short CAD vs long AUD spread trading...now
A mini ES scalper's journal
- Thread starter ycxc16588
- Start date
1-7-2010
Total trades: 6 RT
winner:3
loser:3
net P/L: -1.75 pts
I am completely out of synch with the market today.
around 11:45, entered short ecxpecting a little more pullback. But the pattern also looked like a bull flag. I set tight stop (0.5) right outside the upper bullflag line.
YM is doing some triangle consolidation. On 2 min chart a double top 12-12:30. As it broke the channel line drawn from 11:30-12:00 and did a throwback. Short here. At one point it was a profitable trade for 0.5 pt. I expected a little more so waited. Did not cover when price broke the micro-supply line. Mistake. Didn't cover again when price retest new high 3rd time at 1:40. This was pure supidity. Price is forming a cup and handle. This is long setup for price to test asending traingle upper line the 4th time. Given the consolidation period, the breakout move should be powerful.
I shorted at 1138 as first breakout meeting the ascending triangle price target line. It was to fade the bulge. It was ok trade since I had two contracts. I exited one at 1137 (1pt) another one at at 1135.5 seeing the big red selling bar. It was broke even at th etime when I closed both contracts.
Seeing the big selling bar, I shorted again as the price approaching upper triangle line assuming it was a pullback and there would be second leg.
The problem here was the big selling bar had such high vol at the time of the day. It implies the selling might be over.
My stop was a little wide (at previous high). i didn't exit as retrace went over 50% from the price range from intraday top to swing low of its pullback.
The second retest high was a little weak and it looked also like some throwback of lower channel line. I thought the first new high at 2:45 was a end of move and the real move should be breaking the lower traingle line and moving equal didtance. However, the price action was showing the lower triangle line provided strong support. I didn't add second contract at second time. Closed the position at market close. Another reason I waited until market close was expecting a double top pattern retest neckline or the upper triangle line. It didn't happen before 4pm though it might at after hours tonight. It was irrelevant anyway to me as a day scalper.
I have to say the triangle/breakout/end of move or first failed breakout/second retest breakout is a little rare price pattern. The problem was I didn't put proper stop to protect from unanticipated price move.
It was a bad day for me since I broke a several my trading rules. I stayed too long for some trades without taking adequate action.
Another learning about playing big runaway move of the price is, for instance the 3pm selling, if there is a second wave, I could use stop order to short 1-2 ticks below the swing low. Since the momentum would often provide several tick or even pts move. It is ok to try to short retrace, but if retrace is over 50% fib/ above micro supply line, then the previous dominant move's momentum is most likely impaired.
Total trades: 6 RT
winner:3
loser:3
net P/L: -1.75 pts
I am completely out of synch with the market today.
around 11:45, entered short ecxpecting a little more pullback. But the pattern also looked like a bull flag. I set tight stop (0.5) right outside the upper bullflag line.
YM is doing some triangle consolidation. On 2 min chart a double top 12-12:30. As it broke the channel line drawn from 11:30-12:00 and did a throwback. Short here. At one point it was a profitable trade for 0.5 pt. I expected a little more so waited. Did not cover when price broke the micro-supply line. Mistake. Didn't cover again when price retest new high 3rd time at 1:40. This was pure supidity. Price is forming a cup and handle. This is long setup for price to test asending traingle upper line the 4th time. Given the consolidation period, the breakout move should be powerful.
I shorted at 1138 as first breakout meeting the ascending triangle price target line. It was to fade the bulge. It was ok trade since I had two contracts. I exited one at 1137 (1pt) another one at at 1135.5 seeing the big red selling bar. It was broke even at th etime when I closed both contracts.
Seeing the big selling bar, I shorted again as the price approaching upper triangle line assuming it was a pullback and there would be second leg.
The problem here was the big selling bar had such high vol at the time of the day. It implies the selling might be over.
My stop was a little wide (at previous high). i didn't exit as retrace went over 50% from the price range from intraday top to swing low of its pullback.
