Making of a method
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FT Day 10 Sept 5
Context: The push for the high of 3147 remains intact. Range has formed ON between 35 and 25, with current price towards the lower end of the range. Yesterday's strong rally has not reacted much so there could be some selling coming up, even though the LOLR remains up. However, any reaction downwards is going to find multiple S levels to work through. Plan is to wait for the range to be tested before determining the LOLR.
R: 3147 (High on the Daily)
R: 3140 Highest VAP in this upper area but still low overall
R: 3135 (DT from ON & PM) Low VAP
R: 3130 (MP of range from ON & multiple SH of latest downwave from 3135) Low VAP
S: 3125 (DB from ON) Med VAP
S: 3122 High VAP
S: 3119 (SL from 4th) Med VAP
S: 3109 (MP of upwave from 3083 to 3135) Low VAP
Review:
Session opened with a lot of indecision. Heavy R was being created at 27.75. The breaking of this R and the ret after presented the best opp of the day to go long at around 3128.50 in anticipation of the story about trader intentions to go for 3147.
The scale in on the long side during 0844 was aggressive since the immediate LOLR was down. But the long was taken within the context of the larger story, which was being supported by the PA.
R at 3137 was unexpected. This was a low VAP area and I had no intention of exiting here, especially with my new resolution of giving winners more room. But price fell and this was the moment of max confusion for me.
I exited to get back to neutral and to be available for any shorts since the larger LOLR was now at least even if not down.
The strong S at 0857 tilted the odds back to the long side. I got in again but made a click mistake that exited me out.
The action at 0905 indicated that someone was waiting to load up at lower prices. So the basic story remained intact although I had been shaken out of the long positions.
Since the story was intact, my next opp to get in was after the hinge broke to the upside, in anticipation of breaking through the R level of 35. Once this effort failed, the story became about insufficient effort to carry price up despite intense buying whenever price dipped.
So once price reached R again, I was more confident about going short upon a retest, which I got. However, the HL's from earlier made me ready to exit the trade if any adverse movement was shown.
Once price fell, I expected buyers to come in at these lower prices. Price fell further than expected to range bottom and the confirmation of Range discouraged me from any further entries unless price got close to the bottom again.
The voice recorder helped a bit, but I need to get in the rhythm of using it. Anxiety and freezing up is still quite high.
http://www.sierrachart.com/image.php?l=1378428332199.png
Context: The push for the high of 3147 remains intact. Range has formed ON between 35 and 25, with current price towards the lower end of the range. Yesterday's strong rally has not reacted much so there could be some selling coming up, even though the LOLR remains up. However, any reaction downwards is going to find multiple S levels to work through. Plan is to wait for the range to be tested before determining the LOLR.
R: 3147 (High on the Daily)
R: 3140 Highest VAP in this upper area but still low overall
R: 3135 (DT from ON & PM) Low VAP
R: 3130 (MP of range from ON & multiple SH of latest downwave from 3135) Low VAP
S: 3125 (DB from ON) Med VAP
S: 3122 High VAP
S: 3119 (SL from 4th) Med VAP
S: 3109 (MP of upwave from 3083 to 3135) Low VAP
Review:
Session opened with a lot of indecision. Heavy R was being created at 27.75. The breaking of this R and the ret after presented the best opp of the day to go long at around 3128.50 in anticipation of the story about trader intentions to go for 3147.
The scale in on the long side during 0844 was aggressive since the immediate LOLR was down. But the long was taken within the context of the larger story, which was being supported by the PA.
R at 3137 was unexpected. This was a low VAP area and I had no intention of exiting here, especially with my new resolution of giving winners more room. But price fell and this was the moment of max confusion for me.
I exited to get back to neutral and to be available for any shorts since the larger LOLR was now at least even if not down.
The strong S at 0857 tilted the odds back to the long side. I got in again but made a click mistake that exited me out.
The action at 0905 indicated that someone was waiting to load up at lower prices. So the basic story remained intact although I had been shaken out of the long positions.
Since the story was intact, my next opp to get in was after the hinge broke to the upside, in anticipation of breaking through the R level of 35. Once this effort failed, the story became about insufficient effort to carry price up despite intense buying whenever price dipped.
