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I use two indicators I created. I use poc and deviations +/- off of volume distributions and a lower indicator that has volume and price ratios based on up/down bars.
A 10 minute chart is like a 1 minute chart with all the fuzz removed LOL... it's a good one to look at. As you can probably already see, a higher timeframe can help keep you out of trouble without all of the noise on a M1.
I use volume, a few key moving averages and lately have been messing with some simple stochastics that work well for the currencies I trade. Daily/weekly/monthly/quarterly high, low and mid points are very useful for framing up the market and where price sits in the overall scheme of things.
But... honestly... before you delve into too much of that stuff, more focus should probably be applied to reading price action, market structure, and trying to understand which way the market is really headed so you can work on trading in that direction. It can take a long time to develop a feel for what is going on, but these are the basics that everyone needs to understand before applying a bunch of squiggly lines and trying to make sense of them as well
Re: price action - absolutely. I’m reading several books right now. I have Trading Price Action: Trends by Al Brooks, and I have The Visual Guide to Chart Patterns by Thomas Bulkowski (thepatternsite.com). So yeah, I’m getting my fundamentals down, but I get whipsaw’d quite a bit, so you’re probably right in that trading on a higher timeframe would help.
Do you think trading something other than the indexes would be better, as a beginner? I heard that it’s easier to get whipsaw’d on the indexes, than say, treasuries, although for the micros, I haven’t seen hardly any volume on those contracts.
There is no beginner instrument per se, but at least you have a leg up trading the micros. I've personally only dabbled in the indices, pretty much everything I've learned over the last 2.5 years has been in currencies. They typically move slow and are more of a mean-reversion instrument which, in my opinion, makes them a little more predictable and gives more opportunity to analyze the situation... but they can also be boring as a piece of unbuttered toast I took a look at NQ and ES but they don't move like FX does, and since I consider myself still very much in the learning phase, decided to stick with what I know for the time being.
There's an excellent thread here on FIO started by our very own @Big Mike that covers price action in detail, but it is in the Elite section (you may consider joining, there is a wealth of information at your fingertips there that well exceeds the minuscule cost of membership.) I've never studied Brooks PA but have read it a bit here and there... it's very detailed, the bar by bar stuff is a lot to swallow IMHO, but a lot of traders here swear by it. Not dissing it, but seems like trying to take a sip of water from a fire hose, especially for someone just starting out lol I'm talking more about overall price action and market structure...
Are we trending or ranging on our chosen timeframe? What are we doing on a higher timeframe? Is price trading above or below the day's open? The weekly open? Are we making higher highs and higher lows or vice versa? If price action is moving up and we are above some stuff, would it not make sense to position ourselves to go with the flow? Ask yourself these sorts of questions in order to build some context around what price is doing.
I haven't seen you discuss your entry and exit strategies; when I look at the trades that you've posted I don't understand the reasoning behind your actions, but that sort of thing can be difficult to convey on M1 charts if you're only holding for a bar or two Looks like you might be a breakout trader? Perhaps you could lay that out for us so that we may better understand your methodology... maybe post a M1 chart of some trades you've taken and then the same trades from the M10 with a little more history for us to look at.
So, I've gotten some really helpful feedback in the past few days, and I'm making a conscious effort to focus more on trade awareness (logging/reviewing/journaling) rather than learning new techniques, and doing research. I have done SOME logging, but TradeStation doesn't make it super easy to track P/L on a Simulated account (the live account does show your P/L but, for SIM, I physically have to go in and record all of my orders). I do have a spreadsheet, but its been super time-consuming, and I just don't have a very good system for it yet, however, I went through last night and recorded all of my trades from yesterday morning by hand in my notebook, and I found it extremely helpful.
