Matcha's Dow E-mini Journal

[PatientOperator]

Quote from Matcha:



Is it normal that the more I trade, the more I learn, the more confusion I get? Or it’s because of my lack of skill set and experience. One thing I know is I really don’t know how to properly use all the indicators and price actions together to play an orchestra. Looking at my trading plan now, I still see lots of flaws in it….

Anyway, my favorite show “Mad Men S4” is on this Sunday! Best show ever!! John Hamm is my latest crush!

Hi Matcha,

No worry, the weekend is here for a break to digest what we have learned. And to watch your favorite movies and TV shows.

I share exactly the same feeling on the more I learn the more confusion it can be. It is common to look at TOO MANY things - indicators, and other goodies that it will have contradicted signals. I think you might need to re-evaluate what really are comfortable with you to use and remember to keep things simple.

I suggest to read pg 105 on Marcel's book regarding KISS!!!!! He mentioned that by over-complicating indicators and systems one can create more trouble than it's worth!!!!

That's why I like to stay in SIM trading when I am testing new "goodies" indicators and systems.

Have a nice weekend and enjoy your latest CRUSH

--po

 

[Bolimomo]

Quote from NoDoji:

Boli, I was wondering why the buying kicked in at the 1085 level. My favorite Master of the Obscure Trend Line, pointed it out to me: Draw a trend line from 1:30 low through 5:30 low on your chart and look where it leads.

I am not sure, ND. All I can say is somebody intercepted me because they wanted to buy stocks badly.

I should have been more flexible and not fixated on "a" price - seeing that the momentum is turning. (Advice to you too Matcha and PO).

One thing is I focus most of my eye-ball power on the movement of AAPL instead of ES. Thus the miss. Or that I can do a scale-in mesh order to catch them. (e.g. buy 1 1085, buy 1 1084, buy 2 1083 and so on). I usually scale-in but I missed.

Personally I don't draw trend lines on my charts (only horizontal S and R lines). Because trend lines are like meatloafs (see, can stray too far from food): your have your meatloaf recipe and I have mine. They are all meatloafs but they don't taste the same.

Remember I mentioned that I use GMMA (Guppy Multiple Moving Averages)? I let the system "draws" the trendlines automatically for me. Albeit many, MANY different trend lines.

 

[Bolimomo]

Quote from Matcha:


Another losing day. Most of my entries are wrong. The direction is right, but I had hard time to get the entry right. It’s the typical “Matcha’s all over the place day”.
.....

I see that you have Stochastics in your chart. Do you use Stochastics to make your entries? If so, how do you interpret Stochastics? What trigger your long/short?

 

[Bolimomo]

Quote from Matcha:

See my annotations on your chart.

1. This was a mildly bullish day. The beginning was bearish, but it turned bullish. If you are going to make a long trade, you should do it at Double Bottom - about 9:45 am. (Yellow circle).

2. See there was a bullish run starting at about 10:00 am? Count it: 1, 2, 3. It seemed that you made a long trade at the end of the 3rd push. This is a late entry. If anything it long should be avoided. (Not to say you should short, but avoid a late long.) (Yellow rectangle)

Look at the stochastics chart. This was a bull move at 10:00 am. If you want to long, you should be entering when stochastics is in oversold (2 red cicles), instead of entering long when stochastics is overbought (2 yellow circles).

 

[Now is Now]

Hey there JC

Give me a call on Skype and we can discuss a couple of points. Maybe Sunday before opening.

What is happening doesn't surprise me, but you can get back on track.


NiN

 

[Bolimomo]

Quote from Matcha:


Is it normal that the more I trade, the more I learn, the more confusion I get? Or it’s because of my lack of skill set and experience. One thing I know is I really don’t know how to properly use all the indicators and price actions together to play an orchestra. Looking at my trading plan now, I still see lots of flaws in it….

Yes I think this is normal. Because you are just starting out. You are trying many things that are new to you. You haven't come to a conclusion of what combinations work the best for your trading style and your trading account yet. The day will come that you finally settle down on a few of them that work consistently well for you.

Quote from Matcha:

.....
I found the best book I have ever read is my journal now. I am glad I really take the time writing this journal and keep reading it and taking all the notes every Saturday.

This is your golden discovery. You can read as many trading books as you want. But in the end the one the facilitates the most in your learning is your very own journal - the result of your own actions.

I suggest that you start logging your entries (if you haven't done so already): date, time, and a one-liner why you get in a trade. At the end of each day, review them to validate what worked, and what failed. Especially those that failed, what you think went wrong or misread? Trading is about gradually, methodologically eliminating your mistakes and discovering what works.

 

[Went Fishing]

Matcha

When I first started trading all I wanted to do was; HURRYupANDmakeLARGEprofits!!!! That didn't work out so well. Over the years I learned the market will wait for you, but your capital may not. Please, take your time to learn. Boli is right, you're finding that "fit". This is an important piece of the puzzle, the "fit" between your personality and your personal trading style. You are a smart girl, you're finding that fit while using your sim account.

