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I didn't deliberately write anything down in my pre-open analysis besides Daily LVNs and lesser levels of interest. I'm liking this simple approach more, as it's less time consuming and I'm not fooling myself thinking I'm prepared for the entire trading day. Makes me use my eyeballs in real-time.

Daily LVNs: 2878.25, 2868.
Lesser levels: 2849.75, 2854, 2860, 2885, 2990.

------------------------------------------------------------------------------------------------------------------------

First trade was a responsive sell around lesser level 2860. This was when price was retreating from that false breakout we had around the open:



Had I went short only 2 ticks above where I actually entered, this would've been a profitable trade. Executing is hard in this current market. Despite this minutely early entry, I think I did well.

-2 points.

The next trade was a very late one that I took around 1:30PM. I actually took a break from trading for an hour or so and worked out, came back, and noticed the market was still going. Most importantly, it was moving at a pace I was comfortable with. I waited and watched as price approached LVN 2868, and entertained the notion of going short depending on the OrderFlow. We ended up breaking through that LVN by a couple of points, where there was the opportunity for the market to sell back down or continue. I saw both strong responsive sellers and initiative buyers, and I entered after seeing exhaustion from the buyers. As soon as I entered, I got stopped out by a breakout:



-2.25 points. (1 tick of slippage)

-4.25 points to end the day.

I really can't complain. I did my absolute best today. The same behavior I exhibited today is the same behavior that has made me money in the past, and I acted according to every rule. I will say though, the thing that stung the most today was entering right before the breakout with the second trade.

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  #298 (permalink)
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Greetings @Zachary Standley ! Hope all is well. I continue to find your journal an interesting read and a nice part of my everyday routine...so nice work on that and on your development as a trader!

Your journal prompted me to do a little research on the Footprint tool and delta and to be honest I'm mostly stumped on it. Sometimes it seems like I can fit a couple pieces of the puzzle together but most of the time I'm just puzzled (ha!). (In my case this condition isn't just unique to the Footprint chart however ) Having said that I noticed something in a lot of the charts that you post and I wanted to get your take on it.

It looks to me that divergences in delta and price seem to frequently portend a change in direction or at least a change in momo? On this chart you posted today there was a good one. From 1339 to 1345 there was decreasing delta and price was going higher. And then by 1400 price was ~2871 (not shown).



I've noticed this phenomenon frequently on your charts. Enough to prompt me to bring it up anyway. Again I really don't know much of anything about footprint/delta so I was interested in your take on this. Do you incorporate any of this divergence stuff when you read context? Have you seen anything about this in your research, any testing? I guess that's it.

Be good my friend!

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  #299 (permalink)
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@Zachary Standley

I wanted to ask what your rationale was for choosing to trade off of an 8 Range chart?

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  #300 (permalink)
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I haven't really felt like updating my journal lately!

Something has sprung up in my personal life (nothing terribly serious), and admittedly, it has been interfering with my trading. I've been somewhat lazy, apathetic, and it has shown in my absence and in my most recent trading performance. Yesterday I lost 2 points, and today I lost 2 points- not too big of a deal, really: Today's trade I was simply early in my execution by a couple of points, and with yesterdays trade, I traded against the trend. I know I can do better, and I will. (It's the only reasonable option if I want to make a living out of this )

@Salao, I learned the footprint through Axia Futures. I didn't buy their course or anything, I simply watched one of their webinars that's right on YouTube. It explains the basics of the footprint. As for the divergence you mentioned, I honestly wasn't aware of that. I've just been paying attention to what I consider to be exhaustion or absorption, and that's all I look for. Axia Futures has videos on these two concepts as well.

@TopGunNote There's no solid basis for why I chose the 8 range chart. When I was first introduced to OrderFlow, I watched this video of this random guy trading the 8 range chart. I thought "Hey, that looks cool," and it's been my chart ever since. I like it.

I'll come out of this funk over the weekend, I think.

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