If you use IB TWS Time & Sales it is not good. When the algo trades start going off you can forget about seeing the sizes, as they will print so fast you will not see them. You need to read the rhythm of the tape, and if possible gauge the trades are more hitting the Bid/Ask, which would be much easier if TWS colored the entire rows then just using a dot color. Anyway, it is possible to get a good hang of it with practice. If you use the bar chart with the Time & Sales it is easier, as you can put up a 1 min or 30 sec barchart and see price going off at the Bid or Ask.
NQ Paper Trade Journal
- Thread starter A2x2
- Start date
In my opinion, you simply cannot ignore the NQ or the ES when trading either of these 2. If you look at enough examples, you will see an incredible amount of instances where you cannot explain why prices turns at a certain level when looking only at the one instrument, but when you look at the other, the reason will become clear. They don't always move the same, and one sometimes leads the other, but if one hits a major level and the rejection is solid, the other will be dragged along with it. So its best to keep an eye on both.
2016-10-11 Summary
Daily P&L: -10.75 (5 trades, 2 break-evens, 1 winner, 2 losers)
Trade Summary
Trade 1: Placed a long order at 4835.50 with a close stop-loss of 4832.50 based on Line A being the support line. If the market broke the support line (which it did) then I would have minimized losses. The market dropped so rapidly and then came back up that I was able to exit at the market price of 4835.00. [-0.50]
Trade 2: Immediately flipped short at 4834.00, which I instantly regretted. I could have shorted at a better price so I got out when I could. Line A now becomes the resistance line [+0.50]
Trade 3: Once I watched the market for a bit I was finally comfortable to short at 4835.00 as the market failed to make any major moves above Line A. [+5.25]
Trade 4: Once again, I made the error of reacting too quickly to sharp moves with no follow through. When the market sharply broke above Line A around 12:50pm, I was confident that this was the beginning of the reversal. I entered long close to the top of the range and I got stopped out. [-8.00]
Trade 5: Once I got stopped out of trade 4, I immediately went long again closer to the bottom of the range at 4830.00, only to get stopped out at 4822.00. I was essentially trying to catch a falling knife. [-8.00]
I can definitely see the benefits of using the trend lines from the previous days support and resistance levels. Will try not to react so quickly to sharp moves, and let the charts form before making my move.
Things to (continue to) focus on:
-More patience on the trade set up (wait longer until I take the 1st trade, for the range and chart patterns to develop)
-Need to mentally visualize potential chart formations both to the upside and downside (anything can happen), and strategize my game plan
-Protect profits (do not hesitate to exit and take profits at current levels when market is exhibiting signs of slowing down / utilize time stop)
-Okay to miss entry and not make a single trade for the day
-Always keep the overall trend in mind (will it trend or will it range?)
-After every trade (win or lose), take some time to assess before entering the next trade
Daily P&L: -10.75 (5 trades, 2 break-evens, 1 winner, 2 losers)
Trade Summary
Trade 1: Placed a long order at 4835.50 with a close stop-loss of 4832.50 based on Line A being the support line. If the market broke the support line (which it did) then I would have minimized losses. The market dropped so rapidly and then came back up that I was able to exit at the market price of 4835.00. [-0.50]
Trade 2: Immediately flipped short at 4834.00, which I instantly regretted. I could have shorted at a better price so I got out when I could. Line A now becomes the resistance line [+0.50]
Trade 3: Once I watched the market for a bit I was finally comfortable to short at 4835.00 as the market failed to make any major moves above Line A. [+5.25]
Trade 4: Once again, I made the error of reacting too quickly to sharp moves with no follow through. When the market sharply broke above Line A around 12:50pm, I was confident that this was the beginning of the reversal. I entered long close to the top of the range and I got stopped out. [-8.00]
Trade 5: Once I got stopped out of trade 4, I immediately went long again closer to the bottom of the range at 4830.00, only to get stopped out at 4822.00. I was essentially trying to catch a falling knife. [-8.00]
I can definitely see the benefits of using the trend lines from the previous days support and resistance levels. Will try not to react so quickly to sharp moves, and let the charts form before making my move.
