Matcha's Dow E-mini Journal

[Bolimomo]

From your past day trading experience. Is this the most volatile market to intrad day trade? Does that mean if I can survive in this market, I can trade any market condition?

No this (e.g. today) is not the most difficult market to trade. It was volatile (which was good) and orderly. Not volatile and chaotic. September 2008 was the volatile and chaotic market. And I did great! I have been wishing for its return. If you can survive that market, you can trade any market condition.

The most difficult market to trade was from March 2009 to December 2009. Basically it was a one-way market. Which was up. Mindless updrifts.

About swing stock trade, I am always very afraid of the opening gap under this market condition. (I dont have any swing trade position now). Do you think it's the major risk for swing stock trading?

You trade index futures, not stocks. Index futures trade 24 x 5. There really is no "gap" as stocks do because it trades 24 hours. You have your stop in, and keep your computer running, you should be good. No nasty overnight gap surprises.

 

[Bolimomo]

I will work on the wave count strategy and re look back the trades.

That is one of the reasons one should use at least dual time-frames (I use 3). Higher time-frames hide details. When you look at the 5min, the up move seemed to be some meaningless arrangements of green/red bars. You can "Al Brook" all you want on each 5min bar and scratch your head on what to do next. Then... one last, long 5min green bar gets you excited in thinking "that was a break out, that was a break out..."

When you zoom down to the 1min or the 300-tick level, you can see better that price movement went in waves. If you can ID that there have already been 3 to 4 waves up without a meaningful retracement, the odds of a break out is very low. You were longing into a climactic up move.

 

[~~~]

Quote from Matcha:

My mind was so off today. I wasn’t focus enough the whole day. I had lots of thoughts on my mind besides trading.

I made all the amateur’s mistakes. In early session I turned a few profits to loss.

I went “funky”, set big loss, over trade. Then I chased the market on fake a breakout trade, when market turned direction, I moved stop to a magnificent wide level…Needless to say, my magnificent stop got hit.

Now I am having a bit headache and starting to second guessing myself.-a big “NONO” to a trader. I am going to take a nap now and read “Trading in the zone” tonight.

Bad trades(in circle) were marked on the chart for me to remember today.

No Al today, need some encourage. Take nap first to get rid of this headache.

"The journey of a thoudand miles begins with one step."
relax..sweetie, you've only just begun...
and you found a Very Good Mentor, Bolimomo.
i was just liked you when i first started.. now, even the "sky" drops down, i will treat it as a "blanket" (just joking)
Try doing "yoga" it helps you to calm down and relax.

 

[~~~]

Quote from Matcha:

Chongming Island Real Estate? They only invest in stocks. I will tell them for sure...

The real estate in Beijing (2nd Ring Road to 3rd Ring Road) and Shanghai (Pudong) about RMB30,000 to RMB50,000 per square metre. Not many people can afford to buy for investments .. but Chongming Island real estate is still "CHEAP" now and the developers are gearing up to build luxury villas, hotels ...

 

[Matcha]

Quote from Bolimomo:

No this (e.g. today) is not the most difficult market to trade. It was volatile (which was good) and orderly. Not volatile and chaotic. September 2008 was the volatile and chaotic market. And I did great! I have been wishing for its return. If you can survive that market, you can trade any market condition.

The most difficult market to trade was from March 2009 to December 2009. Basically it was a one-way market. Which was up. Mindless updrifts.


You trade index futures, not stocks. Index futures trade 24 x 5. There really is no "gap" as stocks do because it trades 24 hours. You have your stop in, and keep your computer running, you should be good. No nasty overnight gap surprises.

Pulled the 2008 chart -now. Sept08 looked like hell to majority of people, but I believe to some experts (like you), it's heaven...

i am PMing you asking you about "gap" and swing trades. A bit difficult to explain here.

 

[Matcha]

Quote from ~~~:

"The journey of a thoudand miles begins with one step."
relax..sweetie, you've only just begun...
and you found a Very Good Mentor, Bolimomo.
i was just liked you when i first started.. now, even the "sky" drops down, i will treat it as a "blanket" (just joking)
Try doing "yoga" it helps you to calm down and relax.

thank you!
I like the saying about "sky falling". We say that a lot in Chinese.

