Awash's Journal

Hi,

I thought it was from this thread that I began looking at breadth indicators, VIX,TRIN, advance/decline, a little differently. What I now do is look at each in the context of their Moving Averages, and some oscillators. This has been very helpful in seeing the resolve of the market in holding up or breaking through s/r points.


Most importantly, with regards to some of the comments you made after the errors cropped up on Dec 9th, I think that you may need to adjust your stops in your trades according to the comfort level you have with your entry pt. I know I mentioned this before to you - stops should not be a "fixed" quantity but should vary according to different market dynamics and trade entry dynamics. (i.e. a late entry may need to be followed tightly if you are not sure that you need to be in the trade but cannot seem to decide).

I think the idea of 2 contracts may help psychological too. This thread is an excellent discussion of that topic:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=25608

Awash, in the spirit of the season, I wish you continued good luck and a prosperous New Year -

PS: I told you this thread would prove to be one of the best in the ET.

Peace.

:cool:
 
I used a/d today to (1) bias on the long side since we had > 1000 advancing (Naz) and (2) get out of my longs when price reached previous high but a/d peak was way below. Details of the trades in my journal entries today. I stress, I still used my regular entry and exit methods, I just used a/d as helper.
 
A bit of a better trading day and I tried to place most of my trades with the trend. I need to still focus on entering without hesitating too long. In addition, I need to refine my continuation pattern setups. All input welcomed. I will elaborate more this weekend about the patterns I’m using as continuations.

Trade#1 – Price busted through the opening high of 1063.75 and all my M.B. Indices were pointing up. Decided to enter long and just go for it. Next time, when the market shows such strength and fails to retreat to the downside, I will enter long before the opening/previous high is tested with a tight stop.
*Long 1064.75 - 10:24 EST
*Exit 1066.75 - 10:30 EST [ P/L: + 2 ]

Trade#2 – Entered short off a mediocre divergence setup but my first mistake was I didn’t wait confirmation of a down candle. Decided to cover because price action remained stagnant. Next time, I will wait more confirmation.
*Short 1066.25 - 11:41 EST
*Cover 1066.50 - 11:59 EST [ P/L: - .25 ]

Trade#3 – Tried taking a continuation pattern off a previous high (breakout) but I was late by 1.75 points. This trade worked out for me only because the market was showing considerable strength; also, readjustment of profit target do to late entry. I actually need to refine my strategy and rules for this type of setup. ALL SUGGESTIONS WELCOMED! I mentioned in trade#1 that I should take a position before the previous high to test a potential breakout. Nevertheless, I need to reduce my hesitancy and enter the market quicker.
*Long 1069.25 - 14:49 EST
*Exit 1070.25 - 14:33 EST [ P/L: + 1 ]

Trade#4 – Price really showed a lot of upward momentum but after I entered long I realized we were approaching key resistance levels.
*Long 1071.50 - 15:10 EST
*Exit 1071.50 - 15:18 EST [ P/L: 0 ]
 

Attachments

Quote from dbTrader:



.......I think that you may need to adjust your stops in your trades according to the comfort level you have with your entry pt. I know I mentioned this before to you - stops should not be a "fixed" quantity but should vary according to different market dynamics and trade entry dynamics. (i.e. a late entry may need to be followed tightly if you are not sure that you need to be in the trade but cannot seem to decide).

I think the idea of 2 contracts may help psychological too. This thread is an excellent discussion of that topic:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=25608

Awash, in the spirit of the season, I wish you continued good luck and a prosperous New Year -

PS: I told you this thread would prove to be one of the best in the ET.

Peace.

:cool:
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dbtrader,

Thanks for the insight!! Often, I find myself setting the same fixed stop ( of 2 points) as my exit. However, I do understand the importance of setting my stops per current market conditions. Please don't think I'm not taking this into consideration, because I am.

Thanks again for everything and I wish you a wonderful holiday season!
 
