Matcha's Dow E-mini Journal

No position today. After taking so many fake breakout trades last week, today I became extra extra cautious. Because of hesitations, I missed 2 entries; I decided not to chase them to avoid entering at bad locations. They were marked on the chart. I will try to be as detailed as possible to write down my thought process and trade from today, so I can receive more insights from sifu and every experienced trader here.

This morning’s prep: market trading in a range over night, open slightly sold off, Fedex took guidance up, price broke out last Friday, $TRIN opened and traded below 0.8. Anticipated either a range day or a breakout day. Be aware of the 10530 level as resistant level(6/22 high). Only take long trades.

Circle #1: Missed the entry, the main reason to be so hesitated is it’s too close to YTD high(green dotty line). I am afraid of buying at the Resistant level, besides housing data is announcing at 7:00, If it’s negative, it would came back and hit the stop. So I planed to take pullback trade after it retraced back to YTD’s high. But pullback never happened, so I missed the move.

I didn’t take the trade at grey box too, because it’s obviously a 3rd wave on 5 min, this is another day of the “2stage run day” and a bear flag day. The last run would work, but the profit is too small.

After the morning run, I thought today could be the “midday mush” ,:p. so I left to take my Monday “midday nap”. Zzz.zzzzz….

Circle 2: I “anticipated” it came down to hit 10415 zone to enter. But price didn’t land at 10415, it made a “W” bottom at 10420, then shoot back up. I was too slow to catch that, so I missed the entry. This time price broke up the high of the day and broke the consolidation zone…

No position today, but my head was clear most of the time at market. :p

I am posting both 5 min chart and 1 min chart today with marked entries.

Thank you everyone for your great advice! I now have RSI(Boli’s), EMA 20 and 100. Daily Pivots on my charts. That will be all for now.
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Quote from rolando87:

Hey,

I've been following the ES/YM a lot recently and one technique that i picked up from alexander elder was to look for divergences in the inidicators you use. You can see the most obvious example below at the double bottom at 6:30. Notice how price makes a very close double bottom whereas the MACD and RSI do not. In the second dip neither the RSI or macd make the same low. This signal was a bit more evident in the ES when the second price dip went slightly lower then the first.


He calls it a class B bullish divergence, same applies for the opposite. A class A, which is a more "powerful" signal occurs at 1030 to 1100, when price makes a higher high, but the MACD makes a lower high. However, the RSI made a double top, which isn't as powerful as the macd's second lower dip, but still valid.


I've noticed it works, but not always, sometimes that formation will lead to a trip bottom and yet perhaps another high low on the indicators. Usually it does turn in the expected direction, but you could be shaken out many times before that occurs.

I've also noticed they're more valid on longer time frames, eg more so on a daily chart then a 5 min. And i've almost come to stop using them in the 1 min timeframe because the failure rate is much higher.

I believe this is true of most indicators, the longer the timeframe the more valid it is. If anyone wants to add/confirm that would be best haha.

Keep up the good work, and thanks to everyone who's contributed so far, i've been following this thread religiously haha.
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Thanks for sharing! Got to really know when to look at indicators and when not to. The good things I found about indicatiors are sometime it filtered all the bad trades so I don't go over trade that much. And they help me enter the trades confidently.

I am working on how to use them, what indicators I might dump eventually...
 
Quote from Matcha:


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Circle #1: Missed the entry, the main reason to be so hesitated is it’s too close to YTD high(green dotty line). I am afraid of buying at the Resistant level, besides housing data is announcing at 7:00, If it’s negative, it would came back and hit the stop. So I planed to take pullback trade after it retraced back to YTD’s high. But pullback never happened, so I missed the move.
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Circle 2: I “anticipated” it came down to hit 10415 zone to enter. But price didn’t land at 10415, it made a “W” bottom at 10420, then shoot back up. I was too slow to catch that, so I missed the entry. This time price broke up the high of the day and broke the consolidation zone…
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Very, very good Grasshopper! I am very proud of you! :)

Remember what I said upthread: Be friend with your Fib scribble. Draw from the morning low (around 0530, red circle) to the morning high (around 0900, light-blue circle). This was a mildly bullish day. At 1100, there was a slight sell off. I didn't believe this sell off would go anywhere. Take a look at the retracement. Anything between 23% and 38% is still bullish.

Around 1130, price made a small 3-wave down run, then a Double Bottom. You see that price was equal high, but RSI was at higher low. That's Momentum Divergence. You may bet on the long with a small stop. On a smaller time-frame, you can see the grains better. (That's why look at multiple time-frames.)

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Quote from Bolimomo:

No no.... no no! :)

My advice: Dump the stochastics. Reason: Stochastics changes too fast from "oversold" to "overbought". When price is in uptrend, it stays in "overbought" for a long time. (Vice versa.) Stochastics is like a "on/off" switch. It confirms that you are in an uptrend or downtrend. But doesn't give you much time to react.

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Thanks, Boli!
Entered them in my charts today! Removed some MAs and MACD for now.
 
Quote from baggerlord:

You remind me of myself back when I was obsessed with trying to find the right combo of indicators, multiple time frames, and techniques to solve every little market move. Give it up, the markets don't work that way.

A few of the long time respected guys on here have been kind of enough to share bits and pieces of their methods with me via PM over the years, and not a single one of them uses any indicators. Unless you count various tools they use to keep track of relation to other trading products. (pairs, baskets, indexes etc...)

Learn about what drives buying and selling in modern markets and that will help you. You just gonna frustrate yourself and waste time messing with those indicators and MA's and all that.
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Thank you! Would keep just "a few" for now. RSI, MA, PPT, would pay most attention to Price action, bar by bar...

:p
 
Quote from luckylucy:

nice job Matcha, no trading sometimes is the best trade.
I wasn't discipline enough today, should be shame on myself...
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We all have those days....... We all have emotions. Just need to keep those days as minimal as possible...
 
Quote from Picaso:

and

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I've yet to meet a trader who <i>today</i> doesn't use indicators that didn't study and use them <i>at some point</i> in his career (including myself - I love including myself :D ). It is easy to overlook and discount how much using those indicators helped the trader to better identify and understand price action. Stochastics help understand acceleration, MACD to understand overbought/oversold, multiple and different types of MAs help to better grasp the fractal nature of the market (fuck, I'm starting to sound like JH) and trend persistence, volume and open interest analysis help to break down the elusive nature of market participation, level II (while useless most of the time) gives a better intuitive feeling for liquidity, automated algos and bid/ask pressure, etc.

.......
Think of it as writing poetry; much of the greatest poetry of the last century was written in free verse, but those poets didn't start writing in free verse, they started counting foots/syllables, trying assonant and consonant rhymes, etc. They started writing "Roses are red, violets are blue..." not "If you want me again look for me under your bootsoles". Then, one day they ditched rhythm and rhyme and the rest is history. (Now compare with those who couldn't tell the difference between masculine and feminine rhyme, but throw together a bunch of words in three lines and call it a fucking haiku).

With my best wishes to the reigning Queen of Price Action :) :
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First of all, I like what you wrote!
:D Like your sense of humor. You sound like a poet but not ashamed to use "F"! Actually, lots of good writers here in my thread!

I narrowed down some indicators today. I think I still need just a few of them on my chart. But I would focus mainly on price actions. Eventually, I would decide which one to keep or I might not need anything.

BTW, what about the JH ? Is he the one who was kept being mentioned in multiple threads? He doesn't seem like having a strong fan base...
 
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