 

[Matcha]

Quote from ~~~:

The real estate in Beijing (2nd Ring Road to 3rd Ring Road) and Shanghai (Pudong) about RMB30,000 to RMB50,000 per square metre. Not many people can afford to buy for investments .. but Chongming Island real estate is still "CHEAP" now and the developers are gearing up to build luxury villas, hotels ...

Understand.. Don't you think real estate price is still too overheated? Even Chongming? Do you think it's better to wait untill it's cooling down?

 

[Matcha]

Not a bad day today. Missed the morning session long opportunity. I traded the last 2 hours.

The first 2 trades were such a waste of money and risk. I was betting on a pullback after a series lower lowers and higher lowers-channel down, bear flag. But the channel stalled at 61.8% of FIB retraces and started to make lower high. I knew that Bolimomo said 61.8% could be iffy. But at that moment it really looked like the set up of the turning point after a long retracement. So I went long. It ended up to be a consolidation pattern then a big selloff. I stopped out twice. Wasted $90 on the 2 trades. I think from now on I need to walk away from 61.8%+channel pattern. I got killed a lot when the channel pattern show up. I am neither good at buy low sell high in the channel nor good at but/sell at the end of the channel… Another great lesson to learn today.

The last 2 trades were very beautiful. Classic text book trade for trade A-Breakout Pullback trade. See chart. The pattern is not showing on 5 min chart but on 2 min. even on 3 min it’s a bit hard to see.

Now I really agree with Bolimomo ‘s looking at 3 time frame, especially for a pattern trader. I categorize myself for one. I think I am staying with 2or 3 min for all the patterns. Look at 5 min for overall trend and confirming the momentum. The challenge now is to overlook 3 min chart to get many stop-outs. It takes lots of practice for me to make them really work together…

The 3 wave’s theory is very clear today in last hour too. Although I stopped trading around 12:30. I thought it’s enough for me today. I like the 3 wave theory, but to be safe I might stay with 2 waves for now to take profits or enter since they are more reliable. Counting 3 or more waves for reversal trend is definitely critical.

The measured move worked out perfectly too, see chart.

TRADE A: breakout pullback pattern, according to CNBC, the sell-off happened because of the euro tumbles below 1.20. I am always very skeptical on the news.
Entry: 9977
Exit: 9952
I was out very quick just like a scalper. I know… but didn’t have the courage to hold. Plus 9947(YTD high) is a strong S level, If I had 2 contract, I would scale one out.

TRADE B: reenter. A very clear first pull back signal
Entry: 9945
Exit: 9886
59 Pts
Measured move landed on 9886(S level), so I took profits right there and called it a day…

Today, +$320. 4 trades. 50% winrate

 

[~~~]

Quote from Matcha:

Understand.. Don't you think real estate price is still too overheated? Even Chongming? Do you think it's better to wait untill it's cooling down?

can wait a while for real estate price to cool down .. but not too long because Chongming island is the "Shangri-la of Shanghai"

The Yantze River Tunnel-Brigde system opens to traffic in Oct 2009.
a ride to cross the under sea tunnel and bridge takes only 20 minutes.
(traditionally by ferry boat only & it takes hours .. extremely time consuming and weather dependent.)

don't you or your relatives love to own a 'small paradise" near to Pudong?


good luck & take care.

 

[Bolimomo]

Quote from Matcha:


Now I really agree with Bolimomo ‘s looking at 3 time frame, especially for a pattern trader. I categorize myself for one. I think I am staying with 2or 3 min for all the patterns. Look at 5 min for overall trend and confirming the momentum. The challenge now is to overlook 3 min chart to get many stop-outs. It takes lots of practice for me to make them really work together…

The 3 wave’s theory is very clear today in last hour too. Although I stopped trading around 12:30. I thought it’s enough for me today. I like the 3 wave theory, but to be safe I might stay with 2 waves for now to take profits or enter since they are more reliable. Counting 3 or more waves for reversal trend is definitely critical.

The measured move worked out perfectly too, see chart.

Glad that it worked out Matcha.

This week I am tied up. More tips later.

The next to practice is overlay the daily pivot lines (PP, S1, R1, etc.). And watch how price action behaviors around these levels. In short (under "normal" circumstances)... price likes to gravitate towards the PP line. The S1 to R1 range is a "normal" range. Above R1: bullish. Above R2: very bullish. Below S1: bearish. Below S2: very bearish.

That is a simplistic view. You need to take into account the prior day's movement. If prior day has a high range, today's S1-R1 range will be big. It is unlikely for price to have big move back-to-back.