It was ONE sick puppy
Rule of 10 Journal
- Thread starter jagmot
- Start date
It was ONE sick puppy
Thanks for pointing that out volente_00. You've mentioned that before, and in an inexact market that's how the rule should be utilized in one's trading.
That's why I called the trade as I did ... and hey, good luck with the automated system. I'm quite sure somebody around here can do it.
Reaction high (if you can call it that) at 77.75 and reaction low @ 71.50, so:
-Possible long at 67.75
-Possible short @ 81.50
I gave up yesterday's trade because I was unsure how the oil drop from post-Gustav would play on the market. I would have made money though, because:
1- At the time of posting, I really, REALLY, wanted to hit the bid.
2- Overnight I play only for 6 points (10 is a big and impractical movement for overnight play)
That being said, this morning I did short near the 95 area, because had they kept it at such (and they did), it would have created a very big gap, and RSI was in the overbought region. I made some 9.x points on 1 contract.
Now into the close I bought 2 contracts for an average of 77.25 because I saw some positive divergence on the MACD historigram and RSI was at oversold (and I believe that Tuesday is counter-rally day). Yeah I know that I jumped the gun, but as I said my entries need work.
Then again those weren't Ro10 entries/exit.
Rule-of-10 wise, I'm pretty sure I would have got whiplashed, the rally-then-drop movement was pretty unidirectional and I'm pretty sure that my stops would have kicked in over and over again.
Overall I still believe in the Ro10, but as Volente mentioned you have to pick your days.
Edit: Oh and I wouldn't trade the Ro10 numbers mentioned above, here is my personal reasoning:
-I believe that Tuesday is an up day (especially after the humiliation of today)
-In a larger picture we're in the middle of nowhere. I'd rather long in the 1250-1260 region and short in the 1290-1300 region, whichever one of those targets come first. Until we break those levels (and we will now that traders are coming back from holidays), we're in a big neutral area.
-I'm not too fond of holding overnight (hence why I have a stop @ 78.50, but pondering whether I should keep it there or not), especially for some hard blind-entry rules because a lot of funny stuff can happen. An example would be the selloff before the 4am rally, even though we all knew that oil prices were dropping since Monday evening. I'm not saying that I wouldn't play overnight in general, just that the convergence of these circumstances don't give me a warm feeling.
-Possible long at 67.75
-Possible short @ 81.50
I gave up yesterday's trade because I was unsure how the oil drop from post-Gustav would play on the market. I would have made money though, because:
1- At the time of posting, I really, REALLY, wanted to hit the bid.
2- Overnight I play only for 6 points (10 is a big and impractical movement for overnight play)
That being said, this morning I did short near the 95 area, because had they kept it at such (and they did), it would have created a very big gap, and RSI was in the overbought region. I made some 9.x points on 1 contract.
Now into the close I bought 2 contracts for an average of 77.25 because I saw some positive divergence on the MACD historigram and RSI was at oversold (and I believe that Tuesday is counter-rally day). Yeah I know that I jumped the gun, but as I said my entries need work.
Then again those weren't Ro10 entries/exit.
Rule-of-10 wise, I'm pretty sure I would have got whiplashed, the rally-then-drop movement was pretty unidirectional and I'm pretty sure that my stops would have kicked in over and over again.
Overall I still believe in the Ro10, but as Volente mentioned you have to pick your days.
Edit: Oh and I wouldn't trade the Ro10 numbers mentioned above, here is my personal reasoning:
-I believe that Tuesday is an up day (especially after the humiliation of today)
-In a larger picture we're in the middle of nowhere. I'd rather long in the 1250-1260 region and short in the 1290-1300 region, whichever one of those targets come first. Until we break those levels (and we will now that traders are coming back from holidays), we're in a big neutral area.
-I'm not too fond of holding overnight (hence why I have a stop @ 78.50, but pondering whether I should keep it there or not), especially for some hard blind-entry rules because a lot of funny stuff can happen. An example would be the selloff before the 4am rally, even though we all knew that oil prices were dropping since Monday evening. I'm not saying that I wouldn't play overnight in general, just that the convergence of these circumstances don't give me a warm feeling.
As I go to sleep here I don't see a good reason to place either a long or short entry as both are nearby and don't wish to place both.
Todays results (totals)
3 full stop outs -3 points x 2 contracts
1 target hit +5 points x 1 contract
1 trailing stop hit +5.5 points x 1 contract
-7.5 points total x $50 = -$375
8 commissions @ $4.80RT = -$38.40
Total for the day -$413.40
Todays results (totals)
3 full stop outs -3 points x 2 contracts
1 target hit +5 points x 1 contract
1 trailing stop hit +5.5 points x 1 contract
-7.5 points total x $50 = -$375
8 commissions @ $4.80RT = -$38.40
Total for the day -$413.40
We have trade off 79.75 -10....BUY 6975 s/l 6675.... 9-11 in both sides.... will wait for price performance confirmation.
Looks like a lot of over trading. The 1301 was good, but ignoring what the 9/18 ma was saying and ignoring the gap underneath is not. You will never see me take a long above on a gap up or a short under a gap on a gap down. As a fader you have to understand this rule and how it figures into mean reversion in the ES. YOU ALWAYS WANT TO BE BUYING DISCOUNT AND SELLING PREMIUM IN ES IN RELATION TO CASH CLOSE. Sure there will be days where we gap up or down and just keep trending, but they don't happen often and when they do it is better to just sit on your hands and wait for the next opportunity to arise to exploit instead of catching falling knifes or chasing.
No ...it is "simpler" than that....without giving away the kitchen sink...I use a 4 minute screen using a performance indicator that tracks price.....I set my own parameter , which is consistent and does not vary with time of day/night (don't trade too often at night anyway).
As this existing trade goes it is likely I will be buying above the standard "10" prompts previously described, and that is ok because I have a "confirmed base"....should it roll over then it is obvious the market could not continue to support that level.
The point is though,and yesterday was a perfect example, I cannot simply catch a knife and hope like hell it will reverse simply because a "10" trade appears...had I done so, I would have been knocked out in minutes on at least 2 occassions.
Ahh, as I write I am in BUY 7200 s/l 6900....SELL 2/3 7500 then adjust s/l 7200....as you can see this ti=me I appear to be at a tremendous disadvantage to the original promp, but so be it....at least I have a market in the process of giving an upside bias, which helps everybody.
Hope this explanation is what you were looking for...
WAIT = CHASE