Matcha's Dow E-mini Journal

Quote from Matcha:

Hi, PatientOperator!
Nice meeting you here. It's always my pleasure to know someone read and like my journal.
It's been a very challenging path so far. (I haven't even live trade yet).

Thanks for the book recommendation. Mark's book is in my Amazon reading list. I am kind of debating on whether to purchase Marcel's book or Rober Miner's "High Probability Trading Strategies: Entry to Exit Tactics for the Forex, Futures, and Stock Markets"(with CD). Since you recommend Marcel's book, I will definitely purchase it. Here is the book list I am going to finish:
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Let's both keep best spirit and be CP!:p
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Quote from Matcha:

Only watched the market for the first hour. No trade today.

Now back on my desk, Volume was extreme light. Price has been trading in a range most of the day. Luckily, I didn't trade, otherwise I would be chopped into pieces like "shredded pork". Another rule in my trading plan: Stay away when volume is unusually light. Moving average is flat.

It was really a tough week. Ended up in red.

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Next week, I really need to only focus on one specific setup. -the one has been making profits. (Pull back, touch MA, then form a Double Bottom, or it can be called bull/bear flag).If the set up doesn't show up, I will not be trading. This will be the only way to reserve my capital once I go on live. Over this weekend, I got to analyze how to identify trend day and range day. Almost all the text book talks about this, but for a beginner, I still have difficulty to identify it before it is happening. So I am going to lay out all the theory from text book then apply to YM chart. I need to register all these to my brain...
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Hi Matcha,

It's nice meeting you too on this forum! Your journal has been inspirational. I think it is one of the best journal.

You will like Marcel Links' book. He is a big advocate on waiting for a "Pull back" when trading with the trend. On page 161-162, he mentioned a setup very similar to what you are going to practice next week. Instead of pull back to the MA, it uses a pull back to the trendline. His trading wisdom on page 227 (Becoming a Hi Prob Trader) and on pg 326 (trading rules) clearly highlights the significance on trading with the trend and waiting for a pull back. I have these 2 pages photocopied and have them closed to my monitor to serve as a daily reminder.

Yes, this week was a challenge and today was a very narrow trading range day. I noticed one interesting thing today as the high of the day was hit right on R1. It would have been the best short trade of the day. (Not too many other reliable signals today). Also the narrow trading range has been trapped between R1 and PP. He he! I started tracking the PP/R & S after reading your journal.

I think it is a great idea to narrow your practice to one or 2 setup, until you "register all these to your brain" :)

Good luck and have a nice weekend! And be CP. :D


--PatientOperator.
 
Quote from PatientOperator:


You will like Marcel Links' book. He is a big advocate on waiting for a "Pull back" when trading with the trend. On page 161-162, he mentioned a setup very similar to what you are going to practice next week. Instead of pull back to the MA, it uses a pull back to the trendline. ...

I just purchased the Marcel's book on Amazon. I will definitely read the pages you have mentioned first! Thank you for paying so much attention on my trades! I am very glad! Hopefully we can share some trading ideas here!

Yes, this week was a challenge and today was a very narrow trading range day. I noticed one interesting thing today as the high of the day was hit right on R1. It would have been the best short trade of the day. (Not too many other reliable signals today). Also the narrow trading range has been trapped between R1 and PP. He he! I started tracking the PP/R & S after reading your journal.

Today and yesterday can be great Pivot Point trading days. According to John Carter's book. Pivot Point trades work best on Range days... We should thank Bolimomo for PPT trading. He guided me to the method! I am still learning and exploring the method.

Not sure why the font of your Quote was acting so funky. Tried to use size 1, size 2... Sorry...:confused:
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Hi Matcha,

Glad that you ordered the book from Amazon. That's where I bought most of my books.:)

Thanks to you and to Bolimomo on the PPT trading. I will continue to explore it's application.

--PatientOperator
 
Stock moved up almost 150 points overnight due to Yuan appreciation news. This morning SSF 100 stocks premarket volume was quite heavy. So the Gap might not be able to fill quickly at the opening. But the overnight move is still not reliable. I then had a short bias on the market to fade the move. But somehow after the market opened, I dont know what's going on in my head I contradicted myself and got very confused by the 24 session chart and premarket chart. On the 24 hour session chart, the price was trading in a range. MA was almost flat. On the premarket chart, the MA was up. At 7:30 I decided not to look at the 24 hour session chart anymore.

Trade A: This was a great set up. EMA down, Double top pattern with MA. Stochastic overbought, Momentum down. I took a short, then I was stopped out for only 7 points profits.. After being stopped out, I took a long position since I thought it could be just a range bound… So a great trade turned out to be just a scratch trade

Trade B: Another great set up. 20 EMA slope down and under the 100EMA
Entry: 10448
Exit: 10428
20 Pts, I took profit at the S1 level

Trade C: I went back in, price broke the S1 Level. I shorted at micro trend pull back. Then the opening gap finally filled.
Entry: 10414
Exit: 10382
32 Pts. Took profits at PP level and called it a day

I didn’t do extremely well today. I was still very confused from time to time by using 24 hour session chart vs pre-market chart, range days vs trend days, 5 min chart vs 3 minutes chart.

Watched “The Karate Kid” yesterday. There was one scene that Jackie Chan asked Jaden Smith to continue to do the excise that hang his jacket on the pole, took it off then put back on, then hang his jacket,.. took off…put back…. for many days. The objective is really to change the attitude and understand the spirit of Kung Fu basic moves. That scene totally connected me with my trading. I am just in the stage of “hanging the jacket.” I am going to continue to do so until one day I can do it with my eyes closed.

Today’s PnL: +$113, 9 trades, 44% win rate
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Hi Matcha!

