Spydertrader's Jack Hershey Futures Trading Journal

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CNMS

Your trading log and charts cleared a few things up. They were invaluable to my understanding of this framework.

Entry/Exit of your trades seem to be primarily based on channel context and price setups. Volume was used for adjusting or fitting price channels. Not sure how you used volume but could of been used for :

1) BTC (INC GREEN PRV ) on BO of ST
2) HOLD at 3:50 bar 2 tic move below lo of 3:45 bar. Not sure
of the PRV at 353 but from a quick eyeball test would of been
INC RED PRV ?. Would of made me nervous ... see black circle
in attachment.

Is this how you use volume ?


THANK YOU !
 

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You're welcome :)

1) BO of the short channel RTL, BO of the 15:40 bar's max, green PRV

2) Didn't break the 15:40 bar's min, and the long bias from the next higher fractal: the recent green bars were higher than the recent red bars, after the small R2R a B2x gaussian was forming.

I draw all the gaussians, even 1 or 2 bar long, then I add multi bar gaussians where needed, keeping an eye on the larger fractal channels too.

I noticed that my original post contained an error: the second trade made only 1.25 points, so it was only 0.75 points for the day. Counting the points and the $$ something was not right ...

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1621874>
Quote from 8833broc:

CNMS

Your trading log and charts cleared a few things up. They were invaluable to my understanding of this framework.

Entry/Exit of your trades seem to be primarily based on channel context and price setups. Volume was used for adjusting or fitting price channels. Not sure how you used volume but could of been used for :

1) BTC (INC GREEN PRV ) on BO of ST
2) HOLD at 3:50 bar 2 tic move below lo of 3:45 bar. Not sure
of the PRV at 353 but from a quick eyeball test would of been
INC RED PRV ?. Would of made me nervous ... see black circle
in attachment.

Is this how you use volume ?


THANK YOU !
More...
 
Quote from cnms2:

You're welcome :)

1) BO of the short channel RTL, BO of the 15:40 bar's max, green PRV

2) Didn't break the 15:40 bar's min, and the long bias from the next higher fractal: the recent green bars were higher than the recent red bars, after the small R2R a B2x gaussian was forming.
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Curious as to your thought process on these 2 trades, not sure if Im reading your log correctly...

The first one you went short on the retrace, kinda near where you'd expect it to resume the upwards dominant traverse ??

Second one you hopped back in long on the dom traverse and got caught up in a dip or some kind of flaw and let it get 1.25 pts against you, but held on for a nice gain.
 
If you want to be more conservative you don't enter on the BO, but wait for the price to retrace a little. This will give you a better entry, but could also make you miss a stronger move if the price doesn't retrace. When you exit or reverse this waiting game is dangerous.

One safer way of doing these:
- notice the BO
- place a stop order opposite to your entry at 3-4 points
- place a limit order to enter on a retrace of 2-3 ticks, or more
- after you enter cancel your stop order, or tighten it to a BO of 1-2 ticks against you
- when you recognize / anticipate change, exit with a market order, and cancel your stop order (if you placed one)

You have to compromise between safety and opportunity. Safer / later entries reduce opportunity. Safer / earlier exits reduce opportunity too. The more of a price move you plan to take, the more often you'll have to wash. So you have to calibrate your expectations of profit to your level of comfort, and level of trading (tapes, level 1, ..., forest). A forest move is larger, but it doesn't mean that you'll catch all of it. If you trade at that level, you'll have to be ready to take and accept more washes, or you'll have to accept a significantly smaller profit, maybe just a couple of points of an 8-10 point move.

These are just my views, and may not be in accord with Jack and / or Spyder's views.
 
I entered the first trade assuming a retrace to the wider channel RTL. It didn't happen, and I reversed long. As I described a few posts above, I based my decisions on what I saw and on the trigger points. On the second trade, I was ready to exit if it broke bellow the 15:40 bar's min, and probably to reverse short. Sometimes you take several small losses in a row. If I didn't exit the first trade, my loss would've been larger.

I posted these trades mostly to illustrate that you have to exit, and possibly reverse, when your trade didn't go as you anticipated.

I didn't know what will happen, I just did what I thought I saw (MADA), ready to hold, exit or reverse.
Quote from Jander:

Curious as to your thought process on these 2 trades, not sure if Im reading your log correctly...

The first one you went short on the retrace, kinda near where you'd expect it to resume the upwards dominant traverse ??

Second one you hopped back in long on the dom traverse and got caught up in a dip or some kind of flaw and let it get 1.25 pts against you, but held on for a nice gain.
More...
 
