A mini ES scalper's journal

[ChkitOut]

Quote from NoDoji:

Coming up on 2 years day trading, this is still a huge struggle for me. Lately with the more volatile price action, I've hesitated to take trades because my stop would be "too wide". The setup is very valid, but I let the $$ factor keep me out.

As for the danger of not treating each trade as brand new, it can be extremely expensive.

Today I had several scratch trades mainly from moving my stops to b/e too quickly instead of trusting that my target would be lifted. So I left several hundred dollars on the table. I then took a mediocre setup (out of frustration, wanting to get back what I left behind) and allowed that trade to ride without moving the initial stop and guess what? That stop was hit.

Finally, I trade a truly excellent setup with confluence from all angles. On a scale of 1 to 10, this setup was a 9. I set an initial target and leave my stop in place. Price comes within 3 ticks of my target and pivots, so I exit for what I consider a very decent profit. Technically there is no reason whatsoever for me to exit the trade. No technical reason at all. I exit it because my formerly red P/L is now green. Price moved another .85 ($850) from my exit point. Had I simply trailed a stop above each bar's high, I'd have walked away with $610 of that additional move.

You have to write down the rules and repeat them every day, I think. I believed I had these issues under control and now they creep back in based on varying market conditions.

Best of luck to you on that!

I think most of this behavior stems from one thing, trust.

Its so hard to fully trust your methodology because losses are just a normal part of the business. There is always that part of you that says, I'm probably wrong here. Its like getting punched repeatedly by the bully in school yet continuously engaging him in conversation.

 

[NoDoji]

Quote from ChkitOut:

I think most of this behavior stems from one thing, trust.

Its so hard to fully trust your methodology because losses are just a normal part of the business. There is always that part of you that says, I'm probably wrong here. Its like getting punched repeatedly by the bully in school yet continuously engaging him in conversation.

It's definitely a trust issue. part of the problem is that you can manually test out strategies bar-by-bar on static charts and find high probability setups. But then when you trade live off the setup, price is actually moving. So what appears to be a big red or big green bar on a static chart actually had price bouncing around while it was happening in real time. You put on a trade and in your mind's eye you expect a straight trajectory to your target. The natural give and take price action on a micro scale can then lure one into micromanaging a trade and cutting profits short, IMHO.

 

[trader198]

I do not think it is a trust issue. we all know trading is an odd's game or in ugly word, gambling.
I normally trade with EMA cross ( a cross generates a signal), but as many know, sometimes when a crossing occurs, just a trap, that happens when I short a bottom or long a top. some people may use EMA touching to do trading, every touching generates a sell/buy signal, just as my EMA crossing, there is lots of false touching. or some may trade based on above/below EMA, when above EMA, do long, when below EMA, do short, but some time that just does not work. or go long when it hits HOD or go short when it hits LOD, but who knows why it need breakout?

after i realized trading is a gambling game, I felt lot easier to enter or exit.

Quote from NoDoji:

It's definitely a trust issue. part of the problem is that you can manually test out strategies bar-by-bar on static charts and find high probability setups. But then when you trade live off the setup, price is actually moving. So what appears to be a big red or big green bar on a static chart actually had price bouncing around while it was happening in real time. You put on a trade and in your mind's eye you expect a straight trajectory to your target. The natural give and take price action on a micro scale can then lure one into micromanaging a trade and cutting profits short, IMHO.

 

[ycxc16588]

6-3-2010

Total trades: 2 RTs (ES)
winner: 2
net p/l: 3 pts

I was able to trade from 11:30 to 1pm. I have other commitments at work after 1pm so I could not concentrate on trading for the second half of the day.

I went long at 1099.50 (stop 1098) at 11:35 for potential triangle breaking mini-supply line and bouncing of bottom of triangle. exit at 1100.75 seeing price stalling.
The up leg could not reach the top of triangle showed implied weakness. At 12, price broke the triangle bottom. The down leg to 1092 was almost measured move.

I went long at 1091.5 at 12:34 (stop 1090.75). I had feeling this could be the bottom of the day. I set my PT at 1094 (23.8% retrace). I got out at 1093.25. The up move after 12:30 was quite choppy. I don't think I would be able to hold it until market close or to some significant higher price level.

Today's price action was expected after yesterday's big rally. It is supposed to be a consolidation day with some choppy price movements. Again, my plan was to trade from long side.

Inverted HS at 3:30. NQ has been leading the market.

