Long 4 er2 @ 780.70
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Calling 'Em Like I See 'Em
- Thread starter QuietTrader
- Start date
Quote from QuietTrader:
I apologize for the absence. I took a planned vacation, but thought I would have time to make a few more posts before taking leave, in which I would have told you. It didn't work out that way.
At any rate, I'm back!
Try to post some real time calls today, and perhaps some other thoughts as well. I will also try and address some readers' questions, including those who have pm'd me.
QT
Welcome back QT!
Nice trades so far today! Keep it up!
PT
Despite a somewhat significant pullback of over 3 points in ES, ER2 has (had?) not displayed its prior weakness, setting itself up for a nice move up on the (potential) resumption of the uptrend in the equities. As you can see my timing was way off on this one. That spooked me.
Sell 4 er2 @ 779.90
Sell 4 er2 @ 779.90
Loss on last trade: $320. Profit on day: $1790
I exited that trade without letting it reach my stop. When I saw on the 1-minute bar how price wooshed down almost a full point, I knew I wanted out. At this point, there was a good chance ER2 was going to resume its weakness. I was, however, unfortunately, not confident enough to reverse and go short, which would have been the far better move, and watched from the sidelines as ER2 made new lows in a matter of minutes.
The way I traded the ES-ER2 thus far, while valid, and indeed the way many people who do inter-index research tend to do things (from what I see from posts on other threads), is not normally the way I like to do things. I have a different approach which I feel is far superior. I will try to discuss both approaches soon.
I exited that trade without letting it reach my stop. When I saw on the 1-minute bar how price wooshed down almost a full point, I knew I wanted out. At this point, there was a good chance ER2 was going to resume its weakness. I was, however, unfortunately, not confident enough to reverse and go short, which would have been the far better move, and watched from the sidelines as ER2 made new lows in a matter of minutes.
The way I traded the ES-ER2 thus far, while valid, and indeed the way many people who do inter-index research tend to do things (from what I see from posts on other threads), is not normally the way I like to do things. I have a different approach which I feel is far superior. I will try to discuss both approaches soon.
Long 3 ER2 @ 775.40
Long 3 er2 @774.
Sell 6 er2 @ 774.70 (Scratch trade)
The size and speed of the subsequent selloff (pullback?) in ES caught me off guard. I only took 3 contracts on my original entry due to its counter-trend nature, and had planned to add another 3 if the market would allow me at about 774.80.
When ES came down about 3 points in a big hurry, and the er2's reaction was mediocre, I felt confident enough to add 3 at 774 with a tight stop. When price came to 774.80/90 and failed to show any real bounce-momentum, I bailed for the scratch.
I'm not sure whether I still want to be long, but had a feeling that even if I did, there would be better opportunities at lower prices.
BTW, my impetus for taking the trade originally was the great strength of the European markets despite the strong pullback in the ES. They continue to show strength, and are the source of my still thinking of being long. Right now, I remain on the sidelines in all markets awaiting a little more solid sense of direction.
When ES came down about 3 points in a big hurry, and the er2's reaction was mediocre, I felt confident enough to add 3 at 774 with a tight stop. When price came to 774.80/90 and failed to show any real bounce-momentum, I bailed for the scratch.
I'm not sure whether I still want to be long, but had a feeling that even if I did, there would be better opportunities at lower prices.
BTW, my impetus for taking the trade originally was the great strength of the European markets despite the strong pullback in the ES. They continue to show strength, and are the source of my still thinking of being long. Right now, I remain on the sidelines in all markets awaiting a little more solid sense of direction.
I like the way you trade QuietTrader, and the reason being is I trade exactly the same. I think traders like me and you are few and far between. I really look forward to your outstanding posts!
WAY TO GO!!!
Trading_timeâ¦.
WAY TO GO!!!
Trading_timeâ¦.
Quote from QuietTrader:
Often I see people saying "The entries aren't as important as the exits/trade management once you're in the trade, etc."
For me, entries are critical; exits less so.
Let me explain.
If you can find "pain free" entries where the market never really goes against you, you're in a position to set your stop (see above) at or close to break even, and just let the trade ride. Often, you'll be stopped out for a scratch or a small loss. But quite often (you'll be surprised), the market just keeps going in your direction. If you're patient enough, you can catch some majorly profitable trades while putting very little at risk (see today's ER2 trade).
Pain free entries, contrary to what we often like to do, involves 'jumping on the train' with the momentum. A momentum play, while somewhat risky, gives either immediate confirmation, or a quick exit for a small loss.
I'm not saying there's no merit in catching pullbacks. Especially in 1) a market that's obviously trending (again see ER2 today) and 2) if you have a tool to give you a precise area in which to grab the pullback which will either confirm or deny immediately.
But how many times have you entered the market with a limit order at some price that you felt gave you some opportunity based on whatever analysis you're using, only to have it whoosh right through your limit price and before you know it you're down X ticks? Guess who's on the other side of that trade? The momentum traders. You may ultimately be right, and the market may still turn, even if you got the price wrong. But most likely, you'll either have been 1) stopped out for a loss by that point, or 2) you'll have been so spooked by the way the market blasted through your price that you'll get out at break-even, having made nothing.
