My journey to profitable trading: NQ price action journal

[VV Cehpei]

Well I had another bad day today, almost exactly like yesterday unfortunately.

I started of with back to back 5pt losses, and spent the rest of the day nickel and dime trading trying to make it back. And like yesterday, I ended down -0.25pts and most of my loss is commission. I took a few small losses doing my scalping too, but I'm glad that I kept them small at least. Overall it just wasn't a good day.

The first trade I played the breakout, and the market made me look the fool as I pretty much bought on the high print.

I did write out a trading plan last night too. Mine is pretty basic, but in a nutshell, it's this: I'll trade from 2 charts primarily, and before market open I'll locate overnight hi/lo as well as previous day hi/lo or any other patterns, or supply/demand lines that I see.

Then Using my higher time frame chart I'll wait until price approaches one of my predefined areas, and if I get an entry signal, I'll use my lower time frame chart for the entry. I'll already have a predertimed stop level that makes technical sense, and my maximum loss per trade will be 5points. I will also make sure that each trade has at least 5 points to move in my favor before running into any support/resistance areas.

And I also allow myself to scalp like I did today to try to make back a loss if I get down. It's worked so far for me, and it's the only way I know or seem to have a little bit of success with when I try to chip away at a loss. I know I can be criticized for taking such small gains, but too often over the last few days I've let gains turn to losses, so I just wanted to make sure I took something. So anyways, if I do take some losses with my regular trades like I described, I'll try to nickel and dime scalp to make some back. I suppose I'll keep trying it for now as long as it seems to work.

I'll post the weekly results a little later.

Today's results:

13 Trades, 8 wins 5 losses

1st: -5.00
2nd: -5.00
3rd: +3.00
4th: +2.50
5th: +2.00
6th: -2.00
7th: -1.25
8th: +3.00
9th: -0.50
10th: +0.75
11th: +0.25
12th: +1.00
13th: +1.00

Net points -0.25

Net P/L -$54.14

First 5:


Last 8:

 

[Redneck]

This format does not like excel - please see picture



Something to be said for keeping losers small - In My dumbass Opinion - of course

Loss of (.3) goes to profit of 7.2 - things that make me go - Hmmmmm


RN

 

[VV Cehpei]

^ Hey RN, thanks for taking the time to make that and point that out, it's striking when I look at it that way. And yesterday's trades would look pretty much the same as well. That really drives the 'keep your losses small' point home!

My head is spinning after the last few days, and I have a lot to think about over the weekend.

 

[Turveyd]

Get out of that beaten down, just happy to get out without a loss mentality, small profits are to easy to give back, go for bigger but be sensible about it.

I traded just as I woke up today -$800 in 7mins and I'm not a rich man, defo on the keep your losses small, just deleted my 6month old method as this is happening to often recently.

We've all been there many many times!

 

[VV Cehpei]

^ Hey thanks, yea need the weekend to rest!
Week 7 Results

28 Trades

18 Wins

10 Losses

Monday: +$81.22
Tuesday: +$76.22
Wednesday: -$7.56
Thursday: -$46.58
Friday: -$54.14

Net Weekly P/L +$49.16

Graph:


Stats:

 

[NoDoji]

I did write out a trading plan last night too. Mine is pretty basic, but in a nutshell, it's this: I'll trade from 2 charts primarily, and before market open I'll locate overnight hi/lo as well as previous day hi/lo or any other patterns, or supply/demand lines that I see.

Then Using my higher time frame chart I'll wait until price approaches one of my predefined areas, and if I get an entry signal, I'll use my lower time frame chart for the entry. I'll already have a predertimed stop level that makes technical sense, and my maximum loss per trade will be 5points. I will also make sure that each trade has at least 5 points to move in my favor before running into any support/resistance areas.

I challenge you to find a successful business owner whose success is the result of having written out a basic business plan one night. Even if your basic plan has positive expectancy, you’re not trading a positive expectancy plan. As RN pointed out, where are the 5 point (or more) winners?

You played a breakout on your first trade. I see a pre-market double top around 4020.75. Considering that price level is the upper extreme of a very wide range when price comes back up to it at 10:00 ET, it needs to break immediately with conviction and is just as likely to fail because there’s no trend in play. Does your trading plan tell you to enter a breakout trade more than 5 points from the breakout tick of 4021.00? A breakout entry of 4021.00 gives you a quick 5 points.

With regard to your second trade, does your plan tell you to buy at the close of a 1-min bear bar during a symmetrical triangle formation? The inside of a symm tri in-progress is off limits for entries according to my plan. Even so, wouldn’t you have a rule about scratching the trade break even once price closes below the LTL of the triangle and gives you the chance to get out?