 

[ycxc16588]

Quote from trader198:

I do not think it is a trust issue. we all know trading is an odd's game or in ugly word, gambling.
I normally trade with EMA cross ( a cross generates a signal), but as many know, sometimes when a crossing occurs, just a trap, that happens when I short a bottom or long a top. some people may use EMA touching to do trading, every touching generates a sell/buy signal, just as my EMA crossing, there is lots of false touching. or some may trade based on above/below EMA, when above EMA, do long, when below EMA, do short, but some time that just does not work. or go long when it hits HOD or go short when it hits LOD, but who knows why it need breakout?

after i realized trading is a gambling game, I felt lot easier to enter or exit.

In my opinion, both gamble and trading are game of probability in certain sense. However, the subtle difference between two is you can't take it back once you have bet on, but in trading, in general, you can always get out of your trade at any time if you want. This eventually leads to micro-management.

 

[NoDoji]

Quote from ycxc16588:

I went long at 1091.5 at 12:34 (stop 1090.75). I had feeling this could be the bottom of the day. I set my PT at 1094 (23.8% retrace). I got out at 1093.25. The up move after 12:30 was quite choppy. I don't think I would be able to hold it until market close or to some significant higher price level.

Beautiful entry, you really anticipated that one well. Seriously, with that being a strong 3rd push down from the open, and you having a long bias on the day, it was a valid setup for placing a bracketed order (OCO), target a 50% retrace and leave it alone.

We were discussing how we would be hard pressed to put on a long at that level (we'd been eying 1092.00) and sit through the retracements for a retest of the high if we were watching that price action.

How do you NOT micromanage that? You set target and walk away

 

[ycxc16588]

6-4-2010
Total trades: 4 RTs (ES)
winner: 1
loser: 3
net p/l: -0.75 pt

I traded between 11:50 to 12:55. Tried 4 longs between 1075 and 1080 for reverse breaking supply line, double bottom, breaking 20 bar MA.
Well all potential reverses during that time frame failed with weakness.
The selling were steady. Bars were not too wide or erratic. Euro breaking 1.20 has put a lot pressure on major US indices.
I stopped trading after 1pm for the rest of day.

This is second time all three US major indices have been rejected by 200 DMA again. Next week could be tough again for both long and short.

 

[ycxc16588]

6-7-2010
Total trades; 5 RTs (ES)
winner: 2
loser: 3
net p/l: -1.25 pts

I did a few long scalps in the middle of the day expecting the 50% fib level would provided some support. I got stopped out several times.
I went to meeting from 1 to 3pm.
I went short at 1058.75 around 3:15pm as price went briefly above 20 bar (5 min) EMA and fell below it again with EMA of down slope. I covered at 1057.25. In retrospect, using price touching 20 bar EMA as exit would allow me to hold it until close.

 

[NoDoji]

Quote from ycxc16588:

I went short at 1058.75 around 3:15pm as price went briefly above 20 bar (5 min) EMA and fell below it again with EMA of down slope. I covered at 1057.25. In retrospect, using price touching 20 bar EMA as exit would allow me to hold it until close.

Nice entry, yc. I've been working hard on letting winners run with my trades and on a confirmed with-trend trade like this one, your target would be a lower low. The overnight 1052.00 low was in play IF price failed to find support @ 1056.25, and it failed pretty easily there.

If a with-trend trade does find support or resistance at a previous level, then you have the tough choice of taking quick profits or letting it ride. I had many trades over the past week and a half ride all the way back to break even when finding S/R without breaking down. But as frustrating as it was, it kept me in practice for some larger runs Friday and today.

 

[ycxc16588]

Quote from NoDoji:

Nice entry, yc. I've been working hard on letting winners run with my trades and on a confirmed with-trend trade like this one, your target would be a lower low. The overnight 1052.00 low was in play IF price failed to find support @ 1056.25, and it failed pretty easily there.

If a with-trend trade does find support or resistance at a previous level, then you have the tough choice of taking quick profits or letting it ride. I had many trades over the past week and a half ride all the way back to break even when finding S/R without breaking down. But as frustrating as it was, it kept me in practice for some larger runs Friday and today.

I am still working on trader's psychology part. I tried to limit my daily number of trades. If I have a few loss in a roll, I would either stop for the day or become more picky about rest of the trades I would take. Never fall in a mood trying to get even with market.
How to let winner run? I have a few options to try, 1. Choosing trades with high reward/risk ratio with potential profit target at previous high, trendline/moving average, fib level, etc.. 2. be aware of order flow at various time frame, how they will interact with each other by enhancing at one direction or canceling out at opposite directions. I will need to spend some time to study this. Basically, I would be looking at typical setups at different time frame, such as breaking out /down from R/S, reverting back to MA, reverse bars setup, etc..