Trading the NQ: Take 2

[k p]

Why are you being such a jerk to @i960 when he's been super cool with making suggestions and analyzing your posts to help you?

In all fairness, I thought I mentioned this a few posts later where I said that I knew I was being pissy. I just don't find it all that helpful to be told that I shouldn't have kept shorting 4 times in a row if its not working. I can see that myself.

I also took it quite personally when he said "when you understand how all this stuff works..." It just makes it sound to me like he knows how it works. So if he knows, why doesn't he tell me. And if he knows, why doesn't he show me his NQ chart with his perfect trades? I think anyone out there will not claim to know that they understand how this all works.

Perhaps the biggest problem was that everyone is evaluating me, thinking that I did something wrong, but I don't think so. For me, the shorts set up, so I took them. I actually don't feel all that bad about today at all. Mine stops were small, and they all got hit, oh well.

Then he finished with saying that if I left my stops alone, I would have gotten lucky on that trade. Where is the luck? That was a well setup trade based on the levels. Sure I messed with my targets that took me out, but its as if he's saying that all my shorts were wrong, and that my last trade, if it worked out, would have only been lucky.

You see, he seems to know exactly what I'm doing when perhaps he has no idea. Heck... I might not even know what I'm doing at times to be honest! I seriously meant him no disrespect, just calling it how I see it. Plus, he said I'm chasing breakouts. Is 3 points above a level chasing? Perhaps I didn't wait for a deeper retrace, but something they never come. What is the definition of chasing anyway?

I don't know man, but I just didn't find his post all that helpful at all. It was super critical, based on stuff that I can already see that didn't work, and he provided no hint of what he did that was better, everything was just said from a hindsight point of view.

" but you refuse to do anything differently when it comes to entries, stops and trade management."

How do you know what I'm doing differently? Just the fact that I am keeping my stop at 2 points is big. I let my trade hit my 2 point stop every time (except the one i moved to BE). I kept taking trades as they presented. For the past 2 days I took 1 one trade each day and gave up. Today I kept fighting it. I may have lost, but I kept doing something. Maybe I should have stopped sooner when it wasn't working.. who knows.... but I kept at it.

"What you're doing currently isn't working. Until you change SOMETHING, you will likely continue to have the same results. From all the reading of your posts that I've done, you are completely unwilling to change anything about what you're doing, but think you should be successful just due to the time you put into the effort."

I'm sorry gears, but you are in no position to evaluate me what so ever.

 

[NoDoji]

There really is no way to know how low price will go... ...but its never safe to get in on a move like this... correct? So I'm curious at what point you would say the Holy Grail trade has presented itself and the long can be considered.
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If knowing how low price will go is how you define "safe", then you are correct; it's never safe to get in on any move because how low it will go is unknowable.

My signal to go long occurs during the 8th bar past your blue arrow bar. My limit order to go long is filled during the 12th bar past your blue arrow bar. My stop loss is not more than 2 points (is that "safe" enough) and my minimum target is 6 points.

Whether price can go lower (it can) and whether it will go lower (unknown) than the blue arrow bar's low is irrelevant. All that's relevant is a) there's a long signal during the 8th bar past the blue arrow bar and b) a long signal means I should place a buy order at the price level my trading plan indicates.

All the necessary thinking occurred during the price action analyses I spent months on. There's no longer anything to think about. My success depends on identifying what I see, acting appropriately when I see a valid signal, and managing my trades according to the trading plan which is based on probabilities in my favor.

If I'm unable to accomplish these basic tasks due to fear and second-guessing (thinking while trading), I am unlikely to profit over time.

 

[k p]

My signal to go long occurs during the 8th bar past your blue arrow bar. My limit order to go long is filled during the 12th bar past your blue arrow bar. My stop loss is not more than 2 points (is that "safe" enough) and my minimum target is 6 points.

Here is what I got...

Wow... very interesting. I will tell you what surprises me about this, if I'm reading it right. You have a signal to go long, but you don't take it because your entry is further down, and you require price to drop before you get filled for a long. Is this correct?

I will tell you why I find this interesting. Its because if I think its time to go long, its because price either just bounced off some level which is may never return to again, or because I'm trying to participate in a breakout. I never think "I'd like to go long, but first I need price to come down a bit first". What if it never comes back down to fill your limit order? I guess your answer is that you miss and it you're happy with that because another trade will come along.

This just blows my mind. And yes, 2 point stop is safe enough!

 

[i960]

No I do not know how everything works at all. What I do know is what doesn't work and what I've been simply asking you to do, because I know you're struggling with a couple of basic breakthroughs, is to change your habits and thinking. You've got this inner chimp overruling any semblance of a plan and that simply needs to be beaten out.

What I meant by lucky trade was even if you were lucky it wouldn't have mattered because you messed with the trade. The entire goal here at this point is to change 2 basic undisciplined approaches: chasing breakouts and moving stops around.

Just two basic things. Doesn't even have anything to do with perfect entries or any of that. Has 100% to do with discipline and confidence. It's a framework for fear extinction. Putting on the trade at uncomfortable areas and leaving the trades alone even when uncomfortable. You will see through repetitive learning that in time you will no longer be uncomfortable and trust in your plan/edge/whatever but only if you force yourself to do this.

