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

heavenskrow

heavenskrow

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?
 
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
 
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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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!!!
 
As a swing trader I need to see price break out of congested areas before taking the trade. AAL (American Airlines) forms an 11 week rectangle. The last bar clears 11 weeks of congestion, with the last 7 weeks being inside bars before the breakout when 11 weekly bars are taken out - that is when I entered. Every trade is similar - waiting for price to break out of congested areas. Just be aware of bull/bear traps which also provide great trading opportunities.





AAL.PNG
 
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heavenskrow said:
I have. It is an amazing book. "Anything can happen" fucks me over.
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They write books because they have a harder time trading. I'm not saying that authors do not provide usable information. But, I am saying that the usable information has been in print umpteen years before their rediscovery of the winning trade. :)

I do have a question for you though, Why do you have moving averages on your chart?
 
I think you can be grateful that you are early and not late. That means you have a "good eye" for trades. All you need is some patience, and posting these proves that you are willing to be patient.

Nevertheless, being myself an algorithmic trader, I don't quite understand why these problems arise. If you have a well-tested strategy, and you are following it, you are never early or late. You are just following the rules you know that give you a statistical edge. Sometimes the market will move after you are out of it, that's true, but that doesn't have to matter to you because your strategy is not supposed to catch that movement of the markets.

I don't know if you agree with me in this. I would like to know.
 
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