So once price reached R again, I was more confident about going short upon a retest, which I got. However, the HL's from earlier made me ready to exit the trade if any adverse movement was shown.
Once price fell, I expected buyers to come in at these lower prices. Price fell further than expected to range bottom and the confirmation of Range discouraged me from any further entries unless price got close to the bottom again.
The voice recorder helped a bit, but I need to get in the rhythm of using it. Anxiety and freezing up is still quite high.
http://www.sierrachart.com/image.php?l=1378428332199.png
For the anxiety;
Try taking long â slow â deep breaths (with the intent of lowering your heart rate)
For the freezing up;
Try mentally stepping outside yourself â taking an objective look at yourself â then asking yourself out loud (so you record it)
Why am I anxious?
Why am I freezing up?
Then answer both questions out loud (again while recording it)
Listen you your answers
================================
On another note
Your analysis is fantastic Sir
RN
These are excellent suggestions. Once upon a time I even suggested that the trader use a pulse monitor like runners use, but his anxiety attacks were pretty severe.
I suggest here that you look at an old thread called Zen and the Art of Trading (http://www.elitetrader.com/vb/showthread.php?s=&threadid=38333). It is outstanding, and, unfortunately, largely forgotten. One quote jibes with what RN suggested:
If you get to the fourth post, I was a bit testier in those days
I suggest here that you look at an old thread called Zen and the Art of Trading (http://www.elitetrader.com/vb/showthread.php?s=&threadid=38333). It is outstanding, and, unfortunately, largely forgotten. One quote jibes with what RN suggested:
- You need to be two people-- one is the guy who is doing it, and the second is the guy who steps back and watches the other guy from a slight distance and evaluates whether the first guy is too tired, too upset, too unfocused, too much on tilt, etc, to be sitting at the poker table, trading, or whatever. Most important, this second guy must have the AUTHORITY to pull the first guy out of the chair, if he doesn't like what he sees.
Larry Phillips
If you get to the fourth post, I was a bit testier in those days
I've copied that exchange into my notebok. I may not be the only one who finds that exchange educational, so I thought I would put it together for those who might overlook its usefulness, or otherwise miss it scrolling through.
Still a great journal, Game!
FT Day 11 Sept 6
Context: The breakdown from the value zone turned up sharply during ON and continued up sharp - just a few points short of the High.
The Rev HL and S retest LH has created a range/hinge during PM. S is well defined at 35/30. Being this close to the high, it is likely that if price goes down to 35, it will turn for the attempt back to the top. LOLR up. Clear boundaries today and no reason to trade far away from them.
R: 3147
R: 3145 (PM High)
R: 3140 (mp of PM action)
S: 3135 (PM S and yesterday's Range top)
S: 3130 (mp of yesterday's range)
S: 3125 (ON SL and yesterday's range bottom)
Review:
Being long at the open took away from being able to act fast once the LH at 0846 was created. Until 3035, I did not view the LOLR as being down, mostly because of the S levels right below.
The moment to act was when the Rev wave from 3142 went past S level of 3135. This was a critical point. I was expecting a bounce here. However, the failure of price to bounce back immediately and the presence of congestion on the 5s should have alerted me. The short would have been placed just below the congestion at 3134. This was a good example of placing an order close to the danger level.
I then waited till the next S level of 30. Once again, there was an opp to get in once price retraced from 27.75 and found R at 30. The sell stop would have been place below this R.
Having failed to enter the short side, I reminded myself to not go counter trend. But due to the wave extension at this point, I wasn't excited about going short either.
3109 was a high VAP zone. Once pace flattened here, I waited for the technical rally to retest and then went long. The sell off represented an oversold condition and the long was legit.
The next couple of longs are of lower quality. However, the psychological impact of these trades prevented me from seeing that price was at the old 3100 level and that this was the best time to go long.
http://www.sierrachart.com/image.php?l=1378479920727.png
Context: The breakdown from the value zone turned up sharply during ON and continued up sharp - just a few points short of the High.
