NumberZ Day Trading Journal

[NumberZ]

if you buy a call option and pay let’s say $500, that is the most money you can loose no matter what happens. It’s like trading with a hard stop but more reliable. Again, I don’t want to suggest you trade options, just an alternative when trading small/test account.

Buying a naked option has risk limited to the amount you pay in premium up front to own the option.

I see that there are options on the SPX. Maybe an alternative to the ES?

 

[NumberZ]

I haven't placed any more trades since the two trades on that early H2.

Here are my notes so far, bar counting, measured move as Brooks teaches in the course.

 

[NumberZ]

Maybe a double top here to get the move to touch the moving average? Also I noticed that the second H2 was a 50% pullback which Brooks teaches about.

 

[speedo]

H2's are most reliable of the Brooks set ups it seems to me. Today I made two trades off the same H2 buy set up. The first trade I attempted to buy limit at the close of the H2 signal bar. I was filled lower than that close, and because of the range of the market, I was filled on my 5 point profit target during the same bar that the entry was made. I then placed a buy stop to enter based on the same H2. I lowered the buy stop based on the inside bar. This trade also made it to my 5 point profit target.

View attachment 269668

I like the 5 point target. I also would like to work in what Brooks calls a "swing portion." So maybe I'll add a third contract to hold for swing?

I'm watching the moving average. According Brooks, we should see price touch the moving average (99.9%) and three bars will trade below the moving average (99.5%).

Once you decide on your setups, H2's, DT's, DB's, wedge breaks, MTR's etc, it would be a good idea to track your MFE and MAE on all signals taken or not to adjust targets. Volatility changes and range with it. Targets are dynamic.

 

[NumberZ]

Once you decide on your setups, H2's, DT's, DB's, wedge breaks, MTR's etc, it would be a good idea to track your MFE and MAE on all signals taken or not to adjust targets. Volatility changes and range with it. Targets are dynamic.

You sent me to Google to find out what "MFE" and "MAE" were. And I recognized the first result as an ET member! I guess an ET "sponsor"!

So measure points moved "for" and points moved "against"?

I haven't come across this in Brooks Trading Course yet. Does he talk about these?

 

[speedo]

You sent me to Google to find out what "MFE" and "MAE" were. And I recognized the first result as an ET member! I guess an ET "sponsor"!

View attachment 269681

So measure points moved "for" and points moved "against"?

I haven't come across this in Brooks Trading Course yet. Does he talk about these?

I don't recall his mentioning them, I don't want to get you off track as the study of Brooks will be invaluable should you put in the time and effort but you may ultimately draw other concepts into your trading. I use David Halsey's concepts of measured moves but with adaptations. I also incorporate ideas of Raschke, Sperandeo, and others. The trolls on here like to criticize the "methods" of Brooks. As I've noted a number of times, which is something the trolls have difficulty in comprehending, he does not teach a "method", he teaches how to recognize and understand price behavior so a trader can develop his or her own methodology. If someone is simply looking for a "method" or "setups", there are no lack of car salesmen to provide such but they won't do much if any good without the understanding of the context in which they occur. Becoming a profitable trader takes a lot of time and effort, more than most of us realized going in.

 

[NumberZ]

Had a work emergency on Wednesday morning and kept me busy until an hour or so ago.

Here is my current trade and first one since the last one posted. This is H2 long trade.
Still SIM trading. One simulated contract only.

 

[NumberZ]

I have placed a stop loss order at 4533

 

[NumberZ]

I have placed a stop loss order at 4533

Stop was traded. 4533 is "actual risk" stop per Brooks. 4529.25 "initial risk" per Brooks. Swing traders would use initial risk stop. Scalpers would use actual risk.

I am experimenting.

 

[tiddlywinks]

I have placed a stop loss order at 4533

@NumberZ

I am neither an advocate nor a critic of Brooks. And I do not know what a "H2" is.
But from merely looking at your chart I offer a suggestion...

It is clear the trade moved in your direction.
Why then would you place the stop below the "H2" entry??

Since the trade materialized, the stop at that point should be (at least) 1 tick above BE (break even) so it covers commissions (and basically becomes a wash.) There is no reason that trade should be a net loser of any amount.

Looking further at the chart, around 4539 and 4544 was were sort of resistance levels that could have also been used as stop levels, or target levels depending on exactly what an "H2" is.

It's all about making money... and that requires knowing where a particular setup (H2 in this case) is likely to run into trouble. And more importantly, recognizing when a particular trade is flailing, regardless of what is "supposed" to occur.

Of course, the style of trade (intraday, swing, scalp, investment, etc) in addition to the setup itself, affects how the trade is maintained.

Good trading to you.