Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
I see.. All of what happened this week has been "recovered" today. Looks very bullish.
I've been thinking, and on a deeper and more serious note .. Do you have any major criticisms (constructive of course) of me or any advice you can give that I probably wouldn't like to read? As uncomfortable as the question is for one to ask and for another to answer, I think it would help me greatly if you have any input.
If not, I totally get it, I ask because you've proven to be reliable in pointing out some things that need(ed) attention. I post this publicly because others may have something to say as well, which I'm more than receptive to. If you do, go about it in any way you see fit (PM or on here).. It'll give me something to think about this weekend. I actually turned a corner after @mgcharl told me I didn't have edge awhile back, which was the best thing for my trading (I realized breakouts don't work for me, I discovered volume profile, and orderflow).. But, I obviously still have a ways to go.
..Public judgement and accountability is very useful. I realized this during my time off from here.
To begin with, let me start by saying I am no expert. I've been trading Futures for just over 10 years now and I still learn something new, almost every time I sit down in front of my screens.
One thing I have noticed when I read your posts [and to a lesser degree @snax 's posts] is that you [both] seem to arrive at these conclusions that sound like "Absolutes".
I paraphrase here but: "I saw this, and that so I'm placing my order here at xxxx.xx and my stop is going to be here at xxxx.xx".
What I find unusual is, you arrived at that number either last night when you looked at the charts or first thing this morning. It's okay to have an idea laid out ahead of time, of what you'd like to do, but it shouldn't be "carved in stone".
I prefer to look at the charts as the day develops (I start my day around 05:30 Eastern when I get to my desk),
I like to see how the market reacts to the Economic News releases as the day unfolds. Some days there's lots of News other days there's only one or two items, but I still watch for the reaction by price after the news is released.
In addition I also watch Volume Profile (like you have been lately) but I don't base my entries solely off a level I've seen in the Profile.
That's what I mean when is mentioned "Absolutes". I try to step back and think about the areas in the profile as an "If this, then possibly that" exercise as the day develops.
One thing I would encourage you to do, if you haven't already, is to go take a look at what has been posted in @wldman 's thread recently about:
-How the higher time frames should be your guide for direction, (not an "Absolute" - a guide)
-How to read the 1, 2 and 3 bars and
-The importance of the Broadening Formations.
I found the conversation over there very helpful for those of us that are still "learning".
I hope you find these "suggestions" of mine useful.
I'd like to finish by posting a few charts here to try to show you what's going through my mind as the day develops and when I'm in a trade.
We had a big move up today off the Non-Farm Payroll Report.
One of the first things I like to do after a move like that is figure out where a 50% Retracement of that move will take us. Remember, 50% is not a Fibonacci number, so forget those right now. 50% is simply "halfway back to where we started from".
Don't be in a big rush to Fade these larger moves. If the move was to the up-side and you're thinking about where to get short, wait until you at least start to see the Lower Highs and Lower Lows occurring
Once you're in a Trade, try to analyze without Reacting
I Reacted here and moved my Original Stop
After I got stopped out I realized where the Week Opened
I guess my read on the Low Volume Area was accurate
But: What if I'd just left my Original Stop in place?
I hope that gives you lots to think about over the weekend Zach.
Trade well,
John B.
R.I.P. John Bottomley (Botts), 1956-2022.
Please visit this thread for more information.
Yeah I see what you mean about me arriving at absolutes / jumping to conclusions, especially with where I'm going to enter. This is because it's easier for me to establish a level and trade from it than to read context and respond accordingly. It seems I can't resist following through with a plan I came up with the night or morning before, regardless of what's happening in real-time (..because of the regret of the plan possibly working out and me missing it, and because I virtually want it to work given my effort).. There was a point when I didn't plan at all and had some success trading momentum, but I ended up trading the way I do now because I find nightly and pre-open chart analysis very enjoyable. I like to imagine the opportunities, and it's satisfying when my ideas play out the next day. Still, momentum exists, and my analysis doesn't account for it.
