Techniques for Day Trading the ES, NQ, YM, MES, MNQ, and MYM

[yc47ib]

I don’t recall if Brooks establishes a separate (From SL ) “give up point” for an average down trade or not. I just think it wise to protect oneself from oneself and in the case of a blasted algo blowing throw the SL and even triggering the loss if you have a resting “give up point” it will likely get triggered too getting you heading in the correct direction anyway. Just my way of thinking. However, if my SL gets hit i would probably cancel the “Give up” resting order If I have time to and then enter again on a doubled up trade in the correct direction.

Thank you Volpri for the latest post, and your last point is what helped me most. Before I read and understood this point of yours, I have been thinking what to do after a big SL. I had been following the "orthodox" wisdom: after a big SL, do not revenge, LOL.

On the contrary, instead of sitting there regretting about the trades lead to the big SL (you call it give up point), this is exactly the best moment for "revenging", fast PA, big momentum, smallest possibility for a reversal back. As you said, one has to be decisive and act fast when this happens. Also, there should not be anything to regret regarding the previous averaged down big SL, since that group of trades was done according to a well defined trading plan, and based on the context of that period of time, and there is nothing wrong whatsoever about the Stopped out trades. The only thing can go wrong is when you do not do the revenge trade to make it back. This is a crucial second part of your trading plan that gives you a positive expectation day in and day out.

This point revolutionized my own trading method and psychology! Thank you!

 

[volpri]

I will revisit the trades from yesterday june 15 later to show compounding effect but I took 4 trades today. First two were losses. I was using a 24 hr chart and looking to take a LHMTR (lower high MTR reversal as the trendline had been broken and price traded thru 20 ema and gone back up to test the previous high so I was looking for a reversal. Problem was my SL was too close, so it got hit. Then I thought well maybe it will go up a little more before reversing so I averaged down long on trade two. Shortly after that it reversed and I got stopped out now down well over 100 on bar 9:35. Close to $200.00 down, I think. I don't remember. So, I then doubled up 8 contracts and went short trade #3 on same 9:35 bar as dynamics were moving fast south and soon got back my loss and was up $152.00 Then I did a straight short scalp in trade #4 and ended the day with +$212.50 I am stopping there as I need to go outside and work. Maybe get in another trade or two later today.

But I wanted to show a MTR in action and also how when caught on the wrong side of the market one just has to be flexible enough to reverse directions. It is a procedure or a process. I acknowledge the emotions I feel, I don't bury them or push them aside, but then I work the process.

MTR are usually low probability about 40% of the time they will work. The advantage you have with them is low risk and potentially big reward. So they are usually a low prob, small risk, big reward trade when they work out. I got the MTR correct. My mistake was just setting my SL a tad too close. Then I went long and got that wrong. Two mistakes in a row. It happens. But there are ways to correct them. I just did, GET ON THE RIGHT SIDE. The chart will tell you which is the right side. I had it right at first just set my SL wrong, I should have realized the extent of the weakness was there. Trendline break. Price thru 20 EMA showing strength of bears, then while even though moving up after RTH's open, the bars were overlapping showing bullish AND bearish activity on the test of the overnight high. I mean the weakness was there. I just got off on my SL.

Could be I probably didn't get enough sleep as it was probably around 3 a.m. when I finally got to sleep then up before the RTH's open this morning. I suppose one excuse it as good as the other in this case ROFL.

So 4 trades 3 shorts and one long. two losers and two winners. piss poor win rate but doubling up pulled me back up into profit even with low win rate. Again, context has to be right for averaging down AND for doubling up and reversing or I just get whip sawed. The dynamics on bar 9:35 were like "swoosh" south. Chance to get back my loss and get back in profit. No time to waste gotta jump on it. Immediate context = swoosh. Larger context MTR working. Why not jump on? Might as well. See, first two trades are independent of third trade. A trader cannot let their recency bias stop them from doing what is right. Two losses in a row can stop a trader from doing the correct thing. Must not let that paralyze execution. Gotta get short on swoosh and quickly. The market is being nice to me. It won't last long. Giving me a second chance. I like second chances do you?