I assume the third trade was anticipating that the lower low would hold despite price coming off a lower high. It makes no sense to me in terms of PA, but as luck would have it, it not only held, price moved up off a higher low. You’re in a fine position with almost no risk now. The previous high of 4015.50 is in play. Yet despite the fact that you’re taking 5 point losses and now have a strong opportunity for a 5 point gain or better (a 1-2-3 breakout off that higher low will probably lead to a trip to the upper trend line which at the time of your entry is around 4022.00), you target 3 points, instead of the 10 points that a double reward:risk requires (and was fulfilled in this case).

I don’t see a plan anywhere.

Here’s an example of just one long setup from my written plan that utilizes a 1-min chart. I’m using letters for values and general bracketed information for other details because I’m not giving away something that took me far longer than a day or two to put together:

The [name of setup] is signaled when a breakout (defined elsewhere in detail) exceeds N ticks during a [specified period of time].

Once this signal occurs, two pullback bars must close before an entry can be evaluated. A pullback bar is either an inside bar or a 1-min bar whose low is lower than a previous bar’s low.

If the bar following the first pullback bar is not a pullback bar (if it’s not an inside bar or a bar whose low is lower than the previous bar’s low), the signal is void until two pullback bars in a row occur without any “void” signals occurring.

No pullback bar may have a range greater than N ticks. If at any time a pullback bar’s range is greater than N ticks, the signal is void.

No signal bar (the bar off which an order is based) may have a body [description of relationship between bar’s open and close].

Once two qualifying pullback bars close, [description of where to place an initiating buy stop order]. Continue to trail the Buy Stop until an order is filled or the signal is invalidated by any one of these conditions:

> A pullback bar with a range greater than N ticks

> A low = < [a specific price level from the 5-min chart]

> A close < [a specific 1-min support level]

If an order is filled, place a stop loss at price SL and a profit target of [detailed description of how to manage profit on the trade based on the PA environment in play].

I'm not the sort of person who can trust my instincts to trade and so I need to have explicit instructions to guide me. From looking at your trade entries and exits, I get the impression your instincts aren't too keen either.

Consider running statistical analyses of your current plan and get the details worked out. Then practice in sim until you can get results similar to those indicated by your analyses.

All the best!

 

[k p]

You played a breakout on your first trade. I see a pre-market double top around 4020.75. Considering that price level is the upper extreme of a very wide range when price comes back up to it at 10:00 ET, it needs to break immediately with conviction and is just as likely to fail because there’s no trend in play. Does your trading plan tell you to enter a breakout trade more than 5 points from the breakout tick of 4021.00? A breakout entry of 4021.00 gives you a quick 5 points.

I assume the third trade was anticipating that the lower low would hold despite price coming off a lower high. It makes no sense to me in terms of PA, but as luck would have it, it not only held, price moved up off a higher low. You’re in a fine position with almost no risk now. The previous high of 4015.50 is in play. Yet despite the fact that you’re taking 5 point losses and now have a strong opportunity for a 5 point gain or better (a 1-2-3 breakout off that higher low will probably lead to a trip to the upper trend line which at the time of your entry is around 4022.00), you target 3 points, instead of the 10 points that a double reward:risk requires (and was fulfilled in this case).

(sorry VV, I hope you don't mind me asking a question here)

As always ND, I just love your PA analysis. Given that 4020.75 was the overnight high, how are you playing this to attain the quick 5 points? Are you simply placing a buy stop at 4021 with the idea that if price goes above by even a tick there will be a scalp there of a few points? Given that you're usually wanting to be the second mouse, I would imagine that you would want price to come down and test this level and be pulled into the trade if it comes back up. Or, since the day was quite channel bound up to this point, are you playing the breakout and trying to reach an upper channel line perhaps?

(I had a channel marked in, but the top was only at about 22.50. I entered a long actually at 4025, a few minutes after VV, after we had the bounce off the OH, so it was I think somewhat well set up, it just didn't go anywhere.)

VV's third trade that you comment on (going long even though we came off a lower high) just makes so much sense. And because you spent your time helping me with my trend lines, I too saw that once we were in a long, the UTL from the 5 minute chart was a great target which was hit. Your magic lines really work so well! (shame I didn't take this, but going over the chart today I see the trade set up beautifully).

Sorry once again VV!

 

[NoDoji]

(sorry VV, I hope you don't mind me asking a question here)

As always ND, I just love your PA analysis. Given that 4020.75 was the overnight high, how are you playing this to attain the quick 5 points? Are you simply placing a buy stop at 4021 with the idea that if price goes above by even a tick there will be a scalp there of a few points? Given that you're usually wanting to be the second mouse, I would imagine that you would want price to come down and test this level and be pulled into the trade if it comes back up. Or, since the day was quite channel bound up to this point, are you playing the breakout and trying to reach an upper channel line perhaps?

(I had a channel marked in, but the top was only at about 22.50. I entered a long actually at 4025, a few minutes after VV, after we had the bounce off the OH, so it was I think somewhat well set up, it just didn't go anywhere.)

