Personal YM Journal - candlesticks and trend lines

A

aaronwexler

Hi there, I am a swing trader, trading the YM using candlesticks and Trend lines as my entry point and candlestick patterns as my exit point.

I wanted to start a public Journal to keep my "honest" with myself. This way if I stay out of or get into a trade that I should not have I have to post it to the public and hopefully that will help keep me from doing it.

Right now I am only trading hammers as my entry and dojis as my exit.

I am trading 1 contract at a time with a stop placed 15 ticks below the shadow of the hammer or trend line.

After 75 ticks of "profit" in my direction I move my stop to BE

I am only trading long positions in up trending or sideways trending markets as determined by support and resistance.

I am not as concerned with the exact shape of the hammers I trade off of, ie. the shadow being at least 2 times the size of the body, what is important is that the price has had a reaction or a support line.

I usually get about a signal to trade every 3 weeks or so in a trending market, and I am working on a system for day trading and also for swing trading in a downward trending market and will update the journal when that happens.

That being said there was a very nice looking hammer on the 14th but the market is still down trending so I am waiting for at least on set of higher highs and higher lows. The hammer was also not off any obvious trend line it might have been off of a fib line depending where you trace it from. See file below

I welcome input but please keep it constructive, positive, and or informative.

Thank you
 

Attachments

Great Aaron !! You and I have somewhat similiar styles. I am intraday trading the YM. And Hammers do come into my strategy as well as PPs and S/R.......

In that image there did the Hammer Bar have a flushout in Volume ?? The reason I ask because I find it a very lucrative trade if a long tail Hammer has a bigger than average volume . The point being that Sellers start out but then near the end of that Hammer Bar the Buyers start coming in with heavy volume. Signifying a push upward in succeeding bars.
This works well for me on a 3 minute chart.

Anyway, good luck and look forward to seeing some more posts from you !!!
 
Aaron,

You might want to start considering trading multiple contracts so you can re-adjust your strategy to having multiple targets, at least 2 contracts.

Imagine if you are up 75 points and the trade ends breaking even because you could not take some profits due to your lonely car.

Instead consider two, then when your first target of 75 is hit, you can take profit on your first car, and trail the rest.

Just a thought and good luck with your journal.
 
Thanks for the comments.

As far as the volume goes I am not sure how much volume constitutes a flushout but there was a spike in volume that day. Time will tell if that hammer turns into a profitable one. rmarshceint I would be interested to hear how you use the candlesticks for intraday trading because that is something I am going to want to try in the future. I am looking at using candlesticks combined with woodies version of CCI and of course S/R.

Neet you know I have considered that, but the research and back testing I have done all in and all out is more profitable in the end. The reason being, when you are wrong you lose X2 but when you are right you only win X1 1/2 as apposed to X2 because you exited 1 contract earlier than the other. I would be more inclined to scale in when the trade goes in your favor than to scale out, but either way I am going to stick to the all in and all out for now. Thank you for the input though I think in the end it comes down to personal preference.
 
Quote from aaronwexler:

Thanks for the comments.


Neet you know I have considered that, but the research and back testing I have done all in and all out is more profitable in the end. The reason being, when you are wrong you lose X2 but when you are right you only win X1 1/2 as apposed to X2 because you exited 1 contract earlier than the other. I would be more inclined to scale in when the trade goes in your favor than to scale out, but either way I am going to stick to the all in and all out for now. Thank you for the input though I think in the end it comes down to personal preference.
More...

Aaron,

Yes but notice I said trail the remaining contract. Taking profits on half and trailing the other car is not a bad strategy as long as the stop is given room. Try that see how it goes if your method works better, then by all means, stick to it.

Good luck.
 
So just an update on that hammer seen on the 14th. I was having chart problem and did not have a historical daily chart of the YM. When I commented on it before not being off of any support I was looking at a chart of the DJI assuming it was similar to the YM. Well I got my charts fixed yesterday and can now see that on my YM chart it was a PERFECT hammer off the previous low TL which as of right now would have unrealized gains of $1500 per contract. Granted it could crash or go down before I get an exit signal (and thats not what i want), but it is hard not to be very frustrated. I am just trying to be happy that it is one more trade that that improves the systems win percentage even if it isn't putting money in my account.
 
I forgot how hard the psychology of trading is. Today there was a nice hammer in the YM. (see chart) However it came after a week of nothing but up. By definition hammers come after a period of decline in price. see the following ... http://www.investopedia.com/terms/h/hammer.asp
However, knowing this I still spent an hour looking at the indicators trying to find a reason to let myself enter a trade that went against my rules just because the candle today looked "hammerish". It was only after stepping away and talking about it with my girlfriend that I came back to the charts and was able to look back and find a few examples where the same situation happened in the past. Those situations didn't look good then and they don't look good today....it is not a place for me to go long no matter how bad I want to trade. And I don't mean that statement to sound like some sort of prediction for the future. Anything can happen but the risk reward just isn't there for me no matter where the price actually ends up going.
 
Well just to recap that hammer turned out to be a nice one. It was a long hold and I would have been out on 4/10 with a profit of 383 ticks. I would have liked to be in on 3/28 but there was no real TL to draw support from. You could tell a lot of other people weren't sure as well but the next 3 days of doji type stars. The trade ended up working though.

Which brings us to yesterday where we got another hammer right off of support. The problem here, just like the first one, is that it is a large hammer meaning the stop placed below the bottom of the candle would be out of my risk comfort zone. Sitting out of these trades is getting old so I am looking at the cost of using options when the risk of a normal stop is to great.

I am also finally set up to day trade and will be posting my rules/trades for that soon.
 

Attachments

The Hammer on the 12th is shaping up to be a good one. I was going to trade it as an option but my account had to be set for that so again I missed another one. As an added rule I am letting myself trade the hammers on the daily charts with options if the risk from trading them straight is too great and the price of the option is within my risk limits. It would have been for this trade.

So from here I am going to have to control my emotions so that I don't let the frustration from missing 3 trades drive me to get into trades I shouldn't be in.

Better trades down the road right?
 
You must log in or register to reply here.
Back
Top