Being early in market at right level......but impatient to wait for other traders to catch on.

heavenskrow said:
Throughout my trading career, I have been more early than late in placing trades prior to trend change. My style of treading is similar to Paul Tudor Jones catching tops and bottoms. I have a tight stop, and although more losses, not as significant.

However sometimes when the market takes a long time balancing at the reversal levels, it whipsaws me too much in what I think. Mainly because knowing that the market as a whole is smarter than me, I usually tend to trust the tape more so than myself. So if the market doesnt show signs of strength at the key level, I start overthinking "what if I am wrong?"
Today was a perfect example.

I first copied the bottom range and pasted it to December high and noticed we got reaction there so I anticipated reversal and market moved pretty fast.
SFsJ4Rc.png


I did try catching the bottom a few times on TF, and I was stopped out a couple times, no biggie. At the white line below, I had a limit buy order knowing this should be a key level on TF.
xnU32oP.png


First it pierced key level....then 5min reversal candle formation....then hunted for stops.....and recovery was pathetic..
Look at how weak the tape was......kept hunting stops. and didn't rally right away to test prior highs....just drifted along...with that in mind I started overthinking too much and asked myself why werent there buyers to come in strongly? I thought to myself, maybe the market wants to go lower....so next day I came in with a different theory on TF.
bmaL52u.png


I figured today we would break below the red flag support to fake out the dip buyers into white area support on the notion that gold/bonds, dollar, Nikkei and yen were showing pretty big movements....and then bounce strongly.....
SFsJ4Rc.png


I noticed TF was having a hard time making a new high on short timeframe and that was the bearish clue and confirmation that my theory would play out. So I shorted near arrows...but every goddamn time I shorted, it kept holding. As it came closer to the 3:30ramp, I was wondering why in the earth TF is not going down.... of course I was almost deluding myself of seeing how the trend to upside was just building(notice MA starting to break out of chop and hold) because instead I was thinking I would see selling come in anytime now.... Then as price came back near highs for the eleventh time, I finally gave up and as it broke key resistance, it was time to join TF on the other side even though I did hesitate for a few minutes and got out way tooo early.
2IM9iFG.png


So this is my problem....maybe its impatience or the belief that the markets can do anything so I get wishwashed out. I tend to be very early in levels with "smart money". However, when the market doesn't just react right away or drifts along like yesterday, I start overthinking too much of "Oh what if I am wrong" "Maybe the tape is clueing in that I am wrong"......but then today the tape was clearly bullish but I WAS totally LYING to myself. What do I need to work on?
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Mainly, Heavens row, study hourly charts, monthly charts.......; 5 minutes is noise; i remember Don Bright , Bright Trading did NOt like them[ 5 minute candles] also.Also found the Paul Tudor Jones[Jack Schwager] interview helpful , but actually he got interested in trading by reading Rich ''turtletrainer'' Dennis, remember?? ??? ??
 
heavenskrow said:
...I start overthinking too much of "Oh what if I am wrong" "Maybe the tape is clueing in that I am wrong"......but then today the tape was clearly bullish but I WAS totally LYING to myself. What do I need to work on?
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If you've been having these problems for "many years"...its time for you to find someone to personally trade with you while you're trading until you've learned to control the lack of discipline. I'm not talking about online...I'm talking about someone sitting side by side with you from trade to trade.

It's psychological and sometimes the "peer pressure" of someone monitoring what you're doing while in the same room is enough to fix stuff like this.

ET has hook up threads and if you can't find someone from this forum that lives near you...try other forums, twitter or stocktwits (latter two will allow you to reach more traders near you).
 
Greetings HK,

You Said: I start overthinking too much of "Oh what if I am wrong" "Maybe the tape is clueing in that I am wrong"......but then today the tape was clearly bullish but I WAS totally LYING to myself. What do I need to work on?

Response: Understand, that each and every time while in a trade, when you start “tinkering” with your thoroughly tested and proven efficacious Trading Strategy, you are introducing “Random Variables” into your methodology. In other words, you’re no longer trading the proven winning strategy that you set out to trade. You are trading something else. Instead of trading one method one thousand times, you’re now trading one thousand different methods one time. You need to stop thinking in terms of individual trades, on a trade-by-trade basis, and start thinking and trading in “Series Sets” of 20 or more trades. Then, based on the results of your Series Set, statistically determine whether or not you need to “tinker”.

Hope this helps.

KDASFTG
 
heavenskrow said:
Throughout my trading career, I have been more early than late in placing trades prior to trend change. My style of treading is similar to Paul Tudor Jones catching tops and bottoms. I have a tight stop, and although more losses, not as significant.

However sometimes when the market takes a long time balancing at the reversal levels, it whipsaws me too much in what I think. Mainly because knowing that the market as a whole is smarter than me, I usually tend to trust the tape more so than myself. So if the market doesnt show signs of strength at the key level, I start overthinking "what if I am wrong?"
Today was a perfect example.