VV's third trade that you comment on (going long even though we came off a lower high) just makes so much sense. And because you spent your time helping me with my trend lines, I too saw that once we were in a long, the UTL from the 5 minute chart was a great target which was hit. Your magic lines really work so well! (shame I didn't take this, but going over the chart today I see the trade set up beautifully).

Sorry once again VV!

VV said he played a breakout and the only breakout setup I saw was that double top level in pre market. I'd never trade a straight away breakout because, as I said, a break out of a wide range like that more often than not fails. But if I were to trade a breakout there, my entry would be 4021, not 4025.25. The point I was trying to make was that if VV was trading a first entry breakout, it should've been entered at the breakout level. If looking for a second entry off the initial breakout, then you weigh the risk reward of a second entry setup. The second entry if taken was quickly rejected and I would've been out for no more than a 3 pt loss. I personally don't trade breaks out of wide ranges or trendless action. I trade breaks out of narrow range consolidation or new highs/lows in a strong trend.

Regarding the third trade, I had no idea where that entry came from. There was nothing in the world that would've had me long there, but the point I was getting at was that since the trade was immediately favorable and printed a higher low after entry, there was no reason to cut it short without letting price test the next key levels in line.

The most important point of my post was that a business plan should be clear and have positive expectancy. Taking 5 point losses and then trying to scalp back to even with a series of many trades, none of which is 5 points or more profitable, is a recipe for disaster, IMHO.

 

[k p]

Once again.. perfect answers... thanks so much ND! I think that with all the help you've given us in just this past week or two, we have plenty to build a solid plan.

 

[Turveyd]

I challenge you to find a successful business owner whose success is the result of having written out a basic business plan one night. Even if your basic plan has positive expectancy, you’re not trading a positive expectancy plan. As RN pointed out, where are the 5 point (or more) winners?

You played a breakout on your first trade. I see a pre-market double top around 4020.75. Considering that price level is the upper extreme of a very wide range when price comes back up to it at 10:00 ET, it needs to break immediately with conviction and is just as likely to fail because there’s no trend in play. Does your trading plan tell you to enter a breakout trade more than 5 points from the breakout tick of 4021.00? A breakout entry of 4021.00 gives you a quick 5 points.

With regard to your second trade, does your plan tell you to buy at the close of a 1-min bear bar during a symmetrical triangle formation? The inside of a symm tri in-progress is off limits for entries according to my plan. Even so, wouldn’t you have a rule about scratching the trade break even once price closes below the LTL of the triangle and gives you the chance to get out?

I assume the third trade was anticipating that the lower low would hold despite price coming off a lower high. It makes no sense to me in terms of PA, but as luck would have it, it not only held, price moved up off a higher low. You’re in a fine position with almost no risk now. The previous high of 4015.50 is in play. Yet despite the fact that you’re taking 5 point losses and now have a strong opportunity for a 5 point gain or better (a 1-2-3 breakout off that higher low will probably lead to a trip to the upper trend line which at the time of your entry is around 4022.00), you target 3 points, instead of the 10 points that a double reward:risk requires (and was fulfilled in this case).

I don’t see a plan anywhere.

Here’s an example of just one long setup from my written plan that utilizes a 1-min chart. I’m using letters for values and general bracketed information for other details because I’m not giving away something that took me far longer than a day or two to put together:

The [name of setup] is signaled when a breakout (defined elsewhere in detail) exceeds N ticks during a [specified period of time].

Once this signal occurs, two pullback bars must close before an entry can be evaluated. A pullback bar is either an inside bar or a 1-min bar whose low is lower than a previous bar’s low.

If the bar following the first pullback bar is not a pullback bar (if it’s not an inside bar or a bar whose low is lower than the previous bar’s low), the signal is void until two pullback bars in a row occur without any “void” signals occurring.

No pullback bar may have a range greater than N ticks. If at any time a pullback bar’s range is greater than N ticks, the signal is void.

No signal bar (the bar off which an order is based) may have a body [description of relationship between bar’s open and close].

Once two qualifying pullback bars close, [description of where to place an initiating buy stop order]. Continue to trail the Buy Stop until an order is filled or the signal is invalidated by any one of these conditions:

> A pullback bar with a range greater than N ticks

> A low = < [a specific price level from the 5-min chart]

> A close < [a specific 1-min support level]

If an order is filled, place a stop loss at price SL and a profit target of [detailed description of how to manage profit on the trade based on the PA environment in play].

I'm not the sort of person who can trust my instincts to trade and so I need to have explicit instructions to guide me. From looking at your trade entries and exits, I get the impression your instincts aren't too keen either.

Consider running statistical analyses of your current plan and get the details worked out. Then practice in sim until you can get results similar to those indicated by your analyses.

All the best!

Dude, it's all easy after the event to criticise someones trades, he tried he's learning get over it.

It's not like your signals and rules likely fare any better, I'm sure they screw you over just as many times as they make your $$'s, single candles at any TF ( best on M1 ) are pretty much useless.