Matcha's Dow E-mini Journal

[PatientOperator]

Quote from ~~~:

haha.. sometime i am very generous.. sometime i am very frugal
hmmm.. considering you are smart and charming, and we're both good warroirs and i don't want we killed each other with our 'kung-fu' so may i suggest we toss a coin to decide ...

if "heads" ... i buy you milk tea, dan tart or black forrest cake ...
if "tails" you buy me abalone, shark fin soup, australian lobters, thyhoon shelter crab, suckling pig and some teas will do, thank you no need remy martin xo (see i am so generous again always thinking of saving you $ )

i not only master "the art of the war" i also master "the art of the deal" not by donald trump but by ME lol.

hey warrior.. have you been to Xi'an??

To Matcha & OP .. this is a good example for trading tips, if u lose.. u lose small, if u win... u wanna win Big!

Thank you Big Sister for the very enticing trading tips
--------> if u lose.. u lose small, if u win... u wanna win Big!
Now, that's a good trade Boli cannot resist.

--po

 

[PatientOperator]

Quote from Bolimomo:

That's very true. PO and Matcha take note... see how Big Sister drives a bargain! That's why she is a pro.

Trading is similar. Buy when nobody wants it. Sell when *everybody* wants it. Buy wholesale, sell retail. Repeat.

RE: Xi'an. No haven't. Beijing, Shanghai, Guilin, HuangShan, Hangzhou, Dalin, Zhenyang, Nanjing, Guongzhou... that's all. Next trip maybe. Most of them over 10 years ago. Maybe things have changed... hard to trade on a laptop in Mainland China via the Internet. (Well... Internet was not that widely accessible until recent years...)

Hi Boli,

You and Big Sister are both the warriors and the pro. Lots to learn from for trading and to make deals.

Wow! You're not only a food connoisseur but very well traveled too.

--po

 

[PatientOperator]

Quote from Matcha:



Today’s PnL: +293, 5 trades, 80% winrate

Weekly recap:

PnL: $128
Avg# trade per day: 6
Winrate 61%
Mistakes :7
Cost of Mistakes:-402
Comments: Continue to look at multiple time frame, continue to monitor TRIN and TICK. Learn when to use them when to dump them.

Hi Matcha,

Congrats to your great trading day! Very good PnL. Manageable # of trades and a great winrate. Today was one of those few "monthly income" days. Your avg # trades per day for this week looks great too.

I started out late this morning and did not take advantage of the first 30 mins of market down trotting. Today, I set out to trade only the SHORT trades (after looking at the o/n trend and the $TRIN) but decided to do something crazy with my SIM trading - I traded many LONG trades to see how difficult it is to pick the bottom. The outcome - I got punches from Mr. Market all day long.

Lesson learned: it is very easy to lose $$$ trading LONGS in a strong downtrended market. $TRIN was > 3.50 for the most part of the day.

Looking at your trading and my trading today, it reinforced me that I will LOSE if I fight the market trend. (Learning from my mistakes through negative reinforcement!) If I trade the way you did today, only taking the SHORT trades in a downtrended market, I will WIN.

Have a great weekend to ALL!

--po

 

[NoDoji]

Quote from PatientOperator:

Lesson learned: it is very easy to lose $$$ trading LONGS in a strong downtrended market. $TRIN was > 3.50 for the most part of the day.

Looking at your trading and my trading today, it reinforced me that I will LOSE if I fight the market trend.

PO, there are many days when the major trend is one way, but it's a trending range that you can enter both ways or the day provides a decent pivot at some point.

Today was a day where the stock index futures displayed almost no long invitations (I watch ES and assume the others may have been similar). At 10:40am ET, price broke through previous resistance and left a higher low behind. Not the highest probability trade, but aggressive bottom pickers might've jumped in and ended up with a scratch trade or a small scalp. Then at 1:30pm price broke through previous resistance AND closed for the first time above the 20-bar moving average on the 5-min chart. If strength followed that bar, you could consider it a possible trend reversal. However, the breakout failed right away and that was another short entry signal.

It can be difficult to join a strong trend, like the one that was in progress from pre-market through the half hour off the open. You may feel that price has gone too far and will reverse at any moment, trapping you. You look for long entries against a down trend because surely price has to reverse! So how do you join a strong trend that just isn't pulling back nicely?

I found a method that often works well: Enter via a buy stop or sell stop placed above/below a previous bar's high or low. For example, today's ES opening 5-min bar closes with a low of 1083.25 in a very clear pre-market downtrend, so place a sell stop @ at 1083.00 with your protective stop above the opening bar's high of 1086.50. Trailing a stop above each closed bar's high now keeps you in the trade until 1074.00.

