Matcha's Dow E-mini Journal

[Matcha]

Such a beautiful chart today! I couldn’t believe I ended up the day in red today. I usually do well in those strong trending days! What was I thinking?

This morning the market gap down over 140 points. Premarket volume was strong. Market open at the S3 level but couldn’t hold. All these signals indicate the market is going to continue sell off. But in my head I am having this “market has already come down so much, it should not be going down more” thoughts. So I missed all the down move to the 9800 level.

Then I took some not so profitable trades. They were still OK trades. Around 12:00 Pst. I saw a double bottom pull back pattern developed. So I went long. But suddenly the market became very volatile. I stopped out for long. Then I went long again. Then I realized the Double Bottom Pullback failed, I should go short. Then short, stopped out, short, stop out. Finally, I realized that I couldn’t handle the volatility. So I bailed. Then the market just sells off panically without me.

Another lesson to learn today is. Once I put on a position, then market developed a extra long body candle in my direction (volatility comes in), I should take profits right away. Then move on the sideline. Consider myself hit a jackpot. Because oftentimes, after the extra long body happened, there will be an extra longer body in other direction run me over.

Only one good trade today. But I still thought it is the right decision is to bail at the last hour. I hope I can realize that earlier next time. So I don’t lose too much on volatility.

TRADE A: long, double bottom, trade on pullback, S3 level
Entry: 9837
Exit:9859
22pts


PnL: -$71, 9 trades, 33% win rate

 

[Matcha]

Tight trading range day is to be expected today. So the plan for today will be relying on PP level, yesterday’s key levels, look for Double bottom and double top to go long/short. Take profits at the nearest S/R level.

I didn’t trade the early morning session. Looking at the price action this morning, it’s great that I didn’t trade this morning otherwise I would be chopped up. I also missed the last sell-off half an hour before close.

Today’s PnL: +$133, 7 trades, 71% winrate

 

[Bolimomo]

Quote from Matcha:


Today’s PnL: +$133, 7 trades, 71% winrate

Good job! I was whipped pretty bad by the whipsaws. It was the third time that ES poking low 1036 near 12:30 pm (pretty late for a break) that had me convinced it would head lower.

 

[Matcha]

In my opinion, today isn’t a bad market to trade. There are lots of opportunities in today’s market and there isn’t too much choppiness in the market. I was not doing excellent but end up the day in green. Over trading is still a big problem. The “precision” of the entry and exit is still something I need to work on and be confident about it every time I put on a trade.
The first hour offers great trending opportunity. I don’t trade the first half an hour, so it’s ok to let it pass by.

TRADE A: Short pullback at S1 level. Stopped out once and went back in.
Entry: 9639
Exit: 9611
28 Pts

TRADE B: Before Trade B, I took a long trade, it looks like I was chasing the upside momentum. It looks like price is breaking out from a triangle on 3 min chart. But on 5 min chart, it was the first time price tests the 100 EMA and Yesterdays close. I chose to take a breakout trade, and then I was stopped out for a loss. Then price formed a Double Top pattern touching EMA, I took a short position right away and it worked out.
Entry: 9675
Exit: 9653
22Pts

TRADE C: Reneter, after being stopped out

TRADE D: Long at S 1 Level
Entry: 9670
Exit: 9686
16 Pts

Today’s PnL; $269, 15Trades(press wrong button once), 53% Winrate(Not bad)

Off to bookstore, continue studying...

 

[Matcha]

Quote from Bolimomo:

Good job! I was whipped pretty bad by the whipsaws. It was the third time that ES poking low 1036 near 12:30 pm (pretty late for a break) that had me convinced it would head lower.

sigh.... it's because I didn't trade the first 2 hours...

 

[Matcha]

Nice market today considering a light volume trading day. I didn’t expect the market will trend nicely today. Just because of “my bias”, I missed all the moves.
I marked all the mistakes on chart today for me to review in the future. In order to be a great trader, I need to be more sensitive. I need to be more “intuitive” and know how to handle different situations. Good thing that I am still staying SIM. Great thing is I started to pick up fundamental knowledge I read in book and connect them with day to day market, but in a super slowwwwww motion…. Everyday I feel like I learn something new!

