Dave's trading journal

[dv4632]

Hi

I recently discovered this site and have been impressed with the calibre of the feedback I've seen in some other journals here.

Brett Steenbarger says that practice doesn't make perfect if the stuff you're practicing isn't any good, and that working hard won't do you any good if you're not also working smart. I'm in a position where I honestly don't know if I'm working smart or not. I've never had any experienced traders give me feedback on what I'm doing and am looking forward to getting some advice here.

Now, as a quick synopsis of what I'm trying to do. I trade ES on a 5-minute chart. On my ES chart I have VWAP and the previous days value area marked off, and below chart $Tick and Advance-Decline. I also have a 5-min SPY chart with 20 and 50 emas (because I figure there are way more stock traders than futures traders, and because it allows me to see day session-only price action), which I'll sometimes briefly toggle out to 15-min if I find myself getting too myopic. On a suspected range day I'll replace the ema's with bollinger bands as there are sometimes some nice bollinger pong trades to be had.

All trading starts with a look at the 30-min day session chart to give a larger scale framework from which to view my intraday trades. Are we trending? If so, is the trend fresh, or showing signs of exhaustion? Are we in a trading range? If so, near the high or the low of the range? Stuff like that.

I try not to be a frequent trader, I'm ok with only placing a few trades in a week, though I sometimes go off the rails a bit. Yes, it's boring as hell but I find the more I trade, the more unbalanced I become, and the worse I end up doing.

I'll post up today's trades in a bit.

 

[dv4632]

I was leaning short going into the day.

It looked to me that we were possibly putting in a lower high in the 10:45-11:45 est time zone. With price holding above VWAP and the 20ema (not shown) I thought a break below the lows of the 1327 level could make a nice short, but it didn't happen until around noon and I've been refraining from trading during the lunchtime "dead zone" of late so passed on it.

I then took a break to clear my head.

My short trade was another short of a lower high. I wanted to play for a retest of the previous low at a minimum, and possibly for a new lower low. In hindsight there appears to be no reason to have gotten out, but at the time I was really aggressive and just wanted to book the profit.


One sticking point I have on breaks of S/R levels is whether to enter as soon as price trades beyond the level or to wait for a 5-min bar to close beyond the level. Still unsure on that.

 

[dv4632]

I was reading part of Matcha's journal where Nodoji was advising her to stop trying to trade so many different setups, and instead focus on mastering just one.

I wonder if I'm trying to trade too many different setups. I have tons of annotated charts saved and have a list of several different plays that I see repeatedly, but am I spreading myself too thin by trying to trade them all at once? Should I instead be trying to master one before I consider giving my attention to others?

What stops me from focusing on only one is that they don't all occur every day. For instance, I've read multiple comments about pullbacks to the 20ema. I have it on my charts too. But there are some days where the market just doesn't have enough *oomph* in it to get a trending move going, and in that scenario the 20ema isn't going to be of much use and I'd be better off employing other tactics. Then there are a couple of other plays that might only happen a couple of times a month, so I feel I have to try and learn from them when they occur. So that's how I get into trying to trade multiple setups.

So here's a question to the profitable traders.... how many setups do you trade as part of your plan? Do you have slightly different rules based upon what is happening in the market on a given day, or is it the same thing every day? Really interested to hear any answers.

 

[dv4632]

I did very well today, so not much to report. I did this more to get feedback on my mistakes so I won't go into too much detail on the winners.

FYI most of my trades are in sim. I've tried some 1 lot live trades but don't have enough consistency to go all live. I figure it's better to continue honing my pattern recognition and decision making for now. Besides, I've been using TOS and have been hearing complaints about their fills being bad, or charts being a second or so slow at times, not to mention the freeze-ups, so that makes me nervous about day trading live with them. Don't really need that effecting me when I'm trying to trade! I'm just using them to practice on because they're free, will be switching over to someone else when I really get going.

I didn't get any of the morning downside, couldn't find an entry I liked. I got long on the 11:00 low, the tape seemed to be running out of steam, put in a couple of doji bars on the 5-min, targeting a retrace back to the 20ema and S2 pivot. Worked perfectly. Yeah, it's countertrend, but I knew that going into it.

Next was another long at 1:50 which worked out well. Had a profit order set at 1313.50 at the S1 pivot. Those were my two trades for the day.

 

[dv4632]

Looking at the 5-min day session chart (SPY) there has been a clear series of higher lows since yesterday, so until I saw a lower high I was in "buy pullbacks" mode.

When I saw the doji bar form at the 20ema I got in when the high of the doji was taken out. We also had VWAP and yest VAH just below that area on the ES chart. But I got stopped out on that little jiggle the market had there.

So price came down into the VWAP/VAH/50ema confluence, and was still a higher low, so I pulled the trigger again. I decided I was going to hold for a higher high, and the pivot R1 provided a nice exit point. Being stopped out on a trade, and then taking another trade in that direction shortly thereafter has been a major challenge for me. But I am getting better at it. I figure as I keep practicing I'll build enough confidence in my trading and pattern recognition that the fear of having two losers in a row on the same trade idea will not bother me as much, because I'll be confident in my abilities to make any losses back.

I've had a good week. Much needed, as I had lost money three weeks in a row prior to this and was beginning to question myself a bit.

 

[Matcha]

Quote from dv4632:

I was reading part of Matcha's journal where Nodoji was advising her to stop trying to trade so many different setups, and instead focus on mastering just one.

...

ha, since you brought up my name! So I thought I will share my experience with you. But I am not a profitable trader yet. Just a B/E trader in SIM.

I think it's cool to use mutiple tools as long as you are comfortable with them. Then the next job is to know when not to look at them in certain context. And how to use them to help make trading decisions.

I used to add all different method into one. And I often get extremely confused while in the same time I had to learn how to read the market. I am glad now I only use Bar by Bar and I found it really works for me. I actually enjoying doing that too. I like the process of making both bulls and bears case, looking for which sides are trapped and how I take advantage of them as bars are forming etc... I am still trying to learn that since it's a pretty comprehensive method. With more understanding the market, I am sure I will gain more experience and understand the logic behind each pattern in different context, so I can take trades with more confidence.

As far as setup, I am only trade H2 and L2/ ABC corrective move/Flags/2 attempts. When it is trendless, I fade the 2nd attempt failure if the range is large enough for me. Or I SOH.
I used to trade 4 setups. Now I have much clearer mind while trading since I only look for the number of "2".

ANd its easy for me to do the post market analysis.