I gotta eat breakfast and get to work outside. bye

 

[volpri]

Here is what those trades look like from a RTH's chart perspective. PA looks different there. 5 min chart MES. Still tradable just different tactic. It is called filling the opening gap with strong bearish pressure. So, the tactic is to trade the BO south. At least be in by the close of bar 9:40. The opening sideways move of 13 bars shows bulls and bears pulling and pushing neither side winning. If the opening gap up was going to continue bullish up it likely would have happened before 13 bars. Bears win on this and south we go to close the gap. Of course bulls could come back before the day is over but odds favor the HOD has been made. But you never know LOL. It is all extrapolating and trying to keep odds in one's favor. At least be short by the close of bar 9:40 which I was on the doubled up south position I took on the 24hr chart (MTR actually short before bar 9:40). I will often compare two charts (24 hr and RTH) to decide what tactic I will use. This morning I just used 24 hr chart and didn't even look at the RTH's chart before my first trade, or actually any of my trades.

 

[SimpleMeLike]

I will revisit the trades from yesterday june 15 later to show compounding effect but I took 4 trades today. First two were losses. I was using a 24 hr chart and looking to take a LHMTR (lower high MTR reversal as the trendline had been broken and price traded thru 20 ema and gone back up to test the previous high so I was looking for a reversal. Problem was my SL was too close, so it got hit. Then I thought well maybe it will go up a little more before reversing so I averaged down long on trade two. Shortly after that it reversed and I got stopped out now down well over 100 on bar 9:35. Close to $200.00 down, I think. I don't remember. So, I then doubled up 8 contracts and went short trade #3 on same 9:35 bar as dynamics were moving fast south and soon got back my loss and was up $152.00 Then I did a straight short scalp in trade #4 and ended the day with +$212.50 I am stopping there as I need to go outside and work. Maybe get in another trade or two later today.

But I wanted to show a MTR in action and also how when caught on the wrong side of the market one just has to be flexible enough to reverse directions. It is a procedure or a process. I acknowledge the emotions I feel, I don't bury them or push them aside, but then I work the process.

MTR are usually low probability about 40% of the time they will work. The advantage you have with them is low risk and potentially big reward. So they are usually a low prob, small risk, big reward trade when they work out. I got the MTR correct. My mistake was just setting my SL a tad too close. Then I went long and got that wrong. Two mistakes in a row. It happens. But there are ways to correct them. I just did, GET ON THE RIGHT SIDE. The chart will tell you which is the right side. I had it right at first just set my SL wrong, I should have realized the extent of the weakness was there. Trendline break. Price thru 20 EMA showing strength of bears, then while even though moving up after RTH's open, the bars were overlapping showing bullish AND bearish activity on the test of the overnight high. I mean the weakness was there. I just got off on my SL.

Could be I probably didn't get enough sleep as it was probably around 3 a.m. when I finally got to sleep then up before the RTH's open this morning. I suppose one excuse it as good as the other in this case ROFL.

So 4 trades 3 shorts and one long. two losers and two winners. piss poor win rate but doubling up pulled me back up into profit even with low win rate. Again, context has to be right for averaging down AND for doubling up and reversing or I just get whip sawed. The dynamics on bar 9:35 were like "swoosh" south. Chance to get back my loss and get back in profit. No time to waste gotta jump on it. Immediate context = swoosh. Larger context MTR working. Why not jump on? Might as well. See, first two trades are independent of third trade. A trader cannot let their recency bias stop them from doing what is right. Two losses in a row can stop a trader from doing the correct thing. Must not let that paralyze execution. Gotta get short on swoosh and quickly. The market is being nice to me. It won't last long. Giving me a second chance. I like second chances do you?

I gotta eat breakfast and get to work outside. bye


View attachment 230678

Good chart reading. I agree with your analysis. Nice work on the LH MTR and seeing the weakness. I am like you man. Once i make mistakes, I look for the next week. I tend to use big stops, but I like the high probability setups.

You did very well today. I like the illustration of LHMTR. Great work sir.

 

[volpri]

I came in out of the sun for a few minutes and whiule in the house I took another trade. Averaged down long 4 contracts. See if a trader is trading with a small account averaging down is possible but you have to start really small size and add a right increments but first making sure context is conducive to averaging down.

I figured it was conducive to averaging down long at least for a small scalp as we had been trading above 20 EMA since that 11:30 bar. At the moment I stand at+$308.75 and that is with 5 trades and losing on two. You just have to have the procedures in place and execute. Emotions will drag you along into a pit because they are fickle. You might as well acknowledge them as they will dominate until you do. They can be like a pesky fly. Acknowledge them then go about your business and do what is the right thing to do. Follow procedures.

I have to run to town and buy something so don't know if I will get any more trades in today.

I started averaging on bar 12:30 and finished up averaging on bar 12:50, set my SL and "give up" point then just waited. Made some on all the 4 contracts.

