MacAttack

[macattack]

1st: Short (16) In chop, so faded a pretty green bar. 17-tick stop, 12-tick target
2nd: Long (8) Price broke out of triangle. Bought on retracement. 28-tick stop, 21-tick target. Moved stop to 15 ticks after pivot. Early exit when it didn't pop like I thought it would when it hit new high. Entry was way way way too early.
3rd: Long (-12) Double top, but seems to be finding support at trendline. Target 15 ticks, stop 12 ticks. Hopefully a stop run on the double top shorts.
4th: Long (-8) Same trade as above. 11 tick stop, 20 tick target.
5th: Long (21) 3 Pushes down. 8 tick stop, 21 tick target
6th: Short (7) Potential Lower High with tiny volume climax around 60-min trendline. Stop 11 ticks, 21-tick target. Lost faith in this one.
7th: Long (-10) 11 target, 10 stop. Retrace after TL break & bounce off of channel.
8th: Long (-16) Double trendline support. Back side of major tl & minor uptrend line. Stop 15 ticks. Target 15 ticks.
9th: Long (-18) Horizontal support. 15 tick stop. 21 tick target. Moved stop to 19 ticks because of a 2nd support level right where my first stop was.
10th: Long (-14) Bought another support level. 2 contracts.
11th: Long (-11) Bought same support level. 2 contracts.
12th: Long (8) 3 Pushes down to yesterday's low. 2 contracts. 10-tick stop. 25-tick target. Moved stop to 6 ticks. Added a 3rd contract. Stop breakeven.
SIM TRADING TOTAL
(-29) Ticks (minus commissions)
5 Winners
7 Losers

NOTES
About my 100th losing day in a row I think. Obviously desperate at the end so I kept upping the contracts with tiny stops. Probably not the greatest idea until I've gotten much better at trading. Was doing somewhat ok until the 7th trade. Then I fell apart.
Trades 3, 4,& 5 were also frustrating. The double-top was taken out like I thought, but my timing was off, so by the time I got my 21-tick profit I'd already lost 20 ticks. Pretty much a waste.

 

[jas_in_hbca]

Hey Mac,

I recognize some of those trades as ones I used to take.

Here's how I see it FWIW and keep in mind I am not consistently profitable.

That big bar at 7:04 with no immediate follow through makes me a bit cautious but the PB still offers a valid PB entry. The move into the DT is not very strong and the DT confirms that your long entry is not a good odds trade.

The next entry is fine (possibly a bit early) in a strong trend but I would not consider this a strong trend so not a valid entry for me

I can see 3 reasons why a long at 97.75 at 7:50 should be taken.

I see no valid long trades near EOD. Those look like frustration trades to me.

Hope you don't mind my comments.

 

[NoDoji]

Obviously desperate at the end so I kept upping the contracts with tiny stops. Probably not the greatest idea until I've gotten much better at trading. Was doing somewhat ok until the 7th trade. Then I fell apart.

You fell apart because you didn't shift gears when the uptrend reversed.

On the 5-min chart, draw the lower trend line across the lows from pre-market and then look on your 1-min chart at the price action surrounding that line during the 10:56 to 11:08 bars (your time). That early LTL still held as support during the swing low at 10:20.

The PA during your 11:08 bar was an early trend reversal signal because the 11:07 bar broke that LTL a second time, price pulled back to the underside of that LTL and then price broke the previous swing low (from 10:59) off a lower high.

Now we have lower highs and lower lows.

This is the kind of price action that tells bulls to bail and bears to sell. This is "double pressure" as Bob Volman so aptly puts it.

At that point, trade only to the short side until the PA tells you the potential down trend isn't working and if it is working, continue to trade to the short side until a similar reversal sets up as it did from the highs.

 

[macattack]

I definitely missed the trend change. I kept telling myself it was just chopping around before going up. I had trendlines drawn, but it just didn't register.

I do get quite confused when price is going down, but it arrives at support.
Do you go short, stay short, buy at support & go long?

Obviously the right thing to do today was to ignore the support & sell, sell, sell.
(My support levels are a little questionable I suppose, but at the time I "thought" they were valid & I "thought" price would bounce).

Especially the 1st arrow on my chart. I thought I was a real master trader when I took that one.

