Matcha's Dow E-mini Journal

[NoDoji]

Quote from Matcha:

Back at 9am, saw the setup I like, even though it’s 9am, I went in on a long position. Then stopped out, then went back in, moved my stop, stopped out. Doubted myself, took a short position, stopped out again. Wasted 5 trades on one leg, then I gave up. Market shoots higher without me…

Had to leave early at 12:30 too. So I had to get out TRADE B before 12:30.

Losing focus, lack of trading trending day mindset makes me not take advantage of the trend. Also makes me feel foolish.

Once a strong push in the morning fizzles and establishes a range, it's very difficult to trade. Best to play a breakout of the range, usually in the same direction as the morning move and usually late in the day.

The only way I'm comfortable entering a strong trend is to buy or sell the breakout, and I still often have trouble doing that, especially when previous breakouts have been shallow. The key is to trade every breakout, because you never know when the real move will get underway. I know this intellectually, but still have trouble pulling it off.

The market had a couple nice breakouts early today, gave the bears two short signals for small retraces, then had some shallow breakouts after lunch, which likely made longs nervous after such a strong run, so many of them took profits, and likely attracted a lot of counter-trend shorts who know that once the new highs become shallow, price tends to reverse.

All that is fuel for a strong end of day continuation move because the shorts are trapped with their stops above the high, and the big money that moves the markets is buying into the strength indicated by the fact that price barely dipped below the 20-bar moving average all day, the market is still quite oversold, and Doug Kass called the bottom again.

 

[Matcha]

Quote from NoDoji:

Once a strong push in the morning fizzles and establishes a range, it's very difficult to trade. Best to play a breakout of the range, usually in the same direction as the morning move and usually late in the day.

The only way I'm comfortable entering a strong trend is to buy or sell the breakout, and I still often have trouble doing that, especially when previous breakouts have been shallow. The key is to trade every breakout, because you never know when the real move will get underway. I know this intellectually, but still have trouble pulling it off.

The market had a couple nice breakouts early today, gave the bears two short signals for small retraces, then had some shallow breakouts after lunch, which likely made longs nervous after such a strong run, so many of them took profits, and likely attracted a lot of counter-trend shorts who know that once the new highs become shallow, price tends to reverse.

All that is fuel for a strong end of day continuation move because the shorts are trapped with their stops above the high, and the big money that moves the markets is buying into the strength indicated by the fact that price barely dipped below the 20-bar moving average all day, the market is still quite oversold, and Doug Kass called the bottom again.

Great analysis, Nodoji. I think today's market also qualifies Al's 2HM setup. If away from EMA for two or more hours, then fade EMA and 1st EMA Gap bar.
Like you said, the market has made a strong push in the morning, psychologically it's so hard for me to pull the trigger. I saw the move early morning, "anticipated" the strong trend, I know that I should be prepared to ride the trend or look for the pullback or breakout pullback set up to get in with the trend. When setup showed up, I was in. then it did the pinpoint thing, I started sweating, in my mind I contradicted myself, there is a sound going my mind saying: you are wrong, market has gone up so high and we re in a bearish market, it's not a pullback setup, so get out and look for reversals. Then I was out, then it looked like a pullback again, then went in...out...in...ou...in... I was so crazy...If I should have just stayed in and leave my stop at the pivot low, insist my early analysis, then go do something fun. I would have made a monthly goal...

 

[Bolimomo]

Quote from Matcha:


Today’s PnL: $51.00, 10 trades, 40%winrate

Matcha: If I may say so, I think you have overtraded today. There really shouldn't be any short trades.

Analysis:

- The market had a big move up yesterday... but was sent back down in second half.
- Today the market gapped up and moved up strongly in the morning, negating yesterday's bearishness. Not only that, it broke yesterday's high. Right there was a hint. It was a surprise. (In Al Brook's terms: it's a failure of a failure). Bears got caught off guard. There you should take the bullish side.
- The recent market sell off was severe. We are only bouncing from the bottom. It has some way to go (helps the bulls).
- Today's TRIN (didn't you look at that?)... was under 0.6 most of the day after 07:00 am... to even 0.3. A bullish setting.

On a day like this, don't zip in and out. You will end up losing in commissions and getting crumbs. Especially because you trade only one contract. Should put your stick on the ground and let it run.

Remember the mirror trick? Take the 7/2/10 low and 7/6/10 high... the range. Add to the break. That should be your target.

