Tradersaavy's Discipline Journal

price has gone to 10125, 4 points from target.

it hit 10125 twice and then shot up to 10147.

this is where the larger timeframe divergence will hopefully kick in and drop price back down.

if a signal shows up in the opposite direction to the current trade, I will get out. This is the only way that I will get out of a trade aside from being stopped out or the target hitting.
 
Stopped out.

When price went back to 10125 for a 3rd time and held, and shot back up I was tempted to get out at break even.

But, I have done this before and then price drops back to my target so I followed my plan.

Maybe this will be useful information in the future for some more discretionary decisions but for now, I just go with my plan.
 
Quote from tradersaavy:

...I do not know how interesting this journal was or is going to be for others but comments are welcome...
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Hi tradersaavy,

Here's my personal opinion about YM.

1. Don't get tunnel vision.

2. Never let a profitable trade become a loser because of a fixed profit target that wasn't reached.

3. If this becomes a chronic problem...adapt your trading plan to reflect #1 and #2 that's mentioned above.

Now...here's what I mean my tunnel vision...

It's very easy to get stuck on the chart while forgetting what's going on elsewhere (key economic reports, geopolitical events et cetera).

Today as soon as the news or rumors hit the major networks that Arafat has died or went into a coma that he can't recover from...

The Eminis powered upwards.

Look at it this way...lets say your short and your profitable by 6 points with a target of 15 points and suddenly its blasted all over the TV networks that Bin Laden had been captured...

Are you going to stay short and let your stop/loss be hit for a loser or dump the trade immediately?

This leads to my second point...I don't know what your trailing stop management is like but when YM moves +10 points in your favor...

Your initial stop needs to be adjusted into some sort'uv trailing stop at either breakeven or a few ticks better than breakeven.

This is how I look at it...if I'm in a YM trade and I am profitable...

If it then retraces very fast and picks off my trailing stop at either breakeven or a small profit...

I immediately begin preparing for a possible re-entry signal that may appear and get me back in the trade at a better price in comparison to prior trade entry...

I call this sometimes as having a contingency plan because the market will do whatever it want's regardless to fixed profit targets.

As traders we have the responsibility to adapt (contingency plans).

Fixed targets greatly reduces your ability to adapt.

My question to you is this...did you get any trade signals again between 1030am - 1045am est ???

By the way...news about Arafat hit around 1054am est depending upon the news source (TV, radio et cetera)...

Regardless if its true or not.

The fact is this...price reaction thinks there's some truth to the news either death or coma (brain dead).

All we can do is react to what prices show us.

P.S. Stick to your trading plan until something becomes a chronic problem.

Thus, my comments above only merits a closer look if there is a problem your trying to resolve.

In other words...if it ain't broke...don't fix it.

NihabaAshi
 
Hi NihabaAshi. Thanks for the comments.

"2. Never let a profitable trade become a loser because of a fixed profit target that wasn't reached. "

While the fixed target idea isn't the best, being that a fixed number knows nothing about the continually changing environment around it, this fixed number does have some merit when it comes to typical moves/volatility with YM and it does help create a strict rules-based plan. On the notion of not letting a winner, lets say 10 YM points, become a loser, this is a very difficult part of the methodology. The example trade # 1 provided for 11-4 shows how possible profit taking at 10125 or moving stop to breakeven would have been good trade management. However, yesterday (and on many occasions) there was a trade that was +10 and then reverses back to -4 or so of my entry and then shoots off again for the 15 or more points of gain. Thus it has been decided that until I have more experience with these discretionary trade management decisions, I will take an all or nothing approach unless I get an opposite signal. This method is profitable, although perhaps not as profitable as it could be.

"It's very easy to get stuck on the chart while forgetting what's going on elsewhere (key economic reports, geopolitical events et cetera). "
Yes I am very aware of any schedule economic releases, etc and do trade accordingly. The Arafat news I happened to be watching President Bush speaking live when a reporter informed him of Yarafat possible being dead. I did not see any significant movement so I stayed in the trade.

"Your initial stop needs to be adjusted into some sort'uv trailing stop at either breakeven or a few ticks better than breakeven. "
I know that you personally trade with a style like this, taking partials as well, but, with the description above as to why I do all or nothing, this should answer this comment. I am open to this approach though. Most of these trades have some profit at one point in time. I may track taking partials at certain targets to see how the results are. Perhaps I will post this in this journal as well.

"Fixed targets greatly reduces your ability to adapt."
I totally agree.

"My question to you is this...did you get any trade signals again between 1030am - 1045am est ???"
No. I was looking for it as price touched the 10125 area 3 times but the indicator that I use to detect divergence, which is not the CCI noted in the chart, did not show divergence.
 
As I have previously mentioned, trend days and this system, or most any counter trend system, do not get along well at all.

Today may be one of those days. We'll see.

On trend days there can be divergence inside divergence inside divergence producing stalling notions to the trend but not necessarily reversals.

What if one of those signals is the big turn of the day ? Well, I am not savvy enough to know which, where, when the signal that catches the big turn (if there is one) so the system, once again, takes all signals and over the month long period has a profit even with these painful trend days.
 
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