Matcha's Dow E-mini Journal

[PatientOperator]

Quote from Bolimomo:

Welcome back, Sweetie!

I gotta say this: I think candle-stick thing is overrated. I am not kidding when I say this. And I also would say Brook's bar-by-bar is also overrated.

I think bar-by-bar, and candle analysis are only useful on daily charts. Once you switch the time-frame lower than daily... not that cool. The reason is on intraday charts, 1-min versus 5-min versus 10-min... how a bar forms and its shape depends on the starting point. Shift the starting point for your 5-min/10-min/etc chart the candles will look different. Prices moved how they moved... but the candles will look different for the same period of time.

Especially to me as a very short-term trader, candle and bbb have no practical value. Sorry.

Hi Boli,

I know I am not qualify to comment on the practical value of candle and Al's bbb for day trading purpose. I think you are correct that pure candlestick techniques can be a challenge to apply on different timeframes for intraday charts, for the patterns look different amongst them. I have read a few candlestick books including Nison's and Morris'. I found its a big challenge for me to use them on a stand alone basis for daytrading.

But Al's bbb technique actually uses very very few of the candlestick techniques. Even though he uses candle charts (mostly for eminis trading), he also indicated that his analysis can be used with other types of charts. He uses bar charts for trading stocks. He said the PA signals can be seen even on simple line charts.

I think Al's Price Action Analysis techniques based a lot on chart patterns - trendlines, trendlines, prior highs/lows, breakout, failed B.O., size of bodies and tails on candles and most importantly the relationships between the current bar to the prior several bars (i.e. bar-by-bar analysis). I think the CORE of his PA analysis is based on analyzing the mindset and action between the bulls and bears. Their action are reflected in the price charts. To me, his techniques make sense and have merits based on the understand of the psychology of the crowd. This is evident on his repeating emphasis on failed B.O., failed failures and etc... But then, to fully comprehend his techniques is a big challenge. It takes a big effort and time to study his techniques and try to analyze the crowd's psychology during the course of the day!

So, if candlestick and bbb is of little practical value what then would be a better approach that we (as newbie traders) should rely on?

Thank you Boli for your input as always.

--po

 

[Matcha]

Finished up trading at 12:00 today, a bit exhausted.

Today’s chart looks nice. In hindsight, a nearly perfect measured move day. The open range created from open until 6:50 almost gets measured moved down to LOD

However, there is no way for me to “know” that market would come down that far, otherwise I would have been holding my shorts from 7:30 whole day long…

Trade 1: long @7:15, after the opening reversal down then reversal up. Market looks like channeling up. The set up is a H1 and also a trap for an early bear. But there was no follow through after 2 bars. I exited at the small loss. -7Pts

Then market formed a Micro Wedge or a ledge reversal top whichever it is called. It’s the best set up to go short once a reversal bar turned to be a signal bar. So here goes the trade 2.

Trade 2: Short @7:30, Entry 11375. The follow through was a bit lousy. Instead of a sell off, market is making another micro-wedge down. I didn’t like the reaction very much, so I took profit at Pivot point, also almost the L of the reversal bar. Besides we were still in a tight opening trading range. +17Pts

8:45 am, market made a 3 pushes wedge + D/T Bear flag, L3 short. This is also the best set up ever! The 8:45 bear reversal bar has a small bear body-meaning the risk is small. I left my desk at that time and when I came back market began to sell off.

10:20 am Market is selling off again-3rd leg down. The risk is too large so I am Ok to let go.

Trade 3: 11:23. took a long, only for a scalp. Market kind of hit the MM and looked like a LOD is setting in. The consecutive bull bars are showing some bull strength,. Then a large Doji bar closed at EMA. Following the Doji a bear bar with no follow through, all these are telling me that there are buyers. And early bears might get trapped. Target the test of the H of the Doji and also the Trend Channel line. Only +13Pts

Then I was looking into a short set up. Since the momentum of the bull channel is so strong. I was waiting for a 2nd entry. But market ignored my wish. It began to sell off again. My 2nd entry just never show up!

PnL: $107, 3 trades. 67% winrate

 

[Matcha]

Quote from Bolimomo:

Welcome back, Sweetie!

I gotta say this: I think candle-stick thing is overrated. I am not kidding when I say this. And I also would say Brook's bar-by-bar is also overrated.