I first copied the bottom range and pasted it to December high and noticed we got reaction there so I anticipated reversal and market moved pretty fast.
SFsJ4Rc.png


I did try catching the bottom a few times on TF, and I was stopped out a couple times, no biggie. At the white line below, I had a limit buy order knowing this should be a key level on TF.
xnU32oP.png


First it pierced key level....then 5min reversal candle formation....then hunted for stops.....and recovery was pathetic..
Look at how weak the tape was......kept hunting stops. and didn't rally right away to test prior highs....just drifted along...with that in mind I started overthinking too much and asked myself why werent there buyers to come in strongly? I thought to myself, maybe the market wants to go lower....so next day I came in with a different theory on TF.
bmaL52u.png


I figured today we would break below the red flag support to fake out the dip buyers into white area support on the notion that gold/bonds, dollar, Nikkei and yen were showing pretty big movements....and then bounce strongly.....
SFsJ4Rc.png


I noticed TF was having a hard time making a new high on short timeframe and that was the bearish clue and confirmation that my theory would play out. So I shorted near arrows...but every goddamn time I shorted, it kept holding. As it came closer to the 3:30ramp, I was wondering why in the earth TF is not going down.... of course I was almost deluding myself of seeing how the trend to upside was just building(notice MA starting to break out of chop and hold) because instead I was thinking I would see selling come in anytime now.... Then as price came back near highs for the eleventh time, I finally gave up and as it broke key resistance, it was time to join TF on the other side even though I did hesitate for a few minutes and got out way tooo early.
2IM9iFG.png


So this is my problem....maybe its impatience or the belief that the markets can do anything so I get wishwashed out. I tend to be very early in levels with "smart money". However, when the market doesn't just react right away or drifts along like yesterday, I start overthinking too much of "Oh what if I am wrong" "Maybe the tape is clueing in that I am wrong"......but then today the tape was clearly bullish but I WAS totally LYING to myself. What do I need to work on?
More...

You should work on knowing how to read price action... Price was making higher highs giving you clues that it was not trying to go down.. I recommend you back test a strategy before going live.. Catching tops and bottoms is a dangerous strategy and the market loves when rookies try to do this .. Paul Tudor Jones has a much larger account then you and he probably does not trade with stops because of his large positions.. So stop trying to copy his strategy..
 
eganon69 said:
When the market is going against you on a trade it is ALWAYS wise to reevaluate the trade. BUT the key is to reevaluate it with "virgin eyes". What I mean by that is to look at it usinge EVERY single criteria you use to make sure the trade is likely to go in your direction. If all of those parameters/rules do not still hold true then you may need to exit the trade. However, its also wise to reevaluate the trade to see if the opposite is true. Just because the stock is no longer a BUY based on your rules is it necessarily a SELL?? Often times it is just a HOLD. That is where patience comes in. As the trade turns further against you you will typically have more and more SELL signals. The issues I see in your trade descriptions are that you were second guessing and trying to THINK what the market is doing to trick you. You were not actually following what the market was TELLING you. In fact, I can NOT understand WHY you would think the market would go lower at your red arrows when you were at the bottom 10% or so of a trend channel with a downtrend line (From Friday to mid day Tues) being tested repeatedly at the time of your short trades. In addition, the red arrows are showing tops of a rising wedge on the 5 min chart from Tues 7am to 11 am. Again, another bullish formation..... In addition, just prior to that you see large volume buying around 6:30 am with a capitulation bottom and then immediately followed by a inverse H&S BOTTOM between 0630 and 0845 on the 5 m chart......again a BULLISH signal, Everything I see on this charts suggests that it was best to be LONG not SHORT. Could price break to the lowest edge of the RED sideways channel and prove you wrong? YES but chances favored going higher when prices were testing the Friday to Tues downtrend at the same time as forming a rising wedge at the lower 10% of a sideways trend channel immediately after seeing an inverse H&S formation this morning. I would have been LONG and tried to remain PATIENT!!! I often have same issues where I see changes and because I can get in and out in an minute I need to realize that big money players take time to form their position. Even though they have tipped their hand sometimes I need to wait a bit longer for the trade to mature because the BIG ELEPHANT (BIG MONEY) takes time to move. Best is when it goes immediately in my direction but many times I need more patience.

So my advice is to constantly reevaulate your trade and add HOLD as a potential choice not just BUY or SELL. You also need to step back a bit and realize that multiple timeframes matching help. Just because a shorter timeframe goes against you the longer timeframe is likely the correct one. BE PATIENT. DONT THINK what you THINK will happen. TRADE WHAT YOU SEE!!

Good Luck,

Eganon
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Hi Eganon, thank you for the advice. The virgin eyes method seems like a good tip, and I will take that into my analysis for every trade from now on.

Now I want to argue with you in terms of the technical picture. I don't see much of a valid trendline in regards to the "downtrend line (From Friday to mid day Tues)" Normally I need to see at least 3 touches and clean reaction before I consider it valid. Maybe we have different charts, but I don't see the downtrend line u were talking about...I might edit this later and show what I am seeing.

And in regards to your question of why I think the market was going lower was due to the weak bounce we got the day prior. I was part of the "smart money" getting long and as you can see it clearly tests that white line support many times. But I overthought too much like u said and when there wasn't strong follow through the day prior, I overthought too much and screwed myself over. (Much like Pete Carroll during SuperBowl by throwing the ball at the goal line as well as Dan Quinn being aggressive on the 4th quarter)

" the red arrows are showing tops of a rising wedge on the 5 min chart from Tues 7am to 11 am" -Can you show me what you are seeing? I dont see it.

"In addition, just prior to that you see large volume buying around 6:30 am with a capitulation bottom and then immediately followed by a inverse H&S BOTTOM between 0630 and 0845 on the 5 m chart......again a BULLISH signal," Well the large volume was because it was the open. and yes I did see the small inverse H&S pattern. That to me indicates it wants to go higher short term not necessarily thats the big clue its gonna go higher and higher.

And yes, I always start at the bigger time frame in doing analysis. If only TF actually bounced the day prior instead of taking its time to chop around :p But thank you for your advice!
 
systematictrader said:
U remind me of the days when i was discritionary swing trading i was always early and whenever i got out of something it moved my way, the only thing i notice from your oost that i can comment on Is that it seems like your doing too much thinking, simplify your process or rules if possible aomthat your not taking too mich of the burden, if possible!!!
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Agreed. I've learned from Pete Carroll and Dan Quinn in how much overthinking screws them over. Gotta stick with consistency and logic.
 
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