ES Trend Following

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Here is an updated performance chart for my trading since initiation of this journal. I do regret having tried the last short which turned out to be a mere pullback in the new bullish trend we are in. Now I am missing out on this major move. Trading is something I want to seek perfection in. But I tell myself that it is fine to sit on the sidelines, rather than mess up with random trades. The new charting setup I am using showed how it was nothing of serious matter, yet I took the chance.

Even until this moment, I am not seeing any chance for bears to turn the market around entirely. A lot needs to happen first, before bears can cause any serious damage. A reaction will be a welcome entry opportunity to go long again. One support area I am noting in the daily chart is 1290. Going forward, I want give the Rainbow Moving Averages much more weight in my perception.

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Quote from gmst:

Wow!!

If you keep adding contracts as your equity grows, you are talking about 7 figures account starting from an initial balance of 7k per contract in 2 years!

Great performance. Man, you should go and backtest this thing by hand over the last 5 and then last 10 years - especially periods before 2008 to see what happens when vol was low.

Edit: Alright, lets make it more conservative, even 10k per contract takes you to 7 figures in 2 years if the performance sustains.
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It is impossible to backtest his views.
 
Quote from oilfxpro:

It is impossible to backtest his views.
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It is discretionary; no question about it. But my current performance gives the backtest some credibility, as it appears to be a continuation of the backtested result.
 
Quote from gibdi0n:

B tell me some good trend following books, web sites, youtube videos that helped you in your setups.
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I'm sorry to say that there has been not a single book (or any other material) which helped me in my trading, and I didn't read just a few. As I kept saying in my previous posts, the most significant breakthrough was making plain printouts of price action in the 1H ES chart spanning through several years. No indicators, no volume.
 
well I reviewed your trades on chart. U manage very good your stops. If u enter and it gets in your direction U rise stops faster then when U are in winning position. that is logical since U want to cut your losses. But the main thing that gives U edge is DISCIPLINE. How can U stay so disciplined? Average true range when U traded was 30 points. And that is 1500$ per day of range. Yet U did not got caught in whipsaws. OFC sometimes U miss a move but I would go like: wow its going up: BUY, then it stops, reverses, hits my stop loss, and I say oh that means its going down: SELL, than it reverses again, goes up, hits my stop on other side and now im down 2000$ and SAP ended on the same place. OMG where is my discipline.
Also I noticed that U made majority of your gains on few trades where U made over 5000$. And that says a lot. U dont chase tops, or bottoms, U dont have fixed take profit, your stops are well above the noise. When U get out it generally means that there is a major change in trend and U can easily reverse position. I often end up chasing market and got beaten like hell.
Now your last trade happen on January 13 and we were closing to top high in last 6 mounts, and I just guess you didnt want to risk anymore since U were sitting on some very good earnings.
 
I had reviewed your post again, it is a great journal and it helps. One question, how do you define the support and resistance? It seems you don't have many lines in your charts.
 
gibdi0n, I know this behavior too well. I've been chasing the market up and down with day trading but it did not suit my personality. Furthermore, it helps to look at the trend pattern in the bigger perspective. There are always strong moves during a trend, but what really counts is whether an important low/high has been broken that suggests a lasting reversal. In the time frames I use such as the 1H or 4H, the market does not move fast. It's actually very slow and gives you enough time to decide and ponder about the price action.

I'm not sure if the $1,500 ATR should be of any issue. Think about it: What is the reason that you are chasing the market? Is it because you cannot hold onto trades for more than a few minutes due to the excessive leverage with index futures? If that is the case, you may want to consider downgrading to the SPY (or CFDs if you are living outside the U.S.). When learning to trade, the ES is not an ideal instrument. It is much better done with the SPY. Back then I was so sick of my own trading that I decided to trade extremely small. It helped me at coming up with this trend following strategy, which I otherwise would never have considered and may still gamble my money away with day trading.
 
Quote from luckylucy:

I had reviewed your post again, it is a great journal and it helps. One question, how do you define the support and resistance? It seems you don't have many lines in your charts.
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Hm, good question. Support/resistance is an area that is visibly standing out in a chart because price has touched it several times. You might notice that price has always ranged 20-30 points while at the same time hitting a visible horizontal area. Once that broke, a trend reversal was usually at hand and you could enter with the best risk to reward ratio.
 
Thanks a lot. How do you draw your support/resistance lines? Are you using 1 hr chart since you trade on them or you use bigger time frame?
When i was trading ,there were situations like fake breakout the support/resistance. It seemed the market broke out the lines, but it rebounded to the range, even went to the opposite direction. May i ask how do you avoid this kind of situation and how can you tell a breakout is true or not?
Quote from Bombardier:

Hm, good question. Support/resistance is an area that is visibly standing out in a chart because price has touched it several times. You might notice that price has always ranged 20-30 points while at the same time hitting a visible horizontal area. Once that broke, a trend reversal was usually at hand and you could enter with the best risk to reward ratio.
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