Brain

[NoDoji]

Quote from macattack:

I have so many trades on my chart I can't even remember why I placed them. I get in & out, in & out. The chart is a mess by the end of the day. Perhaps I need to be a little more patient & wait for better setups. (change that to "obviously" I need to be more patient).

Yesterday the chart looked totally confusing to me, and then I switched my CL chart from 400 volume to 200 volume & suddenly I could see all of the strcuture that I was used to seeing.

I think most of this game is all about the little details like that. It's just like running a business; all of the little details can be extremely important. People spend way too much time searching for magical setups I think & forget about the other details.

Well, there's the problem.

Look at a 5-min chart and trade in the direction of the trend when a trend becomes apparent. Once a reversal becomes apparent, trade in the new direction.

In CL today you would not have more than 11 trades between pit open and close today. 8 of them would've provided quite decent profits. One would've likely been a break even trade. A couple of them might've shaken you out for a loss, but each invited a re-entry in rather short order and the re-entry on one of them resulted in a move of over 1.20 before price retraced a little.

Study that 5-min chart and you'll start to see the light. Then define your rules and stick with them. That last part's not impossible to do, though it's about 95% impossible to do.

 

[blueberrycake]

Quote from NoDoji:


Look at a 5-min chart and trade in the direction of the trend when a trend becomes apparent. Once a reversal becomes apparent, trade in the new direction.

At what point would you define a trend / reversal as apparent?

-bbc

 

[macattack]

Quote from NoDoji:

Well, there's the problem.

Look at a 5-min chart and trade in the direction of the trend when a trend becomes apparent. Once a reversal becomes apparent, trade in the new direction.

In CL today you would not have more than 11 trades between pit open and close today. 8 of them would've provided quite decent profits. One would've likely been a break even trade. A couple of them might've shaken you out for a loss, but each invited a re-entry in rather short order and the re-entry on one of them resulted in a move of over 1.20 before price retraced a little.

Study that 5-min chart and you'll start to see the light. Then define your rules and stick with them. That last part's not impossible to do, though it's about 95% impossible to do.

I also have trouble finding "trends" until it's too late, but it's obvious to see that price was going up & retracing on the 5 minute (whether that's called a trend or not doesn't really matter I guess). 100 CL points should have been easy as pie if using the 5 minute chart today.

The sad thing is I have the 5 minute chart up at all times in the corner of my screen. I saw an easy buy point at about 99.37 at 11:29 ET, but I didn't take it. It was a retrace to the 20 SMA on my 5 min chart & the 200 volume chart made tiny higher highs, higher lows. Why I didn't go long? I don't know.

I actually had a little short scalp trade & I took profit at almost the exact low point at 99.16 which I could see coming on the 5 minute, but then I missed the big long trade that would've made the day. I'm so close, but missing something. I talk myself out of trades even though I see them setting up.

I think I'm so used to getting fooled & getting stopped out that I tend to look at everything as a trap. In fact that's how I make some of my trades. When I see something I know everybody else in the world must see too I assume they'll get stopped out. It often works but not nearly as well as capturing the bigger moves would.

 

[NoDoji]

Quote from macattack:

The sad thing is I have the 5 minute chart up at all times in the corner of my screen. I saw an easy buy point at about 99.37 at 11:29 ET, but I didn't take it. It was a retrace to the 20 SMA on my 5 min chart & the 200 volume chart made tiny higher highs, higher lows. Why I didn't go long? I don't know.

I actually had a little short scalp trade & I took profit at almost the exact low point at 99.16 which I could see coming on the 5 minute, but then I missed the big long trade that would've made the day. I'm so close, but missing something. I talk myself out of trades even though I see them setting up.

Yes that was a key buy zone, price pulling back to the 20 EMA on the 5-min chart, which also coincided with a lower channel line off the pullback highs. I was bidding 99.13 as price came in to the 20 EMA and it found support just a few ticks higher higher, so I went long @ 99.30 and was stopped out b/e on the failure to thrive as I call it. I then re-entered my original limit @ 99.13 and caught the wave on the second visit. A price action long at 99.35 or so off that EMA touch was a more confirmed entry. Either way, that's where the trend followers buy in an uptrend.

You talk yourself out of trades because even though trend following is where the easy money is, it's scary at the hard right edge buying when price is falling or price has been falling and then pivots back up. After a while you get used to that counter-intuitive feeling and you pretty much trust the setups because they work so often.

I define an early trend as a bottoming or topping process that then prints a higher low/lower high, and price finally closes above/below the 20-bar EMA. Sometimes in a strong trend this is only a deep pullback process and the previous trend later continues, but I don't care because I just trade price until proven otherwise.

