Birth of a trader

Frank, first of all, good job: that's the way to learn, being methodical.

Second, regarding what I mentioned to you on the CL thread about plotting your targets and stops in the chart, if I recall correctly (sorry, I'm too tired right now to annotate a chart - it's midnight here in Europe), your first two trades you had your target a few ticks above the HOD (and your stop in the middle of the chop). In my view that's not a good place for a target because the market has to break through an important resistance level and then, if it does, you only get a couple of extra ticks. It makes more sense, imo, to either place the target a few ticks before the HOD (or LOD), if you expect it to hold, or 15-25 ticks (or whatever) beyond the HOD (or any important S/R level) if you expect it to break.

Also, I think it was in your first trade, your stop was .53 and a couple of bars before there was a swing low at .51; in my opinion, it would have made more sense to place your stop a few ticks below that low (in that particular case it would have held) or, if you're getting in late (as it appeared to me that you were getting in sometimes) use a way tighter stop.

Tighter stops are the way to go, <u>IF</u> you enter in the precise moment. If you await for any sort of confirmation, get in a bit late or get a bad fill, tighter stops will kick you out of many good trades.

Having a tentative fixed target and stop is fine for convenience, but consider the price action, the volatility/ATR and always ask yourself: am I placing this stop in a place where I would want to start a trade in my original direction? As for the targets try to place them right before the S/R levels; if you want more ticks out of a trade, then gun for the second S/R level, but don't just place targets in the middle of nowhere, because either they will stand little chance of being reached or, when reached, the market will probably keep on going ("now it looks like a runner") and you'll leave money on the table.

Disregard anything you disagree with, indeed, but think about it.

Go get them!
 
Quote from Picaso:

Frank, first of all, good job: that's the way to learn, being methodical.

Second, regarding what I mentioned to you on the CL thread about plotting your targets and stops in the chart, if I recall correctly (sorry, I'm too tired right now to annotate a chart - it's midnight here in Europe), your first two trades you had your target a few ticks above the HOD (and your stop in the middle of the chop). In my view that's not a good place for a target because the market has to break through an important resistance level and then, if it does, you only get a couple of extra ticks. It makes more sense, imo, to either place the target a few ticks before the HOD (or LOD), if you expect it to hold, or 15-25 ticks (or whatever) beyond the HOD (or any important S/R level) if you expect it to break.

Also, I think it was in your first trade, your stop was .53 and a couple of bars before there was a swing low at .51; in my opinion, it would have made more sense to place your stop a few ticks below that low (in that particular case it would have held) or, if you're getting in late (as it appeared to me that you were getting in sometimes) use a way tighter stop.

Tighter stops are the way to go, <u>IF</u> you enter in the precise moment. If you await for any sort of confirmation, get in a bit late or get a bad fill, tighter stops will kick you out of many good trades.

Having a tentative fixed target and stop is fine for convenience, but consider the price action, the volatility/ATR and always ask yourself: am I placing this stop in a place where I would want to start a trade in my original direction? As for the targets try to place them right before the S/R levels; if you want more ticks out of a trade, then gun for the second S/R level, but don't just place targets in the middle of nowhere, because either they will stand little chance of being reached or, when reached, the market will probably keep on going ("now it looks like a runner") and you'll leave money on the table.

Disregard anything you disagree with, indeed, but think about it.

Go get them!
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When I was trading the 1 minute charts I would think about these things - never go long under resistance or short above support. I would try to draw S/R lines, daily highs and lows, pivot points, etc. However, I'm embarrassed to say that since I started trying to trade on price alone, I have been so fixated on price and trying to understand it, that I have completely neglected this consideration. You're 100% correct, and looking back at some of my trades, I can see where mistakes were made.

I still didn't get it when you mentioned it in the thread. I was thinking, heck, I've got a target in mind. What's he talking about?

Thank you for pointing this out, and if you'd be so kind as to point it out to me several more times when needed, I'd be grateful.:)

Get some sleep.
 
Today I threw caution to the wind, along with a sizable chunk of my brain. I made 8 trades and lost 51 ticks. Previous admonitions regarding putting more thought into choosing targets and stops went largely unheeded, and the results reflect that.

Several of my losers were correct trades, but ended up being losers because of poor trade management, incorrect stops and/or targets.

Once again I was torn between scalping out a half dozen ticks or so, or letting the trade run. I suppose that unless I give more thought to targets and stops, what I'm really doing trading price action is scalping with unreal expectations.

There's at least one trade here that I didn't post with the group because I was in and out before I could even click the post a reply button.

So ... here's my take on the day. Let the flaming begin.

Oil was due to open with a sizable gap, however the trend for the previous 2 hours had been down. I was looking for a test of the open, with thoughts that if the opening price failed to hold, the gap might be closed with a huge down move.