 

[volpri]

See why I grab my profits? Look what happened after I exited. I had rather grab em and then enter back in if price continues in my favor. The decline back down on that bar gives me a chance to get back in if I want and at a better price.

Gotta run.

 

[SimpleMeLike]

I came in out of the sun for a few minutes and whiule in the house I took another trade. Averaged down long 4 contracts. See if a trader is trading with a small account averaging down is possible but you have to start really small size and add a right increments but first making sure context is conducive to averaging down.

I figured it was conducive to averaging down long at least for a small scalp as we had been trading above 20 EMA since that 11:30 bar. At the moment I stand at+$308.75 and that is with 5 trades and losing on two. You just have to have the procedures in place and execute. Emotions will drag you along into a pit because they are fickle. You might as well acknowledge them as they will dominate until you do. They can be like a pesky fly. Acknowledge them then go about your business and do what is the right thing to do. Follow procedures.

I have to run to town and buy something so don't know if I will get any more trades in today.

I started averaging on bar 12:30 and finished up averaging on bar 12:50, set my SL and "give up" point then just waited. Made some on all the 4 contracts.

View attachment 230691

Thanks for the write up.

I went short at the red arrow due to 50% retracement of the prior bear leg and bar closing below EMA. I took loss on this trade. I thought I would get another leg down with the L2 short. I think it was a good stop out.

 

[volpri]

While there was an L2 short around EMA look at the context since the open on a RTH chart. Sideways from open, then south and closes the opening gap. Looks like weakness and it is. However on bar 9:50 the bulls push back and begin to reverse the push down by the bears. So how many bull bars in that reversal? There are seven. And 3 sets of two bars in sequence. Really only two bear bars, 10:35 and bar 10:50, and no bear bars in sequence From bottom to top of the reversal. Bar 10:10 and bar 10:25 while bears are really dojis.

Ok how many PB’s in that bull move that started on Bar 10:00? Bars 10:10 and bars 10:25 while technically they are not a PB’s on this 5 min chart they are pauses or implied PB’s. By that I mean on a smaller TF you would see an actual PB. An actual PB in a bull trend is when in a pb the low of a bar goes below the low of the previous bar. While this doesn't happen on the 5 minute chart for bars 10:10 and 10:25 it does on the 1 minute chart and I am attaching a 1 min chart to show it. The only REAL pb on the 5 min chart in that bull reversal up is bar 10:30 a Bar 10:35.


Now implied PB’s are MINOR PB’s or pauses. A little profit taking happens there. Always judge the strength of any up coming pb’s by previous pb’s. All the previous PB’s were minor. Where you shorted was based upon a 50 pb of the previous bear leg. However, you also need to look at that bull reversal leg and judge the strength of it. That will help tell you if you should go long or short at the 50% pb. You don’t just short because there is an L2 near the 50% PB and near the 20 ema. You have to consider the strength of BOTH legs. Therefore, the PB you got short on was actually a PB to get long on. Why? Previous strength of the bull leg. It reversed the bear leg, push price up above the 20 ema, on all minor PB’s so the deeper PB is probably going to fail as a reversal, in spite of there being an L2 entry.

ALWAYS GAUGE THE PROBABILITY OF A PB BEING A REVERSAL, OR JUST FAILING, BY THE PREVIOUS PB’S AND THE PREVIOUS LEG.

In this case your 50% PB was simply a bear flag that failed to continue the bear trend. And the attempt for price to resume the previous bear leg failed and became a deeper PB in the bull leg to actually go long on. In others words, you went short on a bull flag.

Look at all previous PB's in the previous leg. That will help determine if you are going to short or go long. Hope this helps. There is a lot to learn in PA. It takes times. Don’t despair. It takes time to learn the nuances of price action. There are so many. Just always be asking: what just happened on previous bar? Previous 5 bars? Previous 10 - 20 bars...etc. That is immediate context. Who is stronger bulls or bears? Should I be going long or short? What is the probability price will reach my PT if I take a position before it would hit my SL on that position.

 

[trading_jean]

That last post is gold Volpri. I think many of the "TA is BS" guys don't get that concept. I backtested hundreds of set-ups and stand-alone none of them were profitable.

How I see it now in this stage of my learning process is that context on different timeframes gives me probabilities in what to expect: up, down, or range. Within that framework set-ups are ways to enter and exit.

Unfortunately context is exactly the most difficult part to master.

 

[volpri]

Here is my last trade. It was a quick short 2 point scalp. Back to work outside.