Birth of a trader

Quote from Picaso:

A trade consists of an entry price or condition, a stop price or condition and a target price/area (yes, or condition :D).

If you find yourself in a trade where you don't have a clear target, chances are it's an impulse trade and you shouldn't be there in the first place, you can either close it right away or "shadow" the bid/ask with your stop to get free/cheap exposure.

However, if you want to improvise a way to "manage" it, simply trail the stop on the top (if short, as in this case) of every 5' bar. If the 5' bars start feeling expensive, then drill down to 3, 2 or 1 minute bars. In this example that would have gotten you out at 87.70 (if you'd held through inventories :eek: ) on the 7:50/55? bar or you could have exited at 88.20-ish when the spread started widening before the report.

The same system/logic would have stopped you out of your third trade at +17 ticks (more or less) instead of +25.
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Yeah, that makes sense. I need to start looking that the trade as a whole unit instead of just entries and hard targets.

BTW, there's no way I would have held that through inventories!!
 
Actually, I sold 88.48 losing 7 tics, but when it pullback, I did NoDoji's buy new highs. Unless you know well ahead of time on doing counter-trend trades, you will continually miss out on trend trades which are easier when you are a young trader.

I seldom do breakouts counter-trend cause that expands risk and I don't care to risk more than 6-7 tics on any trade anyway. Closer I can get in at the extreme, the better. You know the market wants to get it to "00", so sell it up there, but you better have a better reason than to just sell it. You have Volume under your chart, USE IT. What is volume doing at extremes?

When markets are running hard with big bars, you can trail on each bar or go down to smaller timeframe, but remember, the smaller the timeframe often leads to "noise" bouncing you out of a good trade.
 
Quote from Picaso:

Spread is one tick. Maybe you're still watching December, we rolled to March 2011 last week.

You need to see an auction to change your mind regarding violent moves. You'll think oil inventories are a birthday party. :)

ZN auction tomorrow 1:00 EST.

ZB's on Thursday 1:00 EST.

http://www.bloomberg.com/markets/economic-calendar/
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Question for Picaso or anyone else:

What makes Treasury Futures move in either direction? I initially thought that /ZB would move divergent to the Dow: coming into treasuries when the market sells off and leaving treasuries when the market rallies. But looking at the charts for the past few days, I'm not able to find a pattern. Could someone clarify for a new trader.

Thanks in advance.
 
Quote from ashantt:

Question for Picaso or anyone else:

What makes Treasury Futures move in either direction? I initially thought that /ZB would move divergent to the Dow: coming into treasuries when the market sells off and leaving treasuries when the market rallies. But looking at the charts for the past few days, I'm not able to find a pattern. Could someone clarify for a new trader.

Thanks in advance.
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Yeah, I've seen that too for the last few days. Not sure what's up with that. But I'm just trading like normal. Doesn't really matter to me if the markets all go up or go down. I just trade what's infront of me.
 
Very strong over night up trend, so I wanted to avoid shorts. Got a short signal at 06:05, but it was too close to the EMA so I passed on it. Would have been a winner.

The market got extremely choppy from 06:55 - 07:40 before it looked like it wanted to roll over.

After a 100 tick drop from the HOD, a right triangle started to form.

Trade #1
I was expecting a breakout to the upside towards the EMA, but didn't want to get snagged on a noise spike. I placed a buy stop at 88.59 (2 ticks above the line) and was taken out by a noise spike. -8 ticks.

After getting stopped out of my first trade, CL dropped to the bottom of the 08:30 bar.

Trade #2
Placed a sell limit order at the end of the doji, looking for another test. Got a great fill at 88.52 and 16 MFE. Moved my stop to BE +1 where I was taken out. I debated leaving my stop above the 08:55 bar, which would only be a 5 tick risk, but chose to move it. +1 tick.

Trade #3
After the resumption of the down trend, placed a limit sell to catch the pull back leg. Filled at 88.36 and left a hard target in place. +25 ticks.

Had 2 trades on 6E for -7 ticks. I let my second trade run too long. I had an opportunity to get out BE a couple of times, but stayed in the trade for 33 minutes - dumb.

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Time will hurt you ever time, best trades go your way within six minutes, after that, for day trading, I need to find a way to get to breakeven exit or place breakeven plus one.

Check out low of the day in CL, see the high volume? Big boys accumulating. You can buy the Low of the Day and risk a couple tics, I much rather try to get in near the extreme and risk little than do a breakout and have to risk below the lows. When I am thinking of buying, I wait for a downclose, thinking of selling, waiting for an upclose, then your breakeven stop won't get hit as often. Use what the market let's you see, like volume, if it is a big volume bar, you just can't say it is cause it is making a top, like the high of the day, it closed down, so often where a bar closes is how I use the volume, but for reversals going up, it is opposite for going down in regards to volume, less volume at highs, greater volume at lows.
 
Tried to focus on the bigger picture today, specifically managing trades for a larger profit and not moving to BE+1 after 8 or nine ticks. The plan is to enter the trade with an initial 11 tick protective stop, then trail the stop to 1 tick beyond each bar as it closed.

Trade #1
Price was moving down, then got a pop over the EMA followed by a red bar. Entered sell limit at 88.52 and was filled on the next bar. After that bar closed, moved stop to 88.56 where I was stopped out. Had 16 ticks MFE. -4 ticks.

I was a couple of bars too early on that trade, since price dropped 65 ticks shortly after, but none of my signals allowed me in.

Trade #2
After the big drop, bars 06:25 and 06:30 formed a 2 bar reversal. Entered long buy limit at 88.06 with a tight stop. A few bars too early again. -7 ticks.

Trade #3
This is a frustration trade and a violation of a rule. Price was trying to make up its mind, but I had already made up mine. After the 06:50 spinner, I entered a stop sell at 87.82, looking to catch the momentum down. Got filled and killed. -11 ticks.

After several attempts to go down, price started to rise. I was expecting a rise back up to the 88.60 area, which was the beginning of the leg down.

Trade #4
Entered long at 88.02, removed my target and trailed my stop. Get taken out of a great run by an outside spinner. +2 ticks.

I felt price made a lower high on that 07:35 bar and was likely to resume down.

Trade #5
Went short 88.42 and moved my stop to the top of the entry bar after it closed where I was taken out. -5 ticks.

Trade #6
After stopping me out on the previous trade, price appeared to resume a downward trajectory. Got a close under the EMA on 3 LL, LH bars, but got stopped out. -11 ticks.

Trade #7
Price made a strong reversal and started higher. Went long at the 08:35 bar. The plan was to trail my stop, but price accelerated violently right into a resistance level. Moved my stop up quickly rather than risk losing much of the move. +28 ticks.

Finished down 8 ticks on CL. Grade-wise, I did well managing my stops even though getting out BE+1 when able would have resulted in a positive day. However I would fail myself on rules following since trade #3 was uncalled for.

Took 2 trades on 6E for -17 ticks. Ouch.

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Great resilience keeping yourself together after 6 (kind of) losers in a row.

That's one of the hardest things, congrats.
 
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