Identifying and plotting HVNs and LVNs doesn't take too long. I could re-try just doing that for my "planning" each day of next week, and not put too much thought into it. Focus on "listening" to the market instead.. I remember dedicating a week doing this back when I was in SIM, but I moved on to focus on a separate problem the week after and I regressed back to this way of trading.
I skimmed through wldmans journal when you last mentioned it, and I'll check it out again. Great trade btw..
Quick update here, spent some time reviewing my trades of this week to come up with some goals for next week.
This piece is redundant yet the most important issue to tackle; it surely turns out that what I consider to be "technical-based trades" are what put me in the negative. These are the trades that are based on analysis from the night or morning before, and don't account for momentum. I get big ideas from analyses that I cling to, then I can't seem to open my mind to the market, I follow through with my plan and get taken out. So, no more of these.
The other thing is, I need to actually start executing on range days. I looked through some of my posts, and it seems I have no problem with executing during periods of obvious volatility / trend days, but when it comes to slower paced days (that are still trade-able and that my strategy is to take advantage of), I get gun-shy. I thought about it, and what stops me from entering is that I'm suspicious of a surprise stop run in these kind of conditions. I just don't trust the market as much on these days, but I've seen range extremes trade reliably again and again.
The lesser two things are: go back to holding trades (this is mostly ingrained in me, I can revert back to this easily) because your stop is where you know your trade idea is wrong, and don't panzy out of limit orders that are in-line with the strategy.. Unless things change in regards to directional conviction.
Goals and positive limitations for next week:
- Only trade after establishing real-time strength, weakness, or 2-sided trade.
- Only re-adjust HVNs and LVNs on the daily and primary charts for preparation if necessary. Remember HVNs as attractors and LVNs as possible responsive entry points. No in-depth analysis, no big ideas, no pre-determined entries or exits.
The focus is for me to get into the habit of observing the market, then to respond accordingly.
- Take at least 1 trade a day in trade-able responsive conditions (I have a strategy for this, just haven't been executing).
- Hold trades until p/t or stop is hit.
If I did all of these things last week, I'd be up on the week 10.5 points. I did the math, and these pre-determined trades costed me, along with not executing and holding trades when I was supposed to.
Honestly excited for next week.. This may be the time when I break this cycle.
Speaking for myself, this is a totally valid observation @TopGunNote. I'm aware of my tendency to deal in absolutes, part of it for me is an experience thing I think. I am still very mechanical in my thinking because I just need a lot more reps. I appreciate the observation, it is a good reminder for me!
You're doing a ton of great work, @Zachary Standley! About range days, I started keeping an "On the Radar" section in my playbook, which is where I try to track entries that I'm not yet comfortable taking live but still show a lot of promise. Outside-in trading at range extremes has been on my "radar" for months and I struggle with a similar issue like you mentioned, I know the probability of a breakout away from the range is usually much less likely than a move back into the range, but I always shy away. I usually talk myself out of it because I feel I'm not confident I know where the extremes really are. I've been talking about them a lot more this week for whatever reason, so maybe I'm just about ready to take the plunge
And holding onto winning trades, I think you are much stronger at this than I am, I feel you can get back to this habit fairly easily. I am still struggling with this, partly because I've been making some shaky entries and getting out early led to some small winners so its like re-enforcing one mistake with another. But at the same time a win's a win.
Thank you, @snax. I realized I've practically been stagnating in my growth as a trader by acting out the same old detrimental cycles over and over. There really has been no consistency with my approach; one day I'll close too early, one day I'll take a "level-trade," one day I won't execute when I'm supposed to, etc.There always seems to be at least one different problem a day, and I know these are all normal issues, but at some point at least one problem needs to be seriously addressed and taken care of, otherwise I'll be chasing my own tail indefinitely and be food for my broker. That's why I intend to make a habit of meeting my goals above on a daily basis. Those 4 things are my most pressing problems as of right now- not to get too serious. Of course, I'll continue to make mistakes, but I would be more than happy to see less of them.
