Birth of a trader

Some technical snafu's today and a repeated mistake from a prior day.

Trade #1

Trade entry was perfect, and I was waiting for a test of the 92.57 pivot low, which I got. Moved my stop to BE+1 where I was taken out on a retrace. Only would have had 3 ticks of heat. I think watching a few more 80+ tick moves slip away from me because of <fill in the blank> may help me see the light of leaving my stop alone. +1 tick.

I didn't really see another entry for me as price dropped. Price bounced off of 91.46 which was yesterday's low. I was expecting a retrace to the 92.19 area which was just under a 50% retrace from the high, but I didn't want to do any counter trend trading so I just watched.

Then I switched to the 3 min chart and my heart sank as I saw the beautiful waves CL made on the way down. There were 2 additional nice opportunities that I missed.


CL made a big move up to the 92.19 resistance, then fell back and regrouped for another push. After pushing up past resistance, it made another less convincing leg up at 08:50, then had a big red candle down past previous resistance (now broken support) and closed under the EMA on high volume. The next candle was a small inside bar.

Here's where I over-thunk the situation.

Trade #2
I viewed the 08:55 candle as a trend line break that also broke support. I was waiting for a leg down, and switched to the 3 minute chart and started trailing my stops (see inset). I was filled at 92.14 and stopped out. -10 ticks.

Switched to sim and took another trade, but left my stop in place. Had 6 MFE before being stopped out.

Overall I was reasonably happy with the day. I was patient and took the trades. I didn't see any trades on 6E.

My plan for the remainder of the month is to do my best not to counter trend, and to take only 1 setup - all of them. Then I'll address trade management, which I clearly suck at.

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Something you might want to try, trade 2 mini crude oils, take profit on one for 3 tics and leave stop on other at risk till market goes your favor by 20 tics.

I just don't switch charts, you can always find some chart that gives you an entry and before you know it, you have several charts going. learn how to trade one before adding others to get more signals. If you had nailed the big one, you could have walked away.

There was much resistance at 92.40, that was area to sell it risking a nickel or below 9:50 low for a scalp.

Using NoDoji's just selling new lows of the day worked very good.
 
Not as focussed as I should have been today, but took some nice trades and I'm happy with all of them, even though today was a negative day. Because of my lack of focus, I did miss some trades.

After reviewing past trades, I've found that I hardly ever take more than 8 ticks of heat, so today's goal was to put on the trade, hold the trade until the close of the entry bar, then trail the stop down. I did succeed in that today.

Trade #1 6E
I saw the setup for this as soon as I got in, quickly checked for news then put on the trade. After the entry bar closed, I moved my stop down to 1 tick above and stopped out on the next bar. My original stop was 8 ticks and I tightened it to 5. I would have only taken 7 ticks of heat had I left my stop alone. -5 ticks.

I thought about getting back in to that trade after getting stopped out, but would have liked to see a green bar in there somewhere. There were no other pullbacks until the very end.

The move from 08:00 - 08:15 broke the downtrend line and the latest pivot low, telling me that a new uptrend was coming. I saw the pullback at 08:35, but didn't act on it because the trend was down and going long under the EMA (and that close to it) was hard for me. That would have been a nice trade.

The next pullback opportunity came and I passed on that one too, because it was adjacent to all those parallel bars, indicating to me an area of resistance.

Trade #2 6E
When 6E broke through that resistance area and began another pullback, I went long. I was determined to play this one right. I had an 8 tick stop and trailed my stop up where I was stopped out 3 bars later. I thought the trade might fall apart when the 09:35 bar failed to make it to the top of the trend line. +4 ticks.

I saw that triangle forming, but had to leave the office.

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On the CL side, I had a sell order in at 05:10 but canceled it when the doji formed. I don't like taking signals from them.

I got distracted for about an hour after that and missed the signal at 05:40. In hindsight, I see others, but at the time I was looking for specific candle formations.

Trade #1 CL
After the small inside bar at 07:10 I placed a stop sell 1 tick below. I was filled on the lowest tick of the next bar, then stopped out. Unfortunately, I'm not yet nimble enough to see that I should have gotten back in. -8 ticks.

