Sempai's YM Journal

S

sempai

I decided to post my results and notes here because I wanted to follow Baggerlord's YM method in real time for a while to see how it works, but I didn't want to clog up his thread with my posts.

There are several reasons why I decided to start this journal. First of all, I've been thinking about giving daytrading a try again so I figured it might be a good idea to start a journal and paper trade some methods and then get some input from others at Elite Trader before I start putting actual trades on again.

Also, after seeing the following poll: http://www.elitetrader.com/vb/showthread.php?s=&threadid=20916] ES Points? Long-Term Average? VOTE! I can't understand why I'm unable to be consistently profitable daytrading.

I picked this particular method to start with because it was very simple, and it's as good as any a place to start. In theory, one should be able to come up with a fairly simple and sound idea, tweak it a little bit to fit the market you're trading, your style, etc., and then trade it profitably. Since Baggerlord has been doing so much research and study lately, and since he already "tweaked" the system, I figured why not give it a try for a while. Regardless of the system or method I use, I know that doing this will bring out all of the trading issues, problems, hangups, etc. that I have, and then, hopefully, I can get some input from others regarding what is going on.

The goal isn't to create a "system". Rather it is to learn the process of how to modify and adapt some simple methods and techniques to the current market environment and my own personality and style, and then apply them profitably. BTW, I could have pulled any basic trade setup that appealed to me out of any book for the purposes of this thread (and maybe tweaked it a bit myself), but for the reasons I mentioned above, I decided to go with this one for now.

Here is the link to the thread: Baggerlord's Method for Scalping the YM

This is a summary of the rules:

Chart Setup:

1 minute chart
34 eMA
10 sMA of highs
8 sMA of lows

Pullbacks:

Long: Wait for two consecutive bars completely above the HMA. Wait for a lower high and go long on the breakout of the pivot.

Short: Wait for two consecutive bars completely below the LMA. Wait for a higher low and go short on the breakout of the pivot.


Range Trades:

Long: Wait for a bar completely below the LMA. Go long at the break of the high of this bar.

Short: Wait for a bar completely above the HMA. Go short at the break of the low of this bar.
 
This should be interesting. A few suggestions...

Stick with just pullbacks at first. They have a higher success rate and range trades can be pretty tricky to get right.

Pay attention to commissions. They can add up quick trading like this.

Make sure there is sufficient volume to sustain a trend.

Don't feel the need to take every trade. There will be a lot of them, so cherry pick. IE keep an eye on trendline, the longer term trend, etc...

There you have it, and good luck.
 
Yes, I'm seeing that the range trades can be tricky already, but then again, they all are. I have a couple of great charts I made to upload, but they're too big so I have to do them over again :(

Once I get them redone, I'll post them. I did terribly today so there should be plenty to talk about (but not a big deal since I'm just paper trading right now).
 
3 trades: 2 wins, 1 b.e.
Total: +10 pts.

I just started following the trades in the afternoon. All trades are paper trades. I write the order on paper ahead of time and when my stop price is hit, I give myself a fill. If the price makes a sharp move through the stop price, I’ll figure in a tick or two of slippage, to try to be a bit more realistic. I’ve traded long enough and tried enough things that I believe my thought process is pretty close with paper trading as it would be in real life (especially trading for just $5/pt.). I also think that the fills I give myself are realistic in the long run (i.e. I give myself shitty fills).

#1 Range setup (0). Although the 34eMA was trending down slightly, I took this one because it had just tested prior support at 9275, so I went long with tight stops (due to down trending 34eMA). Once I had a few points in the trade, I moved stop to b.e. and was stopped out shortly after.

#2 Pullback (+5). The market started to run and set up for a long entry so I entered at the break of the pivot high at 9289. The market started to run and I put in an order to exit at 9294, one tick below prior high for +5 pts.

#3 Range setup (+5). The market had been very volatile for the last hour or so and seemed to be making a range in the 9275 – 9300 area. The market had just made an extreme run up to prior resistance at 9303 and then reversed, so I took the short entry signal and placed a limit order to take 5 pts. profit (just used my discretion as market was volatile and I wanted to score a quick profit if I could and exit quickly).

Note that I had missed a trend setup (short) a few minutes before trade #1 that would have been a loser, but I either missed it and got lucky, or I didn’t take it because of the prior support at 9275 (I can’t remember which it was).
 

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10 Trades: 3 winners, 6 losers, 1 break even
Total: -20 points.

As you can see, things didn't go so well today. I got whipsawed a number of times in the first hour and had a couple of retracement trades that fizzed out a few ticks after breaking the pivot. Today's experience is fairly similar to what usually happens when I attempt to daytrade. Although in hindsight I maybe should have passed on a couple of trades, at the time, I had my reasons for taking each one, and I tried to go with the signals as they occured as well as doing stop and reverse trades where I thought they were appropriate. I also considered the possibility that because of the power outage, the markets weren't trading in their usual manner, so I'll continue to try to follow this method for a while. Also, I will only be doing it in the mornings, and only from 9:30 - 10:30 on M,W,F due to my new schedule. This should help me IMO, since I'll be fresher when I am trading, and also, because it's a total pain in the butt to create the journal and the charts, so it will keep the total number of trades down.