I think bar-by-bar, and candle analysis are only useful on daily charts. Once you switch the time-frame lower than daily... not that cool. The reason is on intraday charts, 1-min versus 5-min versus 10-min... how a bar forms and its shape depends on the starting point. Shift the starting point for your 5-min/10-min/etc chart the candles will look different. Prices moved how they moved... but the candles will look different for the same period of time.

Especially to me as a very short-term trader, candle and bbb have no practical value. Sorry.

Hi, Sifu! Thank for reminding me of candles and bar by bar analysis. Please don't get offended. I would like to defend Al's method here.

From my experience studying and adapting Al's method so far, I had to agree PO's comment about candle and bbb.

I think the term of the "al's bay by bar" is a bit misleading to most of traders. It's not just about how to analyze each bars and combination of the bars. Personally, I think his method really combined "EMA,elliote wave, measured move(AB=CD, Fib extension), trend line and trend channel lines, Spike and channels, Wedge, Andrew's Pitch Fork, Line regression, a lot of patterns recognition." He also pays a lot of attention to momentum and market context. He also likes to analyze the probablities when taking the trades.-learned all these information from charts on his website.

But, there is truly no way to analyze bars on small time frames. The smaller time frames helped to see the "shape and story" build into the 5 min bar if necessary. Or looked for early entries.

The concept in his book is only the step one to understand his method. There is more to learn in real life trading by applying his price action trading. I don't think anyone can 100% copy what is he doing. Eventually we will all figure out what's working for us.What type of setups we are focusing on. And who we are as traders...

 

[Went Fishing]

Quote from Matcha:

Eventually we will all figure out what's working for us.What type of setups we are focusing on. And who we are as traders...

Well said my dear, Let's keep Boli wrapped up in his fishnet stockings!

 

[FreeMarketRider]

The yea / nay candle debate is interesting - Good Points for sure. Ya can't argue with taking home some winners. Gotta love that winrate In my view it says a lot about being able to read markets and act accordingly.

 

[Matcha]

Today could have been the best and most efficient day for me. I could be finishing trading at 8am with 40pts. But I screwed up after 2 b/e trades, then I made more trades today. I repeated the newbie’s habit-over trade and revenge trade! I stopped trading now at 9:00am. I will trade on real paper now and continue to watch the market.

But I learned that whenever taking a counter-trend trade @ possibly the LOD +possibly intraday reversal, with one contract, I should either take a scalper’s profit at EMA or I should just hold and leave my stop at where it is originally located-below pivot low and only allow myself to move it to next pivot low when price got through the EMA and poke above the EMA! Not a great idea to mix up the 2 strategies… Unless I have multiple contract to manage.

Market opened and continued to sell off. Price broke out of YTD ‘s channel. Still I wasn’t fast enough and confident enough to join the sell-off. Especially the close of YTD has a strong urgency to go up and looked like market wants to broke the channel and make 2 leg correction and test the start of the channel. After 3 bear bars with low bottoming tails at the open. I wasn't sure if is the pullback of the bull move? or the continuation of the 4th leg down. But market didn't wait untill my decision was made.. It contiue sell-off... So now I am waiting for some other setups. At 11221 level 7:10am, market looked like it’s finished the leg down, buyers started to come in with some confidence. On 60 min chart, 11221 is the measured move down from the channel created from 11/4-11/11/9, 50% of 11/4 gap was filled. Then market here started to formed a base.- buying pressure is accumulating. Besides, market finished 4th push down.

7:35, I took a long after market made the 3rd attempt to break down but failed. Follow through was great! Then I thought that this could be possibly LOD area, I would hold for longer. So I changed my mind from scalp at EMA to hold for possible HOD. Too bad I moved my stop too early. After price hit MA, it turned back hit the stop. +24Pts turned to +1Pt
Then I reenter my long since the trade set up is still valid. This time it hit the stop again after price broke EMA and came back. Another +20Pts turned to +1Pt

A few minutes later, I re-entered again, I didn’t wait a strong signal bar pop up, I went long at 1 tick above a doji bar. Stop hit with a loss. -7Pt. What’s even crazier was I reversed to short since it now looked like a D/T . L2 short at EMA. The bar closed to be another Doji. My stop was hit once again. -11Pts. I was just so stupid and too persistent …

Fortunately I was still able to see that the set up is intact. Waited for more bull momentum, took my last shot, Trade a Long at failed L2.H/L,D/B pullback. Target yesterday’s magnet price area, measured move up, and test the up channel from YTD-11302 level,, the momentum really helped this time, price spiked up with no hesitation! +42Pts

Achieved the daily goal, and overtraded. Got to stop myself from trading here.

