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MES & MNQ using volume profile and orderflow


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MES & MNQ using volume profile and orderflow

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  #11 (permalink)
sloth
Denver, CO
 
 
Posts: 21 since May 2021
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Lilgregy View Post
Thursday, November 4th Recap:

Here again I am questionning my process, contrary to other bad days I've had, I was not totally careless. The trades were made at decent locations (RTH VWAP and FS VWAP), but it was probably due to the fact I could not read the market and the context.
ES 04.11

I think you're hitting on the crux of the issue for a lot of traders. What type of day is it? There's a fairly well known educator, who I won't name, who's written thousands of pages in a number of books who describes how to trade trends, how the trade ranges, how to trade reversals, etc... The part that cracks me up is that I don't think he ever really does an adequate job of explaining (if at all) to his readers how to tell what type of day it is quickly.

In your case - on what day types is VWAP a good location for entry? On what day types will price sliced through it? How do you know when you're wrong?

This is a good journal. Your honest self evaluation and reflection will serve you well. Tomorrow is a new day.

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  #12 (permalink)
 Lilgregy 
Caen France
 
Experience: Intermediate
Platform: Sierra Chart
Broker: EdgeClear
Trading: MES & MNQ
 
Posts: 11 since Nov 2020
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sloth View Post
In your case - on what day types is VWAP a good location for entry? On what day types will price sliced through it? How do you know when you're wrong?

This is a good journal. Your honest self evaluation and reflection will serve you well. Tomorrow is a new day.

Thank you sloth.

Obvisouly VWAP and mid are great locations on trend days, what I thought the day was shaping up to be. Seems obvious in hindsight but during the day we could say I had tunnel vision and struggled to see the market for what it was. After the facts I can find some clues that the trend might not continue, the first one would be price holding below the IBH and failing to break it and then the fact that no reversal happened at both VWAPs.

However, I could have still taken the 3 first trades knowing that as each time there was still some reaction on these locations.

If there is anything I am missing I'd be glad to hear your views on this.

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  #13 (permalink)
 Lilgregy 
Caen France
 
Experience: Intermediate
Platform: Sierra Chart
Broker: EdgeClear
Trading: MES & MNQ
 
Posts: 11 since Nov 2020
Thanks: 10 given, 16 received


Friday, November 5th Recap:

After the bad day I had on Thursday, I thought I'd focus more on MNQ now as it was the market I was initially trading and prefer its movement. I recently traded more MES as I got into learning orderflow.

I did not plan well and was in a bad mindset as I often am after a bad day. As mentionned at the start of my journal I often think that after a big loss I'll start again "fresh", let's say on Monday. When I think like that I can easily get to a point where I am absolutely careless and do not care anymore as I say to myself I'll have a fresh start monday.

Well this is exactly what happened, after a first trade that was decent on MNQ I started taking too many trades on inexistant setups. Saying I overtraded would be an understatement. It got to a point where I removed my daily loss limit on Sierra (about 5% of my account) and I got to a loss of about $270, just below the daily loss limit I set with my broker at 10%. This was obviously a good idea to have this one at 10% as I can't remove it as easily and if I break it I can't trade for the day. So I stopped there and left to do other stuff for a while, I came back and started trading again. I probably was a few dollars away from hitting the 10% limit but miraculously managed to go back to a positive PnL of about $70 on the drop that happened. I should have stopped there, that's also what I told myself but I kept trading and ended up the day negative $180...



What a roller coaster day, I really need to stop having days like that.

My focus will now be on improving my C game. I'm currently reading "The Mental Game of Trading"' by Jared Tendler. He talks about a concept that resonated with me called the inchworm concept.

From the book : "The Inchworm Concept is literally based on the inchworm, a caterpillar that moves in a distinct way. If you’ve never seen the way an inchworm moves, it starts by stretching its body straight, anchoring the front “feet,” and then lifting up from the backend. It then bends at the middle to bring the two ends closer together, anchors the back feet, and then
stretches its body straight again to take another step forward"

His point is that most traders focus on improving their A game, while most of them would need to improve their C game in order to progress. As the inchworm, we need to bring are backend forward in order to move forward, reducing the gap between our A and C game. What's the point of having a number of good days if one bad day can erase them all?

So, as of now, I'll try to improve my C game in order to progress as a trader as I think it is what holds me back.

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  #14 (permalink)
sloth
Denver, CO
 
 
Posts: 21 since May 2021
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Lilgregy View Post
Thank you sloth.

Obvisouly VWAP and mid are great locations on trend days, what I thought the day was shaping up to be. Seems obvious in hindsight but during the day we could say I had tunnel vision and struggled to see the market for what it was. After the facts I can find some clues that the trend might not continue, the first one would be price holding below the IBH and failing to break it and then the fact that no reversal happened at both VWAPs.

However, I could have still taken the 3 first trades knowing that as each time there was still some reaction on these locations.

If there is anything I am missing I'd be glad to hear your views on this.

I'm not going to pick apart your trades with the benefit of hindsight. That's not productive. As you say - things are obvious in hindsight. I will mention a couple things though. True trend days don't occur that frequently. Less than 15% of the time? That number jumps around based upon HTF conditions but it's pretty low. Of all day types, normal variation days occur most frequently. So, if you have an open type that jibes with the potential for trend or normal variation - assuming that it'll end up retracing a good portion of the AM's range is most probable. IN THE ABSENCE of other indications of a true trend day.

The other thing that might be helpful - if you take a valid setup at good location with a reasonable sized stop and you get stopped out. The odds go way up that your assessment of the day type is off. So, there's no need to give it a second try or third try. The market is giving you feedback. Listen to it.

Just a couple of thoughts. My intention is to provide helpful feedback for you to ponder and accept or reject as you see fit. Carry on.

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  #15 (permalink)
 Lilgregy 
Caen France
 
Experience: Intermediate
Platform: Sierra Chart
Broker: EdgeClear
Trading: MES & MNQ
 
Posts: 11 since Nov 2020
Thanks: 10 given, 16 received


sloth View Post
Just a couple of thoughts. My intention is to provide helpful feedback for you to ponder and accept or reject as you see fit. Carry on.

Thank you, there are some really good advice in your answer.

After the first trades I should have been more patient to see how the day would be shaping up, even if it means missing out on a trade, but I really struggle with patience and was probably a bit stubborn after the first losses. I find it really hard sometimes to stay objective and keep in mind the context, but I'll hopefully get there at some point.

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  #16 (permalink)
sloth
Denver, CO
 
 
Posts: 21 since May 2021
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Lilgregy View Post
Thank you, there are some really good advice in your answer.

After the first trades I should have been more patient to see how the day would be shaping up, even if it means missing out on a trade, but I really struggle with patience and was probably a bit stubborn after the first losses. I find it really hard sometimes to stay objective and keep in mind the context, but I'll hopefully get there at some point.

La patience, ce n'est pas facile! Journaling, done on a sight like this or in private is definitely one of the best ways to identify if there are issues with the actual trading process or the emotional control / discipline. The two do seem to go hand in hand. Sometimes the analysis is done to justify the behavior.

Keeping records and journaling has helped me get clearer on my trading plan and more specific - especially when things get off track.

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