 

[NoDoji]

I do get quite confused when price is going down, but it arrives at support. Do you go short, stay short, buy at support & go long?

Obviously the right thing to do today was to ignore the support & sell, sell, sell.
(My support levels are a little questionable I suppose, but at the time I "thought" they were valid & I "thought" price would bounce).

Especially the 1st arrow on my chart. I thought I was a real master trader when I took that one.

You seem to be trading off a 1-min chart and targeting more than 10 ticks profit, so you're not a micro-scalper and the 5-min chart would be your main chart for key levels, not a 15-min chart.

The convergence of TLs could indeed serve as a support level, but you would only enter long off that level if the price action on your trading chart provided a setup.

Look at the 1-min chart where those TLs converge and tell me where a price turn occurs or, better yet, where a 1-2-3 pattern gives you an even more confirmed long entry than an initial price turn. There is neither. No 1-min bar high breaks upside as price falls through those levels.

If you anticipate, you may get awesome entries when it works, but you have higher risk of being the first mouse who gets trapped. It's a trade off; my choice is to get in on confirmation, like a 1-2-3 or the upside break of a 5-min bar high.

Once a trend reversal is in play, support is where you take profits, not where you initiate a counter trend trade. When I short I look at the next previous support level in line to be tested and either take profits there or watch and see if price keeps dropping. Then I get ready to short the next pullback (many trend followers hold through the pullbacks and add to their winners). Just keep shorting until a reversal setup triggers. You'll then have a scratch trade or a loser; consider that your tip to Mr. Market for all the profits you got during the trend.

 

[NoDoji]

Here's an exercise to help study long/short sentiment using strictly a 1-min chart.

Place a 20-period and a 105-period EMA on the 1-min chart.

When price is above both and both are rising, only look for long trades as long as price doesn't close below the 20.

When price is below both and both are falling, only look for short trades as long as price doesn't close above the 20.

When price closes on the opposite side of the 105, you'll notice that the 105 flattens. This is a warning that no side has control and the environment is likely to become chop/range for at least a while.

Now study various methods of entry as price pulls back to that rising or falling 20EMA as long as price is on the same side of the rising or falling 105EMA. Compile stats for various methods of with-trend entry on pullbacks and figure out a rule for entry, stop loss placement and profit taking.

 

[Tonkadad]

I do get quite confused when price is going down, but it arrives at support.
Do you go short, stay short, buy at support & go long?

The quote above is a big STOP sign.

I believe you are sim trading (that's good) but I think you need to take a break. It's good you are not using up your financial capital but IMHO you are definitely using up trading confidence capital (I am sure there is a better way to describe), which I believe is harder to replace.

You have been given some exercises to do, do them. Have the discipline to commit to them until you prove one way or the other that their is value. It will help you to feel in control again.

 

[k p]

Here's an exercise to help study long/short sentiment using strictly a 1-min chart.

Place a 20-period and a 105-period EMA on the 1-min chart.

When price is above both and both are rising, only look for long trades as long as price doesn't close below the 20.

When price is below both and both are falling, only look for short trades as long as price doesn't close above the 20.

When price closes on the opposite side of the 105, you'll notice that the 105 flattens. This is a warning that no side has control and the environment is likely to become chop/range for at least a while.

Now study various methods of entry as price pulls back to that rising or falling 20EMA as long as price is on the same side of the rising or falling 105EMA. Compile stats for various methods of with-trend entry on pullbacks and figure out a rule for entry, stop loss placement and profit taking.

Since I am following this thread, I wanted to put up a chart to illustrate this point that NoDoji is making.

 

[macattack]

Here's an exercise to help study long/short sentiment using strictly a 1-min chart.

Place a 20-period and a 105-period EMA on the 1-min chart.

When price is above both and both are rising, only look for long trades as long as price doesn't close below the 20.

When price is below both and both are falling, only look for short trades as long as price doesn't close above the 20.

When price closes on the opposite side of the 105, you'll notice that the 105 flattens. This is a warning that no side has control and the environment is likely to become chop/range for at least a while.

Now study various methods of entry as price pulls back to that rising or falling 20EMA as long as price is on the same side of the rising or falling 105EMA. Compile stats for various methods of with-trend entry on pullbacks and figure out a rule for entry, stop loss placement and profit taking.