Trade #1
06:46 - Oil surged up 27 ticks on the open, then started to give it all back. After spending most of the previous 2 hours under the 20 EMA line, I was looking for that underside bounce off the bottom. I went short at 75.44 without waiting for the bar to close. I can't say for sure that I would have done things differently since that 06:45 bar ended up so strong with a shaved top. The trade was a loser in either case. Out 15 ticks.

Trade #2
06:55 - The bar that took me out on the previous trade turned out to be a shooting start that closed below the 20 EMA. This fueled my belief the market was heading down, and I went short at 75.45 right at the open of the next bar. I like this trade, and even though I was stopped out for another 15 ticks, I'd do it again.

Trade #3
07:11 - After 2 failed attempts at going lower, I realize the market is heading up. That's the smart part. The not so smart part was I didn't wait for this bar to close, but got in long at 75.53 just 1 minute after the open AND with a 10 tick stop. My intent was to scalp 15 ticks with a tight stop. I was stopped out with 1 tick of slip before the market reversed and soared up. Had I continued to use my 15 tick stop and let the trade run, it would have turned out differently. Another case of being right and wrong at the same time. Out 11 ticks.

Trade #4
07:30 - I didn't go long on the 07:20 bar even though the previous bar was very strong because it was approaching the opening high which failed (see, sometimes I do think about S/R). When the market blasted through that on the 07:25 bar with a nice strong bar, I went long at 76.14 immediately at 07:30. Unfortunately, I forget to adjust my target and stop from the previous trade and only ended up with 15 ticks.

Trade #5
07:45 - It's always nice to see a gravestone doji at the top of a big run. I waited 1 more bar for confirmation and entered short at the open of the 07:45 bar at 76.32 and was immediately rewarded with about 10 ticks in my favor. I looked at my poor man's MP plot and it showed a support level around 76.19 which was above my target (thinking again) by 7 ticks. However, my brain assured me that this pullback would be at least 20 ticks so I only creeped my stop to BE+1, and that's how it ended. Up 1 tick. The low of the bar was indeed 76.19 - what luck.

Trade #6
08:11 - Now this trade was a calculated risk, and falls in the category of trying to catch a falling knife. The trend was up big, and that 08:05 bar broke the trend line. My thinking on this was, "What a great long entry!", just like yesterday. The only difference was it was a reentry yesterday, and today it was part of the pullback. Went short at 76.27 and lost 6 ticks.

By now I'm having some doubts about how the day is going. My intent was to trade the touch of the 20 EMA for a long play, and the TOP indicator was showing some support around the 76.05 area. However, when I got the touch I had been waiting for at 08:20, it was off 4 strong down bars and I was too intimidated to take the trade then. I decided to wait 1 more bar, but even that green bar didn't convince me. I guess the lesson here is to stick to your plan.

Trade #7
08:52 - After the big 48 tick drop at 08:45, I saw things differently. The 4 bar bounce off the 20 EMA was now looking like the first pullback in a new downward trend. I entered short 76.02 at the touch of the 20 EMA from the retrace of that big drop and kept my stop tight at 10 ticks. I was stopped out as that bar retraced about 75%. There would have been a small scalp trade here had I waited for the bar to close.

Trade #8
09:25 - After seeing the failed short play I watched the next 3 bars make higher highs and higher lows.When the 3rd bar closed above the 20 EMA I went long at 76.06 and was stopped out at 10 ticks.

Today I didn't feel like I was 'in the zone'. My biggest mistakes I think were to not wait for the close of the bar for confirmation of the trade, and not being consistent on what I was trying to do - scalp or momentum trade. I think I also need to be more aware of the big picture. I've got my fingers crossed that this comes with time and hard work.

When I first started training for an instrument rating as a pilot, I was totally overwhelmed with all the data I had to keep track of to control the plane without looking out the window. But after many hundreds hours of training, it became quite easy.

Maybe just a few thousand more hours of practice and I'll get this too.

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Quote from frank8800:

Today I didn't feel like I was 'in the zone'. My biggest mistakes I think were to not wait for the close of the bar for confirmation of the trade, and not being consistent on what I was trying to do - scalp or momentum trade. I think I also need to be more aware of the big picture. I've got my fingers crossed that this comes with time and hard work.

When I first started training for an instrument rating as a pilot, I was totally overwhelmed with all the data I had to keep track of to control the plane without looking out the window. But after many hundreds hours of training, it became quite easy.

Maybe just a few thousand more hours of practice and I'll get this too.
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Frank, you have a good point about deciding what you want to do, scalp or choose reasonable profit targets based on joining the group that exerts control over price.

If you want to scalp, I think it's best to scalp a piece of an ongoing momentum move, to help ensure you can get price movement quickly in your favor (my first trade today we discussed was based on that concept because my initial order was left in the dust unfilled, so I used a 1-min chart for a late entry confirmation and scalped 11 ticks instead of my usual target of 20 or better).

