Matcha's Dow E-mini Journal

[Matcha]

Quote from Bolimomo:

Good luck finishing the book. I bought a copy. I so far couldn't pass page 15 or so. Sitting on my bookshelf now. Maybe one day.

For one thing... I really don't rely much on reading bar by bar. If you read the daily bars, that's okay. But I use 42-tick charts to trade! When FAS runs heavy, zoom... I got 10 x 42-tick bars zoom by me... LOL

Also hard to get over is the failure of the failure of a failure means it's okay after all. LOL

LOL. I sometimes think he is more forgeiner than I am! Maybe one day I can write a book with my broken english.

I read the review, seems like lots of people become more profitable after reading it. And I believe price action is the key.

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 was advised to use range bar. But after a few weeks, I have to admit. I am not that experienced and smart to use it. Its just that I like to look for the patterns. I will not be able to seem very clearly on range bar. Its just me.

so the 42 tick is considered a very small time frame on ES, right?

 

[Matcha]

Today I got a little busy with phone calls and emails, So I missed quite a few good trades. Only 2 trades. Plus after yesterday's positive day. I am a little hesitated to trade...

Trade #1:
8:01
short 10616
Exit 1: 10610
Exit 2: 10581
41 pts

Trade #2: this is a clear D/B to me, + DIV, Doji with long tail. price rejected at the previous low, S level etc. But I didn't get in at the very bottom since I was confident enough. I entered on a mini retrace back.
11:26
Long 10534
Exit 1:10542
Exit 2: 10563
37 pts

+380 today

The first missing trade was missed at 7:25 am. At first I was anticipating a short entry, price retesting the EMA and price reject at the previous demand level. Then I looked at the previous divergence on MACD. and on the smaller time frame. The trend line was going up strongly. So I hestitated. Trade #1 was my 2nd chance to bet on the downward move, and it succeeded. But I took profits too quicky since it reaches the low of previous low and I thought that since the price came down so drastically. it might bouce back which is always a wrong thought! After the move, I realized this could be a Measured Move Bolimono taught me yesterday.(all marked on chart)

The last reversal trend around 12:30 is such a classic reversal end of the day trade. I hesitated again. since I am afrad I am going to lose the 100% winning rate today...

There are just so many opportunites in today's market! I started to love this game even more!


Sorry my chart always looks like a house of crazy spagatti.

 

[devilfishlane]

I've been trading options for a while ,but would also like to learn to trade the ES. You said previously you studied for a few months until you started. What did you study and have and websites that are useful to learn from? I currently use TOS for options(Butterflies and Iron Condors) and could paper trade while learning

Thank you

This reply could be for anyone that has advice for me

 

[Matcha]

Quote from devilfishlane:

I've been trading options for a while ,but would also like to learn to trade the ES. You said previously you studied for a few months until you started. What did you study and have and websites that are useful to learn from? I currently use TOS for options(Butterflies and Iron Condors) and could paper trade while learning

Thank you

This reply could be for anyone that has advice for me

I trade YM. $5 increments. Dow index fund. I think its good for beginner. It doesn't move as fast as ES.

I studied Toni Turner's book on Beginner's Guide to short term trading and Beginner's guide to day trading. If they sound too fundamental to you. Just skim them over at boarders before you purchase.
I use stockcharts.com. I had DVDs from Pristine. They are pretty general but great for beginners who has never been in the market. I also went to some trading school-again, they teach you only general ideas.

I also use google search to find information on each indicators and chart patterns.

After you aborb all the fudamentals. The key is to apply them into your screen time. This part is untaughtable.

The best exercise is to find the pattern you feel most comfortable with to trade. Find 50 of them and trade with it another 50 times They have to be embedded in your head.

Then always think why and when this happened. Who is buying and who is selling. I still can't get this part....

Oh, I am reading Al Brook's "Bar by Bar Analysis"-very difficult reading.

Another way is to follow my journal. just kidding

I use tradestion. The drawing tool is pretty cool. So far I didn't find any bugs. Maybe because I am always in SIM. I heard lots of people comment tradestation's technology is very behind. But I am not that tech savvy. So it's good enough for me. Try to negociate the free trial if you are interested. The TOS is not bad either for paper trading.

