If you can spot the trend, it's probably already too late...

[MsFutures]

Nodoji:

These are my questions after viewing your trades from last Thursday.

1. First Trade: even though you had higher lows in place before you place the 1st trade, I also see Lower High (compared to the High at 5:20am or so) put in by the red candle right before your entry bar. Wouldn't this LH negate your long bias at this point?

2. Second Trade: the large green candle bouncing off 20ma tells me the up trend is still strong therefore I would be still thinking long. Why did you short after the small bar -- couldn't this small bar be just a little pause on the way up (given the size of the green bar, a little pause is only normal, is it not?). My point is you seemed quite sure about the reversal as you immediately put in your 3rd trade.

3. Third Trade: at this point I might still see "long" (at least not short) as the bar right before your entry bar left a long tail signaling the selling was not very strong. Of course the trade proved you were right. What did I miss?

4. Fourth and Fifth Trade: these are most amazing entries because the stops are just a few pennies. I have the notion that you always wait until the bar completes before you put in a trade (Brooks emphasized this notion in his book). I know you have this notion too. However, how do you reconcile this notion with your decision to put in these trades before the bars were completed?

Thank you Nodoji!

OC

 

[NoDoji]

Quote from OptionsCharm:

1. First Trade: even though you had higher lows in place before you place the 1st trade, I also see Lower High (compared to the High at 5:20am or so) put in by the red candle right before your entry bar. Wouldn't this LH negate your long bias at this point?

The price action just before I entered said "long", but after I was in the trade I noticed the LH and started second-guessing. I reminded myself to trust the trade, every time I micromanage I regret it. Price has a strong tendency to test levels and the speed with which it came right back and retraced the final push down told me that overnight resistance would likely be tested. When price bobbled back and forth I hated this trade, but I heard my friend Geez' voice in my head saying, "I found that leaving my initial stop and target in place produced the most consistent gains," and I figured I should at least try it one time. I will be honest, I doubt I could ever stay in a trade like this again; it just stressed me out the whole time. In a do-over situation I would've exited at b/e earlier and probably re-entered a few bars later.

Quote from OptionsCharm:

2. Second Trade: the large green candle bouncing off 20ma tells me the up trend is still strong therefore I would be still thinking long. Why did you short after the small bar -- couldn't this small bar be just a little pause on the way up (given the size of the green bar, a little pause is only normal, is it not?). My point is you seemed quite sure about the reversal as you immediately put in your 3rd trade.

The bar I shorted was a medium size green candle at first, but when it retraced 3/4 of itself, leaving a lower high I became an early short and got trapped by placing a stop at the high of the previous bar. Had I been watching the 5-min chart I doubt that 2nd trade would've happened.

Quote from OptionsCharm:

3. Third Trade: at this point I might still see "long" (at least not short) as the bar right before your entry bar left a long tail signaling the selling was not very strong. Of course the trade proved you were right. What did I miss?

The 3rd trade I was now confident. Volume bars were red, the bar I entered on left another LH, and I'd seen lower channel line overshoots off this kind of setup so often that I had pure faith in it. What you missed from the static chart is how price is acting in real time. Sometimes it just talks to you and some instinctive part of you says, "Hey ho, let's go!"

4. Fourth and Fifth Trade: these are most amazing entries because the stops are just a few pennies. I have the notion that you always wait until the bar completes before you put in a trade (Brooks emphasized this notion in his book). I know you have this notion too. However, how do you reconcile this notion with your decision to put in these trades before the bars were completed?
[/QUOTE]

By this time resistance was established near the now-falling moving average. Intraday, this confirms the previous trend has reversed and now I expect 3 or more pushes down. 4th trade price had already sold off the 20 hard on volume, the green bar no volume and it couldn't even test the previous bar's high: "Hey ho, let's go!"

Same for the last trade, price tries to break through the 20 and simply can't. If it can't go up, it will most likely move down to test the next level. I didn't need to wait for those bars to complete, because the previous bars told me all I needed to know.

I've been manually back testing using only the 5-min chart this weekend, so we'll see how it goes this week. I like the 3-min chart for various reasons, but I believe it should only be a cross-reference and I should wait for 5-min bars to complete before trading a setup.