IMO: As much as you like Al Brook's book. Don't bar-by-bar analyze a 5-min intraday chart. Look at the bigger picture (points stated above).

 

[PatientOperator]

Quote from Matcha:

Great analysis, Nodoji. I think today's market also qualifies Al's 2HM setup. If away from EMA for two or more hours, then fade EMA and 1st EMA Gap bar.
Like you said, the market has made a strong push in the morning, psychologically it's so hard for me to pull the trigger. I saw the move early morning, "anticipated" the strong trend, I know that I should be prepared to ride the trend or look for the pullback or breakout pullback set up to get in with the trend. When setup showed up, I was in. then it did the pinpoint thing, I started sweating, in my mind I contradicted myself, there is a sound going my mind saying: you are wrong, market has gone up so high and we re in a bearish market, it's not a pullback setup, so get out and look for reversals. Then I was out, then it looked like a pullback again, then went in...out...in...ou...in... I was so crazy...If I should have just stayed in and leave my stop at the pivot low, insist my early analysis, then go do something fun. I would have made a monthly goal...

Hi Matcha,

If it makes you feel any better about today's trading, I, too, did not take advantage to ride the strong up trend. I barely net 1.25 points with 13 trades. My win/loss rate today was 53.8%. I keep fighting the trend and traded countertrends after the early morning push. I couldn't believe I didn't follow my own rules to not trade countertrends when the prevailing trend is one sided. I need more self control. Case in point, I traded 6 longs and 7 shorts (shame on me). For the longs I have 5 wins and 1 loss, but the shorts took a big hit with only 2 wins and 5 loss. Well, I think it was lessons learned once again.

Have a good one on Thursday!

--po

 

[~~~]

Quote from Matcha:

Thank you for sharing your experience with me. Very impressive! I have been living in a frugal life to pursue trading now....Just started to learn to take some responsibilities. It was hard! No shopping, eating out for me anymore...

Don't be too hard on yourself, sweetie. I was so frugal during the first 5 years of my career because i was always working, so really that's no time for me to spend $ on shopping. During that 5 years, I needed only a small room to sleep and take shower. Saved $ and saved time, no need to waste time for doing household chores. My fine-dining expenses were all paid by my boss and my clients always pick-up the bills even till today because i am a lady and they are gentlemen

i started with 0 in 1992...Dec of 1997, i bought my 1st cozy apt and lexus with cash.. till today.. i always buy my houses and cars in cash coz i hate paying interests i am doing ok coz i am a pretty good financial planner.

Matcha .. i think it's very hard living a frugal life just to pursue trading with no income coming in.. if you have 10k to spare .. maybe you can start trading "live" .. if you can make avg about $200 per-day ($1000 a week/$4000 a mth) You can reward youself by eating out twice a mth and go shopping in Macy's once a mth ( do not bring your credit card!)

if you make avg about $100 per-day ($2000 a mth) you still can reward youself by eating out once a mth and go shopping in Target only. if you make less than $1000 a month .. then no eating out and no shopping and go back to SIM Trading. If your account keeps going up.. you reward yourself more but if it goes down to 5k .. you go back to SIM Trading again. Matcha, SIM trading and Live trading are two different games .. In Live trading, that's where you really learn how to control your emotions. i think you are good but just lack of confidence and can't manage your emotions yet but you have to start somewhere ...
Hopefully in few years, you can buy your hse and sport car by cash.. go shopping like a queen too

 

[athlonmank8]

Today was a gimme as on the daily chart there was very little horizontal over-head resistance as well as the start of the first half of a 11-13 day cycle moving the market. One of the ways to keep out of whipsaws is to use time-based exits (stops) AND often times entries as well.

Matcha. IMO if you're just starting out, one of the best ways to trade is to take intraday signals on RELIABLE 4hr and even daily levels. You're going to make ~1-3 trades daily at the MOST, but these are reliable trades and it really prevents you from over-trading.

The market ran on a trend-line all day. Once it establishes it it'll usually go parabolic to end it. But before it does it leaves a trader with very low-risk entries. Simply put a resting order on that trendline and a tight stop below a minor support level (keep it insanely tight). You can also take signals on a lower TF tick chart (333ish) if that's your style too and IMO is what i'd recommend if you got some speed.

The market's in retest mode right now.

 

[~~~]

Quote from Matcha:



My background, I have been seriously studying trading since Feburary. I spent 10-12 hours per day studying and looking at charts.

