Birth of a trader

[NoDoji]

Quote from frank8800:

I normally wait a bar for confirmation (not sure why I didn't today),

If it makes you feel any better, I sold a low tick early this morning because I didn't wait for price to confirm an entry by placing a stop order at the proper level. Amazing how that 1 tick made all the difference between a winner and a loser.

Quote from frank8800:

Even so, that second lower high had me thinking the long side was done for awhile. I need to keep an open mind about these things.

How soon after you reach 20 ticks in profit do you move your stop? And does it depend on your profit target?

I, too, had a short bias (surprise, surprise) at that point because of the 2 lower highs, but I waited for that move to run through the resistance levels first, because of the higher low (triangle forming). If it kept going, I'd have my buy stop ready to buy the breakout of the high, but other than that, I was watching for another lower high or fbo to short.

If I put on a counter-trend trade, or if my 20-tick min profit resides near a major S/R level, a range high/low or a trend line, I'll lock in 20 ticks pretty quickly. If it's a with-trend trade, I often leave my stop at b/e until the profit target zone or 30+ ticks is showing, at which point I will lock in the 20-tick minimum. I had a trade today that went 27 ticks in my favor, but my target was somewhere farther away and I let it go all the way back to a b/e stop out. I wasn't too happy about not locking in the 20 ticks, especially since price came back and gave me another chance to do so, but it was my choice however dumb, and with CL there's always another boat of opportunity coming along

 

[frank8800]

Mixed feelings about today. My rules kept me out of the morning chop and news cycle, but they also kept me out of a winning trade.

After the oil report, the 07:40 and 07:45 bars formed LH's and LL's with a close under the EMA, but the overlap was too much for me, so I passed on the short trade. So I watched the price fall 70 ticks and was trying not to get discouraged about it.

Even during the drop, there was still lots of overlapping bars, so I switched to sim.

Trade #1
After a drop of 100 ticks, it looked like it was ready for a retrace. Placed a stop order at 80.85 after the close of the 08:30 bar and was filled. Had a hard target and got it easy. +25 ticks.

After that, I was feeling a little better and switched to real money.

Trade #2
Price topped out and started forming a triangle. The overall trend was down, but the recent trend was still up. I was going to target 15 ticks to the EMA and after the close of the 09:10 bar, put my order in at 81.39 hoping to get another failed push high and a good fill. I was very nervous about taking this trade because everything was so whippy and it was close to the EMA, so I moved my stop to BE+1 after about 4 ticks. I was stopped out, then price ran down to the EMA for the 15 ticks I was hoping for. +1 tick.

This bummed me out, because I had a plan that worked, and didn't stick to it. Same thing happened yesterday. Took a deep breathe and moved on.

Trade #3
Price bumped off the EMA, but without any enthusiasm. The 09:40 bar made a LL and LH, and the next bar was a big bear bar that closed under the EMA. I waited 1 more bar for confirmation, then when the 09:50 bar closed under the EMA, I went short with a market order on the next bar for a full stop. -11 ticks.

Switched back to sim.

Trade #4
Same thing as the last trade. Got LH and LL with a close under the EMA. Went short and was stopped out. -11 ticks.

After reviewing the chart, my only observation is that on trades 3 and 4, the EMA was flat and I was just in a range and didn't see it.

And as for that giant run at the end, I don't have a clue as yet how to play that, other than jump in. Even the 1 min chart barely gave you a pullback entry.

I looked at putting the trade markers on, but I thought they were hard to read.

 

[FirstDegree]

Nice trade on Trade 1. I didn't even see that one or know how to get in. It was a quick V reversal.

Trade 2 you're playing in a very tight range, barb wire. You really want to stay away from them. Don't try to guess where or how it's going to break out of the pattern. Wait for a signal that tells you. Sometimes you won't get a signal; therefore, no trade. Maybe the signal here was the doji, price is tightening up into a coil. You have up, down, up, down, expected up, but it doesn't close as an up bar, so you short 1 tick below the low and target the EMA.

