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shodson's Trading Journal

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  #501 (permalink)
 shodson 
OC, California, USA
 
Experience: Advanced
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rtrade View Post
Why quit? Well, you got that correct...it does require you to watch the market...would you rather have a broker watch it for you? It's your business....but fret not, I have a possible solution to your lack of motivation. I can motivate you like a Marine Corps Drill instructor, but you might not see that it's for your good.




Oh my, you do need some futures.io (formerly BMT) members intervention...trust me we all go through that...even athletes go through that...it's called a "SLUMP." But don't worry you'll break out of it.



Geez you brought up the house, wife and kids....and the pets. Yup, it sure sounds like your OUT of mental capital....so what does Money Management 101 say? "Preserve Profits." So if you're live trading (I don't know if you are or not, but if you are...) STOP!!! Mentally your not SAFE to trade LIVE, but on a SIM you are.



Oh LORD, another one thinking the grass is greener on the other side. Please remember Higher Time Frame is HIGHER RISK? So I say NO! for now anyways.



REALLY?!! Do you really believe that? Why don't you prove to yourself that you can apply your technical analysis skills on a smaller time frame FIRST...Trust me, you'll SLEEP a lot better.



Sulking?....ya; Whining?...kinda; Time for a reality check? Yes, but not what you may think....you're in futures.io (formerly BMT), you're among members that care! The REALITY CHECK is YOU CAN TRADE and YOU WILL TRADE. Like I said, I may have a SOLUTION....if you're willing...well I gave up my video card installation to give my 2 cents on your matter...if you don't like it...it's cool, no worries.

Change your avatar...it tells me you make things too complicated...pick one of your pets or something SIMPLE.

Let's get back to the beginning, like me a beginner. Back to basics...ok? I went to your first post of this thread and this was the only thing that struck out to me considering your situation.



hmmm, so you just LIKE to trade the opening hour (6:30-7:30am Pacific time) maybe you can even stretch that time to 2hrs...I'm sure your "house, wife, kids, and pets" can do without you for 2hrs, yes?...ok, I won't push it...1hr...there...JUST TRADE 1 HOUR A DAY....BE GREEDY for 1 HOUR!!!

hmmm, $330/day equals, not including vacation and holidays, over $85,000.00/year Are you beginning to getting you excited now!!! huh?!!! You can buy a lot of PET FOOD with that chunk of cash

Ok, how?...well, all I'm going to give you is the frame work and the rest is up to you and other futures.io (formerly BMT) members to assist. I took the liberty of looking at your latest chart. Since you were trading NQ and I'm familiar with it I picked it. I noticed that you like Volume and candles for price action. NOW I don't know your STYLE of trading but I can make suggestion that might help you. I reproduced your charts and provided you with a 15minute and a 5 minute side by side.

The only difference is that I changed your VOLUME to the ON BALANCE VOLUME. Please ask Mike about it because created it on one of his threads...I don't personally use it, I can make it work for me if I wanted to. Remember, I'm just trying to keep your style of trading. And I you seem to be inconsistent in your entries. So let's look at the chart I attached.

First of all, if you are using the 15 minute as entry for day trading...in my humble opinion...it's too LARGE. That is why I included a 5 minute so you can see a side by side comparison.

A. is the basic opening candle...you can clearly see the OBV signal short for both 15 min and 5 min which corresponds with a big red short candle.

B. is where you took the LONG...as you can see the 5 min gave you a profit, briefly, because the 5 min OBV turn long; But the 15 min OBV is still short...so it's good but expect to TAKE PROFITS Quickly.

C. is where both 15 min and 5 min OBV turns long....BUY BUY BUY...don't hesitate.

D. once again, both 15 min and 5 min OBV turns short.... SELL SELL SELL...don't hesitate.

Play with it and see what you think. Oh, and just my 2 cents again...stick to ONE instrument for now...don't go jumping around like the Fulcrum Trader....that guy is a PRO...like in PROFESSIONAL TRADER....he knows what he's doing. So if you want to start with CL go for it...but stick to one instrument.

