ES Journal Archive (2009 - 2010)

[ES.Dreamer]

Ammo,

Thank you for your posts, charts, and commentary, even with your ADD I read them

Sharing some experience...

Best place to short an inverse head and shoulder is above the neck. Especially if you don't mind a little heat.

Most of them will want to come back to the neck for a retest, this is where you can reduce risk, and if things go well, it will eventually fail to flip the neck and end up taking the shoulder and many times the head as well for new legs.

Not saying this is the case here, as you know, we never know the outcome of the markets, but I was taught to play necks this way and based on my experience and realized profits, I know of no better way. I can honestly tell you it's the herd the one who tries to buy the breakouts. Pays to think outside the box.

In other words, don't short below the neck, only above it, or you could find yourself painfully early as they are usually "designed" to trap buyers high.

ESD

 

[ammo]

thanks

 

[Redneck]

I agree with NH

I may have bitched Ammo out awhile back – but I would never bet against him


RN

Quote from No.Heat:

I rarely get involved in these pesky debates and eventhough I agree with you and Atticus on Schizo's flip flopping science fiction trading I felt I had to interfere when it comes to Ammo.

Ammo is actually doing brilliant trading and I will explain why.

ES is an extremely whippy instrument and by placing trades with small stops you risk the typical infamous "death by a thousand stops" so by doing what he does he takes care of this problem.

Contrary to traders averaging down in lunacy as you stated, ammo not only has a max risk parameter aka emergency max pain, but he is also consistently managing his average fill when realizing he is wrong. I'm sure the guy is properly capitalized.

His decision for mostly going short probably has to do with his experience with the markets. Market as whole is far more likely to have an enormous drop overnight than a double digit upside move. On top of that what a coincidence that "Flash Crash Day" was on the downside. When we will see a "Flash Rally" on the upside on the markets ?

Once again, just like Atticus stated, Ammo is the reason I read this journal, I just wish he had a writing style with more clarity, as sometimes his writing is lazy and confusing, but the concepts are solids.

That's it for me at this point, good trading.

 

[JSSPMK]

Re - herd buys breakouts.

It's not bad, already up 70+% in 8 months. Due to headfakes & most importantly not knowing how to trade breakouts they are looked upon as a 0 edge strategy, but in my experience breakouts are a necessity as up trends need new highs & down trends new lows. Just like Ammo scales into a position, with breakouts I scale in until I hit the right one. That way you are warranted to be on right side when it breaks. Plus I increase size after every failed breakout. I only deal with daily & upwards levels.

Quote from ES.Dreamer:

Ammo,

Thank you for your posts, charts, and commentary, even with your ADD I read them

Sharing some experience...

Best place to short an inverse head and shoulder is above the neck. Especially if you don't mind a little heat.

Most of them will want to come back to the neck for a retest, this is where you can reduce risk, and if things go well, it will eventually fail to flip the neck and end up taking the shoulder and many times the head as well for new legs.

Not saying this is the case here, as you know, we never know the outcome of the markets, but I was taught to play necks this way and based on my experience and realized profits, I know of no better way. I can honestly tell you it's the herd the one who tries to buy the breakouts. Pays to think outside the box.

In other words, don't short below the neck, only above it, or you could find yourself painfully early as they are usually "designed" to trap buyers high.

ESD

 

[No.Heat]

Quote from JSSPMK:

Re - herd buys breakouts.

It's not bad, already up 70+% in 8 months. Due to headfakes & most importantly not knowing how to trade breakouts they are looked upon as a 0 edge strategy, but in my experience breakouts are a necessity as up trends need new highs & down trends new lows. Just like Ammo scales into a position, with breakouts I scale in until I hit the right one. That way you are warranted to be on right side when it breaks. Plus I increase size after every failed breakout. I only deal with daily & upwards levels.

JSSMPK,

I read your journal. If you ever catch a long consolidation, that does not break out but instead keeps faking both sides my understanding is that you could be in trouble.

On top of that, due to your martingalish sizing you are only using a very small portion of your capital correct ?

You mentioned something like 5% max pain, does that mean you are 70% up on the capital used to achieve no more than 5% max pain or 70% on all capital ? I hope you see my point you don't want to trick yourself, underleverage is also problematic as we want to move all of our capital.

For what is worth, what ESD shared is pure gold. In fact, I will add the following, in downtrends fading bullish reversals is money, and in uptrends fading bearish reversals the same but only after they look "confirmed", full trap in effect. As he said, must learn to think outside the box to survive this game because as you know, it's damn brutal.

 

[No.Heat]

Quote from ES.Dreamer:

No Heat,

Thank you for those insights very interesting logic, always a pleasure to read distinct styles of trading.

I suppose you consider taking heat as opportunity hence your username?

ESD

My pleasure.

Yes, precisely, I see heat as opportunity until I realize I'm dead wrong, much like Ammo, then time to take the loss and move on to the next trade. The balance is of course obtained by letting winners run full blast, without this, you don't stand a chance.

 

[NoDoji]

Quote from JSSPMK:

Plus I increase size after every failed breakout. I only deal with daily & upwards levels.

Do you mean that if you trade a breakout and it fails, you exit the position and try again with larger size on the next attempt to break that level?

 

[NoDoji]

Quote from No.Heat:

The balance is of course obtained by letting winners run full blast, without this, you don't stand a chance.

NH, what is your technique for riding winners? Do you trail a stop, scale out, base exits on price action near major levels, exit on pushes to new highs/lows and re-enter on pullbacks, or...?

 

[No.Heat]

Quote from NoDoji:

Do you mean that if you trade a breakout and it fails, you exit the position and try again with larger size on the next attempt to break that level?

Yes but he takes the opposite side on the next trade as far as I recall from his journal posts. However, he is underusing capital a great deal, and this is a problem. For instance, if he loses 5 in a row he loses 5% of his capital, therefore, Im assuming his 70% claim is only on the chunk of the capital used for the 5 attempts and not on the full capital he used to based his max 5% risk.

 

[No.Heat]

Quote from NoDoji:

NH, what is your technique for riding winners? Do you trail a stop, scale out, base exits on price action near major levels, exit on pushes to new highs/lows and re-enter on pullbacks, or...?

I don't trail stops, I'm either wrong or I get my targets, no bullshit in the middle as this kills my expectancy.

Breakeven trades do not exist in my trading only winners and losses.