The second retest high was a little weak and it looked also like some throwback of lower channel line. I thought the first new high at 2:45 was a end of move and the real move should be breaking the lower traingle line and moving equal didtance. However, the price action was showing the lower triangle line provided strong support. I didn't add second contract at second time. Closed the position at market close. Another reason I waited until market close was expecting a double top pattern retest neckline or the upper triangle line. It didn't happen before 4pm though it might at after hours tonight. It was irrelevant anyway to me as a day scalper.
I have to say the triangle/breakout/end of move or first failed breakout/second retest breakout is a little rare price pattern. The problem was I didn't put proper stop to protect from unanticipated price move.
It was a bad day for me since I broke a several my trading rules. I stayed too long for some trades without taking adequate action.
Another learning about playing big runaway move of the price is, for instance the 3pm selling, if there is a second wave, I could use stop order to short 1-2 ticks below the swing low. Since the momentum would often provide several tick or even pts move. It is ok to try to short retrace, but if retrace is over 50% fib/ above micro supply line, then the previous dominant move's momentum is most likely impaired.
On SPX minutes chart, it shows a nice inverted triangle with rising hypotenuse. This could be a minor reverse pattern according to Schabacker. Also some people would call it expanding diagonal since the bottom is not perfectly horizontal and it is also rising less steeper than the hypotenuse.
It looks like some big move is coming. Trader should pay close attention to the price action as it approaches the horizontal support line.
By looking at the large picture, I completely misread today's intraday price pattern.
After price bouce hard ths morning to recover all the open drop, it formed a small ascending triangle (presumably a continuation pattern). It was perfect breakout at apex and after that a throwback retest the top horizontal line. If looked at it inside the large inverted triangle with rising hypotenuse. This is very clear.
My today's big loss was not necessarily related to misreading the chart/pattern, but a failure to control the loss when price didn't go the way I was expecting.
It looks like some big move is coming. Trader should pay close attention to the price action as it approaches the horizontal support line.
By looking at the large picture, I completely misread today's intraday price pattern.
After price bouce hard ths morning to recover all the open drop, it formed a small ascending triangle (presumably a continuation pattern). It was perfect breakout at apex and after that a throwback retest the top horizontal line. If looked at it inside the large inverted triangle with rising hypotenuse. This is very clear.
My today's big loss was not necessarily related to misreading the chart/pattern, but a failure to control the loss when price didn't go the way I was expecting.
1-8-2010
Total trades: 6 RT
winner:1
loser:5
net P/L: -3.5 pts
I got up early and tried to trade the openning. Since there was a big price drop at employment report. I thought the openning might be a bear flag and entered short. Price moved quite fast and I was stopped out by 2.5 points. Price broke 1135 and stayed above it for most of the day. ES was forming a rectangule consolidation zone. YM looked like a ascending traingle. Although YM broke the bottom triangle around 1:40, there was no follow through. I was thinking it would do a throwback, but it instead formed a tight congestion zone.
Although I became bullish biased after early morning price action. Instead of buying on the dip, I tried to buy on breakout of resistance. I lost some due to many failed breakout. The last breakout at 3:35 was very powerful one given the duration of consolidation/congestion zone. I didn't enter long as it brokeout. I didn't fade it either due to one it is too later of the day, two, the momentum of this later breakout could be quite violent due to long peiod tight range consolidation.
This is very good example when estimate the breakout price target, keep in mind, the magnitude of breakout price move is often proportional to its time spend during consolidation. Long consolidation often leads to big move after breakout. In that case, entering after nreakout confirmed would still be very profitable trades.
I am doing very poorly for the last two days. I'll use the weekend to review some of my silly mistakes made over this week. Also I noticed, after some losing trades, I often become very hesitated when I supposed to enter a trades. I do have some hard stop or technical stop for every trades I enter so to minimize loss before it gets too big.
