Matcha's Dow E-mini Journal

[Matcha]

Quote from PatientOperator:

Hi Matcha,

Ditto for a bad day in PnL. My winrate was 33%.

I think today was mostly stuck in a pretty narrow range if you take away the first half hour. ES was trading mostly within a 5 point range. One has to pick the top and the bottom with a sniper precision to capture a descent profit. Not a very good day to ride any trends and let the profit run.

Keep the Spirit up!

--po

PO.
no sure how to trade today... by the time I realize price stuck in consolidation, I am already down more than $100...
Everything seems to signal bullish today. Only things that signal "the bullish trending is limited" is Stoch. on 60min chart stays in OS area most of the day and we are near the R level.

If day like this can't be avoided, we should really work on " let winners run longer" to offset the lossing days...

 

[Bolimomo]

Quote from Matcha:

I don’t like today. A big negative day…

Nothing really works for me today. Market open gapped up more than 100 points. Then continue to head higher. I did not participate because I have no confidence to enter with the trend at the open.
.....

Okay Grasshopper. Don't be discouraged. Let's do a day's end analysis. Time to pull another trick out of Boli's hat.

There is something called... gosh it has many names... but I just call it a "2-stage run". It is a bullish/bearish run but will occur in 2 stages. Classical chart pattern: it's called "bull flag" or "bear flag". It is one of the measured moves. The trick is, of course, identifying the first leg. How do you know the first leg is a first leg but not an entire move in a range bound market? Well... that takes experience. That's what you are doing now... soaking up screen time to build up your experience.

Remember Fib analysis?

Observe that ES went quite a bit higher overnight. Very uncharacteristics of a follow up of a bearish move from yesterday. Looks like something happened in Europe. (You probably don't need to know the exact reason. Just that the market was moved up higher)

To "kick the tire" of a move: Fib the low to high of the move. If it doesn't retrace more than 38%, the move is still bullish. If it is 23%-38%, it is very bullish. In many of these cases, the surge will come in a second leg for a measured move.

First: Use fib to "measure" the move. Last night's retracement was barely 23%. Very bullish. Is there a good chance for a second move? Maybe... when the US market opens.

Second: Use fib projection to project the 100% movement on the second leg. This is the target.

After price has fulfilled the 100% projection after a 2-stage move, it is unlikely that it will go up much further without some kind of retracement. The bid for a "break out" above the 100% mark on the same day is likely to fail. On the other hand, because this is such as bullish day, (TRIN 0.6) a big drop is unlikely either.

 

[Bolimomo]

Second chart:

 

[PatientOperator]

Quote from NoDoji:

Today was a day where if you didn't play the opening range breakout (ORB), you'd likely start forming opinions about "too high" and reversals. Then if you got whipped around or failed to take any trades, you might feel like you did nothing and start trading the midday mush, as I like to call it.

..

Hi NoDoji,

You must have read my mind. I missed the first 30 minutes and then I become comatose for the rest of the day trading aimlessly.

Quote from NoDoji:

Avoid the midday mush. Then watch for the late-day breakouts, which is the hardest thing to do because the mush has lulled you into a semi-coma by then.

...

To get around this happening, I've decided to always try and have my buy/sell stops in place in advance.

When you say the midday mush, do you mean to avoid the lunchtime, say from 1200 to 1400 hour e.t.?

How do you set buy/sell stops in advance? Do you mean anticipating an imminent breakout or do it way in advance like setting some stops during lunch time to anticipate late-day movements?

Thanks a lot for your analysis and how to trade discretionary on a day like this.

--po

 

[PatientOperator]

Quote from Bolimomo:

Okay Grasshopper. Don't be discouraged. Let's do a day's end analysis. Time to pull another trick out of Boli's hat.

There is something called... gosh it has many names... but I just call it a "2-stage run". It is a bullish/bearish run but will occur in 2 stages. Classical chart pattern: it's called "bull flag" or "bear flag". It is one of the measured moves. The trick is, of course, identifying the first leg. How do you know the first leg is a first leg but not an entire move in a range bound market? Well... that takes experience. That's what you are doing now... soaking up screen time to build up your experience.

Remember Fib analysis?

Observe that ES went quite a bit higher overnight. Very uncharacteristics of a follow up of a bearish move from yesterday. Looks like something happened in Europe. (You probably don't need to know the exact reason. Just that the market was moved up higher)

To "kick the tire" of a move: Fib the low to high of the move. If it doesn't retrace more than 38%, the move is still bullish. If it is 23%-38%, it is very bullish. In many of these cases, the surge will come in a second leg for a measured move.