Having gone through every one of my trades, I am starting to see trends/habits in my trading, that I certainly can improve upon. For one, I noticed that I often tend to go short on really big signal bars, which often tend to be false-breakouts, and will get whipsaw'd. Concurrently, on one occasion (and I'm sure this was not the first time), I went short on a false breakout, and then immediately reversed my position, only to get whipsaw'd a SECOND time, which was extremely frustrating. I also noticed that, on both of those trades, I was selling/buying on the wrong side of the MA, and I never waited for a follow-through bar. In the future, when this happens, my goal is to wait for a follow through bar, and if it comes, wait for the pullback, and then get in on the second leg down.
I also noticed that i have been going short, at the bottom of bear trends (riskier entries) after the trend is near exhaustion. At one instance, I did this, and barely got out with 3 ticks; the next bar was a doji, and for whatever reason I entered again, eventually getting out at breakeven (which, tbh, could have been a lot worse, but my judgment was still poor). I am also going to make a strong attempt to trade on the inside of the MA from now on, as I have a tendency to jump in after too-large-of signal bars, that cannot find support, and end up reversing after many take profit. I'm also going to mess around with throwing on some of the chart-strategies in TradeStation, and use them - not as a rule of law - but as a hint or "flag" that there could be price action in this area, as that seems to be part of my problem (that I don't have a refined strategy). I think this will help me to read the price action a little bit easier, and get into a flow, so I'm not making quite as many amateur mistakes, and not second-guessing myself on as many good trades.
Also, @Rrrracer, and my strategy, and what kind of "trader" I am, to be honest, I haven't really thought about it enough on those terms, yet. I suppose you could call me a breakout trader? I'm almost always on the 1m bars, looking for breakouts, or short/medium term trends, and I don't generally hold my positions for very long. I wouldn't say that I'm necessarily scalping, but probably the next-closest thing to it. That being said, my routine involves checking the Futures Heatmap in the morning, looking for decent % gains and trending price action, jumping on the 1min bars, and then just looking for breakouts and short term trends.
I also noticed that I had been shorting into bull trends (even after decent sized bull-signal bars), which, tbh, I should know better, given how many reversals fail. Additionally, when these kinds of plays come into fruition, I think I end up tilting pretty hard, and frequently sell at max-pain, as I'm generally pretty conservative with money in real-life. This is something I will definitely need to work on, and will try and be conscious of, in the moment. I'm not quite 100% sure what the best way to approach this would be, whether or not its best to just take the hit, or if its worth it to try and hold it a little longer, to see if it loses momentum, and the bear trend continues. If anyone has suggestions about this, I'm all ears.
My goals for this coming week are as follows:
-Log my trades every day, accounting for entry/exit prices, P/L, commissions etc...
-Take notes/observations after each trading day, and reflect upon my strategy as a whole
-Submit any common threads for peer-review
-Focus on refining my trading strategy, and follow my trading plan
-Get TradeStation setup on my iMac, and focus on adapting order flow and market profile to my strategy
So, I know I haven't posted for a grip, but I have slowly but surely been working on developing my strategy. I've been doing a great deal of backtesting in Sim, and although its certainly a work in progress, there are a lot of things I've recently implemented to my practice that have been super beneficial. Also, to be honest, I've definitely been fighting recency bias, having gotten my ass handed to me early on in futures, and I think it's taking me a bit to find my confidence again.
For one, I started trading on tick charts, instead of time-based charts. That has definitely helped, as it "mutes" the bars that have very little activity, and helps me to find breakouts, as when they occur, bars tend to start flying. I'm also continuing to learn OrderFlow, having my primary chart showing the volume numbers up/down, and a second, larger chart w/ rectangles.
I've also found the TradeAnalyzer in TradeStation, which I've only recently found/adopted, but is going to be INSANELY helpful in tracking my metrics. Before, I was having to track all of my trades, and crunch all of my numbers by hand, basically (cause TS doesn't have Sim accounts' listed for P/L in the Client Center, on their website). Anyway, that has every metric I could ever need and more.