Boli is teaching you pure gold, give yourself time to process the information. YOUR THREAD IS ONLY 2 MONTHS OLD !!! that's what? 40 trading days!!!!!!!!!!!!
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Quote from Bolimomo:

ES typically "runs" in a 5 point increment. i.e. when it runs, it quickly runs for 5 points. I would imagine the Dow would be about 40-45 points at a time.
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I trade the EUR/USD and I've learned a bit about volatility and runaway trends over the years. I invite you to watch these moves closely. The way orders are processed these days through our brokers and at the CME along with algos and HFT discerning stop running from the beginning of a trend can be tricky. Every market is different, yet the same. As prices trend up they may run up 10pt back off 7pt run up 10(new high) back off 7 up 10 back 7 and so on. This is why waiting for that pull back to enter leaves traders standing on the dock as prices sail away over the horizon. Experience will show you, you must learn to embrace uncertainty to win in this business. In the price action above there is a pattern (easy to see on a chart after the fact when we ask ourselves, Why didn't I ????) look for this pattern in your market, you may be surprised at the consistency of these movements. A 2 or 4 lot trader hooks into a trend and "hangs on" a 2 or 4 hundred lot trader may buy and sell the fives and tens all the way up the trend, get the picture? I'm just asking you to give it a looksie as you're watching everything else. As you get to know your market you'll begin to see what's "out of line" and who's doing what.

I'm not suggesting you buy and sell up the trend. But maybe someday Boli will lend you his Super Duper Flash Gordon Raygun looking Laser Order Puter Inner http://www.elitetrader.com/vb/attachment.php?postid=2899577 and you will. I don't know if Boli has the glasses for that gun or not, but I might start with those.http://www.youtube.com/watch?v=AMEc_MiLmgw&feature=related He must use some kind of 3D lens to look at those charts, they're out of this world!!!!

<*)))><

 

[Bolimomo]

Quote from Bolimomo:


This is your golden discovery. You can read as many trading books as you want. But in the end the one the facilitates the most in your learning is your very own journal - the result of your own actions.

I suggest that you start logging your entries (if you haven't done so already): date, time, and a one-liner why you get in a trade. At the end of each day, review them to validate what worked, and what failed. Especially those that failed, what you think went wrong or misread? Trading is about gradually, methodologically eliminating your mistakes and discovering what works.

After you have successively reviewed a series of your own trades over a period of time (let's say 4 weeks to 2 months), I guarantee you... that you will see a pattern of behavior emerged. You lost big in the same way. Or you got stopped out in the same way. (Hopefully you will find some that you won in the same way.) You can then use those observations as a basis to start another book: your "trading rule" book. (Sun Tze's Military Doctrine.) From that point on you try to follow your rules to trade. Gradually through iterations you will modify old rules, install new rules, and get rid of old and non-functional rules. (Note: good to have one set of rules for a trending market and one set for the chopping market because those rules are completely opposite of each other.)

 

[Matcha]

Quote from Bolimomo:

I see that you have Stochastics in your chart. Do you use Stochastics to make your entries? If so, how do you interpret Stochastics? What trigger your long/short?

Trade in the direction of stochastic on 5 min chart and %k %D cross but %K and %D are not in the OB/OS level. Enter on 1 or 2 min chart when %k%D cross then reverse to the same direction of the 5 min chart.

Problem is lately I have been watching 60, 15, 5, 2 min chart and 4 stochastics on each chart. Plus I am trying different parameters on each chart. I got very confused often times... When I made sure 4 time frame, 4 stochastics and 4 MACD are going in my favor, I then got in the trade very late! Sounds foolish, common sense! But that was exactly what I was doing last week...

 

[Matcha]

Quote from Bolimomo:

See my annotations on your chart.

1. This was a mildly bullish day. The beginning was bearish, but it turned bullish. If you are going to make a long trade, you should do it at Double Bottom - about 9:45 am. (Yellow circle).

2. See there was a bullish run starting at about 10:00 am? Count it: 1, 2, 3. It seemed that you made a long trade at the end of the 3rd push. This is a late entry. If anything it long should be avoided. (Not to say you should short, but avoid a late long.) (Yellow rectangle)

Look at the stochastics chart. This was a bull move at 10:00 am. If you want to long, you should be entering when stochastics is in oversold (2 red cicles), instead of entering long when stochastics is overbought (2 yellow circles).

Thanks again, sifu.
From 7/23 7/22,7/13 chart and the trades on each day I made. The most obvious common mistakes are I entered on all the false breakout trades. Long at the high. Think it's a breakout. And I kept doing it every day. Buy at the top. Reason 1 is I had the wrong idea that: oh, so bullish, it;s going to be a nice trend day and break out days! Reason 2: Deepdown inside, I wanted to chase the move.

Another misconception is when I entered on a 2nd wave or a 3rd wave bullish move(not a best entry), I don't take profits when I saw the last move dies down. Becasue I think, ok let it retrace unless it doesn't hit my stop, it will continue to move up. The entire 3 wave move is just a big leg of the bull trend... But it never happened...

I hope I can recognize all these at the market next week.