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Right after I posted the above that I took no trades, I saw MES heading into a nice pullback. So I waited to go fix breakfast to see if the Pending Home Sales or Consumer Confidence reports would have an effect. You never know, but in this case the price just continued pulling smoothly back through the reports. Price pulled back to both the VWAP and the 21EMA and I decided I would not pull the trigger if it closed below those marks. It didn't, rose back up and put me in the trade and hit my first target at +6 ticks. The second contract had a target a couple tick under some potential resistance and price did struggle a bit to exceed it's opening price, but it finally hit the second target for +14 ticks.
Only three trades today, looks like the market is waiting for the FOMC. I have an appointment so I won't be at the keyboard to see that.
I took a pullback in MES after its drop from the OR. Hit the first target for +6 ticks and had the second target set at a MM. Got lucky and the price plunged, hit my second target for +25 ticks, then retreated.
I was experimenting with time frames today. I normally use a 3 minute trading time frame, a 30 minute HTF and a 1 minuted TF that I can occasionally improve my entries with. Today I sampled a 2 minute TF for both trading and entry. On the first trade just noted, I did gain a 2 tick entry advantage over the 3 minute chart, but lower time frames also can provide false entries as often as early entries and my second trade was just that. I entered and got stopped out for -16 ticks. Had I been on the 3 minute chart I would not have been looking for an entry. (my screen shots are all 3 minute, by the way).
My third and last trade I simply mis-read the chart. Thought for sure I had an entry to a new up trend but was stopped out for -16 ticks instead.
Yesterday was my short day so I only had 30 minutes before the open (MES) and 30 minutes after to watch the market and I didn't find any suitable trades.
Today I had more time but I simply watched the market and how it performed against different time frames. If I had found a suitable trade I would have taken it but I was really more interested in putting up different time frames to see how they represented price action.
I have slowed my trading down as I spend more time studying and learning. Perhaps by next week I'll be more active but I'll probably still stay in the micros for awhile. This is one of the most difficult things I have ever tried to learn. I have usually been able to learn new things quickly and my slow pace in this endeavor has been a frustration. Over the past few weeks I have finally been able to step back, take a deep breath and come to grips with the fact that if I am going to be successful with this I have to be prepared for a longer learning curve than I anticipated. Despite knowing full well from this community and virtually everything I have studied that most people do take years to achieve an edge, I felt that somehow I was going to beat those odds. Humble pie sometimes has a bitter taste but it's good for growth. And, by the way, I appreciate all the encouragement, support and advice from the FIO community -- it all helps!
I hope everyone has a great weekend and I look forward to being back here on Monday!
Mike
NW Trader
There is no path to happiness. Happiness is the path.
I have to compliment you for your transparency. It’s really nice to see that I’m not the only one who struggles at times, and it’s certainly good that you’re aware of the “concept” of trading the larger contracts, and how it affects you.
I’m eager to see how you might be applying some of the techniques from TopDog Trading. Wave counting, and using the stochastic as a “cycle indicator” has been invaluable for me, knowing that I am not getting in too early, nor too late, and I’m entering at the ideal time. What is the green line? Btw? If it’s the 50MA, but have been safer to go long. I also never trade when it gets super flat like that. I cannot express how helpful it is to have a solid
filtering system now!
Still massaging my strategy and I may have it a bit too tight. I spent about 3 hours watching the MES after the open and finally go a setup that matched my criteria. If it had been a killer, that would have been fine. As it is, I took a pullback and set my targets just above the previous SL and at the measured move. Initial stops on both contracts were at -8 ticks. Price slowly moved down and hit my first target for +6 ticks, then wandered up and down. While it was moving down I had slowly moved my second stop down a bit as well. Price ultimately backed up and hit the stop for -3 ticks.
On the one hand, yes it was SLOOOW and I only got one setup. I went to the gym after that so it's possible there were others, I haven't checked yet. On the other hand, I cannot complain because the one trade was a winner and I did not put myself into any losing situations. So I am pleased with that! I'm going to continue tweaking the time frames and working with the entry criteria and, of course, stay in MES while I do that.
One of the days when I have 30 minutes before and after the RTH open. With my new, tighter entry rules that does not seem to be enough time to find a trade. However, the practice and optimizing continue.
This morning in MES I found a retrace beginning that had great promise. I normally to not trade against the trend, but this retrace looked excellent for a potential scalp. So I took the trade and set a couple targets fairly close for a scalp. Price moved up, just kissed my first target but didn't trigger it. I still thought the trade had merit but I was running out of time so when I had the chance I scratched it for +2 ticks. After breakfast, just before I left for work, I saw that price would have just hit my targets before dropping.
Would I have taken a counter-trend trade if I had been trading ES rather than MES? If I had $200 at risk rather than $20? Probably not. And therein lies the problem as well as the opportunity with Sim accounts and micros. Be as disciplined as you want, you can't pretend the risk is something it's not. You can't drive a Yugo and really believe it's a Porsche and you can't pretend that $20 poses the same risk to your account as does $200. Nevertheless, probably 80% of the trades I am taking in the micros are exactly what I would do in the minis. Every now and then, like today, I can explore something I would not normally do. And that's educational because I can experience the result without risking much money. Once in a while I do learn a new approach to an entry or an exit so it's all worthwhile.