Remember the those WINNING trades...go over it in your psyche. Let those trades dominate your thoughts.

Please, other futures.io (formerly BMT) members jump right in...

Thanks for the encouragement rtrade, and everybody else. And I love your enthusiasm and energy. I only thought a couple of people ever looked at my journal.

Not to be a buzzkill, but I don't think the 5/15 OBV double signal strategy outlined is all that great. This assumes you only exit when the 5min OBV turns against against the 15min OBV. Here's ES for 2010 so far.




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  #502 (permalink)
 shodson 
OC, California, USA
 
Experience: Advanced
Platform: IB/TWS, NinjaTrader, ToS
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So I've taken to heart some of your recommendations and decided that I just have to make some time to become a better discretionary trader. I know I can't sit in front of the screen all day, but if I can get 1-2 hours in, like I originally intended at the beginning of my journal then that might be good enough to find a few trades. I think it will be hard for me to not overtrade and get in a trade during my time window. In the meantime, I will still mechanically trade gaps and first-hour ranges and not give that up. It has served me well and I can't let a little drawdown make me bail out.

So shortly after the open I looked for some trades and decided to do some SIM trading on CL today. I decided to take several screehshots at various decision points of my trade. I was thinking what a good idea it would be to video record my trades, like Mike has recommended, with audio of me thinking out loud through these trades, kind of like my own one-on-one trading room with myself. It'd be cool to then review these with a team/group, like SMB does.

So I took one trade, then I had to get my daughter off to school early.

120min chart - I saw the big reversal CL had yesterday and it killed the 2hr trendline pretty hard after Bollinger, RSI and Stochs had it oversold for quite a while. However it looked like it was starting to make a move to the upside out of oversold conditions and bouncing off of the bottom Bollinger, and the uptrend might resume, so I thought I'd look for long entries on the lower timeframes.

15min chart - It looked like the overnight session was consolidating yesterday's move and we were in a range. Maybe I should wait for a new trend to emerge before picking a market direction.

I decided to enter on a pullback to yesterday's closing price after it looked like it wanted to make a move to the upside. I was filled at 88.69. I had a 20tick stop and a 40tick target, but that I would use discretion in trailing my position. I almost immediately took heat, and thought about bailing early because the trade was going against me, but I thought I'd give it more room. It had already gone down 15 ticks, so I might as well see if it goes down another 5 and hit my stop. I wrote my check to the market for 20 ticks so I might as well see if it turns around in my favor.

Question: So how do you handle situations like this? If a trade immediately goes against you do you just bail, or do you have a stop loss level in place that you're willing to suffer? Some of you will bail and not take a full stop and just have the stop there just for emergencies, while others use the stop no matter what the tape is doing.

Anyways, it luckily turned around to the upside and got me 30+ ticks. My ATM moved my stop to B/E+1. I started seeing gradual crescendo volume on the 1000 vol chart up into resistance, so I took that as a warning that we might get a reversal, so I tightened my stop even further to lock in profits. I was stopped out +13 ticks. Good thing, the market did reverse and went through my original stop.

1 trade, 1 day, so far so good. I have to admit, on SIM I was much more cavalier (while in the trade I went and cooked eggs and toast for my kids) than I would be with real money, so I kind of just got lucky on this one. This is why I don't like SIM trading, it's easier to "goof off" but I don't really even have a trading plan for discretionary setups, so I can't imagine trading real money without a plan in place. I guess my ATM was part of a plan, but not a whole plan. My plan was, I guess, just to trade what I see. I think eventually that's where I want to get to: trade what you see and feel, knowing the market well enough that I can just know when it's a good time to get in or out.

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  #503 (permalink)
 incometrade 
Rochester Hills, Michigan
 
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Well its good to see that you took some peoples advice and didn't quit. Nice to see you get a win and build back a little of what you were missing. Keep at it and I look forward to the progress.

Incometrade
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  #504 (permalink)
 Big Mike 
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If you have a proven methodology which you have "forward tested" (NOT backtested) using live trades or out of sample data only, then you can rely on that methodology to tell you what to do.