Hope it helps. Maybe I can ask you option questions when I am ready

 

[devilfishlane]

Thanks Matcha. I'll follow your progress. Sounds quite complicated, but more adrenal driven compared to income producing Iron Condors and Butterflies.

 

[Bolimomo]

Quote from Matcha:


I use tradestion. The drawing tool is pretty cool. So far I didn't find any bugs. Maybe because I am always in SIM. I heard lots of people comment tradestation's technology is very behind.

I use TradeStation too. For my charting but not for order execution. They are cool... when they are available.

On Thursday 5/8/10... the market crashed. All my TradeStation charts crapped. At the most crucial moments. Something wrong on the TradeStation's server side. Overloaded? Breaking their infrastructure? Dunno. They crapped for the rest of the trading session. As usual, calling their trade desk when something like this happens would only end up in an endless queue. I gave up. (It happened before). For this reason and others I don't trade with TradeStation. I use Townsend's RealTick and they worked okay through the session last Thursday. TradeStation didn't resolve the issues about their datafeed availability until about 8:00 am on Friday morning. Way too long for me.

Their charting capability is great. But be careful with them.

 

[Bolimomo]

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.
.....

Reversal trades are highly risky. Low probability? I wouldn't say low probability but highly risky and high profitability if you make it out. The crucial part if knowing when to get in.

Take a look at AAPL yesterday 5/13/10. It plunged down to $256.40 from $260 in minutes... but bounced to $259 in 15 min.

I always maintain my view and advice:

- Beginners: join the trend only.
- Intermediate: (Above) plus fading a mature trend - reversal trades.
- Advanced: (Above) plus playing whippy days when a lot of people are sitting on their hands.

 

[Bolimomo]

Quote from Matcha:


so the 42 tick is considered a very small time frame on ES, right?

I trade mostly equities (AAPL, GS, FAS, SPY). I use 42 tick charts on AAPL and FAS only and 32 tick for GS. For SPY and ES futures 42 tick is too small. I use 330 tick on SPY. Only 1min on ES.

One needs to do some trial and error to locate the sweet spots.

 

[Bolimomo]

Quote from Bolimomo:

Reversal trades are highly risky. Low probability? I wouldn't say low probability but highly risky and high profitability if you make it out. The crucial part if knowing when to get in.

Take a look at AAPL yesterday 5/13/10. It plunged down to $256.40 from $260 in minutes... but bounced to $259 in 15 min.

It's the mirror trick again. (Measured moves)

AAPL peaked at 265.00 yesterday. Day support was around 261. When the market sold off and this support was broken... 4.00 down would make it 257.

Plus: AAPL's S2 was at 256.87. (Those are daily pivot numbers). 265.00 early in the morning was at R1.5 (close to R2). For some stocks to traverse from R2 all the way to S2... it was a big range day. Very likely to have some kind of bounce at S2.

The actual low went to 256.40... for less than 1 minute. Yes I know because I was trading it long. My long entry was at 256.80 and still it dropped 40 cents on me. But in the overall scheme of things it's not that much, considered that it bounced to 258... then 259.

Experience will help you. Gradually build yours up.

 

[Matcha]

I am done for the day (11:39am) no matter how attractive the market looks like now, because I am over my daily loss limit.

Horrible horrible day, I have done nothing right. And market stopped me left and right. There was one trade, by the time I entered my 6 tick stop. it already went down 10 Pts. That nasty large body candle!!! One trade I was watching it turning 20 pts to-10 pts loss in a few seconds!...

Feel sick on my stomach because of all the losses. I have to keep telling myself that "Keep a winning attitude", "Keep a winning attitude".

so, -$226.00. I still think watching 2 time frames is very confusing to me. Oftentimes. I missed all the good entries. Next week, I would only focus on smaller time frame chart unless the smaller frame is too messy and choppy. But I will look for major S/R levels on Larger chart before market open.

I have to stop trading Tue -Fri. I will be back next Monday. Stay tuned!! Next week is going to be great!