I started the morning with a strong LONG bias and thought the market would continue upward but I was quickly proved wrong. I paid for it early on!!!

TRADING TIP FROM #FUTURESTRADES ROOM: “Having a bias Long or Short is ok. However, it's your responsibility to trade what you see and not what you think.”

Trade#1 – Entered super late as a result of my long bias. It took me over 25 minutes to adjust to what I was seeing on my charts. I should have been short around 9:48 at 1081 but I chased price a bit and nothing positive stemmed from this trade. Decided to cover short after potential reversal sign.
*Short 1078.50 - 9:54 EST
*Cover 1078.25 - 10:03 EST [ P/L: + .25 ]

Trade#2 – I tried to make up for my early exit in trade#1 by reentering short but was late again with my entry. Price made a new low on that one candle and started to reverse. Covered on reversal signal!
*Short 1077.00 - 10:12 EST
*Cover 1078.25 - 10:31 EST [ P/L: - 1.25 ]

Trade#3 – A bit late with my entry! Immediately as I covered trade#2 off the positive divergence on MACD, I should have doubled my contract size so I could have easily got pulled back into the market. Instead I went long 1 point after closing my previous trade. There was some resistance there from a previous high but decided to hold the position. This trade was never going to develop in my favor after price ranged for an hour. Should have practiced better trade management!!
*Long 1079.25 - 10:32 EST
*Exit 1078.00 - 10:59 EST [ P/L: - 1.25 ]

Trade#4 – Wanted to test a possible change of trend but it didn’t follow through. Reset my stop to 1 tick above breakeven after price went in my favor. Got stopped when we didn’t bust through 1076.25 (strong resistance).
*Long 1075.25 - 14:14 EST
*Stop 1075.50 - 15:01 EST [ P/L: + .25 ]

Trade#5 – Late entry! Should have entered prior to the break of the LOD at 1073.25. Nevertheless, I was able to manage this trade for a profit.
*Short 1072.75 - 14:54 EST
*Cover 1070.75 - 15:01 EST [ P/L: + 2 ]

Total Errors: 5 mistakes!

Stopped trading at 15:02 EST!

For tomorrow: Work on reducing errors to zero! Refine my rules for continuation patterns
 

Attachments

I didn’t do a good job at reducing my most common mistakes today. Will continue to work on them.

Trade#1 – Used my 30 minute chart to gauge market direction and early on it was up. Went long to test the strength of the opening high. I exited prematurely after seeing a doji and down candle, if I had of waited just a bit more for another candle I would have been in-the-money. Next time I’ll try to show more patience.
*Long 1069.25 - 9:53 EST
*Exit 1069.25 - 9:58 EST [ P/L: 0 ]

Trade#2 – Decided to go long again after we pierced the 1070 area, price moved higher but negative divergence started to brew on my 1-minute. Closed position on first sign of reversal.
*Long 1070.50 - 10:02 EST
*Exit 1070.75 - 10:10 EST [ P/L: + .25 ]

Trade#3 – We had a small retracement from our last high of 1071, should have set up my short but when price moved higher I wanted to retest the new high. A bit late entering (by 1 tick) but price moved in my favor and I failed to manage this trade properly. Should have reset my stop 1 tick in my favor, especially since price was losing momentum after not making a new high. Price quickly turned around moved against me and I exited too late. Poor trade management!
*Long 1069.75 - 10:34 EST
*Exit 1068.50 - 10:48 EST [ P/L: - 1.25 ]

Trade#4 – As a result of the losing momentum and poor trade management in trade#3, I was late setting up my short positions on all signals. Decided to cover out of frustration!
*Short 1068.50 - 10:48 EST
*Cover 1068.25 - 10:57 EST [ P/L: + .25 ]

Trade#5 – Price moved off its current session low of 1066.75 and made several higher highs afterward. Wanted to play the long side as this was the overall direction of price movement. Went long to test high of the day again, this time I properly managed my position and the breakout worked in my favor. Only mistake I made was my entry could have been earlier at a price of 1069.50.
*Long 1070.00 - 14:08 EST
*Cover 1072.00 - 14:23 EST [ P/L: + 2 ]

Total Errors: 4 mistakes!