Quote from cnms2:

I entered the first trade assuming a retrace to the wider channel RTL. It didn't happen, and I reversed long.
More...

Im glad you brought this up... I seem to always be in this predicament. You never know if the retrace will go all the way to the RTL, half way, just a couple quick bars, etc. I try to wait for an ftt of the retrace tape, but that very rarely works. This is why I am looking forward to the trading part of this thing. You are right, you frequently get small losses, but they add up and it tends to leave you a few points in the hole going into the dom traverse.

I have tried to limit my trading to only taking the 'easier' pt 3 entries, but this involves either getting in on the retrace and possibly getting in too early, which results in a couple small losses, or waiting for increasing prv and missing half the move. This has become more noticeable lately with these tight choppy days. Sometimes it's not an issue at all, I'd just like to find a happy medium..
 
In one of my very recent posts, I've written about how I see "point 3" trading, form the point of profit expectations. This chart is a theoretical example. That entry could've resulted in a loss, if the price turned down sooner. On the other hand, you didn't have to wait for it to go negative, but just exit with a wash, and re-enter if the trend resumed.

In this example you would make 1 point +/- 2 ticks slippage - commission, for a 5.75 point traverse. Not that much ... but with a safe entry, and an exit that allowed for a possible stronger trend.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1622256>
Quote from Jander:

Im glad you brought this up... I seem to always be in this predicament. You never know if the retrace will go all the way to the RTL, half way, just a couple quick bars, etc. I try to wait for an ftt of the retrace tape, but that very rarely works. This is why I am looking forward to the trading part of this thing. You are right, you frequently get small losses, but they add up and it tends to leave you a few points in the hole going into the dom traverse.

I have tried to limit my trading to only taking the 'easier' pt 3 entries, but this involves either getting in on the retrace and possibly getting in too early, which results in a couple small losses, or waiting for increasing prv and missing half the move. This has become more noticeable lately with these tight choppy days. Sometimes it's not an issue at all, I'd just like to find a happy medium..
More...
 

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It seems, from my perspective, that you are trading the "super-forest" PT3s, which IMO would be much harder and more frustrating. The PT3 you entered on on the "super-forest" looked to me like a PT2 on the "forest," which might put you on the non-dominant side of the market (sort of, I see you entered on +prv and thus dominant, but this sequence looks more like you entered between PT1 and PT2, not PT3), when as a PT3 trader you are trying to be on the dominant side. Here is how I viewed that action (my stuff in yellow). It wouldn't even occur to me to draw that green channel unless I was just bored, b/c it seems forced w/ the gaussians and more of a super long term thing. Actually I might draw it just so I can watch price as it approaches that long term LTL, but I wouldn't be drawing it to trade that channel's PT3. Just my .02.

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1622308">
 

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Quote from Ezzy:

Thought this quote from Jack might give a bit of clarification to your observations
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Hi Ezzy,

Thanks, this was very helpful :cool:

Best Regards,
 
I see ... Where the "forest" is, is a matter of interpretation, I guess ... See my view of today bellow.

My point was not about this particular case, but about calibrating your profit expectations: it doesn't mean that having a 6 point channel you'll get a lot of it most of the times. Entering on point 3s is a little easier than entering on FTTs, but it shouldn't be a tentative of picking tops or bottoms.

In my interpretation, forest and point 3 trading was introduced for two reasons:
- because it is a little easier (less risky) to identify timely a point 3 than an FTT
- to slow down trading and allow more time to the beginner to observe and analyze.

But, the profit per trade is not expected to be significantly larger than when trading at finer levels. And the more aggressive your point 3 entry, the more often you'll have to wash (including taking small losses). The same with exits: exiting at RTL or BO will eat up some of your profits sometimes, and will allow you to catch stronger moves other times without paying for slippage and commissions.
Quote from Pr0crast:

It seems, from my perspective, that you are trading the "super-forest" PT3s, which IMO would be much harder and more frustrating. The PT3 you entered on on the "super-forest" looked to me like a PT2 on the "forest," which might put you on the non-dominant side of the market (sort of, I see you entered on +prv and thus dominant, but this sequence looks more like you entered between PT1 and PT2, not PT3), when as a PT3 trader you are trying to be on the dominant side. Here is how I viewed that action (my stuff in yellow). It wouldn't even occur to me to draw that green channel unless I was just bored, b/c it seems forced w/ the gaussians and more of a super long term thing. Actually I might draw it just so I can watch price as it approaches that long term LTL, but I wouldn't be drawing it to trade that channel's PT3. Just my .02.
More...
 

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