In CL today, price trended gradually down into the pit open, broke out of the channel upside, pivoted off a higher low and closed above the 20 EMA at the 9:10am ET bar. To me it's now an uptrend until price fails to break a previous high and print higher lows. Price remained in a clean uptrend until FOMC at which point it dipped below the 20 EMA, breaking the previous pivot low from 1:40pm ET, failed to test the previous high and then closed near the low of red bar at the 20 EMA. I take that as a short signal with very likely trend reversal, as least near term. Once the previous pivot lows of 100.38 and 100.22 break, the next support level technically is previous resistance becomes support, which was the mid 99.80's during the 10:50am bar. That was my initial target on the short position.

Make sense?

 

[macattack]

Quote from NoDoji:

Yes that was a key buy zone, price pulling back to the 20 EMA on the 5-min chart, which also coincided with a lower channel line off the pullback highs. I was bidding 99.13 as price came in to the 20 EMA and it found support just a few ticks higher higher, so I went long @ 99.30 and was stopped out b/e on the failure to thrive as I call it. I then re-entered my original limit @ 99.13 and caught the wave on the second visit. A price action long at 99.35 or so off that EMA touch was a more confirmed entry. Either way, that's where the trend followers buy in an uptrend.

You talk yourself out of trades because even though trend following is where the easy money is, it's scary at the hard right edge buying when price is falling or price has been falling and then pivots back up. After a while you get used to that counter-intuitive feeling and you pretty much trust the setups because they work so often.

I define an early trend as a bottoming or topping process that then prints a higher low/lower high, and price finally closes above/below the 20-bar EMA. Sometimes in a strong trend this is only a deep pullback process and the previous trend later continues, but I don't care because I just trade price until proven otherwise.

In CL today, price trended gradually down into the pit open, broke out of the channel upside, pivoted off a higher low and closed above the 20 EMA at the 9:10am ET bar. To me it's now an uptrend until price fails to break a previous high and print higher lows. Price remained in a clean uptrend until FOMC at which point it dipped below the 20 EMA, breaking the previous pivot low from 1:40pm ET, failed to test the previous high and then closed near the low of red bar at the 20 EMA. I take that as a short signal with very likely trend reversal, as least near term. Once the previous pivot lows of 100.38 and 100.22 break, the next support level technically is previous resistance becomes support, which was the mid 99.80's during the 10:50am bar. That was my initial target on the short position.

Make sense?

Thanks for that analysis. I printed off the chart & followed along. It all makes perfect sense. I need to start paying more attention to the 5 minute chart. I have it up at all times, but I get caught up in the fluctuations on my smaller timeframe chart instead of paying attn to the big picture.................missing the forest for the trees I guess. (not that 5 minute is big picture, but it's bigger than some).

 

[The Oracle]

Quote from macattack:

Thanks for that analysis. I printed off the chart & followed along. It all makes perfect sense. I need to start paying more attention to the 5 minute chart. I have it up at all times, but I get caught up in the fluctuations on my smaller timeframe chart instead of paying attn to the big picture.................missing the forest for the trees I guess. (not that 5 minute is big picture, but it's bigger than some).

i doubt very much if a 5 min chart alone can reveal what is currently happening with the instrument you are trading. different instruments will behave in different ways and if you do not know the difference then the odds of you making money are greatly reduced

there are many punters that can pick the winning horse very frequently, but when they try to pick a winner in some other sporting field they fail miserably

if you do not know what you are doing you will never make money trading and will be doomed to follow those who know everything about nothing

pick one instrument and stay with it until you are profitable every week, you will be surprised what you see after a few months of successful trading

the only person you need to help you is yourself, but many find that the hardest thing in the world to do!

 

[oraclewizard77]

I did 3 trades today. 2 losers, 1 winner for a net loss of $ 30.00. My other days were profitable. I stopped trading after 3 trades since I was feeling confused.

I think this was related to a possible bacteria infection since it was not just trading I was getting confused about.

Tonight, I felt more clear since I believe the medicine is starting to work. We will see on Friday, if I am able to trade better.

However, rule of thumb, if you are confused and can't recognize a valid trade setup, stop trading, and wait for a better day.

Also, you may in fact be sick, so make sure to get treated.

Finally, I would stop drinking alcohol for a few days to clear your mind.

 

[wrbtrader]

Quote from macattack:

...I wake up, turn on the computer, look at the charts & I just feel confused. I feel stressed. Everything just looks hazy. I make stupid decisions & it seems like no matter what I do it doesn't matter; just about every trade reverses as soon as I enter & turns into a loser...

Anybody else ever have this experience?

Yes.

Now you know what trading days to either turn off the computer and go do something nice for the day instead of losing money or lower your position size dramatically to the minimum due to the increased risk exposure of trading in such confusing price action conditions.

This is one of those things that just can't be taught. It's something you must learn on your own and then have the ability to consistently take action to prevent trading on such a day or to minimize your losses dramatically so that they have minimum impact on your prior trading day profits in comparison.

Quote from macattack:

...That is a tough one. It's extremely difficult to sit out the entire trading day; I feel like this is something I should be able to overcome. I just don't know why it happens...

