Birth of a trader

[frank8800]

Quote from NoDoji:



Did you notice that your hard target was 1 tick above the overnight high? That is a breakout long entry in and of itself.

I'd recommend hard stops and mental targets, because you never know when a trade will turn out like this one.

No, I didn't notice that. Truth be told, I'm not trying to assimilate a lot of data and make educated decisions at this point, but am trying to distill trading to building block skills from which I can build upon.

Some of the things you'd told me that I didn't really understand at the time kept resurfacing. Not like a bad burrito, but in a good way.

One thing I feel I must overcome is the need to categorize every setup. Give them names - something I can compile statistics on. You know: Look for pattern X and do Y, then compile win/loss, MFE, MAE, etc. But the more I look at this, it's not like that at all. It's fuzzier, and situation dependent.

You'd told me about risk/reward ratios before making a trade, and I didn't understand how that was possible to do that effectively 'on the fly'. I think I see now. Of course, I've seen things that weren't there before, but mostly in college, late at night.

 

[NoDoji]

Quote from frank8800:

No, I didn't notice that. Truth be told, I'm not trying to assimilate a lot of data and make educated decisions at this point, but am trying to distill trading to building block skills from which I can build upon.

Some of the things you'd told me that I didn't really understand at the time kept resurfacing. Not like a bad burrito, but in a good way.

One thing I feel I must overcome is the need to categorize every setup. Give them names - something I can compile statistics on. You know: Look for pattern X and do Y, then compile win/loss, MFE, MAE, etc. But the more I look at this, it's not like that at all. It's fuzzier, and situation dependent.

You'd told me about risk/reward ratios before making a trade, and I didn't understand how that was possible to do that effectively 'on the fly'. I think I see now. Of course, I've seen things that weren't there before, but mostly in college, late at night.

I am forced to notice the high/low of the day because my DOM has the high defined in blue and the low in red. So while I was in that trade and saw the overnight high of 86.05 approaching, I had visions of a straight shot to next major resistance of 86.52. And when price stalled a tick shy of that level 2 minutes before the jobs report, I was more than happy to exit there, wait for the report, and play the next breakout, which I did, buying 86.52 and exiting b/e, but the important thing is to keep swinging it when a strong trend is on until you get a reversal signal.

There are things Bighog told me umpteen times for well over a year that I only really understood in the last couple months. The more screen time you get, the more things start to clarify themselves.

I like categorizing my setups and in fact I use many abbreviations in my daily analyses and when I see those abbreviations now I can immediately see the chart pattern in my head. And when I see the chart pattern X setting up in real time, I know that Y happens more often than not, and that's how I solidified my edge so taking the trade becomes second nature over time. Yes, it is fuzzy and situation dependent, but that's because price action in a huge auction where the participants have many reasons and time frames for trading is chaotic and all we can do is play as many games reflecting our edge as possible to keep the odds in our favor.

As for risk:reward, often there isn't time to calculate it all fast enough with CL because suddenly you notice a strong setup. I confess that sometimes I throw on a trade, throw in a 15 tick max stop and think about the details after the fact. Most of the time those are the best trades because your subconscious recognition that "this is good" caused you react instinctively.

 

[frank8800]

Over traded today, but came out OK. This was all sim since I'm still working on some things. Had this been real, I probably would have stopped after the last loser and missed the biggest trade of the day.

Saw the huge support at 86.05 from 4 touches. The 08:05 bar broke support, then got a bull candle and a week inverted hammer that touched the EMA before retracing.

Trade #1
Shorted the open of the 08:20 candle with a tight stop. -5 ticks.

Trade #2
Took this trade off a shorter time frame after it became apparent that support was going to hold. Got 32 ticks MFE, but was trailing my stop with a hard target of 40 ticks. +17 ticks.

Got whip sawed on my next 2 trades

Trade #3
Long 86.67 when it looked like it was going to break the 08:50 pivot and keep on going. -4 ticks

Trade #4
Since we weren't getting any upside follow through, was looking for another test of the lows. Short 86.64 and moved to BE +1 quickly. +1 tick.

