So I'm back at it. The first step was figuring out a plan/set of rules for me. As I alluded to in a previous post, I might be limiting myself, but this is my initial set of rules. I'm not getting married to them.
I've read a lot of journals and know that while everyone might be looking at the same vehicle (ES, NQ, CL, etc.), everyone sees things differently and has a different approach for entries, trade management and exits.
My goal for this initial phase of trading (sim) is to get comfortable with entries based on specific rules and to exit based on pre-determined chunks of price movement. For instance, my initial stop will always be 3.5 points. Then my plan is for the stop to be moved based on forward price movement. Once price hits 5 points in my favor, the stop is moved to BE +1. Once price gets to 9 points, the stop is moved to +5 points. Once price gets to 13 points, the stop is moved to +9 points -- and so on in 4 point increments. I've looked at a lot of static charts and this approach is what I'll be testing. In my static chart review, MAE of 3 points was common so I'm using 3.5 points to provide a little more leeway.
My reasoning for approaching it this way is that for so many, determining the correct target and/or determining that a move over is often the most difficult part. Holding (even trades that go in your favor) can be so damned hard too - and me especially. I also know that I'm not great at determining price action. I'm faked out a lot. For now, having rules for guidance are what keeps me from making decisions based on what I think I might see - and exiting prematurely. #1 is having a set of rules to follow (plan). #2 is to see if I can follow my own rules. I've struggled with #2 in the past.
Today I was able to follow my rules and thus I'm pleased with my execution. Is there room for growth - yes. But following the bare bones of the plan occurred = progress!
Right after the open is where many likely saw the initial entry for a long (A). The down trend line from just after 7AM was broken, with a nice RET and then the market shot up. I saw it too, but it occurred in the time window that's off limits to me - the first 10 minutes after the NY open. So though my entry was quite a bit later, I set it up based on the high of the 0946 bar (4203.75). It triggered 4 bars later (B). It hung out for a few minutes and did go into the negative, so of course I wasn't thrilled about that. But since my stop was set at 4200.25, it wasn't hit. The MAE of the trade was actually just 2.25 points.
With the stop plan in place, I was stopped out of the trade at 4213.75 for a total of 9 points. (C)
In the CWS world, I saw the next entry from the 1052 bar as the DL was fanned due to the higher high and then price hugged it (the DL), but I didn't take it (D). I didn't take it because I didn't want to risk losing what I'd gotten in my first trade. That's why I say that progress was made, but that there's still room for improvement.
For my first day back in the sim saddle, I'm pretty stoked. Now it's time to rinse and repeat - consistently.
I've read a lot of journals and know that while everyone might be looking at the same vehicle (ES, NQ, CL, etc.), everyone sees things differently and has a different approach for entries, trade management and exits.
My goal for this initial phase of trading (sim) is to get comfortable with entries based on specific rules and to exit based on pre-determined chunks of price movement. For instance, my initial stop will always be 3.5 points. Then my plan is for the stop to be moved based on forward price movement. Once price hits 5 points in my favor, the stop is moved to BE +1. Once price gets to 9 points, the stop is moved to +5 points. Once price gets to 13 points, the stop is moved to +9 points -- and so on in 4 point increments. I've looked at a lot of static charts and this approach is what I'll be testing. In my static chart review, MAE of 3 points was common so I'm using 3.5 points to provide a little more leeway.
My reasoning for approaching it this way is that for so many, determining the correct target and/or determining that a move over is often the most difficult part. Holding (even trades that go in your favor) can be so damned hard too - and me especially. I also know that I'm not great at determining price action. I'm faked out a lot. For now, having rules for guidance are what keeps me from making decisions based on what I think I might see - and exiting prematurely. #1 is having a set of rules to follow (plan). #2 is to see if I can follow my own rules. I've struggled with #2 in the past.
Today I was able to follow my rules and thus I'm pleased with my execution. Is there room for growth - yes. But following the bare bones of the plan occurred = progress!
Right after the open is where many likely saw the initial entry for a long (A). The down trend line from just after 7AM was broken, with a nice RET and then the market shot up. I saw it too, but it occurred in the time window that's off limits to me - the first 10 minutes after the NY open. So though my entry was quite a bit later, I set it up based on the high of the 0946 bar (4203.75). It triggered 4 bars later (B). It hung out for a few minutes and did go into the negative, so of course I wasn't thrilled about that. But since my stop was set at 4200.25, it wasn't hit. The MAE of the trade was actually just 2.25 points.
With the stop plan in place, I was stopped out of the trade at 4213.75 for a total of 9 points. (C)
In the CWS world, I saw the next entry from the 1052 bar as the DL was fanned due to the higher high and then price hugged it (the DL), but I didn't take it (D). I didn't take it because I didn't want to risk losing what I'd gotten in my first trade. That's why I say that progress was made, but that there's still room for improvement.
For my first day back in the sim saddle, I'm pretty stoked. Now it's time to rinse and repeat - consistently.
