It was exactly two months ago that
Spyder told me to crawl, walk, run (
http://www.elitetrader.com/vb/showt...dertrader+cunparis+walk+run+crawl#post1807702) so I thought it would be a good time to ask for some input on my journey.
In that 2 months time I decided to temporarily put the Hershey equities on hold and do the futures journal. This was mainly because I've been using the IBD approach to equities for the past 2 years and felt comfortable with that which let me focus on something new. Also at the time the market was in a down trend which wasn't a good time to go long on stocks.
I've now made it to the end of the month on str/squ. I've made a lot of progress and I feel there are just a few things that are holding me back. And it is here that I'd like to get some feedback. I want to allow myself all the time it takes to become proficient in the tools that I have before adding more (DOM is the next chapter but I'm waiting a bit).
I'm finding that I'm able to find FTTs but there is just one small problem. Often I find an FTT and I reverse (I'm up to using a simulator). The prices moves a bit in the new direction and then reverses to make another attempt at the LTL. So I reverse, thinking what I saw wasn't an FTT. And usually I end up being proven right in my original FTT call and the price will then reverse again and go towards the RTL, so I reverse again. In theory it's all good but in reality I find that I often lose 50-100 dollars on each reverse, so that I often get down $200. I know that one shouldn't be concerned with P&L at this point, but at the same time I feel like the sim is telling me I'm a bit off. I have heard/read that Spyder will only lose a few ticks. I'm not sure how to do that.
Here is an example from Friday's ES:
At the first yellow circle at 10:35 I thought I had an FTT. In hindsight I'm not exactly sure why, in hindsight it looks like we couldn't confirm it until 2 bars later at 10:45 when volume dropped. I ended up reversing in the middle of the 2nd bar there (10:40) and went long. Then on the 3rd bar at 10:45 I thought I was wrong and I reversed again to go short. Then I realized that it was really an FTT and reversed yet again. I forgot how much the reversing cost me but it was around $200 or more I think. The other problem with this approach is that the entry point (the last reverse) is often too high and then the pt 3 of the new channel can drop below the entry. Overall it doesn't seem like a good situation.
So my question is did I miss anything that could have helped me to have a better reversal? And when one reverses and then you think you were wrong, how many ticks do you let it go against you?
This is actually the situation from the 2nd yellow circile at 11:10. I didn't want a repeat of the first yellow circle area so I figured I'd reverse sooner and if even if I'm wrong I could as Spyder says wash or even make a few ticks. I thought it was an FTT on the volume peak. But I was proven wrong.
For this one, I thought "let's just see what'll happen" and I didn't reverse. It dropped more and went over 200 euros against me. I was chatting with another participant here and he hadn't reversed so it was interesting cause we were chatting together, we both agreed on what was happening, yet I was long and he was short!
Since volume was not increasing I held my long position and finally at 11:25 it started going up and my $200 deficit quickly erased and because a very nice profit (I exited shortly after it left the channel, I had to take the lunch break).
now I don't think it's good to let a trade go against you $200, but at the same time getting whipped around reversing isn't good either. So I'm hoping that someone can offer some advice or insight to help me see what I'm missing.
A similar situation for me is the pt3. Often I think "ok I see decreasing volume, it's really low, this could be a pt 3, etc. and I enter. And then the price continues the direction it was going (against my position) but I hold. It sometimes go against me but usually I was just a little early in my pt3 and it ends up ok except for my entry wasn't as good as it could be. It's really the same situation as with the FTT I believe.
I remember bundlemaker saying Spyder told him to wait until 2 (or was it 1? I forget and can't find the post) bars after the FTT. But usually by then the entry is too risky.
I feel like if I can spot the pt 3 & ftt ok, it's just a question of timing. I think once I get the timing worked out then I'll be doing much better. It's just these bad entries that are causing me grief.
Sorry for the long post but I've really been doing a lot of work on this reading, practicing, studying, etc. It's hard doing the journal without being able to participate with everyone. Most of my questions do get answered in the journal but I think sometimes a bit of personal coaching/guidance is necessary to get over the hump.
Thanks to everyone who participated in the futures journal.
cunparis
PS: If anyone is going through the futures journal and would like to share experiences and problems, please PM me. I've already had one other person PM me and we've traded together a couple times and I can't tell you how valuable that has been for me. To bounce ideas around and talk it out. Very helpful and a lot of fun. I hope there are others.