 

[FreeMarketRider]

Quote from NoDoji:

A Doji signifies indecision; my goal as a trader is to be decisive

That says it all. Thanks for posting a page from your playbook. Doubts and second guessing haunt us all - Kudos for the discipline to work it

 

[Bakinec]

Ms. ND, thanks for taking the time and effort to post the chart and explain your trades in a very humble manner for that kind of mastery over price!

I wish you many more trading days like these than others in the future!!

One aspect I seem to be at odds with in your method is volume. I have seen volume actually work against my trade set-ups a lot of times, especially when I was trading ES. I trade cable now and removed volume altogether. IMHO, volume is a distraction.

How would you describe the role volume plays in your decisions to enter trades?

 

[NoDoji]

Quote from Gubinec:

How would you describe the role volume plays in your decisions to enter trades?

Still learning a lot about relationships between volume and price. Most of how I use it is by instinct at this point, probably from having seen patterns so many times.

Very high volume at the top or bottom of a strong multi-legged trend usually indicates a reversal point - trend exhaustion.

 

[MsFutures]

Quote from NoDoji:

I didn't need to wait for those bars to complete, because the previous bars told me all I needed to know.

Dear Ms. Nodoji,

I love and admire your confidence in the action reading and your animating and colorful "Hey ho, let's go!". Of all of the details you laid out, your "Hey ho let's go" is going to do it for me I think!

I would like to take advantage of this thread to congradulate you on a record day. Boy I am not surprised! May you have many many more record days!

OC

 

[NoDoji]

Quote from OptionsCharm:

Dear Ms. Nodoji,

I love and admire your confidence in the action reading and your animating and colorful "Hey ho, let's go!". Of all of the details you laid out, your "Hey ho let's go" is going to do it for me I think!

I would like to take advantage of this thread to congradulate you on a record day. Boy I am not surprised! May you have many many more record days!

OC

Thanks OC!

Today was a "Hey ho Let's go!" day if ever there was one. I had a PLAN after the open today and when it set up as I expected I jumped on it, then followed the trend down.

Best part is I picked the exact trend reversal point after the open. It would appear I was top-picking without confirmation, but I decided that if price couldn't rally beyond the previous support zone of 1193.50 following the good LEI news, I was shorting with size. I was going to consider that a failed triple top setup, using last Friday's DT from that level. Sure enough, it failed to break through and I shorted @ 1192.00, covered 1188.35, shorted @ 1190.00, covered 1186.50, shorted 1187.00 and sat on my hands until the low was tested, exiting @ 1182.75. I think I was supposed to watch for and trade a reversal setup at that point, but I was basking in my glory.

The market has been so compliant lately, making decent moves, and following all the rules. Hope this keeps up!

 

[MsFutures]

Quote from NoDoji:

Sure enough, it failed to break through and I shorted @ 1192.00, covered 1188.35, shorted @ 1190.00, covered 1186.50, shorted 1187.00 and sat on my hands until the low was tested, exiting @ 1182.75.

I checked the chart for the exact points of your entries and exits and I dare to bet $250 that your pal Al didn't milk as much as you did from that big down trend. To come to that kind of accuracy is truly an art. I did have initial short entry at 1190 however as usual I meddled too many times along the trend and as a result sabotaged a good day.

Worst of all, my timing was so off that just at about 2pm EST, I put in a limit order to short 1181.50 as it looked like ES was going to break down further (challenging earlier low of 1179.75 and maybe more), luckily about 2 seconds later I felt uneasy about it and I was able to cancel it right before ES turned up decisively. This trade, other than being late in entry (right entry shall be 1:50pm or so at 1184) and soon to hit resistance, what else did you see in my mistakes? Why couldn't I see it was such a low point that a huge rally was to be born from there seconds later?

Frustrated that I even contemplated shorting at that low point (as I was well aware that my biggest sin was chasing), I was not able to jump in the huge rally unfolding right before my eyes. I hope I can really learn!

Anyway, did you catch the 2pm EST rally? I thought you must have to make your record day!

OC

 

[NoDoji]

Quote from OptionsCharm:

Anyway, did you catch the 2pm EST rally? I thought you must have to make your record day!

Days when technical price pivot points and price action work together so perfectly aren't all that common. All my trades were done before the opening 2 hours were over. What made it a record day was the fact I traded 5 lots. Someone posted a while back that trading 3 lots CL was similar to trading 10 lots ES. I figured since I've traded 2 lots CL at times and since I had a plan and a strong expectation for ES that morning IF a certain setup occurred, I shouldn't be worried about sizing up for a change