#1 Range setup (-8). Market opened with first bar above HMA, so I shorted with a stop above the high of entry bar.

#2 Range setup (0). I tried shorting again about 2 minutes later when I got another short signal. I could have taken a quick 5 pt. profit on this one, but I wanted to try and let it run, but use a tight stop just in case. I trailed a stop above each bar and was stopped out at break even.

#3 Range setup (+6). This one set up on a gap and push down at exactly 10:00 am, so I figured a report just came out (didn’t check for reports prior to trading). Since I figured it was a report, I wasn’t sure whether to fade the move and take the long signal, but I decided to go ahead with it. Since I wasn’t too sure about the entry, and also not sure if this was possibly the beginning of a downtrend, and also because the 9290 level was prior support (hence now possible resistance), and also because I just had 2 losers, I decided to take a quick profit and exited at 9290. As you can see, there was some resistance there, because after I got out, the market retraced about 5 points before continuing up.

#4 Range setup (-8). A valid short setup so I took it. In addition, a long setup was forming with 2 bars above the HMA, so I placed a stop and reverse above the pivot high. The market turned around and went up, exiting me out of this trade and entering long for the next.

#5 Pullback (-5). Although there was resistance above the entry, the early a.m. high was about 7 points away, so I figured there would be enough room to either take a quick profit, or slip a stop in at break even if it went up there. However, it only went up a couple of ticks and then headed down, confirming resistance and setting up a short range setup, so I stopped and reversed again, using the short setup as my exit signal for the failed long.

#6 Range setup (-6). I entered short based on a valid entry signal occurring near resistance. I placed my stop above the pivot high. I was stopped into the trade, the market went 1 tick in my direction, then reversed, quickly taking out the stop.

#7 Pullback (+7). Market started to run up and a valid Pullback formed, so I went long at the break of the pivot high. I placed an order to take profits at 9320, which was the daily high for the past 2 days. The market traded through slightly then headed down. I may have been able to squeeze a few more points out of the trade with a trailing stop, but I had no idea if it would hit resistance and drop like a rock (which often happens), or if it would continue up, so I played it safe and took my profits.

#8 Range setup (-5). A pullback after the large run up created a long setup. Perhaps in hindsight, I shouldn’t have taken this one, but I thought the market may have just been pulling back for another run up to the highs, so I took it.

#9 Pullback (-5). A valid short after trading down subsequent to testing prior daily highs. Looked like it would possibly continue down to prior lows due to strong momentum. A stop above the pivot high would have risked 9 points, so I made a judgement call and placed my stop above the high of the entry bar (for 5 pt. risk), in anticipation that if this was a good trade, it should run right away. However, it didn’t and I was stopped out. In hindsight, I woulda coulda shoulda placed my stop above the pivot, and brilliantly traded my way out with a break even or perhaps a small profit, but I guessed wrong.

#10 Range setup (+4). Market looked like it might be settling into a lunchtime range so I took this one. Again, due to many losses during the day, I decided to take a quick profit and place my exit order at 9309, the prior high from a few minutes before. This turned out to be a good call since it only went through it a few points before heading back down again.

I didn’t take any more after this because I was getting too exhausted from all of the activity and because I was beginning to annotate the charts and write notes.
 

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sempai/baggerlord

isnt; trade # 1 also a failed pullback trade i.e. in the bar just before you would have gond short on a pullback trade ?

Also did you miss a nice range trade at approx 14:44 or 14:45 ish on a long - that one to me based on the rules would have been sweet ?

thanks in advance for any thoughts - thanks for sharing trades & thoughts

F.
 
Quote from fionna:

sempai/baggerlord

isnt; trade # 1 also a failed pullback trade i.e. in the bar just before you would have gond short on a pullback trade ?

Also did you miss a nice range trade at approx 14:44 or 14:45 ish on a long - that one to me based on the rules would have been sweet ?

thanks in advance for any thoughts - thanks for sharing trades & thoughts

F.
More...

Yes, it was. If you look at the bottom of my notes, I commented on that: "Note that I had missed a trend setup (short) a few minutes before trade #1 that would have been a loser, but I either missed it and got lucky, or I didn’t take it because of the prior support at 9275 (I can’t remember which it was)."

Also, that second trade you mentioned I didn't take because at the time, the 34eMA was trending down and acting as resistance, although now that you mention it, it did test prior support at 9270 from 12:30 p.m., so it might have been nice to try and get in there. However, I did catch a small part of the move on the continuation in trade #2.
 
You are doing your entries different than I was. You are trading these more as breakouts, and will end up chasing price a lot. See my pic for where I would enter.

About today, the nonexistant volume should have kept you out most of the day. You need markets to move for this to work.
 

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Another thought, you need an exit signal before you take an exit. If you take 5 pt profits between commish and losers you will end up net negative. At the very minimum wait for a previous bars low to be broken. If you are well in the profit a trailing stop of say the low of previous three bars would work. Also, the most recent big bar makes a good exit as well. Sometimes the market will really explode in your direction, especially on pullbacks, and you can't afford to miss this.
 
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