Things to (continue to) focus on:
-More patience on the trade set up (wait longer until I take the 1st trade, for the range and chart patterns to develop)
-Need to mentally visualize potential chart formations both to the upside and downside (anything can happen), and strategize my game plan
-Protect profits (do not hesitate to exit and take profits at current levels when market is exhibiting signs of slowing down / utilize time stop)
-Okay to miss entry and not make a single trade for the day
-Always keep the overall trend in mind (will it trend or will it range?)
-After every trade (win or lose), take some time to assess before entering the next trade
It is debatable if watching the NQ can help trading the ES, as the ES is where the big players are. I have watched and traded both, and found no advantage apart from overall market sentiment, in which case you can also include Russell 2000 and Wilshire 5000. In summary, it can depend on your approach and objectives. I currently only look at the ES for daytrading, with a quick glance at SPX for major levels as noted previously. Too much info slows down the decision process, and this does not help when trying to beat the pros on their home ground.
Forget about mentally visualizing and all that rubbish. For now, just sit and wait for break of PDH or PDL. Do not try intraday trading until you have mastered outside day trading, as you will get crucified trading the e- minis intraday without a lot of experience. You must crawl before you walk. Accept the fact or become another statistic.
One of the things I found is that your charts must be very easy to read so that you can easily identify the major levels when trading. This means you need to experiment with some different colors until you get a scheme that makes the charts jump out at you when trading . This is one such color scheme that works for me. Sometimes I will change the color scheme if I do not like what I am seeing. The main thing is your results, and you do whatever is required to assist you with getting good results, no matter how silly it might seem. The brain is a funny thing, and I have found that mine responds to different color schemes in different ways. Clarity is an important requirement. Your chart has too much stuff on it. Strip it down to the bare essentials and see if it makes any difference. Do not be afraid to experiment without any of the text book stuff, as most of it is useless when it comes to making money trading.
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News weighs on price, so why wouldn't you be short on a day when price is abviously weak?
You will know how many buyers and sellers are there by watching Market Depth or Booktrader. I am not sure how many trades on the NQ are attributed to automated programs, but they are a lot less than the ES. If you watch Booktrader you will get a hang of when momentum is starting to build up, and after a while will get good at calling breakouts from consolidations, but trying it without charts is not that easy and requires a lot of experience. If you look at too many charts you will get distracted and start thinking about things that do not really matter. Remove all TA from your charts, even volume for now, and just use the Booktrader. You can also use Time & Sales to help with Bid/Ask trade identification (this where TWS falls down, as other platforms automatically color trades that go off at the Bid/Ask with different colors across the whole row). Think in terms of momentum, as you do not want to keep missing the boat. When momentum slows be wary, and if price retreats back into consolidation area be prepared to get out with profit if not already locked in with auto trail.The reason is simple, as you can easy re-enter if momentum build up again in the direction of your initial trade. Of course, if momentum has reversed, then you need to reverse also. Never marry a trade, as it is like marrying a woman, in that she will break you with bad habits.
- Never place a stop at LOD as you will get hammered a lot.
- When you see a spike on the 1 min candle with no follow thru, be wary.
- Always be aware of Time of Day, or TOD.
- Always watch the SPX (2 week x 30 min) for major levels during Regular Trading Hours, or RTH,
- If I was you I would start with 2D1M.RTH with no volume, or 2Day1Min.RegularTradingHours.
For comment 3, "always be aware of Time of Day (TOD)", what time slots are you specifically referring to? I tend to notice changes during the lunch hour, after the lunch hour (1:30pm to 2:30pm) and EOD. If a major shift doesn't happen at one period, it tends to happen at the other. Do you typically hold off on trading during the beginning of these periods until new patterns develop?