If You Can Draw A Straight Line . . .
- Thread starter dbphoenix
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So I got off to a good start this morning. Premkt was more or less a range (or a range within a range) noted on my chart. Soon after the open, the upper limit of that overnight range was briefly challenged and though breached, it was the briefest of breaches. I found myself shorting during the 9:34 bar.
Overnight, price had found either willing buyers or uninterested sellers at 66.50-67, and a little jousting developed right there at 67. I ended up exiting the market at the market during the 9:38 bar. A fortunate fill allowed me to make off with +4 points. Then price dropped through that support, and I was left watching like a deer caught in the headlights.
My next area of interest was 62.25 (not shown). I know that DbPhoenix would say 62.25, or 63, or 61, as we are not looking for surgical precision. But I awaited the 62.25 print, which never came. I felt the market wanted to rally. And I mean I was convinced of it by watching the chart and the T&S window, where I display time, last, and size. But, that deer in the headlights condition persisted.
Needless to say, that first trade was also my last, as I decided it best to sit on my hands. Why chase to recover a profit that wasn't ever mine in the first place?
I did take notes as I continued to watch, but other than a long entry during the 10:40 bar (price leaving hinge-like congestion), or the second chance long entry during the 10:49 bar (price coming back to the approximate mid-point of the hinge-like area), neither of which I took, I felt out of sync somewhat. I think I was disappointed by my early exit from that short, and then my unwillingness or inability to pull the trigger on a long down between 63-65.
I will continue to watch, as I am very much "in-training," but I am done trading for the day. My plan, going forward, is to trade and take what the market can give me from 8:30 - 11:30 AM EDT, and then to enjoy other things in life. I spent time in the "Making of a Method" journal by Game, and re-reading your essay on the Trading Journal/Trading Log, and I have decided that I need to redouble my efforts to re-establish a more meticulous and accountable record of my trading and what I am trying to accomplish now that I am moving into futures and away from stocks.
One thing that may be throwing me off when trading the NQ is that when I traded stocks, I always had that big opening gap as a reference point with firm implications (I traded long only, so above the gap - good, below the gap - no good). With the NQ, that is not the case - the reference points are many, each often with multiple implications, and mostly in my head.
Comments - good, bad, and otherwise - always welcome.
Thank you for the daily and hourly charts. I need to work on bringing that more into my planning.
Overnight, price had found either willing buyers or uninterested sellers at 66.50-67, and a little jousting developed right there at 67. I ended up exiting the market at the market during the 9:38 bar. A fortunate fill allowed me to make off with +4 points. Then price dropped through that support, and I was left watching like a deer caught in the headlights.
My next area of interest was 62.25 (not shown). I know that DbPhoenix would say 62.25, or 63, or 61, as we are not looking for surgical precision. But I awaited the 62.25 print, which never came. I felt the market wanted to rally. And I mean I was convinced of it by watching the chart and the T&S window, where I display time, last, and size. But, that deer in the headlights condition persisted.
Needless to say, that first trade was also my last, as I decided it best to sit on my hands. Why chase to recover a profit that wasn't ever mine in the first place?
I did take notes as I continued to watch, but other than a long entry during the 10:40 bar (price leaving hinge-like congestion), or the second chance long entry during the 10:49 bar (price coming back to the approximate mid-point of the hinge-like area), neither of which I took, I felt out of sync somewhat. I think I was disappointed by my early exit from that short, and then my unwillingness or inability to pull the trigger on a long down between 63-65.
I will continue to watch, as I am very much "in-training," but I am done trading for the day. My plan, going forward, is to trade and take what the market can give me from 8:30 - 11:30 AM EDT, and then to enjoy other things in life. I spent time in the "Making of a Method" journal by Game, and re-reading your essay on the Trading Journal/Trading Log, and I have decided that I need to redouble my efforts to re-establish a more meticulous and accountable record of my trading and what I am trying to accomplish now that I am moving into futures and away from stocks.
One thing that may be throwing me off when trading the NQ is that when I traded stocks, I always had that big opening gap as a reference point with firm implications (I traded long only, so above the gap - good, below the gap - no good). With the NQ, that is not the case - the reference points are many, each often with multiple implications, and mostly in my head.
Comments - good, bad, and otherwise - always welcome.
Thank you for the daily and hourly charts. I need to work on bringing that more into my planning.
Per DbPhoenix's comment last week, that is a good idea. I actually have that as part of my trading plan with the exception that I will short at the extreme of the range, but not from within the range, so long as the hourly trend is up.
Thank you for posting your charts, I have found them helpful.
You're making the common mistake of focusing on entries and exits and trades you wished you'd taken and didn't and trades you took and wished you hadn't rather than staying centered and observing what traders are doing.
Traders spent hours hovering around 68, +/- 1pt. This was their equilibrium level. It was possible that this might provide a launching pad either up or down at the open, and there was an attempt to rally, but that moved only four points. Your short was a good one, and your exit was prudent, but notice that traders took price the same distance from the equilibrium level to the downside, i.e., 63.
Now to play it, one could go long and exit at the equilibrium level, or hold in anticipation of another pull to the upside. Or wait until this range is broken one way or the other. Either would have required astute observation to keep the trader in since a demand line drawn from 63 to 68 would be broken 45m later but hold above the previous swing low. Trading more than one contract, whether real or sim, would enable the trader to keep dancing rather than become a wallflower.
When faced with a pre-open equilibrium level or trading range, it helps to plot the mean of all this and imagine a rubber band stretching one way, then the other. This is exactly what happened this morning. Traders had established an eq level, tested it both ways, then decided they wanted to move on to a higher level, which is implied by the longer-term trend I posted.
Finding levels of potential interest in advance is useful, but what matters is what traders are doing, not what one thinks they ought to be doing.
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