Trade #5
Went short on the close of the 09:35 candle after it formed a double top. Had a fat-finger accident when I tried to trail my stop down. The mouse cursor jumped to the left just as I clicked and submitted a market order instead of moving my stop. Didn't make much difference. +8 ticks.

The next 3 trades I was like a dog chasing his tail.

Trade #6
Short 86.81 after the double top and a couple of good bear bars. -10 ticks.

Trade #7
No excuse for this. Should have waited for confirmation that the double top was going to break. Long 87.02 stopped out -8 ticks.

Trade #8
Right idea, just too tight a stop. The market made 1 last attempt to break that double top and failed. Short 86.94 with a very tight stop. -6 ticks.

Trade #9
Showed a little more patience and went short 86.89 at the open of the 10:30 bar and got a nice ride. +40 ticks.

 

[frank8800]

Little out of step with the market today. Looking back on my 4 trades, 3 were long. There was so much support for each leg, I was unable to see the forest for the trees. It's really hard to short above support, and I haven't had much luck putting sell stops in place and letting the wave take me down (or up, either).

Early market was up, but it started to flatten out by the time I got in. There was huge support at 82.27 so I was very reluctant to take any shorts.

Trade #1
The failure to go higher on the 07:15 - 07:30 bars had me looking for a short trade. Price dropped unconvincingly before popping back up above the EMA and making a lower high. The 87.07 had 2 hammer tails stop there, so I was waiting for a break of that. Went short 87.06 but no follow through. +1

Trade #2
After the failed short, price closed above the EMA and I went long with a tight stop. -5 ticks.

Trade #3
Same song. Lots of support at 86.92, and price was making HH's and HL's. No follow through again. Out BE +1.

I was watching price make that ascending triangle, figuring these things usually break out to the flat side. However, I didn't want to get caught in a false break out, so I kept my distance. I was still convinced that support was going to hold, so I wasn't looking for a short. When price broke out to the downside, I wanted to wait and see if support held before going short.

Trade #4
Support held, and price made a couple of HH's, I placed a buy stop above the triangle and was filled 87.21 but there was no follow through. I was so caught up in cheering my long position on, then staring slack jawed as I was stopped out, that I didn't see the double top form after I was stopped out BE+1 on the 10:25 bar.

That was the short trade of the day and I missed it.

 

[Picaso]

Quote from frank8800:

That was the short trade of the day and I missed it.

Don't beat yourself up about that, you were in good company

It's the problem with so-slow days, you end up letting your guard down. Good thing you weren't chopped to pieces earlier in the day.

 

[frank8800]

Quote from Picaso:

Don't beat yourself up about that, you were in good company

It's the problem with so-slow days, you end up letting your guard down. Good thing you weren't chopped to pieces earlier in the day.

Thanks. I'm OK with it. The only thing I'm a little miffed at is my apparent inability to change positions quickly or see the big picture. I guess I need just a 'little' more screen time.

 

[frank8800]

Just kept plugging away today, trying to learn as much as I can. I had some good entries, but got whipsawed out on one of them, and the other I didn't manage very well. That's OK, because right now I'm mainly focusing on entries. It's part of my 3 step rehab program: Identify the entry. Take the entry. Manage the trade.

Trade #1
Price was rising before the 05:30 news, then after the news, had a pullback. Entered long 87.06 and moved my stop to BE+1 when it was going my way. The next bar took me out with 1 tick slip. 0 ticks.

After the run up, price made 2 shooting stars. I placed a stop sell at 87.41 and waited patiently for the 3rd push higher that never came. Instead I watched and chose to ignore the low risk short entry at the close of the 06:20 bar. There's a lesson here, I think.

Trade #2
Price was showing some weakness making LL and LH, but had doji's overlapping the EMA. I decided not to let that spook me and let price be my guide. Went short 87.03 when that baby hammer looked more bearish. Kept a tight reign on my stop and moved to BE+1, but got slipped again. 0 ticks.

Trade #4
The 06:45 bar formed a baby hammer on high volume and closed over the EMA. Decided to play the catch a wave game and picked an entry at the high of the hammer with a stop 1 tick below the hammer's open and let it run. Didn't move to BE+1 when I had the chance. I really suck at this game. Stopped out -4 ticks.

Took a break to watch the oil report madness.