 

[Matcha]

Quote from NoDoji:

Nice trading, Matcha!

It makes sense not to trade the first 30 minutes with stocks due to the emotional baggage of overnight gaps having to be shed, but I don't understand the value of having a rule not to trade the first 30 minutes when you trade futures, since the price action continuous. A lot of excellent moves occur during pre-market and into the open, as well as right off the open.

Have a great weekend!

Thank you for pointing this out! I think I might have this misconception of not trading first 30 min.

The reason why I had this 30 min rules are :
1. I read that, the overnight reaction could be unreliable(low volume). The opening reaction are very excited and can change everything.
2. I don't play Gap. I don't have a system to trade, yet. I read John Cater's Gap Play (future market). He mentioned that Gaps are contrarian plays, "fade the gap play". Opening gaps create lots of emotion in the market participants. So he usually take the oposite side of the emotion-fade the gap.

So I just assumed that first 30 min can be volatile and tricky. I then had this 30 min rules.... lately I have been watching overnight reaction, premarket volume etc. I found that the first 30 min can be so lucrative if played well. I just haven't had the confidence and great system to pull the trigger yet!

 

[Matcha]

Quote from Bolimomo:

PO and Matcha:

It's good to keep monitoring $TRIN and $TICK. But they are not the gospel. I would not advice to trade based on $TRIN/$TICK alone. They are to be viewed in the context of the day's environment.

For example, a while back I had an idea: why don't I just fade the market (e.g. trading SPY) based on $TICK. Short if 1min $TICK > 1000. And long if 1min $TICK <-800. The result was miserable. ...

Price (or index value) is still "the" thing to look at. Everything else is supplemental.

...

I understand that price action is still the first thing to look at. The reason for me to use indicators is to filter the unessasary enties, send me signals to get out of the trade and give me confidence to pull the triger. That's why for every indicator I added to the chart, I need to get very very familiar with it. And I need to make them work together. As experience added up, I can remove some indicators I probably don't need anymore.

I was reading John Carter's Tick fade strategy. It was just like the "fade the market" set up you talked about. I don't think I can adapt that. It's just a bit too mechanical. I like your comment about look at the context and price action first.

I always have a question about this mechanical system trading vs discretionary trading. Aka, the HFT nowadays. I don't have too much knowledge about how they do trading. But I know that they are all rely on the techinals. They(quants) build the trading systems by using FIB. Stochastics. Pivot point , etc. all the indicators. They can watch all the markets and watch the correlations of them. Lots of hedge fund companie generate huge %of returns per year. Does that mean that discretionary trading will not work one day?

 

[Matcha]

Quote from ~~~:

haha.. sometime i am very generous.. sometime i am very frugal
hmmm.. considering you are smart and charming, and we're both good warroirs and i don't want we killed each other with our 'kung-fu' so may i suggest we toss a coin to decide ...

if "heads" ... i buy you milk tea, dan tart or black forrest cake ...
if "tails" you buy me abalone, shark fin soup, australian lobters, thyhoon shelter crab, suckling pig and some teas will do, thank you no need remy martin xo (see i am so generous again always thinking of saving you $ )

i not only master "the art of the war" i also master "the art of the deal" not by donald trump but by ME lol.

hey warrior.. have you been to Xi'an??

To Matcha & OP .. this is a good example for trading tips, if u lose.. u lose small, if u win... u wanna win Big!

that tells you are not only a great trader but a best business woman!

 

[Matcha]

Quote from ~~~:

If you are relocated to Asia, you won't be trading the Dow right away .. only the warriors handle the eccentric Dow.. you start from the bottom..slowing, slowing move up to the stars..

yeah.. i think i am a pretty cool boss coz my staffs love me lol.

Too bad you and OP not in NYC. But there's always many opportunities where we can meet (who knows, i like San Francisco and Sausalito very much, maybe i will make a trip there ..)

In Aug, i am go to Shanghai and Beijing and later will take a holiday in Xi'an to visit the Terra Cotta Warriors. This is my first trip to Xi'an and seeing all the Warroirs from few thousand years ago make me longing for this trip. (have you been to Xi'an?)

P/S: if you relocated to Asia alone, someone will be heart-broken..

no, i wouldn'want to trade with warriors if that really happened. I prefer to start from the very very bottom. From 0, step by step. I am very low-maintnance at work. I was thinink of trading my own account at night.