Total trades: 6 RT
winner:1
loser:5
net P/L: -3.5 pts
I got up early and tried to trade the openning. Since there was a big price drop at employment report. I thought the openning might be a bear flag and entered short. Price moved quite fast and I was stopped out by 2.5 points. Price broke 1135 and stayed above it for most of the day. ES was forming a rectangule consolidation zone. YM looked like a ascending traingle. Although YM broke the bottom triangle around 1:40, there was no follow through. I was thinking it would do a throwback, but it instead formed a tight congestion zone.
Although I became bullish biased after early morning price action. Instead of buying on the dip, I tried to buy on breakout of resistance. I lost some due to many failed breakout. The last breakout at 3:35 was very powerful one given the duration of consolidation/congestion zone. I didn't enter long as it brokeout. I didn't fade it either due to one it is too later of the day, two, the momentum of this later breakout could be quite violent due to long peiod tight range consolidation.
This is very good example when estimate the breakout price target, keep in mind, the magnitude of breakout price move is often proportional to its time spend during consolidation. Long consolidation often leads to big move after breakout. In that case, entering after nreakout confirmed would still be very profitable trades.
I am doing very poorly for the last two days. I'll use the weekend to review some of my silly mistakes made over this week. Also I noticed, after some losing trades, I often become very hesitated when I supposed to enter a trades. I do have some hard stop or technical stop for every trades I enter so to minimize loss before it gets too big.
After suffering some big loss from last Thursady and Friday, I went over my trading rules and trading methods again over the weekend and try to resynchronize myself with the market.
There are many people calling tops over the last several days. It is very possible that a intermediate correction might be imminent. However to daytraders, the intermediate trend might be not that critical. The long term bias is not necessarily helping day scalper to judge price action objectively at least to my opinion.
Total trades: 8 RT
winner:5
loser: 3
net gain/loss: 0.75 pt
Started at 11:30
Closed all positions at 3:25.
Today is interesting day since the market behaviors are much "normal" as compared to last Friday since there are many ups and downs with decent volatility. Today is supposed to be a daytrading riendly day. last Friday's long tight consolidation period was not offering good trading opportunities to scalper though daytrader can still make good profit if traded last 30min breakpout successfully.
From 9:40 to 12:30, price defined a nice down swing trend channel.
I went short at 12:36 since price bounced back from teh supply line, LL was formed, a tight bar with dryup vol. These are perfect sign right before price breakdown. Although I was right, I didn't take full advantage of price move and exited early. the swing low 1138 at 12:45 was the top of teh consolidation range formed last Friday. It provides decent support here. Large vol spike also indicated selling might be over for the moment.
long at 1:06 as price broke the micro supply line. It was a quick small scalpe.
long 1:36 as price approaching large trend channel (supply line), and vol driedup as selling dimished. Exit as price brokeout and stalled near 38.@% retrace.
Short at 2:10 expecting a throwback to retest trendline. Stopped out at loss as price shoot up and retested 38% fib line.
Short shortly after 2:30 expecting price drifting down. After waited for ~20 minutes without price going lower, covered at samll loss (0.25pt). Luckyly it was right before price brokeout 1141.5.
Price brokeout at 3:00 and tested 50% fib and resistance at 1142.5 at 10:45. Selling was not high, enter long here at bull flag expecting a test of 61% fib line, also a second leg moveup. Exited at 1143.50 for 1pt profit at 3:21pm.
Since there is 40min left to close, and based on the price action, it doesn't look like it would challenge open high. The second leg with lower vol than the first one indicating buyer was a little exhausted. I didn't go short either since price trend was clearly up since 12:45.
There are many people calling tops over the last several days. It is very possible that a intermediate correction might be imminent. However to daytraders, the intermediate trend might be not that critical. The long term bias is not necessarily helping day scalper to judge price action objectively at least to my opinion.
Total trades: 8 RT
winner:5
loser: 3
net gain/loss: 0.75 pt
Started at 11:30
Closed all positions at 3:25.
Today is interesting day since the market behaviors are much "normal" as compared to last Friday since there are many ups and downs with decent volatility. Today is supposed to be a daytrading riendly day. last Friday's long tight consolidation period was not offering good trading opportunities to scalper though daytrader can still make good profit if traded last 30min breakpout successfully.