I went thru this exercise with about 70 trades, and I'm pretty sure I didn't see what you thought I'd see. The only way I could see to make money was if both the 20 & 105 ema's were very strong & trending steeply. That does happen in CL, but more often it's a somewhat choppy little bastard. So I didn't come up with rules to make money using the 20 vs 105 ema's, but I realized how important a "strong" trend is vs a "weaker" trend.

What's funny is that I kept taking signals with the ema's & lost money. Then I did a bunch of trades & did the opposite, and I lost money. Then I decided I'll take some with the ema's & some against, and I lost money.

My best conclusion is that I would really hate trading based on those ema's. Not my thing.

But anyway I found this exercise was helpful in other ways. Every time I do a study like this I usually learn "something" even if it's not what I expected.

 

[NoDoji]

I went thru this exercise with about 70 trades, and I'm pretty sure I didn't see what you thought I'd see. The only way I could see to make money was if both the 20 & 105 ema's were very strong & trending steeply. [...]I realized how important a "strong" trend is vs a "weaker" trend.

Mac, this is exactly what I wanted you to see! This exercise is designed to help traders understand the power of a strong trend (or a strong trending move).

Those EMAs are like the Key on a road map. A dotted line on a road map might indicate a primitive dirt road and a solid double line might indicate a divided highway. If you want to get from point A to point B in the fastest and safest manner, you take the highway even if it looks like the dirt road route is shorter.

Now, I have no idea what methods of entry and trade management you tested off the very limited conditions I presented, but even if you weren't too thorough in that regard, you still you learned the power of trading for continuation in the direction of a strong trending move instead of trying to pick the end of the move.

But anyway I found this exercise was helpful in other ways. Every time I do a study like this I usually learn "something" even if it's not what I expected.

Now you have some idea of how much I learned by doing similar meticulous studies every day for hundreds of days.

* * * * * * *

When you started this journal you said, “If price makes a 1-2-3 reversal at support in an uptrend then go long…not because it's a certain pattern with a certain name, but because price stopped going down & turned up & the context it occurred in supports going long.”

So right out of the gate, you had a sensible trading idea consisting of a pattern that forms at key level (support) in a price action environment (uptrend) that places the odds of success in your favor (positive expectancy setup***). If you’ve done enough research surrounding this powerful price action concept, you'll have at least one method of entry and trade management that results in a net profit over each series of N trades.

*** I define a setup as a pattern of price action behavior - such as a double test of a level (possible 1-2-3 forming) or pullback bars in the opposite direction of the last directional price run - that occurs in a definable price action environment (trend, range, consolidation) under a specific set of conditions (filters).

I recommend that every aspiring trader master a single setup before even considering another. From the evidence presented in this journal, it seems like you haven’t done this yet.

The reason price movements often seem random to you is because the back and forth wiggles that occur on a 1-min chart (or on a price ladder) make it difficult to separate the signal from the noise. The noise can shake you out of a position that’s still valid and it can lure you into a position that makes no sense technically. It’s so easy to overtrade yourself into a hole if you’re focused on minute to minute price movement.

I'm going to be taking a break soon, so to keep you busy here are two more exercises to further hone your analytical skills (and maybe spark some trade ideas as well):

Exercise 1 (example is for short, just reverse for long):

1. Using the rising/falling 20/105EMA criteria from the last exercise (both must be rising or falling), when price drops at least 10 ticks below the falling 20EMA, watch for a pullback bar. For the sake of this exercise, a pullback bar is defined as a bar that closes with a higher low than the previous bar.

2. As soon as you see that setup, wait for the trigger, which occurs if the next bar doesn’t break the first pullback bar’s low. If this condition is met, sell short immediately at the close of this second pullback bar.

3. Place a 10-tick stop loss and a 10-tick profit target.

Exercise 2 (fading a range extreme):

1. Wait for the two EMAs to meet and flatten. This happens when price trades back and forth through them twice, meaning price has printed one swing high and one swing low outside these EMAs, which should be very close to each other.

2. If price begins to pull back toward the other range extreme, place a limit order to buy or sell 1 tick ahead of the previous swing high/low.

3. Place a 10-tick stop loss and a profit target 1 tick ahead of the opposite extreme.

Have fun!