As for trading range days, I imagine one could eventually make a living by doing that alone.. I say this because these days are so common. I kick myself when the MES is trading in a range, and price actually bounces off of a lesser level like the VP daily VAH in the ETH session.. This has happened a million times, it seems I just need to get used to taking risk in these conditions (which means I need to enforce some discipline / act through the discomfort). Also, I think the apprehension is because I was bit many times in the past from trading break-outs on responsive days, and it's true, traders get chopped up by algo's on days like this too, so that's usually on my mind. Still, being able to take advantage of range days is important (to me). But yeah, I've been doing the same thing as you, talking myself out of range-plays.. We'll crush it though.
Do you remember that week months ago (maybe 6-7) when I decided to exclusively work on "holding trades no matter what?" This came from the frustration of me closing many trades pre-maturely, and I just had enough. I decided that I wasn't going to close a position manually for the whole week, even if price was 7 or 8 points in my favor. Price was to hit my p/t or stop loss (I know, broken record here). Anyway, I proved to myself that I could hold trades no matter what, and ever since then, I know I can do it and feel confident in my ability to hold trades. That single week had a big impact on my trading, and that weakness became a strength. It was simple practice in SIM, too.
The idea of LVN's ("Low Volume Nodes or Numbers") and HVN's brings to mind a few thoughts I'd like to share with you,
These LVN's & HVN's are what I was referring to when I mentioned that some of your journal entries sounded like you were thinking in "Absolutes"
I've been a student of Market Profile for almost as many years as I've been trading Futures and like you, I tried to rely on specific levels (to the tick) that I could see in the Profile.
I don't have an exact "stat" but believe me when I say I was more often wrong than right when it came to placing my trade simply because it was an LVN or an HVN.
When you're looking at these LVN levels:
What happens in a Low Volume Area? An LVN is an area where there has been fewer trades executed. Why?
Basically, the Market did not agree on that area as being correctly priced, so they did not trade there.
My question to you is, if the Market doesn't think this area is worth trading in, why are you entering a trade here? Would it be a better place to Exit your trade?
In addition, if you spend some time looking at those LVN's as an "Area" rather than one specific "Number", and as an area where the Market generally has not been willing to trade. Ask yourself, what is the most likely outcome when price enters that LVN-Area?
I submit there are two basic outcomes that are likely:
1) The move might "Lose momentum, pause and possibly revert to the Mean" OR
2) It may be an area price runs right through because no one other than you has an interest in getting involved there.
When you're looking at these HVN Levels:
What happens in a High Volume Area? An HVN is an area where there has been many trades executed. Why?
Basically, the Market participants (Both Buyers and Sellers) have agreed to trade in this this HVN area. But does this mean they agree on this area as being correctly priced?
My question to you is, if the Market has conducted most of it's business in this area, why are you entering a trade here? Would it be a better place to Exit your trade?
Again, if you spend some time looking at those HVN's as an "Area" rather than one specific "Number", and as an area where the Market generally has been willing to trade. Ask yourself, what is the most likely outcome when price enters that HVN-Area?
Once again, I submit there are two basic outcomes that are likely:
1) The move might "Lose momentum, pause and possibly revert to the Mean" OR
2) It may be an area price runs right through because something has changed and not everyone is willing to continue getting involved here, so now they're looking for a new place "to do battle".
All I'm trying to say is, while being aware of LVN's and HVN's can help you measure what is going on in the Market, It isn't the "Be All and End All" of trading.
Once you start looking at the Market Profile as a Tool, (that has some good and bad points) that highlights Areas of High Interest and Areas of Low Interest, I think you can increase your chances of success.
Trade Well,
John B.
R.I.P. John Bottomley (Botts), 1956-2022.
Please visit this thread for more information.
"what is the most likely outcome when price enters that LVN-Area?