I think you'll be much more satisfied with your results by entering a move off a price pivot and letting the price action take you into the move, and targeting a break of the next S/R level to be tested. These are almost always moves of 20 ticks or better except during low volume ranges, which is when you should absolutely not leave your desk for any reason because if you do you'll miss the Move of the Day. :p
 
Quote from NoDoji:

Frank, you have a good point about deciding what you want to do, scalp or choose reasonable profit targets based on joining the group that exerts control over price.

I think you'll be much more satisfied with your results by entering a move off a price pivot and letting the price action take you into the move, and targeting a break of the next S/R level to be tested. These are almost always moves of 20 ticks or better except during low volume ranges, which is when you should absolutely not leave your desk for any reason because if you do you'll miss the Move of the Day. :p
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Thanks again, NoDoji. I thought a great deal about what you said and have looking at charts with a new perspective.
 
Back with a different perspective:

Up 11 ticks on 3 trades. Managed to avoid most of the whip and come out in 1 piece.

I saw the 70 tick premarket rise when I booted up this morning, so I was predisposed for long, with-trend trades. The consolidation after that big rise almost got me. I was waiting for a breakout long, but the 05:30 bar was a surprise to me, so I just watched. There was a bounce off the EMA, then 4 bars of trend back up. The slope was steep, so had there been a decisive break from that trend, I would have tried to go short.

Trade #1
Price bounced off the EMA 3 times. On the first bull candle, I put in an order long at 82.04 and was filled on the retrace of the next bar. I didn't like the way price was reacting (should have gone higher faster), so I moved my stop up to BE-2 and was taken out. I had the chance to get out BE+1, but spent too much time thinking about it. -2 ticks.

The next several bars were big bear bars. The 06:50 and 06:55 bars had the same low, so I was waiting for a reversal candle.

Trade #2
After the bull 07:00 bar, I entered an order long at 81.37, just a few ticks below the close. I'm still trying to figure out a good entry for these things. I was filled on the retrace of the next bar. This is another good example of how trading 2 contracts would be better (but I'm not there yet). Got out +12 ticks, then price moved up another 40 ticks! +12 ticks.

I watched price bounce off the EMA and wanted to go short, but it was moving too fast. Put an order in short at 81.62 after the 07:25 bar closed, but wasn't filled.

The 07:35 and 07:40 bars formed a double bottom, but I don't like it when the bear candle's tail is longer than the bull candle, so I passed on it. Got lucky, because I probably would have been stopped out on the next bar.

Price started getting whippy around the EMA, so I just watched.

Trade #3
After the big surge up through the EMA by the 08:10 bar, I was looking for another opportunity to go long. The next bar was a small, bear bar that did form a HH and HL, so figuring the trend was resuming, I went long 81.80 on the close of that bar and was filled on the 08:20 bar. After 8 ticks I moved my stop to BE+1 and was taken out on the next bar. +1 ticks.

Decided to call it quits for the day.
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A very whippy day. Slightly biased at the open for long trades because of the overnight action. When the 05:25 bar hit the high of the 04:50 bar and formed a double top, I was thinking short. The next bar formed a LL, but it bounced of the EMA and price was so close to the EMA and in an up trend, I decided to pass on the trade.

The next 90 minutes or so price whipped around the EMA with big tails, so no trades.

The 07:05 bar was a huge surge, and I thought the up trend was going to resume, but while waiting for a pullback entry, price kept dropping to below the EMA.

Trade #1
Even though the 07:25 bar was green, it did form a LL and LH, so I shorted 3 ticks above the close with a tight stop. I got a few ticks to the good and immediately moved my stop to BE + 1 where I was taken out. +1 tick.

Price continued to climb after that. and after the 07:50 bar I drew a trend line. I was looking for price to challenge the 07:05 bar high, and it did go right past that.

Trade #2
The 08:00 and 08:05 bars showed there were now buyers, and both bars hit the trend line I drew earlier. I went long 83.10 at the close of the 08:05 bar. +20 ticks.

I didn't see the price hitting 83.38 three times in a row until after my review. In all honesty, even if I had noticed that, I should have also noticed the sloppy right triangle price was forming and then expect a break out long.What I was looking for was a strong break of the trend line down,or another push up.

Trade #3
The 08:45 bar was a strong break down, but it didn't go past the EMA. I was expecting it to test the high on the next bar before continuing down, and place an order short at 83.26. In hindsight, this wasn't very smart. It just worked out because the day was so volatile. +10 ticks.
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What happened to your stochastics?

I would also suggest adding a momentum ocillator.

Nice clean chart.
 
Quote from Yme:

What happened to your stochastics?

I would also suggest adding a momentum ocillator.

Nice clean chart.
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Dropped 'em. Trying to trade off of price and volume only. There were times when the stochastics worked like magic, but they (like all indicators) give false signals from time to time. That was killing me, trying to decide if THIS signal was the real one. Then I'd have another indicator that would confirm the first indicator, and so on.
 
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