Contrast this with the guy on the other side of the trade. He took you out, and immediately found himself in a profit situation. He might have 1) taken profits, 2) put a stop at break-even and gotten stopped out for a scratch, 3) put a stop at break-even and watched as the market continued to go his way for a great gain.
Even if you both break even, who's the better trader? Who's going to make more money in the long run?
Of course, knowing what momentum is is an art of its own. It's a lot easier to see on an X-trader dome than it is to see on a chart. This is one of the many reasons X-trader is an invaluable tool to me.
There are many others. Another one is its AMAZING simulator. I haven't used every simulator there is, but the X-trader simulator is fantastically realistic. I often am spooked out by just how real it feels, and have to check to make sure I'm not trading a real market. Its price feed, to be sure, is not as perky or as thorough as a real Exchange, but for playing. testing strategies, and alleviating boredom, it's #1.
(BTW -- totally off topic. When you post to ET, it used to be that what you put in the "subject" area was appended to your post in bold letters. Now it's not. Why not? Where have all the subjects gone? What's the point of a subject if you can't read it anyway? Mods? Baron?)
I have not traded since my last posted trade.
1) I felt out of sync with the market and didn't want to do anything foolish. 2) We had a little birthday party for my daughter, for which another daughter baked a beautiful cake, and I didn't want to get myself attached to any trades that might cause me to miss the fun.
In my opinion, one of the great things about trading, that make the stress etc. worth it, is that you don't have to be a slave to the market. I know many traders write things like "I haven't missed a single hour for the past seven years..." If that's what turns you on, fine. I don't feel I have to catch every tick.
That's not to say I cavalierly imagine I can just flick on my monitor, click my mouse a few times, and make a living. Trading is not a video game. You have to be patient, and stalk good opportunities. However, if you monitor a few markets (or stocks I assume), there are opportunities to make money every day without having to take crazy risks and without having to be obsessive about it.
Sometimes you'll take a break for whatever reason, and arrive to find you just missed a great opportunity. Of course, to some extent it's upsetting. But you have to learn to get over it, and wait patiently for the next chance, be it a continuation trade, or a reversal. (In The New Market Wizards interview of Randy McKay there is an absolutely fantastic account of a terrible trade he took, buying gold at its very top -- just because he was obsessively upset about missing the move. If you want to be a successful trader, you must learn to overcome such emotions, or risk self-destructing.)
My theory, and feel free to disagree with this, is that in the long run, I won't lose out from leaving my office to attend to matters such as a child's birthday party, an important visitor, etc. Often, if a sudden need arises, I'll just exit my position, and avoid the worry. If I'm comfortable, I'll make sure my stop is in, place an OCO profit-taking limit order (if I feel it's called for), and leave for a few minutes. After all, sometimes nature calls too.
You'll notice as well that I've kept my size intentionally small today. The first day back after a hiatus, you want to be careful about overextending yourself and taking on large positions when you haven't yet regained your feel for the market's gyrations. (Besides, I had a great pre-market trading the DAX which gave me some breathing room.)
1) I felt out of sync with the market and didn't want to do anything foolish. 2) We had a little birthday party for my daughter, for which another daughter baked a beautiful cake, and I didn't want to get myself attached to any trades that might cause me to miss the fun.
In my opinion, one of the great things about trading, that make the stress etc. worth it, is that you don't have to be a slave to the market. I know many traders write things like "I haven't missed a single hour for the past seven years..." If that's what turns you on, fine. I don't feel I have to catch every tick.
That's not to say I cavalierly imagine I can just flick on my monitor, click my mouse a few times, and make a living. Trading is not a video game. You have to be patient, and stalk good opportunities. However, if you monitor a few markets (or stocks I assume), there are opportunities to make money every day without having to take crazy risks and without having to be obsessive about it.
Sometimes you'll take a break for whatever reason, and arrive to find you just missed a great opportunity. Of course, to some extent it's upsetting. But you have to learn to get over it, and wait patiently for the next chance, be it a continuation trade, or a reversal. (In The New Market Wizards interview of Randy McKay there is an absolutely fantastic account of a terrible trade he took, buying gold at its very top -- just because he was obsessively upset about missing the move. If you want to be a successful trader, you must learn to overcome such emotions, or risk self-destructing.)
My theory, and feel free to disagree with this, is that in the long run, I won't lose out from leaving my office to attend to matters such as a child's birthday party, an important visitor, etc. Often, if a sudden need arises, I'll just exit my position, and avoid the worry. If I'm comfortable, I'll make sure my stop is in, place an OCO profit-taking limit order (if I feel it's called for), and leave for a few minutes. After all, sometimes nature calls too.
You'll notice as well that I've kept my size intentionally small today. The first day back after a hiatus, you want to be careful about overextending yourself and taking on large positions when you haven't yet regained your feel for the market's gyrations. (Besides, I had a great pre-market trading the DAX which gave me some breathing room.)