A mini ES scalper's journal

3-19-2010
I am afraid that I won't have time to trade today.
So far, it looks like the double bottom scenario (second at 12:30) has failed to break the neckline. Buyer may be trying to absorb the selling with flat price (narror rectangle consolidation). It can drop more if the support can.t hold, but I guess the chance of further break down is not very high on option expiration day. SPX might settle around 1160 or 1165 for 50% retrace.
 
3-19-2010
Total trades: 2 RTs
winner: 2
net p/l: 2.25 pts

ES open at low of overnight trading range and immediately run into last Friday's close. It consolidated at or slightly below last Friday's close and then broke thru the resistance. It was nice two leg move up.

I was able to trade from 12 to 1pm EST. It looked like an descending triangle forming from 11 to 12pm. There was a shallow retrace (23.3%) from opening range and price was above Friday's consolidation range as well as close. Tick data was also bullish.
Went long at 1158 limit order. There was no fill so I bought at ask 1158.25. I forgot to cancel the limit order and it was filled 2 seconds later at 1158.00. Immediately I was going to put on stop at 1157.50. The stop run at 1157.50 occured before I entered my stop order. The tape reading showed strong support at 1157.75. I still put stop at 1157.50. Exit first order at 1158.75. Moved stop to 1158.00 and exit scond order at 1159.75.
I was expecting some reaction if price challenges the intraday high at second attempt. 1160 was decent exit.

The throwback on dried up vol between 12:40 to 12:50pm was second chance to go long. I missed this trade since I was planning to go to a meeting at 1pm EST. I had meeting until 3:30p EST.

After another breakout/throwback on YM at 2:10pm, the price was forming a rising wedge. It was clearer on YM that price was forming Hl and HH. The wedge trendline was respected. Any long position should be closed if price breaks the wedge bottom. For scalper, the best place to get out long would be up wedge line.
 
3-23-2010
No trade today
I was in several meetings until 3pm. I did check market from time to time, but didn't really have time to trade.
Price broke out ascending triangle at 3pm. This was the second leg since yesterday's open rise. Based on my limited experience, after such long consolidation, the breakout should be at least 4 pts above 1165.5 resistance. Given the vol for the last hour breakout, I would not short it in front of a bull stampede. Market has been making 52 week new high almost everyday for the last few days. Mutua funds might have to keep up buying in order to beat the indices. It could be very close to intermediate top, but for daytraders, 1-2 pts miscalculation means loss. It will interesting to see how this spectacular bull run ends.
 
3-24-2010
Total trades: 5 RTS
winner: 1
loser: 4
net P/L: -4 pts

I've made numerous mistakes today. My daily money loss limit is 200 and I would stop after the limit get hit. From now on, I will also limit my daily max number of trades to 5 RTs.

Today is a consolidation day after yesterday's bull run. I've identified the descending triangle pattern after the retest of intraday low (a successful stop run with no followthru selling).

Again today I was confused between swing/scalping. I was trying to do swing trading on scalping opportunities. I might be more comfortable with my scalping setups, apparently, my decisions regarding swing trading was very poor. Scalping allow me to get in/out quickly (no more than 30 min per trade). Swing trading requires tremendous patience to wait for the best place to get on or off.

I was buying dip between 1-2pm with slightly large stops.
Vol was not particularly high with the swing low at 1:20pm. failing to break neckline/50% fib of day range showed weakness.
1:50pm swing low was nice double bottom/retest open low with successful stop run. There was not really any panic selling, Smart shorts covered quickly. It was a turtle soup plus set up. I was holding long at loss when the intraday low was taken out. Although I hold it until 1165 (50% fib) with small profit, it was a big mistake not cutting loss quickly. It was a typical thing that a trader's judgement is affected by the position he is holding. Once, I thought I had moved over that stage, but now I know I am not always.

I was long at 1163.75 anticipating a breakout of bull flag at 3pm (my target was 1165.50 a supply line from early swing highs). Immediately, I had small profit and could have got out at 1164.25/1164. I got stopped out by expecting second leg. I did re-enter at 1163.5 again based on my tape reading. Again, I got kind of shaking out before my expected second leg breakout.

I was tempted to buy the pullback of last breakout. However, since it has only 15 min left before market close at 4pm, and the vol was not really there, I felt the price would settle around middle of the daily range 1164-1165.
 
3-24-2010
What do I learn from today's mistakes?
1. wide stops: why set wide stops? because I don't really know where I should enter the market.
2. forgot stops? So I was lucky that I didn't get wiped out holding losing trades and hope it would come back. When in doubt, get out and re-evaluate.
3. Technical things: yesterday market close at high, today opened weak and could not go above yesterday's close and immediately sold down. 1165 the middle of early intraday range, which is also the key resistance level before yesterday's last hour breakout. Pay attention to it. Watch the price action.
Market is in general weak when price consolidate at lower half of the daily range. price retraces 78%, it most likely would retrace 100%.
4. never, never let winning trade become losing trade. If I have 3 ticks gain, I would take 1 tck or break even at minimum regardlessly.
 
Quote from ycxc16588:

What do I learn from today's mistakes?
1. wide stops: why set wide stops? because I don't really know where I should enter the market.
2. forgot stops? So I was lucky that I didn't get wiped out holding losing trades and hope it would come back. When in doubt, get out and re-evaluate.
4. never, never let winning trade become losing trade. If I have 3 ticks gain, I would take 1 tck or break even at minimum regardlessly.
More...