It's called "having discipline". If you have the need to trade when the odds are highly against you...you will instill other possible trading problems. Regardless to why it happens...find your discipline and avoid situations like that when you first see signs of it.

Quote from macattack:

I just make stupid decisions & I don't know why. I don't really see price action as more difficult from one day to the next since I've see it all before...

That's a contradiction to your earlier statements that you feel confused, stress and the price action looks hazy on some trading days. Thus, you do see some trading days more difficult prior to the first trade.

Quote from macattack:

One of my biggest problems is too often holding on for a bigger move. I'm always trying to make the wins huge & the losses small. But since the markets tend to range so often I'll be up significantly & then convince myself I'm disciplined by staying in & going for the big win, and then sure enough price reverses significantly & stops me out. My nice gains turn into losses, breakeven, or tiny gains.........all pretty useless.

Thanks for the advice.

I'm a little confused. I'm not sure if you're talking about a single profitable trade that you're allowing to retrace and hit the stop/loss or if you're talking about your overall trading day that's at a profit and then after a group of losses...your profitable trading day turns into a losing trading day.

If such is a BIG PROBLEM...you can easily review your trading habits (trade logs) to determine when such tends to occur. With that important piece of information...You now know when you should stop trading for the day to protect your nice profits. It's that simple and if you fail to do that...you're just going to become another failed day trader that forgot the number one goal...

To be profitable and to do whatever it takes to ensure such occurs by close of day.

Just take a look at all the recent threads about "how difficult day trading is", "its a loser game", "dead end job"...all of those thread starter had/have serious discipline problems they couldn't overcome. It was almost as if they were "addicted" to a drug like some junkie looking for the next fix.

The sad part is that instead of dealing/resolving their discipline problems...they try something much easier via tweaking their trade methods in hopes that such will fix their discipline problems.

I just never seen so many types of these threads in one year in comparison to all the combined prior years. That in itself is a good thing because traders are finally realizing "trader psychology" has an enormous impact on your ability to be a profitable trader...arguably more important than any thing else assuming you're not using automation/mechanical trading system.

*****
Change my charts, try a new indicator, change the parameters of my trade signal. Yet, the discipline problems still remains until it consumes your trading account.
*****

Mark

 

[Mysteron]

Quote from macattack:

Today I had one of those days where trading just seemed really easy. I was calm, confident, careful. I felt like I could read the charts like a trout fisherman can read a stream. It all just seemed really logical & clear.

It's not the first day I've had like that; in fact it happens quite often. Just not often enough.

I may be like that for a couple days in a row, but then something happens. I wake up, turn on the computer, look at the charts & I just feel confused. I feel stressed. Everything just looks hazy. I make stupid decisions & it seems like no matter what I do it doesn't matter; just about every trade reverses as soon as I enter & turns into a loser.

All the profits I made on the other days dwindle away. It literally feels like my brain is malfunctioning. If I could see clearly every day as I did today I'd be golden, but something goes wrong & I just don't get it.

At the end of the bad days I'll look at my entries & exits on the chart & they are just pathetic, random, slop; I can hardly believe it was me that placed the trades. I have plenty of experience to know better.

Anybody else ever have this experience?

Hi MK,

I've not heard from TE in recent months, so I deleted my remotetraders account. It seemed right to draw a line and move on. I hoped we would all have learned something fundamental, beyond what is openly stated on these forums, by following him but it didn't happen for me at least. I'm a bit dissapointed but no complaints though.

After trading I often consider the following guide lines and its obvious then what I did right or wrong. It helped me get out of the rut of a series of loosing trades. I daytrade US stocks BTW.

Note:
RR = risk / reward,
HPT = high probability trade,
LPT = lower probability trade

 

[macattack]

Quote from Mysteron:

Hi MK,

I've not heard from TE in recent months, so I deleted my remotetraders account. It seemed right to draw a line and move on. I hoped we would all have learned something fundamental, beyond what is openly stated on these forums, by following him but it didn't happen for me at least. I'm a bit dissapointed but no complaints though.

After trading I often consider the following guide lines and its obvious then what I did right or wrong. It helped me get out of the rut of a series of loosing trades. I daytrade US stocks BTW.

Note:
RR = risk / reward,
HPT = high probability trade,
LPT = lower probability trade

I think he posts under "The Oracle" now. Sounds just like him anyway (whoever he is). Thanks for the guidelines example. I haven't figured out which trades are high or low probability yet. I am sim trading CL right now, but need to fix my sloppy, unstructured approach before I can move on.

Out of everything I've read on this site I'd say Anekdoten's thread was the most valuable. Maybe it'll come out one day that he was a rambling, psychotic sociopath living in his mom's trailer in the backwoods of Alabama, but he seemed like the real deal to me, and his advice seemed to make sense in a "common sense" sort of way.