One thing that came out through the woodwork, in seeing my metrics, was how much I'm spending on commissions in Sim. With that, I'll be venturing over to NinjaTrader here relatively soon. I think that will help keep my costs down, given the fact that I've been scalping, for the most part. For example, today was a bit of an off day, but I'm currently down $86 (and $40 of that is commissions), granted, I'm not nearly as apt to trade as frivolously IRL.
Anyway, having better metrics is going to help me out a ton. As per the tools and stuff, its hard to say what the best approach is. For now, I am just experimenting with several different approaches, until I find what works best for me. Tick charts are definitely in. Volume profile has definitely been helpful; I'm trying to use the value area more frequently, particularly taking note of where the market enters, with regard to the previous day's VA, as - if it enters above/below, it has a pretty high chance of moving all the way through it (from what I've read).
I know I probably don't need most of this crap, and for the most part, I am mostly just watching the price action anyway, save for brief periods where I'll check other charts, but I don't want to turn into the trading version of U2's "the Edge" with a gazillion effects pedals and using a different tone on every song. I'm sure, once I find my rhythm, I'll simplify it to just a few, core tools/indicators - like I said, I'm just experimenting, for now, to see what works. I'm also in the process of writing a solid trading plan for myself, with rules for as many conditions as possible (that account for my specific weakness/tendencies).
Some of the prior issues I remarked were:
-Not monitoring the EMA
-Immediately reversing after a losing position, getting f*****, and having the trend continue
-Trading IN ranges, rather than shorting at peaks and buying at troughs (although I'm getting a ton better at trading in ranges as of late)
I'll post my full trading plan here in the next week or two. This has definitely been a helpful process, though, and a highly recommend it! Anyway, I'll have some decent stats here, in the next week or two, and I'll actually be able to pull some meaningful data. I know it's hard to help someone when you can't really see where they need improvement.
So, I traded like absolute trash this morning, and after going back over all of my trades, the common thread that I'm seeing is that, although I'm picking the right direction, they have no room to run. Generally, when I place my trades, I am watching the price action, and then placing my order either at, or one or two ticks off of the current price-level; it’s like "shooting from the hip" to a degree, hoping to catch the movement as it develops.
However, my best trade of the day, today, was more of a mean-reversionistic style, having observed the lay of the chart, found a price level that I thought was suitable for a short, and placed my order. Not ten seconds later, I got a sweet pull for ten ticks. Immediately after, I got another short for six ticks. Seems like it makes a LOT more sense, to make the market come to me, instead of trying to chase the market, when trying to place my orders.
Anyway, I'm going to continue using this method throughout next week, and log the results. Thank god I finally found something that works - hah. Was starting to get pretty frustrated, putting in a shit ton of effort every week, put constantly striking out.
On bar one you can see that I'm trying to catch the trade as it runs. The trend had been short up to this point, however, my entry was poor, and I inevitably ended up covering when it turned several ticks against me, although it would have turned into a good trade, had I held.
Bar two was my best trade of the day. This was when I first decided to pick a decent level, and let the market come to me, rather than try to catch the price action and shoot from the hip.
Bar three I caught a second short for six ticks, although it ended up dropping considerably afterward.
Bar four, I attempted to catch the reversal, picking where I thought the market might bounce, but I ended up underestimating slightly, and covering too soon. As you can see, it ended up bouncing shortly after, and had I held, it would have turned into a good trade.
Bar 5, the market was attempting to go short again, and against my better judgment, I placed a more aggressive entry (which was a good lesson) as it finally reversed, and I got trapped. Next time, I'll know better.
Alright, so I thought I would dip my toe back into the market, after I had a pretty nice trade last night. I was trading on Sim, and there was a pretty big breakout, so I switched over to live and caught the downside.
Everything started out pretty solid this morning. I ended up picking the direction right on trade 1, but I ended up closing too soon, getting spooked on the pullback. I wasn't using Order Flow, like I usually do (my charts just didn't load, but I didn't think I would need it, necessarily). Had I been using it, would I have made the same mistake? I don't know.