First: Use fib to "measure" the move. Last night's retracement was barely 23%. Very bullish. Is there a good chance for a second move? Maybe... when the US market opens.

Second: Use fib projection to project the 100% movement on the second leg. This is the target.

After price has fulfilled the 100% projection after a 2-stage move, it is unlikely that it will go up much further without some kind of retracement. The bid for a "break out" above the 100% mark on the same day is likely to fail. On the other hand, because this is such as bullish day, (TRIN 0.6) a big drop is unlikely either.

Thanks Boli for the day's end analysis for a day like this. I am going to digest this further. I will pay attention to the o/n activities and include them into my trading plan for the day!

--po

 

[NoDoji]

Quote from PatientOperator:

When you say the midday mush, do you mean to avoid the lunchtime, say from 1200 to 1400 hour e.t.?

How do you set buy/sell stops in advance? Do you mean anticipating an imminent breakout or do it way in advance like setting some stops during lunch time to anticipate late-day movements?

Thanks a lot for your analysis and how to trade discretionary on a day like this.

--po

I usually avoid trading between 1200 and 1330.

If there's narrow range consolidation on low volume, and you set buy/sell stops outside the breakout levels, you won't miss a move. On the other hand, there are often a lot of false breakouts before a real move gets on, so the downside is getting chopped to death unless you wait until the last hour to prepare for the break.

 

[PatientOperator]

Quote from Matcha:

PO.
no sure how to trade today... by the time I realize price stuck in consolidation, I am already down more than $100...
Everything seems to signal bullish today. Only things that signal "the bullish trending is limited" is Stoch. on 60min chart stays in OS area most of the day and we are near the R level.

If day like this can't be avoided, we should really work on " let winners run longer" to offset the lossing days...

Thanks Matcha.

I agree that we should work on "let winners run longer".

Looking back at my worst PnL days, I seemed to always did pretty bad when trading in a narrow range. No matter how hard I try, I seemed to be whipsawed and got chopped into pieces

I am glad that we can put this into perspective and have sifu and masters like Boli and NoDoji to give us advice on what to improve on.

--po

 

[PatientOperator]

Quote from NoDoji:

I usually avoid trading between 1200 and 1330.

If there's narrow range consolidation on low volume, and you set buy/sell stops outside the breakout levels, you won't miss a move. On the other hand, there are often a lot of false breakouts before a real move gets on, so the downside is getting chopped to death unless you wait until the last hour to prepare for the break.

Thanks a bunch NoDoji.

I think I will take a lunch break during that time period between 1200 and 1330 e.t. if I see things start grinding to a halt or take a nap like what Matcha did sometimes. I think Matcha doesn't normally trade during the lunch doldrums hour also but I might be wrong to assume that. (Matcha, am I correct?)

So you set both a buy and a sell stop order to cover both sides of the breakout?

--po

 

[Matcha]

Quote from Bolimomo:

Second chart:

Hi, Sifu! You are super!

It's very clear to me now. Today's chart has similarity with 7/13's chart. The over night reaction is bullish. market open gaped up . then making it's second stage move. second impulse move. The third move will mostly like failed. Then do a FIB level and FIB extension to ge the 100% or 113% measured move.

TRIN trade bullish all day long.

The difference is 7/13 the pullback is more fluid, so it has more room to go up.

Today when price finished it's 2nd stage move, and 3rd exhaustion move. it then spent most of the day just range bound.-bear flag.

My mistakes today is keep thinking price is going to break out. You have pointed out that on 7/13. But today I didn't remember it at all!!!:eek: That's why hold position at 3rd move today to "hope it's going to the moon" is not working. Buying the breakout for sure is even a worse idea. I should have taken profits quickly on my first and 2nd trade. Then buy at the pull backs. At least I would have had a breakeven day!


Now it makes sense that why Nodoji defined today is the classic "midday mush" day.

I need to start to pay more attention to premarket and overnight move....

 

[Matcha]

Quote from PatientOperator:

Thanks a bunch NoDoji.

I think I will take a lunch break during that time period between 1200 and 1330 e.t. if I see things start grinding to a halt or take a nap like what Matcha did sometimes. I think Matcha doesn't normally trade during the lunch doldrums hour also but I might be wrong to assume that. (Matcha, am I correct?)

So you set both a buy and a sell stop order to cover both sides of the breakout?

--po

You are right , PO. I dont trade during lunch break. I get all positions out before 12:00EST...
Sometimes I missed the move, most of time I avoid getting chopped out.