TRADE A: Short: Didn’t identify the turning point.. Missed the pullback. Trade on the Breakout pullback. But stopped out on a low probability entry bar
Entry: 9641
Exit: 9621
20Pts

TRADE B: wasted so many trades on the bull flag legs. The final success brough my account in green…
Entry:9603
Exit:9623
20Pts
TRADE C: reenter on stron trend
Entry: 9632
Exit:9645
13 Pts, out too quickly

Today’s PnL: $73, Winrate:44%, 9trades

Weekly Recap:
PnL: $385
Avg #of Trades: 11
Win rate:44%

Have a great long weekend!

 

[PatientOperator]

Hi Matcha,

Congratulations on another profitable week!

I like your defensive plays. May I ask what is your average stop size? I automatically set my initial stops for ES at 2.5 points (approx. 24 points for the YM) and I adjust my stops relative to the most recent high or low (if possible) once the order is executed and then trailing for profit if the trade moves to my direction.

I also use mostly stop order to sweep in my trades. Just like the Dr. (Al Brooks) has prescribed. Do you use mostly stop orders or limit orders?

I say you are on a roll in your SIM trading.

Have a great July 4th and a great long weekend!

--po

 

[Matcha]

Quote from PatientOperator:

Hi Matcha,

Congratulations on another profitable week!

I like your defensive plays. May I ask what is your average stop size? I automatically set my initial stops for ES at 2.5 points (approx. 24 points for the YM) and I adjust my stops relative to the most recent high or low (if possible) once the order is executed and then trailing for profit if the trade moves to my direction.

I also use mostly stop order to sweep in my trades. Just like the Dr. (Al Brooks) has prescribed. Do you use mostly stop orders or limit orders?

I say you are on a roll in your SIM trading.

Have a great July 4th and a great long weekend!

--po

Thank you, PO. Avge Stop size 8-10points, $50. Protective stops are one tick or two ticks about/below swing high/low, so the protective stops sometimes can be large. 12 points. But most of the time I don't wait untill it hits my protective stops. Sometimes it works in my favor that I don't wait until it hits my protective stops, sometime it doesn't... I am still very struggling on my entry....

I use limit orders. I use Matrix(I think it's the DOM order system?) to enter orders. All I do is simply click Buy and Sell the price I want.

BTW, got the book yesterday. Will start to read tomorrow.
Have a great weekend!

 

[NoDoji]

Hi Matcha,

I read through your journal and it's an example of how to do a journal right! I still read my own journal (now closed) to remind myself of what I've learned, because it's so easy to forget and repeat mistakes.

Al Brooks' book is by far a most difficult read. I would read about 3-4 pages at a time and read those pages several times until I absolutely understood exactly what he was describing and could recognize the setups quickly when doing my daily bar-by-bar analysis (where I hide all but the previous hour or two of a 5-min chart and then reveal one bar at a time until a bar signals a setup).

I've had the book for almost 1 year and stopped at page 248 because I'd learned so much valuable information that I figured it was time to work it until I could eventually trade like a machine.

I'll post a few replies below.

I would wish you good luck, but you don't need luck because you're putting in the time and have everything going for you to succeed. Managing exits is the most difficult thing I've tackled as a trader and it confounds me every single day. I'm stubborn though so it takes me longer than most to get to the point where I follow my rules without micromanaging. I think what I need is a stint in the military. That would correct this major defect that can make or break an otherwise good trader!

Looking forward to following your journey to live trading,

Donna

Quote from Matcha:

But when I put on the conter-trend, I got killed most if the time. I think that's why reversal trade is high profitable lower probablity trade? Because my winning rate is so minor on reversal trades. So I currently abandoned the D/T and D/B patterns at this stage. I only trade pullbacks.

I believe there is something missing on my reversal trade set up. I am doing the excise that pulling 60 trades of D/B, D/T and analyze them again and again...