Stopped trading at 15:02 EST!

For tomorrow: Work on reducing errors to zero!
 

Attachments

I think my indecisiveness early on did me in on my first few trades coupled with the fact that I was late entering the market.

Trade#1 – .Early on price moved lower and I attempted to short with the small down trend but was late entering. Should have entered on the pullback around 9:45 EST at 1070.50. After we didn’t break my support level of 1069.50 I decided to cover (I closed this position a bit late too). Next time I need to be on time!!!
*Short 1069.75 - 9:49 EST
*Cover 1070.75 - 9:57 EST [ P/L: - 1 ]

Trade#2 – .My entry was clean but my trade management was poor. Price tried pushing down but lost momentum to continue (no new low created). I should have covered this position upon MACD diverging but I was too indecisive because price didn’t make a new high it just stalled. Next time I’ll just exit especially when indicators are pointing up.
*Short 1070.50 - 10:18 EST
*Cover 1071.75 - 10:35 EST [ P/L: - 1.25 ]

Trade#3 – This trade was awful! After realizing price wanted to push higher, I waited 5 minutes too long to open my long position after coming off trade#2. This was just ugly!!! I was late exiting my prior trade and late entering this trade.
*Long 1072.50 - 10:40 EST
*Stop 1071.25 - 10:49 EST [ P/L: - 1.25 ]

Trade#4 – Good negative divergence signal on 3 minute, however, I was slightly tardy in my entry (wanted 1073 after not setting a new high) and divergence signal was confirmed at 11:20. Because of the slow downward movement I decided to exit with the intention of reentering if price failed at attempting the retest of the high. However, I missed my reentry signal!! Poor trading overall.
*Short 1072.25 - 11:30 EST
*Cover 1071.75 - 11:42 EST [ P/L: + .50 ]

Total Errors: 3 mistakes and overall poor trading today!

Stopped trading at 12:45 EST!

For tomorrow: Keep trying to reduce errors & learn to quickly open up opposite positions if price proves my initial trade wrong!
 

Attachments

Quote from Awash:

Trade#1 ?.Early on price moved lower and I attempted to short with the small down trend but was late entering. Should have entered on the pullback around 9:45 EST at 1070.50. After we didn’t break my support level of 1069.50 I decided to cover (I closed this position a bit late too). Next time I need to be on time!!!
*Short 1069.75 - 9:49 EST
*Cover 1070.75 - 9:57 EST [ P/L: - 1 ]

Trade#2 ?.My entry was clean but my trade management was poor. Price tried pushing down but lost momentum to continue (no new low created). I should have covered this position upon MACD diverging but I was too indecisive because price didn’t make a new high it just stalled. Next time I’ll just exit especially when indicators are pointing up.
*Short 1070.50 - 10:18 EST
*Cover 1071.75 - 10:35 EST [ P/L: - 1.25 ]


Your trade 1-- it's more about accepting a missed trade and not being upset, and staying on the lookout for the next trade. Look, there is a your entry signal right after that entry on the **long** side. This past week I noticed I have the same exact problem. I also have the problem after a losing trade in which I followed my rules exactly. Many times this means there is a great setup coming on the other side. However if I get pissed off I miss it.

IMO trade 2 was not worth entering because it followed ** three ** failures (long shadows) to move lower.