Don’t like overtrading, it makes my chart look silly and messy…

PnL: $118, 5 trades, 60%winrate

 

[Matcha]

Quote from Went Fishing:

Well said my dear, Let's keep Boli wrapped up in his fishnet stockings!

 

[Matcha]

Quote from FreeMarketRider:

The yea / nay candle debate is interesting - Good Points for sure. Ya can't argue with taking home some winners. Gotta love that winrate In my view it says a lot about being able to read markets and act accordingly.

Thanks you!
My goals now:
Avg 20Pts per day is the goal for me.
Avg 100 Pts per week
Keep the win rate to 50% or above.
Winning days per week >losing days
largest losing trades <1/2 largest winning position
largest losing day < 1/2 or less largest winning days
4 Concecutive winning days
4 Concecutive winning weeks
Maxi trades per day is 6

B/E trade/day is considered a winner

Achieve all these in SIM before go on live

 

[PatientOperator]

Quote from Matcha:

..... I wasn't sure if is the pullback of the bull move? or the continuation of the 4th leg down. But market didn't wait untill my decision was made.. It contiue sell-off... So now I am waiting for some other setups. At 11221 level 7:10am, market looked like it’s finished the leg down, buyers started to come in with some confidence. On 60 min chart, 11221 is the measured move down from the channel created from 11/4-11/11/9, 50% of 11/4 gap was filled. Then market here started to formed a base.- buying pressure is accumulating. Besides, market finished 4th push down.

.....

Fortunately I was still able to see that the set up is intact. Waited for more bull momentum, took my last shot, Trade a Long at failed L2.H/L,D/B pullback. Target yesterday’s magnet price area, measured move up, and test the up channel from YTD-11302 level,, the momentum really helped this time, price spiked up with no hesitation! +42Pts

Achieved the daily goal, and overtraded. Got to stop myself from trading here.

Don’t like overtrading, it makes my chart look silly and messy…

PnL: $118, 5 trades, 60%winrate

Hi Matcha,

You did great achieving your daily goal and nailing that wonderful 42 pts! Thank you for confirming my analysis of the bullish reversal at 7:00pst. I thought I might be making some misguided counter-trend trades.

I, too took one b/e (+0.25 points) trade before entering a LONG at around the same spot that you entered your excellent long trade (at 8:27pst), but I did not hold it long enough to hit my profit target. I got out when it broke above the previous 2 swing highs. I need to practice more on the measured move and need more confidence in my analysis. Then I took another long trade at 9:22pst, market went up, I didn't take a scalper profit and worst yet, I stepped out and left my original protective stop on. When I got back I saw my stop was hit and immediately reversed to go up to reach the HOD. Took another Long trade in the middle of the long consolidation at 12:05 pst. It was an agonizing trade. The market drifted till the EOD. Took a small profit and got out.

For the day, +1.00 ES pts, 4 trades (3+, 1-). Even though the PnL was not much, I feel that I had a good day practicing my PA analysis.

Have a good one tomorrow!

--po

 

[Matcha]

It’s good to go easy on today since we have been in a tight trading range almost the whole morning. Took only 2 trades.

Yesterday market made 4 legs up then chopped around until the close. Today market gapped down more than 60Pts. The first large doji bar signals the uncertainty. 7:20 am market formed a wedge bear flag. I didn’t short the high of the bull bar since the momentum was a bit too strong.

8:30am, Long. After bear made 3 failed attempt and 3 push in a triangle pattern. Tighten my stop a little too quickly. Stop was hit 2 bars later. -7Pts

8:46 reentered. Long, the follow through Break out bar was great, The opening range is still small. So I thought the break out could at least test HOD. But the momentum wasn’t strong enough. Instead of bull trending, price made a tight channeling up then after 3 pushes, it sold off and failed to test HOD. I was out at B/E.

10:00 Market made another bear wedge down to test the lower channel, forming the D/B patter at the magnetic price level earlier in the day - 11213. Since it’s still in a range, I had a buy order at 11214- Low of the 10:05 reversal bar. But the order didn’t fill, market never came down to hit price. Then I waited for a 2nd entry, never happened. 10:30 Market had a pullback, I thought it would be too risk to buy since we were still in a trading range. But market started to trend very nice from here…

PnL” -$29.80, 2 trades, 50%winrate