Trade #4
Things settled down and started to move higher. I waited for the overlapping bars to spread out a bit and went long at 87.09 based on a shorter time frame. At this point, I was fixated on the shorter time frame and didn't even look at the 5 min chart. I trailed my stop up after each bar close, but had I done that on the 5 min chart, I would have had a stellar trade. Instead... +16 ticks.

I watched that run up on all different time frames and didn't have the guts to jump in. Anywhere would have worked.

 

[frank8800]

Happy Veterans Day to all who've served!

Morning was down, so I was looking for shorts. Missed a nice one at 05:30 because I slept in.

Trade #1
After I missed that first leg down, I waited for a second entry. Price moved above the EMA and stalled. I placed a stop sell at 88.05 after the 06:20 bar, but wasn't filled. The next 2 bars dropped below the EMA. I got filled short at 87.88 on a retrace of the 06:35 bar, then after 15 ticks MFE, it came back and took me out BE +1.

The next hour was overlapping insanity. I watched the bear flag build and briefly thought about shorting the breakdown, but the past hour's barbed wire kept me out.

Trade #2
The inverted hammer at 07:50 was inline with previous support, and a better trader would have gone long on the close with a tight stop. That's not me at the moment. Instead, I waited for the bars to spread out a bit. After a close above the EMA and another confirmation bar, I entered a buy stop at 87.94 and THIS time I was going to manage it from the 5 min chart. I got 21 ticks MFE and price started coming back down. On the next bar, the T&S was going crazy and there was no follow through, so I moved my stop to BE + 10 and was taken out.

I watched for a little while longer, then decided to do some studying.

 

[frank8800]

The morning session was down, so I was looking for short trades.

Trade #1
After the double top and the big down bar at 06:10, I was waiting for a breakdown. The 06:25 bar closed at the EMA, just below the lows of the 2 previous bars. Looked to the shorted time frame for an entry. Went short at 86.32 with a tight stop, but was taken out. -5 ticks.

After the 07:20 shooting star, I seriously thought about putting a sell stop 2 ticks below, but given my success rate with that trade, I decided against it. Would have worked this time.

Interesting that the big down bar stopped right at the double bottom made on 05:20/05:25. It looked like price was trying to break above that. The ascending triangle formed and gave a false breakout, then price crashed again.

Trade #2
This was a counter trend trade based on a shorted time frame. Looked like some support at 85.32. When long 85.37 with a tight stop. Out BE+1

Trade #3
Frustrating. Got a nice entry, then after 9 ticks moved my stop to BE +1. The next bar the bottom fell out. Would have only taken 7 ticks of heat. +1

Trade #4
After another big leg down, price started creeping back up, making HH's and HL's. I didn't know if price would bump off the EMA or go right through. Took the long signal with a tight stop. -2 ticks.

Trade #5
Price backed off the EMA, then had 2 strong up bars, the the second bar closing above. I didn't wait for the second, confirming bar (broken rule) and it cost me 11 ticks.

Finished the week flat. Just keep swinging..

 

[frank8800]

The recent overnight trend was up, so I was looking for long trades. However, the long wicks on the candles didn't inspire confidence in me.

Trade #1

After the 2 news events, it looked like the new trend was down. I did get a long signal and took the trade, but kept a tight watch on it. After the entry bar failed to push higher, I moved my stop to BE+2 where I was taken out.


I watched the triangle form and was ready for a southbound break out. I'm still too uncertain about break out plays, but I did watch that 1 min chart to see if a stop sell at 85.26 would have been a winner or hit my 11 ticks stop. It would have been a winner.

Trade #2
After the drop, waited for confirmation, then entered short at 85.20 from a shorter time frame entry. Got my 9 ticks, moved to BE+1 where I was stopped out before price dropped 20 ticks.

Just watched for the rest of the morning.

On my first trade, I had a tight stop of 7 ticks that would have been hit. On my second trade, I had a 9 tick stop that would NOT have been hit. My hard target on both trades was 30 ticks. If I had let the trades run their course, I would have lost 7 ticks on the first trade and made 30 ticks on the second. Managing the trade is the next stop on my rehab program. Time to implement that Shadow Trader feature.