Trade#3 This trade was awful! After realizing price wanted to push higher, I waited 5 minutes too long to open my long position after coming off trade#2. This was just ugly!!! I was late exiting my prior trade and late entering this trade.
*Long 1072.50 - 10:40 EST
*Stop 1071.25 - 10:49 EST [ P/L: - 1.25 ]


I like your trade three long entry because of the 3 previous failures to move lower. But the stop in this case has to be below the three failures, plus add size if it moves close to the stop. Some say never add to a losing position. I say if you have good s/r backing you, and you get real close, add to the position with the lower risk.
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Remember when I wrote……

Quote from Awash:

.......... I decided to discontinue live trading for the remainder of the year as this will give me the opportunity to focus on my most common errors. I'm also adjusting my system and adding new strategies and setups to complement trend days (later i will discuss in full detail).

All charts will reflect simulated trades!
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Well, recently I made additions to my systems and now I want to take the opportunity to explain the new setups I've added.

In short, I wanted additional signals to complement trend days, that way I won’t be fixated on just playing trend reversals! Now, instead of just focusing on divergence setups, I look for continuation patterns with the overall market direction.

Trend Following System:

Setup: Open a position (long or short) and/or look for continuation patterns in the predominant direction in which price is moving. Use the 30 minute chart interval to gauge price direction. Also, look for common patterns characteristic of a TREND (e.g. higher highs/lows for an uptrend and lower highs/lows for a downtrend).

Entry signals
  • Entry Rule#1 - If price is approaching a support/resistance area, open a position no less than 1 index point prior to the area as this will be a good test of its strength. If price breaks the s/r level move your stop 1 tick in your favor and manage the trade. However, if the s/r level holds close position and look for a reversal signal accordingly. CAVEAT: The longer you hesitate to enter the market the less likely you'll be successful.
  • Entry Rule#2 - If price is approaching a previous high or previous low, open a position no less than 1 index point prior to the area as this will be a good test to see if price makes or fails to make another high or low. If price makes a new high or low move your stop 1 tick in your favor and manage the trade. However, if price fails to make a new high or low based on previous high or low, close position and look for a reversal signal accordingly. CAVEAT: The longer you hesitate to enter the market the less likely you'll be successful.
  • Market Exit Rules - Same as before!

Daily S/R Levels can be found here:
http://home.houston.rr.com/aarondwashington/

Caveat: intraday numbers change daily


The entry & exit rules are pretty simple but in order for it to work successfully I have to be “Johnny on the Spot” with the entries, as the market can make a small move down in the morning and then quickly reverse higher and vice versa. Not to mention aggressive trade management!
 
Quote from peterfigliozzi:

......Your trade 1-- it's more about accepting a missed trade and not being upset, and staying on the lookout for the next trade. Look, there is a your entry signal right after that entry on the **long** side. This past week I noticed I have the same exact problem. I also have the problem after a losing trade in which I followed my rules exactly. Many times this means there is a great setup coming on the other side. However if I get pissed off I miss it.

IMO trade 2 was not worth entering because it followed ** three ** failures (long shadows) to move lower.

I like your trade three long entry because of the 3 previous failures to move lower. But the stop in this case has to be below the three failures, plus add size if it moves close to the stop. Some say never add to a losing position. I say if you have good s/r backing you, and you get real close, add to the position with the lower risk. [/B]
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peterfigliozzi,

Your input is very encouraging. Thanks for continuing to post!

Since taking the new signals I'm learning a lot more about myself as a trader and doing things I've never done before; all in a good way.

Truthfully it's not just about "accepting a missed trade and not being upset" bur rather sticking to the plan at least 90% of the time. My entries just have to be faster with these signals otherwise the probability of success diminishes.

For instance, (trade#1) I entered 1 tick before my support level of 1069.50 (blue line) and price retraced off it. I took a quick loss do to my tardiness and looked for the next signal.

Trade#2, my aggressiveness for the downside push was still on but a positive divergence signal came and I didn't cover my position and go long. Actually, I covered for a loss and waited five more minutes to get long. That's just not good enough in my book!!!!

In hindsight, I probably should have set a wider stop on trade#3 but overall if I had of been on time it may have worked out for me. Nevertheless, trade management is key but with these new signals I really need to be on time and avoid chasing price.

Good advice overall!
 
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