The best counter-trend trades are off a 3rd or 4th push in a trend. A lot of screen time will eventually guide you to recognizing the counter-trend setups that are actually very high probability. One is a weak 4th push (a failed final breakout); the other is 2-3 strong bars in a final push, starting with the breakout bar (the bar that breaks through the previous high or low and is followed by another strong bar, and sometimes a 3rd). It's the extensive screen time required that makes this type of trade suited to very experienced traders.

Trading with the trend is so much easier and well-suited for everyone (rated G)

Quote from Matcha:

The problem is I can't handle 5 min chart(Al is using 5 min). I like the smoothness on tick chart. But I am still running problem on Larger time frame and small time frame. I got so distracted by confliction on the two. I think it's better to focus on the larger view, but then my stop will be so wide. I don't have such a rich stomach for it.

I agree that the wide stop required by waiting for a 5-min signal bar to close is hard to stomach and often keeps me out of many excellent trades. However, my bar-by-bar backtesting has determined that the stop size is irrelevant because if the setup is a prime setup (with confluence all around), the profit target is usually much larger as well.

I recently added a 1min chart to help me get early entries when I smell a good setup forming. I may sometimes be the early entry trader that gets shaken out, but the stops are so much smaller that it's worth it to me.

Quote from Matcha:

I can't even kill a bug. I am very much a girly girl!

I personally carry bugs back outside when I find them. Even teeny tiny bugs. But I will play with spiders and snakes so can't quite consider myself a girly girl.

Quote from Matcha:

Picture that, A crazy lady with messy hair sitting in front of computer talking to herself.

Putting together a Skype group was very helpful because although I still talk to myself all day, I now wear a headset and convince myself that those are actual humans on the other end listening.

Quote from PatientOperator:

I also use mostly stop order to sweep in my trades. Just like the Dr. (Al Brooks) has prescribed.

I use stop orders more than ever now to enter with-trend trades that break through a specific level (such as a pivot high/low, a previous bar's high/low, etc.). This method of entry has been awesome as almost every trade is immediately profitable as the follow through momentum carries price in your intended direction.

 

[PatientOperator]

Quote from NoDoji:

Hi Matcha,

I read through your journal and it's an example of how to do a journal right! I still read my own journal (now closed) to remind myself of what I've learned, because it's so easy to forget and repeat mistakes.

...

...

I think what I need is a stint in the military. That would correct this major defect that can make or break an otherwise good trader!

--------------

The best counter-trend trades are off a 3rd or 4th push in a trend. A lot of screen time will eventually guide you to recognizing the counter-trend setups that are actually very high probability. One is a weak 4th push (a failed final breakout); the other is 2-3 strong bars in a final push, starting with the breakout bar (the bar that breaks through the previous high or low and is followed by another strong bar, and sometimes a 3rd). It's the extensive screen time required that makes this type of trade suited to very experienced traders.


......

Trading with the trend is so much easier and well-suited for everyone (rated G)

...

I recently added a 1min chart to help me get early entries when I smell a good setup forming. I may sometimes be the early entry trader that gets shaken out, but the stops are so much smaller that it's worth it to me.


.....
.....


I use stop orders more than ever now to enter with-trend trades that break through a specific level (such as a pivot high/low, a previous bar's high/low, etc.). This method of entry has been awesome as almost every trade is immediately profitable as the follow through momentum carries price in your intended direction.

Hi Donna,

I concur with all the superb insights in your response. Matcha did a great job in her journal.

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I do feel the same that I need a major stint in the military to correct my mistakes made in trading - things I keep reminding myself not to do...

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Your insight on the best countertrend trades are awesome. I think this type of trading is "R rated" and can be very rewarding. I do like the "G rated" trading more.

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I do the same using the 1-minute chart for entry. It can jump start an entry even though it might be a bit early but the tighter stop it allows makes it worthwhile.

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Ditto - I found using the stop orders to enter with-trend trades can be profitable from the get go as it flows through in the direction of my intended trade. I used to do mostly limit orders or market orders on the entries. Limit orders can be frustrated at times and can miss a trade all together.

--po