Overall not a bad day. Didn't counter trend trade or move my stop too soon. I'm trying to keep yesterday's lesson in mind.

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One of the patterns that occur a great deal in most markets is called "overlap", except does not happen as much in Crude Oil. I do this all the time in currencies and Indexes. I wait for a signal, then price breaks out of the area, where many of newbies and younger traders enter, then place an entry at a little better price cause the market is generally going to come back to nab the "weak hands" for small losses and breakeven stops. This is what is continually happening in your trading. You are selecting good trend trades, but at least half of them get stopped out for a tic plus/minus and price leaves without you. Of course there will be times when market does not retrace back and you have to find other pullbacks for entry, but more often than not, at beginning stages of a new trend, more overlap happens and less so in middle of the trend.

Perhaps you have enough past trades for trend to backtest this and see if this works for you.

What I repeatedly see in your trend trades in crude oil is your entries are way beyond after the market has moved in one direction. From the highs of 3:30 approx to the lows before you took your loss of 8 tics, Crude had gone $2.20, the big move has already been made. Only way I would consider making this type of trade is waiting for price to breakout, then pullback till you would have been stopped out, then put on the trade, sort of like a slingshot.
 
Quote from Handle123:

I wait for a signal, then price breaks out of the area, where many of newbies and younger traders enter, then place an entry at a little better price cause the market is generally going to come back to nab the "weak hands" for small losses and breakeven stops.
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Interesting, I thought about that stuff too: I came to the conclusion that if you wait for the price to retrace a bit you're going to miss the BEST moves that do not retrace and keep chasing an entry.

Do you think that overall it is better to wait for a small retrace and giving up entries in stronger swing ?
I understand that you're keen on backtesting so you may give us your insight on what the best entries are :)

Thanks to all for your valuable comments, much appreciate this journal.
 
Quote from Handle123:

One of the patterns that occur a great deal in most markets is called "overlap", except does not happen as much in Crude Oil. I do this all the time in currencies and Indexes. I wait for a signal, then price breaks out of the area, where many of newbies and younger traders enter, then place an entry at a little better price cause the market is generally going to come back to nab the "weak hands" for small losses and breakeven stops.
More...

Giving out trade secrets now, eh? :D

I started doing this pretty regularly lately. I call it the "second mouse" entry. The risk is possibly missing a move, but as you said it works especially well in a new trend and out of low volume ranges where there are many false breakouts before the real move transpires.
 
Quote from Handle123:

One of the patterns that occur a great deal in most markets is called "overlap", except does not happen as much in Crude Oil. I do this all the time in currencies and Indexes. I wait for a signal, then price breaks out of the area, where many of newbies and younger traders enter, then place an entry at a little better price cause the market is generally going to come back to nab the "weak hands" for small losses and breakeven stops.
More...

Excellent point.

I had to comment on this since it is something I discovered by my own experience lately.

Far too often I find myself being right on the direction of the market, but I execute too early since I`m afraid of missing a move and then get stopped out. I keep telling myself that "this time it`s different", but in most cases, there is always an opportunity to join the movement at a better price, with better R/R and more conviction (since you may see price actually closing above the current level).

Bars usually have some overlap, so there is no need to buy the high of the current bar. Look to enter on retracements within bars. That is, on a micro level, not just the macro level.

I remember reading somewhere that when a neophyte trader wants to execute a trade at a certain price level, he should instead look to execute his trade where he initially planned to place his stop for that trade. Maybe there`s something to it :)
 
Quote from Laissez Faire:

I remember reading somewhere that when a neophyte trader wants to execute a trade at a certain price level, he should instead look to execute his trade where he initially planned to place his stop for that trade. Maybe there`s something to it :)
More...

Looking through my notes this weekend, I found out that it was NoDoji who wrote this in her journal. If I may, NoDoji:

"That's when I started entering trades around the price zone I would've placed a stop had I entered when I first thought I'd miss the move."

:)
 
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