Now you're starting to get into the middle of the afternoon where bars just tend to have a mind of their own. It kind of looks like you're shorting at the low of the range. That is a big thing to avoid. I've done it too. The biggest thing is recognizing the range. If you want to short, I would short at 1 tick below the low of that small doji bar, 81.11.

Trade 4 you're basically fighting the reversal. That doji bar is a big reversal signal or at least should make you suspicious of a reversal. It made a big push to go lower out of the channel's range, but failed. This is more of a long signal than a short signal. It also made a higher low from the low of the day. The problem I had with the trade was that it was so close to the EMA and it still had the looks of being in its range at this point.

As far as the end of the day run, I went long at 81.41 off a break of that doji's high. It pulled back on the 1min to the EMA (and was above the EMA on the 5min), there was another higher low 2 bars prior, and if it was still stuck in its range that doji bar would have probably been more of a bear bar. At the time it had poked its head up and then went lower, but failed to close on its lows.

I just traded that in SIM and got +30.

I'm sure NoDoji can come in and explain more with the resistance levels and what not.

 

[NoDoji]

Quote from frank8800:

And as for that giant run at the end, I don't have a clue as yet how to play that, other than jump in. Even the 1 min chart barely gave you a pullback entry.

There was repeated resistance at or near 81.40 at 10:35am ET, 11:35am, 12:10pm, 1:00pm, and 1:05pm. A flag formed between 11:55am and 12:55pm, broke slightly upside, then broke slightly downside. Price then left a a lower high @ 81.30 (1:25pm bar), likely attracting short sellers, since the upside channel break failed. Finally, with the close of the 1:40pm bar, the flag channel pattern (lower highs/lower lows) breaks down as a higher low is put in.

The early longs are in off the 1:15pm bar close. The next round of longs are in at the break of the 1:35pm bar high. The longs are all OK here and the shorts are getting nervous if price breaks that 81.40 resistance zone. You can bet many stops are there, likely enough to drive price at least to 81.48.

FD, great call on that one. I didn't notice till after the fact there was the 81.48 R level to be tested, nearly guaranteeing a heat-free trade. That's what I get for not just placing the damn buy stops in advance. That was one of the highest probability setups I can think of. Now stop cutting your winners short. Am I a bad influence?

Frank, ditch the hard profit target. You can always lock that in, but don't limit what the market is willing to offer. Next resistance on that very nice counter-trend trade (though your entry was a bit late) was 81.38 (also an upper resistance trend line level). That's where you should you consider taking profits if it stalls.

 

[frank8800]

Lot's of opportunities today, but I only scratched out lunch money. I let the 05:30 news keep me out of a great long trade, and after my first trade I fell asleep at the switch and missed a great short. There were 2 shorts I had limit orders in for that didn't get filled because I was being too cautious. Oh well.

Trade #1
After the run up and double top, price dropped through the EMA and consolidated in a triangle (drew the bottom trend line). Price broke out big and pushed up through the EMA. I thought this would be the 3rd attempt at a high (3rd time's a charm), and I put a buy stop at 82.32 which was the high of the previous bar. Got filled, got 8 ticks, got BE+1.


Trade #2
After the big drop and hammer at 07:50, I was expecting a long trade. Went long at the close of the 07:55 bar. Right idea, just too soon. +1 tick.

I saw the triangle forming and was expecting a breakout to the flat side, but it was so close to the EMA, I didn't want to go long.

Trade #3
After the big run, I was looking for a long trade. The 08:35 bar had HH and LL and I went long at the close. I kept a very tight watch on it because it was a counter trend bar, and as soon as I was able I went to BE+1 where I was stopped out.

 

[frank8800]

Feeling pretty good for someone who hit his daily loss limit. I broke some rules and got burned for it - which is a good thing.

Saw price run up, stall, then make a second stab at breaking 81.85. This was the HOD, and I wanted to buy that.