Otherwise, I would ask why a 20 tick stop? What exactly on the chart told you that at 19 ticks you were still correct about the trade, but at 20 you were wrong and the trade was no longer going to work? This is how a stop should work. It has nothing to do with comfort. Comfort is defined in your risk management, where you decide ahead of time, regardless of price action or any chart, that you cannot take a trade if the required stop is more than 'xx' ticks. That is prudent risk/money management.

But a stop is decided based on the chart. Based on the price action. It has nothing to do with your comfort level.

So you first have to answer that to be able to answer your next question on "should I get out if it immediately goes against me". I've been getting better at identifying turning points, so I am able to use a smaller stop. That stop is there because after 'x' ticks, I am now WRONG. It has nothing to do with my comfort level, or "willing" to give the market 'x' ticks. No. My stop is set based on me looking at price action and the chart and saying, OK, I think this is going down. I will set my stop to 'x' because if it hits that, then I am wrong, it is not going down.

Now, when I enter a trade there are many times (majority even) that I have the opportunity to get out well ahead of a "full stop". It is important to manage the trade. That is what discretion is all about. Putting the trade on and then leaving the room is like automating a strategy, and won't work. Such a "strategy" has its uses for some over the course of their "trading education" (like for instance if you always pull your target off too soon), but in the long run you must manage the trade in both directions --- targets and stops.

And that means discretion. Brett always says he constantly evaluates the trade from the opposite angle. If he is short, he constantly looks and says "what reason do I have to go long here". You need to perform a similar exercise when in a trade. If you've decided to set a stop 17 ticks away, you may find other indications before price gets to 17 ticks that the trade is not going to work. Pull the trade, save some money. Don't just hope for the best. This is a very difficult thing to master, and it is why recording the reason you took the trade and exited the trade in a journal are crucial, because if you are doing it for the wrong reasons it will obviously not work well.

I think video recording yourself is an EXCELLENT way to quickly learn a multitude of ways to improve your trading. Just remember, no one is perfect - you are going to make mistakes. But mistakes are what lowers your expectancy and costs you money, so your goal is to minimize them. Sometimes you will pull a trade off too soon. Sometimes not soon enough. The goal is to continue to learn and improve. Set just two things at a time over a two week period to focus on, don't try to do too many things at once. Get those two things down pat, then move on to two more.

Mike

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  #505 (permalink)
 shodson 
OC, California, USA
 
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Wednesday, December 8th - I picked up 3 gap trades as we opened above yesterday's close, all 3 winners. They took a fair amount of heat after the open but then decided turned southward.

ES: +4 ticks
NQ: +24 ticks
TF: +22 ticks





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 trs3042 
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shodson View Post
Wednesday, December 8th - I picked up 3 gap trades as we opened above yesterday's close, all 3 winners. They took a fair amount of heat after the open but then decided turned southward.

ES: +4 ticks
NQ: +24 ticks
TF: +22 ticks




Glad your back in the saddle. Excellant work!!!

Rick

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  #507 (permalink)
 mainstream 
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Hey Shodson, there's a lot of posts here since I last looked, but since you were trading morning gaps, you should check out the latest FUTURES MAGAZINE. There is an article on morning gap trades...

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  #508 (permalink)
 shodson 
OC, California, USA
 
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mainstream View Post
Hey Shodson, there's a lot of posts here since I last looked, but since you were trading morning gaps, you should check out the latest FUTURES MAGAZINE. There is an article on morning gap trades...

Got a link? I couldn't find it on their site.

Current Issue - Futures Magazine

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  #509 (permalink)
 shodson 
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Thursday, December 9th - The gap guides were strong but the markets opened above my 40% rule. All markets filled there gap and my 40% rule kept me out of $1,300 of profits today. I may have to revisit that rule, see if I really want to keep this rule in place.

First hour setups weren't that strong so I didn't do anything there either.

I woke up too late to do any SIM trading. I got some nice crescendo reversal signals on the larger volume charts.

NO TRADES




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 mainstream 
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The art of war and the science of trading - Education - Futures Magazine

This is the second page that specifically addresses the gap trade.

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