Today's results:
1 trade
1 winner: 2 ticks, $2.50
See you right back here tomorrow!
Mike
NW Trader
There is no path to happiness. Happiness is the path.
I've been enjoying reading your journal NW! (Does that stand for North West btw?) You seem like a really cool dude.
You bring up such a good point about how you would take that countertrend trade on sim but probably not in real life. It's like: how do I make the sim experience be as close to reality as possible. It's hard to do. I guess it's just a part of the process we have to accept.
For me, the more I get closer to having actual bonafide rules for my trades, the more meaningful sim becomes because it's a test of whether I can truly follow my rules. But like you say, sim can be used for testing new stuff of course, just have to take the results of new stuff with a grain of salt. I've noticed that you always have a really measured response to any wins or losses you have, which is inspirational to me.
Thanks for the feedback! Yes, the NW stands for Northwest as I live in that part of the US. Not sure about the cool dude, many would disagree, but thanks!
Excellent point about trading your rules whether in sim, micro or other markets. I am still developing my rules and learning this crazy business, and that's exactly where the value of sim and micros come in. I doubt that most new traders could survive the first few years of trading if all you had was the regular instruments. Unless your daddy left you a few million to play with! But I absolutely agree that once you have developed a set of rules it should not matter what you trade, you must have the discipline to follow those rules.
As for my attitude about losing, it's really more about my overall attitude toward trading (and life in general). Trading is difficult to learn, frustrating, and potentially as costly as it may be profitable. My feeling is that if you don't find the process fascinating and enjoyable, then no matter what the "potential" rewards may be, you're not going to be a happy camper. If I ever get to the point where I don't enjoy the trading itself, where I am not still interested in studying and learning more, then I'll just close my accounts and go do something else. Yes, certainly, I'd love to make a sh**pile of money, who wouldn't! But as with so many other things in life, if you become so focused on the destination then it becomes impossible to enjoy the journey. And in the end, the journey is all there is. May sound like BS philosophy, but it works for me.
Thanks again and best of luck in your trading!
Mike
NW Trader
There is no path to happiness. Happiness is the path.
Today was interesting, certainly educational, but profitable? Uh, no.
In MES this morning, after the OR surge, I took a PB on a slight trend but I failed to see that the PB was too shallow. I did not put a Fib on it prior, but afterwards I did and it barely hit 25%. As it was, it was simply the first leg and I was out for -20 ticks. I took a second PB, still a very slight trend and in fact the trend started to change just as I placed my entry and I failed to notice. Stopped out for -12 ticks. After those two trades I stepped back a little and realized that what I had failed to see was that after the OR, price had dropped into a narrow range of about 4 points and was simply range bound. The only trend was within the range and I didn't see that.
That in itself is a valuable lesson about the trees and the forest. With trading it is so critical to be able to focus in on indiviudal candles or patterns (the trees) and yet still keep the overall market picture (the forest) in mind. It's not that you have to just see the forest and the trees, it's that you must be able to see and comprehend them simultaneously, keeping both in context. It is a trader's skill that is easy to describe but difficult to absorb into your muscle memory so that is is automatic. I'm still working on that!
My third trade I decided to work the range if I could. Four points is a pretty narrow range but if I can catch a good entry then 8-12 ticks is easily possible with a couple contracts. So I found the good entry and price sluggishly headed in my direction. Then some news about Trump/China/Tariffs hit and price bounced, took out my stops, then plunged in my original direction without me. -10 ticks. Not much I can do about that sort of thing except make sure I've always got hard stops. Here's the first three trades:
I was going to call it a day after a less than auspicious start, but then I noticed that the news event had pushed price out of its range and it was now trending. So I took a pullback but was too early, -16 ticks, took the same PB a few minutes later at the correct place, hit my first target at +6 ticks but then it didn't continue as I thought it might and it hit my second stop at -4, giving me +2 ticks for the trade. Wasn't much, but at least reminded me that I can, on occasion, pick the correct dang entry!
So that's the story of a losing but educational day. I don't mind all this because I know I'm still experimenting with various things so there will be no consistency until I get past that. I do feel I'm inching toward actually having a strategy and I will be happy to get to that point, have some rules and eventually make it back to regular instruments.
Happy trading, y'all!
Mike
NW Trader
There is no path to happiness. Happiness is the path.
Have you started messing around with the stochastic settings in the reading material I gave you? It is super helpful, that way you have the ideal entry (around the 20 if long, or 80 if short, and making sure %k is crossing %d, and tilting back into the direction of your trend. I use %K 5 %D 3, and smoothing 5 for short term, and 3:1:3 for long term charts.) That way, you are making sure that you are entering on full-retracements, and not entering once you’re approaching a cycle-high (if long) or cycle-low, if short.
Also, I put my stops 1-tick above the candle I entered on, however there have been a few times I’ve gotten stopped out prematurely, so I usually find its more effective putting my stop on the opposite sides of some important real estate, like the 50MA, or using order flow to map my stops.