Trade #1
I meant to put a buy stop 2 ticks above the high, but I submitted a market order and was filled at 81.80 and was immediately down 4 ticks. While I was debating with myself whether to go flat or try for a break even, I was stopped out. I've done this to myself countless times on sim while I was learning NT, and one of my rules is to read the $%^ing message before clicking OK. Broke that rule. New rule - if you're unhappy with a trade, just get out. Immediately. -11 ticks.

Trade #2
This is a combo of broken rules. I traded during the 05:30 news, and I rationalized it to myself that I gave up a valid, profitable trade yesterday because I didn't trade during the news. I also shorted this uptrend, right above the EMA. All very stupid, and I'm glad I was stopped out. If you break a rule and it works, you'll be tempted to break it again. To further add to my broken rules/stupidity, I didn't wait for a confirming bar after the close below the EMA. Thank you sir, may I have another? -11 ticks.

The market was making new highs and I wanted to be in on it.

Trade #3
The 05:50 bar broke resistance and closed above that 81.85 level. I targeted a pullback to 1 tick above support and got a great fill at 81.86 which was the low of that bar. At this point I thought I had a tiger by the tail, but the next bar retraced and took me out at the low if its bar. Fitting, I guess. +1 tick.

Trade #4
Not willing to leave it alone, I targeted a pullback to the 05:50 outside bar and trend line support at 81.95 and was filled and stopped out on the trend line break. -11 ticks.

At this point I hit my daily loss limit and debated doing 1 more real trade, since the first trade really was an accident. Decided to go to sim.

Trade #5
Did what I was supposed to do. Waited another bar after a close below the EMA. I opted to cancel my hard target of 25 ticks and manage it manually. +21 ticks

Trade #6
With the 2 hammers offering support, I went long at 81.67. This trade was actually another mistake, since my intent was to place a buy stop 1 tick higher at 81.68. I managed this stop manually. +7 ticks.

Trade #7
Was looking like the up move was done. Shorted 81.66, got 8 ticks and BE+1.

At this point I had some office work to do, so I stopped watching. Looking back, I probably would have been stopped out of the short on the 08:20 bar, and hopefully would have been smart (or lucky) enough to take the next short at the 08:30 bar.

This week I finished down 18 ticks in real trading and up 43 ticks on sim. For the month (only 2 weeks) I'm up 7 ticks real (-6 after commissions) and up 34 on sim.

I cancelled my hard target of 25 ticks in favor of letting the market give me what ever, and managing the stop manually. In hindsight, I would have had 2 sim trades for +50 ticks instead of +28. I don't have enough experience to see if it's better to take multiple 25 tick winners as opposed to getting big runners.

 

[FirstDegree]

Just a quick look at your trades, I was excited to see you took Trade 6. Then I looked in more and you bought at the pivot high. Think about buying 1 tick above the high of the higher low hammer bar, 1 bar prior to the big green bar. 81.58.

You would look to see it break above that pivot high. Once it gets there you can move your stop to +1 and ride it out. If it breaks that pivot high you now have extra momentum for it to go higher. You would then look for it to test either the previous breakout at 81.92 or a test of the high of the day. You could have targeted somewhere around 81.88 for a +30 gain.

As far as the previous trades, I don't trade pre-market so I really can't comment.

Trade 5 looked pretty good. Strong move down, close under the EMA, small doji pullback that couldn't find any direction and an internal double bottom.

 

[frank8800]

Quote from FirstDegree:

Just a quick look at your trades, I was excited to see you took Trade 6. Then I looked in more and you bought at the pivot high. Think about buying 1 tick above the high of the higher low hammer bar, 1 bar prior to the big green bar. 81.58.

You would look to see it break above that pivot high. Once it gets there you can move your stop to +1 and ride it out. If it breaks that pivot high you now have extra momentum for it to go higher. You would then look for it to test either the previous breakout at 81.92 or a test of the high of the day. You could have targeted somewhere around 81.88 for a +30 gain.