I submit there are two basic outcomes that are likely:
1) The move might "Lose momentum, pause and possibly revert to the Mean" OR
2) It may be an area price runs right through because no one other than you has an interest in getting involved there."
My strategy revolves around outcome #1 here, as you know. This is my practical understanding of low volume nodes: in responsive conditions when price action is slow and/or when there's low volume and volatility, there often isn't enough participation or interest in trending higher, thus, it's more probable that price stays within range / inside the LVN. Of course, this isn't always the case, as these price regions can be traded through by up to 5 points (pick any number, really) and reverse, or do a myriad of things.. Also, I want you to know that just because I've been referring to LVNs as a particular number, doesn't mean I think the next prices below or above it aren't part of an LVN region. I do think of LVNs as regions in my analyses, that's why you'll see me write ~3111 (~ = approximation). So ~3111 refers to that LVN area and may include prices like 3110.50 up to 3112, etc.- but, to your credit, I often find the level least traded from out of that region, and execute there. I've done this because it's more difficult to gauge price action to determine a good entry based on current conditions.
On trending days, it's more likely that outcome #2 will occur, but of course, context matters: LVNs aren't created equally, either. This is when I look for a pull-back to an LVN within the context of the market (through my amateur interpretation, though), and possibly enter there. I find that price will pull back just before an LVN by 1-2 points, sometimes more, sometimes less, or trade through it by 1-2 points, then continue trending- or, on harder days, price reverses and trades back up through 2-3 seemingly reliable LVNs. The market is a complicated environment, and I acknowledge this- that's why LVNs and HVNs aren't the End All, Be All of trading. I've just been clinging to certainty in my execution with these LVNs is all!
The last thing you said definitely hit the nail on the head:
Once you start looking at the Market Profile as a Tool, (that has some good and bad points) that highlights Areas of High Interest and Areas of Low Interest, I think you can increase your chances of success."
I see you've been trying to nail this point home, and I'm grateful for that. Next week is all about confronting this through my goals. I'll keep an open mind in these up-coming sessions; I'll ask myself if the current context really calls for a long at this LVN region (for example). I want you to know that, when I do trade my best and don't trade from the analysis from the night before, I trade with momentum, and am careful and skeptical of LVNs- especially in trending conditions. Of course, it all depends. Would you say "Context is king?"
With all that being said, I'll think about this: Would it be a better place to Exit your trade?
The 4 Stages of Trader Development:
Stage 1: Unconscious Incompetence Stage 2: Conscious Incompetence <-- I am here
Stage 3: Conscious Competence <-- This is where I want to be
Stage 4: Unconscious Competence
It is currently important for me to be conscious and aware of my behavior and actions before and during the trading session, so I can advance to Stage 3. Advancing to Stage 3 and staying there requires deliberate and uncomfortable practice. I must push my boundaries and fulfill the goals below. As long as I meet these goals consistently, I will be on the right track.
Daily Goals ("Check" answers):
1. For my planning and preparation for the session, I only re-adjusted and/or acknowledged LVNs and HVNs in the daily chart, and translated them to the shorter time-frames. I did not come up with any hypothetical scenarios, as they've proven to negatively effect my bottom line. =
2. I made a trading decision after deliberately identifying dominant strength, dominant weakness, or range-bound conditions within the first 15-20 minutes of the cash open. =
3. If today was range-bound, I took at least 1 trade that was appropriate for the conditions. I applied and executed my trading range strategy. =
4. If I took a trade today, I let my profit target or stop loss get hit. I did not interfere with the trade(s). =
Did I make any mistakes today? If so, what did I do wrong, and why? (specify):
Possible actionable solution(s) for the mistake for future reference:
Do I continually make this mistake? (In this case, I'd have an intervention and dig deep, which is out of the bounds of this journal structure)
Additional notes:
(I may add more to the checklist part of the journal, and I may add more questions at the bottom. Depends on if I realize something relevant and important in my trading review tomorrow.)
Of course, I'll continue to make mistakes, but I would be more than happy to see less of them.