From 9:40 to 12:30, price defined a nice down swing trend channel.
I went short at 12:36 since price bounced back from teh supply line, LL was formed, a tight bar with dryup vol. These are perfect sign right before price breakdown. Although I was right, I didn't take full advantage of price move and exited early. the swing low 1138 at 12:45 was the top of teh consolidation range formed last Friday. It provides decent support here. Large vol spike also indicated selling might be over for the moment.
long at 1:06 as price broke the micro supply line. It was a quick small scalpe.
long 1:36 as price approaching large trend channel (supply line), and vol driedup as selling dimished. Exit as price brokeout and stalled near 38.@% retrace.
Short at 2:10 expecting a throwback to retest trendline. Stopped out at loss as price shoot up and retested 38% fib line.
Short shortly after 2:30 expecting price drifting down. After waited for ~20 minutes without price going lower, covered at samll loss (0.25pt). Luckyly it was right before price brokeout 1141.5.
Price brokeout at 3:00 and tested 50% fib and resistance at 1142.5 at 10:45. Selling was not high, enter long here at bull flag expecting a test of 61% fib line, also a second leg moveup. Exited at 1143.50 for 1pt profit at 3:21pm.
Since there is 40min left to close, and based on the price action, it doesn't look like it would challenge open high. The second leg with lower vol than the first one indicating buyer was a little exhausted. I didn't go short either since price trend was clearly up since 12:45.
Thank you for the suggestion. My day job schedule would prevent me from trading until ~1pm most of days. You are correct that most consolidation (barb wire, whipsaw zone) occur during lunch time. I believe the market is really telling a trader when to get in and when to get out. The question to me is whether we are willing to listen or be able to hear what market is telling us. There are often intraday low made between 11 am to 1pm especially in a bull market. It presents good trading opportunities.
One of the important skill/knowledge that a trader has to develop into intuition is when to stay out of the market when there is no good/high probability opportunities/setups. This is essentially something I am willing to work on.
Yes, statistically, price in general moves slowly with low volatility during middle of the day for most time. Trader should avoid trading at these conditions.
I think it's most difficult to avoid trading during these low probability times when you miss a strong set of opportunities during the first 1-2 hours, which is when most of large moves take place. If I miss a great opportunity because I step away for a break, or I hesitate to put on a trade right away when it sets up, then I often feel the need to make up for the "lost profits" and churn away during the doldrums. I've been working very hard to avoid doing that anymore.
Due to my limited experience, I am not comfortable trading the first 90 minutes at open due to high volatility. Some traders would suggest to reduce the captial committed or exposure when the market volatility is high. I have been doing some study and reseach regarding trading the early session of the market after open. Sometimes it looks to me it would be beneficial to position either at close or premarket hour to take advatange of large market move at openning. Since price moves so fast right after open, it would be difficult to read the price and act quickly during that period. At least that is what I feel.
I am always trying to position of next move. If I miss a trade, for instance, missed the selling climax extreme swing low, I would look for second chance, like next pullback or when price breaks W neckline to go long. My major problems now are 1. I didn't act decisively when there is a setup (fear), 2. I didn't get out of losing trade quick enough. The second part could be improved by, 1. improving entry to make stops not so easy to be shaked out; 2. recognize when it is tradable market and when it is not.
1-12-2010
total number of trades: 8
winner: 4
loser: 4
net P/L: -0.5
Started trading at 12 ET
closed all trades at 3pm
Although it is negative today, I am actually quite happy with my judgement and overall execution. I made a mistake early entering a wrong order and took 1 pt loss since the market was moving quite fast.
There were some selling climax between 12 to one. Since there was a good support for SPX at 1132.50. I started looking for reverse when close to this level.
Long shortly after 12:30 after two selling climax bars, stopped out at loss.