As far as the previous trades, I don't trade pre-market so I really can't comment.

I was definitely late to the party on that one!

I've got mixed feelings about using buy stops like that. I know NoDoji does this with great success, but my limited use of that method has cause me more stop outs than winners. I'm sure this is due to my incorrect usage, but I would place a buy stop, get filled, then stopped out on a retrace. I've discussed this with her, and apparently the key is to make sure there's some support between your order and your stop. I'm only first starting to see support and target levels, so that's something I'll revisit later. I'm still waiting for my 'ah ha' moment.

What I seem to have more success with is placing stop orders near support levels for longs, and letting price come back down for a test. (Opposite for shorts) Then I get filled at a great price. The downside to this is I tend to miss several trades when price doesn't quite make it.

 

[FirstDegree]

Quote from frank8800:

I was definitely late to the party on that one!

I've got mixed feelings about using buy stops like that. I know NoDoji does this with great success, but my limited use of that method has cause me more stop outs than winners. I'm sure this is due to my incorrect usage, but I would place a buy stop, get filled, then stopped out on a retrace. I've discussed this with her, and apparently the key is to make sure there's some support between your order and your stop. I'm only first starting to see support and target levels, so that's something I'll revisit later. I'm still waiting for my 'ah ha' moment.

What I seem to have more success with is placing stop orders near support levels for longs, and letting price come back down for a test. (Opposite for shorts) Then I get filled at a great price. The downside to this is I tend to miss several trades when price doesn't quite make it.

She plays a lot on momentum, breaks of levels where price has a good chance to make a move in her direction, but I don't want to speak for her.

The idea of buying bar breaks is to carry you into the trade. The idea of a survivable stop is a place where if price goes down to it, you most likely know you're wrong. If you just put your stop in the middle of a bar it's possible you'll get stopped out too early before having it go in your favor. I do that because I have a comfort level of 10 ticks where I really don't want to have to endure a bigger drawdown. It's not the best method, but that is what I have been doing, trying more or less to enter the setups where there is no retracement, or I get out early. I'm working on that as much as possible.

What you're doing with buying on limits sounds like you're sort of trying to enter by catching "falling knives" (when you go long). Such that you enter as price is coming back expecting a bounce. I don't know exactly how you enter as it would take a closer examination with knowing your seconds and cross referencing on the 1min chart, but you might be able to refine your entries by buying bar breaks, such as you did with Trade 5. At least keep an eye on it. Check out my journal as I usually talk about other setups that looked good, not just the trades that I actually took, and think about buying/selling on the bar breaks.

Your Trade 6 wasn't bad, you basically took the 2nd option, but option 1 was even better.

 

[NoDoji]

Quote from FirstDegree:

What you're doing with buying on limits sounds like you're sort of trying to enter by catching "falling knives" (when you go long). Such that you enter as price is coming back expecting a bounce. I don't know exactly how you enter as it would take a closer examination with knowing your seconds and cross referencing on the 1min chart, but you might be able to refine your entries by buying bar breaks, such as you did with Trade 5.

This anticipatory method of trading can definitely get you a better entry price. I never trade this way, but I see trend lines/channel lines, 20 EMA, and previous S/R levels that hold beautifully to the tick and the traders working this style get amazing entries at pivot points. The other upside to this style of trading is that you can place very tight stops. I think it's likely a top-notch strategy if you master the nuances of trading that way. I'm currently studying and playing with it a lot in sim, but in my live trading the closest I come to this is to use the 1-min chart for the early entries off levels.

Quote from FirstDegree:

You would then look for it to test either the previous breakout at 81.92 or a test of the high of the day. You could have targeted somewhere around 81.88 for a +30 gain.

Agreed, this was a very nice long setup, and definitely invited a minimum profit target of 81.85. Be patient when price has a level to go test. Trend followers will bid it up or offer it down to that level far more often than not.