You did good today capturing some of the good setup in the down trend. I traded 6 times today and had 2 trades similar to your Trade B and C. I entered and exited almost identical with your Trade B. I entered a bit late for "Trade C" after the micro trend pull back and closed out the short position a bit too early. Today, the PP/S/R has been proven to be useful once again. It is going to be a fixture on my chart :-)

I agree with you that the Kung Fu discipline exercise is very relevant to trading. I am also aiming at the same goal so that I can react to setups without second thoughts. Are you a Kung Fu person? :-)

--PatientOperator.
 
Today I didn’t take advantage of what the market offered to me. The pivot point trade worked very well in today’s market.
In early morning session. I was very confused by the trend line on 5 min chart and 2 min chart. I took a few very bad trades. The time frame so far is still the biggest problem. In theory, if I trade setup on larger time frame to intraday swing, I should only go to small time frame to trigger. If I trade setup on small time frame for a scalp, I should only go to large time frame confirm momentum, ignore the trend. But I always mixed up the 2 strategies together. Because I was often distracted by the mixing signals sent by the 2 time frames.
Trade A was the pullback with pivot point trade strategy. Although I got stopped out for only 4 points profit.
Trade B; reenter: although I took profits very quickly at S1 level(S1 level is also a weekly Pivot point).

Today’s PnL: -$59, 10trades, 44%winrate

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Quote from PatientOperator:

Hi Matcha!

You did good today capturing some of the good setup in the down trend. I traded 6 times today and had 2 trade similar to your Trade B and C. I entered and exited almost identical with your Trade B. I entered a bit late for "Trade C" after the micro trend pull back and closed out the short position a bit too early. Today, the PP/S/R has been proven to be useful once again. It is going to be a fixture on my chart :-)

I agree with you that the Kung Fu discipline exercise is very relevant to trading. I am also aiming at the same goal so that I can react to setups without second thoughts. Are you a Kung Fu person? :-)

--PatientOperator.
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Thank you! Have you been using weekly and monthly pivot point? I have them all in one speadsheet now. I only lay out weekly and monthly PP on my chart. I also layed out midpoint on chart as well. Seems like market really reacts to the Pivot points these days.
John Carter has some rules on pivot point. I will log those rules later here on my journal. You can test if those work for you.
Hehe, I am definitely not a Kung Fu person. I can't even kill a bug. I am very much a girly girl!:p
 
Hi Matcha,

Hehe! You are definitely a smarty girly girl!

:)

The pivot points I used are the "canned" study feature in my charting tool. It automatically inserts them into my 5 minute chart everyday. I guess it is not the monthly or weekly type. I think it uses the same formula that you mentioned earlier in this thread. You are correct that it did track the movement quite well lately. Amazingly, today the high was near the Pivot Point and the low was right on the S2. It touched the S2 three times near the close.

Today, I followed your advice to wait "patiently" for the best setup before I made the trades. I remember you did very well when you focused on waiting for the high probability trades. I tried very hard to stay within my trading plan, the trades that I have waited did well but when I strayed from the trading plan and did a countertrend trade to the long side when the trend was clearly down in the afternoon I lost that one. I still need to learn how to be a disciplined trader.

To determine the trend, I look at the 30 minute chart. I look at the 5 minute chart for setup. For entry, I use the chart trader on the 1 minute chart. Then I went back to the 5 minute chart to monitor the trade for exit. At one point, I try to use only the lower time frame (1 minute) chart for setup, entry and exit, but I found it to be too overwhelming (too many setups) and tend to overtrade a lot. I then went back to use the 5 minutes chart to look for setups. This is more manageable (just like Dr. Al Brooks said).

I primary use price action and also use indicators to confirm my setup. The indicators I use are EMA and stochastic. Nothing really fancy. Just try to keep things simple. I try to trade with the trend and wait the pull backs. When the market is in a trading range, I simply use the stochastic to get the cue. Marcel Link has a good chapter on oscillators. His topic on stochastic is very good.

Have a great trading day!

--po
 
Rules to use Pivot Points ,(Quote from “Master the trade”)
1. First pivot play is done in conjunction with gap, if there is one. If there is a gap down, buy a decline into the closet pivot level. If there isn’t a gap, wait until 9:45am Est to initiate the first play
2. If the volume on ES (5 min) is over 10,000 contracts (usually trending days), wait for the markets to penetrate a pivot level, moving up at least a quarter of the way to the next pivot level. Once this happens, I will then set up a bid to buy the first retracement back to the violated pivot level.
3. Enter with limit orders only. Place orders in front of the pivot points.
4. Once filled, place an order to close half of the position at the next pivot level,.
5. I (John Carter) place a 20-point stop for the YM, 2 Point for ES
6. The markets rarely have a sustained move about R3,S3. If I trade to those levels, I will always fade the move.
7. After two losers in a row, I am done with pivots for the days.
8. pivots trading can be combined with other strategies
9. Pivots trading works better in choppy days.

To quickly identify choppy or trending day
1. Look at how the markets react to the pivot levels once they reach them. On trending day, market will move to a pivot level, consolidate for 15-20 min. then continue to march in the direction of the trend. On a choppy day, markets will move up to a pivot level, hand around for short time, then drift back in the direction from whence they came.
2. Set up 5 min ES chart, see what kind of volume is coming to market after 10:00am EST. IF the volume is over 10,000 on each bar, then the market has power and volatility behind it. These types of days usually have wide ranges and strong trends.

I found his stops are too aggressive to me. 20 points for YM… He mentioned that Pivot point is a price-based strategy. You basically enter before everyone else who is using indicator to trade. So he is in the trade very quickly without any more confirmations, I am a little hesitated to do so. I think it takes lots of experience in the market to get his guts. I will use the pivot point with other strategies.
 
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