Tuesday, October 11th, 2011 - I faded the gap at the open due to favorable-looking setups on the gap guides. I made sure to watch the size of the gap that it was not too large. This time everything lined up and it auto-traded for a nice and easy 8+pt win.
ES: +33 ticks
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Wednesday, October 12th, 2011 - The gap guides were very favorable in the U-H zone as I had confirmation across other futures and ETFs, but the market opened at 1200.75, two ticks above my max (1200.25), so no trade was taken. This was good as it would have stopped out at or above 1208.75 for an 8pt loss.
NO TRADES
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The SPY touched the highs at 122 reached on 8/5, 9/16 and 9/20 but failed to break through. It needs to get through 123.50 and, if it does, I would say this little bearish period would be over. However, the way the market closed in the last hour today was very bad, and looks like a reversal. A lower close tomorrow would confirm that we're headed back to the bottom levels (107.5 and 110.0) of the this bear flag, especially if Europe sneezes the wrong way.
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Thursday, October 13, 2011 - The market opened below yesterday's lows and gap setups there were not favorable. I avoided what would have been a 7+pt loss.
The first hour guides came out and I felt that the guides were positive enough for a low breakdown, especially with my bearish bias and poor odds of the gap filling, and the market would have to make almost new highs on the day to stop me out, so I took a shot at it. I wanted to get short on a pullback after the lows were broken, but I had to step away for a bit so I just put a sell stop limit order 1 tick below the lows and when I got back I was filled. Unfortunately, it stopped me out for a loss. I sure wish I could have gotten short on a pullback like I wanted. I need to write a strategy for this.
ES: -31 ticks
My wife and I celebrated our 15th anniversary yesterday and one of the things we did was go see Moneyball. I really liked the movie. I was able to compare it to trading with the importance of sticking to your plan, especially when you have statistics and historical probabilities on your side.
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Friday, October 14th, 2011 - The market opened in a favorable gap zone (above yesterday's highs) but the gap was very large in size, beyond my level of tolerance so I did not take a gap trade. As the market is not yet closed I'm not sure if it would have been stopped out or not, though, as of now it has filled in 10pts of the gap with 3.5pts of heat so those that went for partial gap fill probably made some money.
The FHGs came out with a slight edge for fading the lows of the 1st hour. I did so but with an improved entry to reduce my risk and increase my gain. I was filled and my target was hit in a few hours with little heat. I was concerned that my trade was contrary to gap fill, which had high probabilities, but the lower odds introduced by such a large gap negated those fears.
ES: +23 ticks
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Here is a mid-month review. I'm pleased I can get a pretty good profit factor even with only a 50% win rate.
I also started charting my P&L since Sept. I wish I had more to show for this account, but the line is above $0 most of the time. Still, that's a lot of work for a little bit of money.
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