My goal: To be consistently profitable. I am currently sim trading. I will go live when I can be consistently profitable.

Matcha, may i know what's you PnL in March, Apri.. till Jun for your sim trading? The reason i ask is because maybe you are ready to go "live" trading but 'fear" of blowing out your account stopped you ...

 

[Matcha]

A day full of hesitations. The Double bottom / bull flag pattern was so clear to me. I missed the 11:30 move. 11:30 price tried to take the previous high and YTD high/close, but failed to go down. On 15min chart, it was a even more clear double bottom pattern , stochastic divergence. I just got out of TRADE B, so I didn’t have any guts to go long. And I wasn’t prepared enough to take the long side. But then market offers a second chance, a 50% retrace pullback entry from previous swing. I didn’t go in either, because I “thought” it couldn’t rally, we rallied so much yesterday and we had been range bound the whole day. So I let it pass even though everything is laying out so clearly right in front of me…. What a fool!

I think “fear” really manipulated me in trading. Even all the trading conditions are made, “fear: started to contradict my judgment, he said: no, that couldn’t happen, wouldn’t be that easy, no, you are going to lose”. Then when I was in a trade, he told me to get out. When the trade is not in my favor, he told me to take the flip side… I am blaming to “fear”, but I am really blaming myself. The prescription to this syndrome is practice, practice and practice. Besides, I had to refine my setup, keep repeating to myself, no fear, be confident. Trade only you are good at.

Today’s PnL: +$46, 8trades, 38% winrate.

 

[Matcha]

Yay! You are back! Missed you here!

Quote from Bolimomo:

Matcha: If I may say so, I think you have overtraded today. There really shouldn't be any short trades.

Please be harsh and criticize me as much as you can. That's the only way to learn.

Quote from Bolimomo:
Analysis:

.....
- Today's TRIN (didn't you look at that?)... was under 0.6 most of the day after 07:00 am... to even 0.3. A bullish setting.
[/B]

I don't look at TRIN, I will now.

Quote from Bolimomo:
On a day like this, don't zip in and out. You will end up losing in commissions and getting crumbs. Especially because you trade only one contract. Should put your stick on the ground and let it run.
[/B]

Totally agree, I couldn't believe it's so hard for me to stay with the trend and be relaxed. The problem is I couldn't defy yesterday was a great one way trending day and the begining of the rally. even though I saw the double bottom.double bottom pullback pattern, even the "dragon" pattern. Then in the market, I second guessed, Then I saw the 6/9 sell off and gap down. I thought " is the run up sustainable today? The origin of the ralley shows so much order inbalance and weakness, is the market going to fill the 6.29 gap first then sell off? or it will just sell off here? then I zip in and out like crazy...

Quote from Bolimomo:
Remember the mirror trick? Take the 7/2/10 low and 7/6/10 high... the range. Add to the break. That should be your target.
[/B]

Mirror trick works like a charm each time, I watched it every time. I remember all you have told me. It's me that always take profits at the first S/R level with one contract.

Quote from Bolimomo:
IMO: As much as you like Al Brook's book. Don't bar-by-bar analyze a 5-min intraday chart. Look at the bigger picture (points stated above).
[/B]

I started to add 15 min chart this week. I am glad you pulled that chart too. Working with different time frame is challenging to me. Because I read different signals. So add one at a time will help me eventually collaborate 3 time frames. Now since I am OK with 5 min and 3 min(sometimes 2min), So I added 15 min.

Can someone actually use both tick chart and min chart?

I always remember you have said trade intra day swing, don't scalp. I hope I can work this out soon so I will be able to go live.
But I need now revise my plan: here are some thoughts with the time frames, feel free to correct.
60 min/30 min. 15 min chart: draw major S/R level, look for bigger pictuer directions of the market.
15 min chart: in the market, use it to look for strong trend, overall direction, momentum.
5 min chart: look for consistency with 15 min chart, look for patterns. set ups, only go long when 15 min is bullish, only go short when 15 is bearish
2/3min chart: trigger.

 

[Bolimomo]

Quote from Matcha:

Yay! You are back! Missed you here!

Sorry for being AWOL. Good being missed. This sifu has some issues of his own. I am an old man la!

You have 2 big sisters NoDoji and ~~~ watching over you. You are safe Grasshopper! Be confident to fight your way through the wooden dummy alley. I think you are going to be the next NoDoji. Keep it up.


(more later)