On trade 2, I tried to catch the break off the trendline, but again, I ended up closing too soon, on the pullback (anyone else seeing a trend here?). Had I not closed abruptly, I would have caught a pretty nice return.
On trade three, I trade to place a single short, but my computer started lagging out for some reason (which had never happened to me) and it ended up placing like 5 orders, and I got executed for three of them. I kind of freaked out, and pretty much closed as soon as I could.
On trade four, I tried going long, after the bull spike, but I sold after the large bear trend bar came in. I placed a short trade immediately after (trade 5), but sold when it looked like it may go long again. Had I held longer, I would have caught the biggest trade of the morning.
By trade six, I had already decided to bow out of the market. I had several lost, consecutive trades (not a good sign) so I knew I needed to stop. However, it was a MASSIVE bear movement. That being said, I hesitated way too long, and by the time I entered, it was way too late.
Clearly, my issues today were emotional ones. Simply put, I'm covering my shorts way too soon. Good trades are being sacrificed, because I'm not willing to let pullbacks go far enough in the wrong direction. I read recently that I good place to put your stops is Average True Range x2, however, I guess I have difficulty analyzing when to pull a trade, versus what is just a pullback. Also, perhaps I just need to be more comfortable allowing for more space, when clearly the market is more volatile (or maybe trade more zoomed out?). I'm not sure. You'll notice, though, that I'm choosing the right direction virtually every time, and my trades WOULD have been good trades HAD I HELD THEM LONGER.
Well, I suppose there's one good thing. I know where I need improvement - lol. Thanks for reading guys. Would appreciate any feedback you might have to offer.
Total Profit: ($31.00)
Gross Profit: $10.50
Gross Losses: ($41.50)
Total Number of Trades: 11
Percent Profit: 18% (not accounting for lag spike, which would put it at 25%)
Winning trades: 2
Losing trades: 9 (3x in lag spike)
Avg Loss: ($4.61)
Avg Win - $5.25
Biggest Win - $9.00
Biggest Loss - ($7.25)
Max Consecutive Win - 2
Max Consecutive Loss - 8 (3x in lag spike)
Man, I feel like a broke through some kind of barrier. After a shit ton of anguish, and lost money, hours of reading, watching youtube videos and shit, I finally had a killer day on the futures market. Its not huge money or anything (still trading 1-lots) but my execution was excellent, and that's definitely something to be stoked about.
OVERALL:
Total Net Profit: $45.13
Gross Profit: $58.13
Gross Loss: $13.00
Total Trades: 11 (8 winners, 3 losers)
Percent Profitable: 72.73%
Avg Winner: $7.27
Avg Loser: $4.33
Biggest Win: $17.50
Biggest Loss: $5.50
Max Consecutive Win: 4
Max Consecutive Loss: 2
Sadly, I missed the huge downside today, when the manufacturing report came out, because I'm running Windows through Bootcamp on my Mac; the time is always 6hrs ahead (which I usually fix) but I had to restart this morning - it ended up giving me an error message every time i tried to place a trade.
Things I'm Doing Well:
-Not chasing the market
-Buying pullbacks
-Watching Volume to buy breakouts
-Not buying extended up/downtrends
-Watching overall volume for trend exhaustion (I have my second monitor set to paint the candles so they are color-coded for volume
-Other small things have helped, like having my computer set automatic trendlines, as well
Anyway, I know its not huge money, but its progress. I've worked really, really fucking hard at this shit, and even if its a small stepping stone, I feel like I'm at least seeing some results, and have been able to apply/adapt to the markets, and my own personal weaknesses.
I took a look at NQ and ES but they don't move like FX does, and since I consider myself still very much in the learning phase, decided to stick with what I know for the time being.
I'm talking more about overall price action and market structure...