I am so jealous you can travel around so many places. It sounds so exciting! No, I haven't been to Xi An yet!

Enjoy your trip !

 

[Matcha]

Quote from PatientOperator:

Hi Matcha,

Congrats to your great trading day! Very good PnL. Manageable # of trades and a great winrate. Today was one of those few "monthly income" days. Your avg # trades per day for this week looks great too.

I started out late this morning and did not take advantage of the first 30 mins of market down trotting. Today, I set out to trade only the SHORT trades (after looking at the o/n trend and the $TRIN) but decided to do something crazy with my SIM trading - I traded many LONG trades to see how difficult it is to pick the bottom. The outcome - I got punches from Mr. Market all day long.

Lesson learned: it is very easy to lose $$$ trading LONGS in a strong downtrended market. $TRIN was > 3.50 for the most part of the day.

Looking at your trading and my trading today, it reinforced me that I will LOSE if I fight the market trend. (Learning from my mistakes through negative reinforcement!) If I trade the way you did today, only taking the SHORT trades in a downtrended market, I will WIN.

Have a great weekend to ALL!

--po

I have to say today TRIN helped me stay out of the long trades. If I didn't look at it. I would have had this confusing moment again by looking at multiple time frame and then take long trades. Plus the market has been so bullish for so many days. The past 3 days. price is making channels-bear flag. So we had a bias in favor of long side.

For example: At 7:45PST, looks like market is reversing up. Price broke the micro trend line and started to form higher highs and higher lows. On 15 min chart. Price landed at the lower channel and started to reverse up. on 60 min chart. price is kissing "chinese wall" 200 MA, 200 MA could be a great support. Everything looks like it could be a "bottom" of the day. You had no idea how much I wanted to take long side of the trade. Plus the thinking of the market has come down so much. we are in a strong bull run etc.... I am not sure if you at that time are trying to go long. I looked at the reaction and really wanted to go long at that moment.

But TRIN is at more than 3.0 level. 20EMA and 100EMA on 5min is down so much. So I had to resist the "temptation"!

We should avoid the thinking " when market sells off so much, it's going to reverse". Market can do anything to us. Follow it's lead...

i hope from today, I don't screw up trend days anymore! I am still not taking very good advantage of the free money from market today...But at least it could be a great start....

Have a great weekend, PO! You will have a great week next week! No worries! We learned a lot from Boli, Nodoji and sis this week! I am very

 

[Matcha]

Quote from NoDoji:

PO, there are many days when the major trend is one way, but it's a trending range that you can enter both ways or the day provides a decent pivot at some point.

Today was a day where the stock index futures displayed almost no long invitations (I watch ES and assume the others may have been similar). At 10:40am ET, price broke through previous resistance and left a higher low behind. Not the highest probability trade, but aggressive bottom pickers might've jumped in and ended up with a scratch trade or a small scalp. Then at 1:30pm price broke through previous resistance AND closed for the first time above the 20-bar moving average on the 5-min chart. If strength followed that bar, you could consider it a possible trend reversal. However, the breakout failed right away and that was another short entry signal.

It can be difficult to join a strong trend, like the one that was in progress from pre-market through the half hour off the open. You may feel that price has gone too far and will reverse at any moment, trapping you. You look for long entries against a down trend because surely price has to reverse! So how do you join a strong trend that just isn't pulling back nicely?

I found a method that often works well: Enter via a buy stop or sell stop placed above/below a previous bar's high or low. For example, today's ES opening 5-min bar closes with a low of 1083.25 in a very clear pre-market downtrend, so place a sell stop @ at 1083.00 with your protective stop above the opening bar's high of 1086.50. Trailing a stop above each closed bar's high now keeps you in the trade until 1074.00.

Very insightful! Nodoji! The biggest challenge for me is really to identify trending day, big range days and tight range days as early as possible after the market opens. I have been working on an analysis on it by collecting all the information from the books I purchased and the real time studys. So far I come up with:

1. first hour ES volume- above 10000 and goes up after 6:30 EST-7:30 EST. Trending days. ( by John Carter, but by my observation, ES barely trades below 10000 in the previous month. so I got to re work on the number)
2. Fib retrace on 60 min chart(this only can give a rough gauge)
3. Time to spend on Floor trader's pivot point(by john carter)
4. Inside days
5. moving average on 5 min chart
6. 2HM
7. small pullbacks
8. Gap
9. range from previous day
10. Trin and Tick

Feel free to add more or correct me if I am wrong