The Rev HL and S retest LH has created a range/hinge during PM. S is well defined at 35/30. Being this close to the high, it is likely that if price goes down to 35, it will turn for the attempt back to the top. LOLR up. Clear boundaries today and no reason to trade far away from them.
R: 3147
R: 3145 (PM High)
R: 3140 (mp of PM action)
S: 3135 (PM S and yesterday's Range top)
S: 3130 (mp of yesterday's range)
S: 3125 (ON SL and yesterday's range bottom)
Review:
Being long at the open took away from being able to act fast once the LH at 0846 was created. Until 3035, I did not view the LOLR as being down, mostly because of the S levels right below.
The moment to act was when the Rev wave from 3142 went past S level of 3135. This was a critical point. I was expecting a bounce here. However, the failure of price to bounce back immediately and the presence of congestion on the 5s should have alerted me. The short would have been placed just below the congestion at 3134. This was a good example of placing an order close to the danger level.
I then waited till the next S level of 30. Once again, there was an opp to get in once price retraced from 27.75 and found R at 30. The sell stop would have been place below this R.
Having failed to enter the short side, I reminded myself to not go counter trend. But due to the wave extension at this point, I wasn't excited about going short either.
3109 was a high VAP zone. Once pace flattened here, I waited for the technical rally to retest and then went long. The sell off represented an oversold condition and the long was legit.
The next couple of longs are of lower quality. However, the psychological impact of these trades prevented me from seeing that price was at the old 3100 level and that this was the best time to go long.
http://www.sierrachart.com/image.php?l=1378479920727.png
A big lesson from today is the need to have two competing stories, especially when close to longer term critical levels.
The story about the attempt for the high of 3147 was legitimate - being supported by the PA over the last few days and especially by the strong buying from ON up to the PM high.
The PM rejection of 45.50 and the sell off to 35, combined with the retested R and LH at 44.50, provided the outline for the second story - that of traders realizing that there was no one else left to buy and push price to the High of 47, thus presenting fertile conditions for a down cascade.
Looking at S/R levels is not enough, I have to always have context (even if the context is 'I don't know'). By having a story, I have something to work with as PA unfolds. Otherwise, I am left either being too attached to one story or lacking decisiveness when price is at anticipated S/R. Today was more a case of the latter.
Going forward, I need to systematically record errors of thinking and the lessons learnt from them, so as to review them and avoid making the mistakes again. This kind of record keeping is more important than just noting down trade stats.
The story about the attempt for the high of 3147 was legitimate - being supported by the PA over the last few days and especially by the strong buying from ON up to the PM high.
The PM rejection of 45.50 and the sell off to 35, combined with the retested R and LH at 44.50, provided the outline for the second story - that of traders realizing that there was no one else left to buy and push price to the High of 47, thus presenting fertile conditions for a down cascade.
Looking at S/R levels is not enough, I have to always have context (even if the context is 'I don't know'). By having a story, I have something to work with as PA unfolds. Otherwise, I am left either being too attached to one story or lacking decisiveness when price is at anticipated S/R. Today was more a case of the latter.
Going forward, I need to systematically record errors of thinking and the lessons learnt from them, so as to review them and avoid making the mistakes again. This kind of record keeping is more important than just noting down trade stats.
There are days when price action is not enough to understand what is happening. There is no sense agonizing over your confusion with the price action if you pay attention to external factors so that you recognize these situations.
Today the Open failed because Putin was on the news tape saying that Russia would provide more support for Syria if the US strikes. This totally disrupted the order flow bias in the currency market into the NY Currency Cut. After the NY Cut at 0900 CT the news tape reported that Putin was referring to more humanitarian aid rather than military aid. At that point the bias reverted to the original tone. This is why the 0900 CT extreme was not extended. There was pause as the market waited for Obama to finish a news conference on Syria. Then Europe was bought into the Europe Close at 1030 CT according to the original bias. After that the typical algo chop but that is not important if you are focused on the first two hours of the US RTH Session.
Also PM action in the Close was fueled by news on the tape that Syria has used gas again, this time in Damascus. Everything in the PM was pretty typical before that.