I sure learned these lessons the hard way. Now plaster them against the wall in front of your face and pray daily for the strength to never repeat them!

A helpful hint - when you think of placing a wide stop, that's where price will go, so either enter immediately and make that price your profit target, or wait for price to get there and THEN fade the move :cool:
 
3-25-2010
Another bad day for me. I was completely controlled by my emotion. Tried to catch falling knife and just got stopped out numerous time. I have to say I got complacent with the "buying the dip" stuff. Of course, theer is nothing wrong with "buying the dip", but a trade needs to know what is dip and what is reverse.

let's see what was going on for the last several days.
In retrospect, I doubt that there is much participation of commercials for the last two days. Yesterday was a consolidation day (and probably trapped some shorts). This morning's gap up open above the descending triangle probably caught many stops and attracted more later bulls. Ok, if today would be a trend day, the pullback should be no more than 2.5-3 pts (shallow pullback). The retracement level should be no more than 38%. A break of 62% implies the retest of open low and an attempt to close open gap.
After restet low, price temperarily found some support at 1166 (near yesterday' settle level). I did fade the first retest low and took 2.25 pts from 67.25 to 69.5. Judging by the speed of price move, it was more short covering than good buying (flat price with relatively tight range). When it failed to break above the neckline/50% fib, it is over for bulls today.
Today's gapup leg was the 3rd leg since 3/22. keep in mind that some temporary correction would be imminent.

After price failed to break 50% fib/neckline 1171, and failed to even retest double top neckline 1173, I was still trying to find long entry and ended up with stop loss.

Tape reading tells me, the price was weak everytime after panic short cover while I was still emotionally trying teh dip buying. It looks like big money/smart shorts are not in a hurry to cover and price closed at the low of the day.

Only thing I did right today was putting on stops on every trade religiously (0.75-1.25 pts).
On spx, price broke the trend line since mar 4 at 1170 the last hour. 1157.50 is another important level by tomorrow.

Anyway, I will stop trading for the rest of March to recollect myself.
 
Most time I was in meetings this morning. I was able to check briefly the market during small breaks.
There are times that trader's dicipline would partially/completely breakdown. I believe that I've suffered this problem for the last two days. It was the gambler's mentality that takes control from time to time or once in a while if I don't guard myself carefully against it.
It is good to take a break even a few days to curtail the gambler's mentality, the urge to trade to get even with the market.

There was a decending triangle after early morning high on ES. However, it broke to the down side with increased vol.
1157 was strong support. It was a double bottom from 1-2pm. Price managed to get above nckline and touch 50% fib (68% on YM). At 3:10. I am watching whether it is going to be a bearflag since 1pm or it would go up to test 62% 1165 and up to 1167 where the decendng triangle broke down.

On spx, be aware of potential falling wedge forming. There were three touches at the upper wedge line. If it stays in the wedge, price might break out to the upside on Monday (Mutual fund would be back after spring break and end of quarter window dressing.) Again am I bullish biased again?

IF we are at intermediate term top, the price might do inverted expanding triangle, or multiple top pattern to cause damage to both bulls and bears.
 
3-29-2010
SPX broke out of falling wedge this mornig (bullish Monday). It touched 1175, the midpoint of the falling wedge. In a large picture, today is a consolidation day.
Today's intraday swing low shortly after open closed the gap from Friday's close. Intraday retracement failed to retest intraday low.
At 2:50pm EST, after 3 touch of the falling supply line, the 4th attempt broke out the down trend line at 1168.25. After retracing >78% of the daily range, the price failed to make new high later of the day and settled around 50% 1168.
If SPX break out of current consolidation range, the second leg up can retest 1180 high.

The bearish scenario would be if SPX break 1170 decisively with vol, today's consolidation would turn into a big bearflag. Price would most likely test ~1160 lower channel line again.
 
3-30-2010

ES open slightly above yesterday's close this morning and immediately closed gap at 1169. Price broke upside, but sold down quickly. Price bounced above 20 bar (5min) EMA briefly and then broke below it. Shortly price broke 1170 (the extended trend line since yesterday's consolidation triangle), then penetrated the bottom of open range at 1169. Price traveled almost equal distance below 1169.

It has been quite choppy since intraday low. First bounce since intraday low met resistance at 50% fib (bottom of open range at 1169). Price failed to retest inraday low between 1-2pm and found good support at 78% retrace from the morning. based on my tape reading, buyers were supporting 1167.50 since 1:50pm.
At 2pm price broke the second less steeper supplyline. There was a throwback to retest 1167.5. At 2:30, it broke out 1168.50 resistance line. The price target would be 1169, 50% fib, then 1170, 68% fib. Close settled near middle of the intraday range again. Today is the 3rd day that price settled in the middle of daily range since last Friday.

Another observation was DJ transport has been near day high around 2pm prior to the price breakout above the middle of intraday price range.

On 3/25, SPX broke the trendline drawn since mar 4th. Since them there were two throwbacks to retest the trendline yesterday and today. Next throwback by tomorrow time frame would challenge 1180. However, if it broke 1172 tomorrow, it would be temporarily bearish.
 
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