Long again at 12:52 as price hit the left channel line of down trend. My entry was very close to the swing low so it didn't stop out at 1:20 when ES made a new swing low (other reasons I stayed in trade were, 1. YM didn't make swing low at 1:20, 2. selling vol was low). It was close. Exited as price broke the supply line of down channel.
Buyers were gaining control after SPX rebounced from support at 1132. I was looking for long again. Re-enter long at congestion area around 1:45.
At 2:10, long after the price breakout at 1:55 and forming bull flag. Entered long as price approaching the micro supply line. I got stopped out at second down leg within bull flag.
As price broke the supply line of bull flag second time, entered long again. Stopped out at 2:45. The down move looked like a shakeout rather than true selling. Re-enter long again and exit at 1131.5 (estimated target for teh second up lag after bull flag), which was also 38% fib retrace level.
Since 50% retrace 1132.75 and 1132.5-1133 former support became potential resistance, I expected long potential was limited. a vol spike right before 3 implied end of bull movement. I didn't expect strong selling after it. It was short opportunity, but since theer was some congestion zone right eneath it could provide some support. I didn't go short either. No trade after 3pm.
It turns out that there were some nice short scalping opportunity as price broke 1130.75 ( a bear flag after first leg down).
For the most trades, I acted quite decisively. The biggest stop loss I suffered today was due to 2:40 shakeout. I might be able to cut loss early by using slightly tighter stop. In hindsight, since buyers put so much effort from 1:30 to 2:30 in the congestion area, they most likely would not give up here without testing 38% retrace level.
Anyway, re-entering long immediately after shakeout was right decision. The trade gave 2 pt profit.
3:40 to market close has nice uptrend. Buyers had most of the control of price since 1pm. Price (ES) finally tested 50% retrace at market close. Bulls were determined and not giving up now.
total number of trades: 8
winner: 4
loser: 4
net P/L: -0.5
Started trading at 12 ET
closed all trades at 3pm
Although it is negative today, I am actually quite happy with my judgement and overall execution. I made a mistake early entering a wrong order and took 1 pt loss since the market was moving quite fast.
There were some selling climax between 12 to one. Since there was a good support for SPX at 1132.50. I started looking for reverse when close to this level.
Long shortly after 12:30 after two selling climax bars, stopped out at loss.
Long again at 12:52 as price hit the left channel line of down trend. My entry was very close to the swing low so it didn't stop out at 1:20 when ES made a new swing low (other reasons I stayed in trade were, 1. YM didn't make swing low at 1:20, 2. selling vol was low). It was close. Exited as price broke the supply line of down channel.
Buyers were gaining control after SPX rebounced from support at 1132. I was looking for long again. Re-enter long at congestion area around 1:45.
At 2:10, long after the price breakout at 1:55 and forming bull flag. Entered long as price approaching the micro supply line. I got stopped out at second down leg within bull flag.
As price broke the supply line of bull flag second time, entered long again. Stopped out at 2:45. The down move looked like a shakeout rather than true selling. Re-enter long again and exit at 1131.5 (estimated target for teh second up lag after bull flag), which was also 38% fib retrace level.
Since 50% retrace 1132.75 and 1132.5-1133 former support became potential resistance, I expected long potential was limited. a vol spike right before 3 implied end of bull movement. I didn't expect strong selling after it. It was short opportunity, but since theer was some congestion zone right eneath it could provide some support. I didn't go short either. No trade after 3pm.
It turns out that there were some nice short scalping opportunity as price broke 1130.75 ( a bear flag after first leg down).
For the most trades, I acted quite decisively. The biggest stop loss I suffered today was due to 2:40 shakeout. I might be able to cut loss early by using slightly tighter stop. In hindsight, since buyers put so much effort from 1:30 to 2:30 in the congestion area, they most likely would not give up here without testing 38% retrace level.
Anyway, re-entering long immediately after shakeout was right decision. The trade gave 2 pt profit.
3:40 to market close has nice uptrend. Buyers had most of the control of price since 1pm. Price (ES) finally tested 50% retrace at market close. Bulls were determined and not giving up now.