 

[k p]

No I do not know how everything works at all. What I do know is what doesn't work and what I've been simply asking you to do, because I know you're struggling with a couple of basic breakthroughs, is to change your habits and thinking. You've got this inner chimp overruling any sense of a plan

I do apologize for my reply that might have come across harsh, but I just took it very personally and emotionally.

I think what's happening here again is the notion of trading price via supply/demand and seeing setups. If I was to look for a setup, then yes, I can see how all this should be worked out in a trading plan and when you see the pattern, you execute.

But nothing ever looks exactly the same, and much of the way my thought process works is to say "ok, if traders don't push price up past this point again, it means we have run out of buyers, so lets see what happens at this level and if I see weakness, I short". This means that in some sense, there is a certain amount of thought process going on. This might be the death of me, who knows, but honestly, I don't think anyone who is successful really knows exactly what they are doing and why down to the tiniest detail. (except for NoDoji.. she has it all worked out to the tick!).

What I mean by this is that if you showed me your exact trading plan, your rules, I could more than likely follow them and still lose money. This would tell me that the trading plan isn't as solid as claimed. Only a computer could execute flawlessly. I think most people who do well have a great trading plan, an idea about what they look for, but they have a shit load of screen time to differentiate nuances.

To use a dating analogy.. its like this. I can tell you I like brunettes. I can say I want them 5'6"... I want them 120lbs, I want them busty with a 26" waist. I want long hair, smokey eyes for makeup, juicy lips, bubbly personality, etc. And you can bring me exactly that, and I still might not be impressed because of certain qualities that I find attractive yet I just can't quite put into words.

So I think traders develop a "feel" for price that simply cannot be taught. This is why I find it more helpful to be shown trades that are taken, versus to be guided by a general set of rules that they think are helpful, because even those rules this same trader may not act upon.

I got upset with your reply because I didn't think I was acting recklessly today at all. I don't feel like an inner chimp was running the show. I had a short bias, I saw trades set up, I took them. I saw some resistance at several places, I shorted below them. One I waited to short far too long, I know, but I thought it was better to try. All of this might point to chimp behavior, but I thought it was better than just staring at the screen and not doing anything like the previous 2 days.

 

[NoDoji]

Here is what I got...

You got it exactly as I would trade it.

What if it never comes back down to fill your limit order?

I wait for the next signal.

This just blows my mind.

Blows it wide open.

 

[i960]

KP this is what I kept telling you about not jumping on breakouts or spikes but instead entering a limit order below (or above) the long (or short) direction such that it lowers your effective risk. This is also why I described you hopping on it quickly on spike but not entering on retrace as being loss averse: fear of missing out and then when presented with the best entry: fear of loss.

Your assumption that price retracing back to the original level (and even dipping below slightly) represents weakness is not how it works.

More faith and less fear.

 

[k p]

Your assumption that price retracing back to the original level (and even dipping below slightly) represents weakness is not how it works.

I do often see how this test happens, but my assumption is that if I get in close enough, a stop could incorporate this test, and then I'm not worried about not being able to participate. You see, if using just a 1 min chart, the RET that forms above the breakout sometimes doesn't come for 10 points... and this would be much too late. So then I go looking for a RET on a smaller time frame, and what I often got into was a move that didn't go anyway.

Anyway, thanks for your reply again and I do apologize again for being snippy before. With NoDoji's help, I can at least see what you were getting at before. I'm still not sure at where you guys suggest the buy stop to be placed if price spikes above R by 3 or 4 points, and heads down. Would it be at the resistance level? It might very well fall right back through resistance and end up being a failed breakout because I might be buying just as price continues to crash back down. At least in this case, I would have bought lower down so can get out sooner. But of course, sometimes price never does retrace back down but just hesitates, before it jumps higher yet again. So I guess that's just a missed trade. Anyway... I will see what I can do by looking at things from this perspective. This is in essence what I was trying to do by waiting or a RET on a 5 sec chart, but its obvious that sometimes the RET is much deeper before price continues higher.

 

[k p]

So here is my chart. No trades today. All the things from the past few days in my journal have been on my mind. The ascending triangle, and the fact we broke out of it just before the open. The idea to not jump on the BO right away. (which is true because after a BO, my first instinct when price drops below/above the level is to fade the BO as a REJ of the level, which works quite a bit today like at 10:05 today when price dropped below 4511 and came back up)

I mark 3 areas where I very, very strongly considered a trade, but ultimately didn't put one on. The environment today made it extremely good for reversals.

To be honest, I feel a bit mad for not putting on trades today because it is a step backwards. Yesterday I might have tried the short too many times, but somehow I felt that after all the comments and PM's, that the consensus was that I was doing things drastically wrong. I can't say they were the best things to do because clearly I didn't make money, but it got me off my game plan which prevented me from taking trades today. I'm not blaming anyone as I know that ultimately I am responsible for my own actions, but the effect was that I didn't put on any trades today out of fear, when I wasn't all that fearful myself yesterday, even if all the trades didn't work out. Somehow the tight stop, even if hit multiple times, still kept me in the game. Now I realize that if on an average day I lose more than I win then I cannot consistently make money, but I think at this point, I can hover around BE for a few weeks perhaps... which would be a big step forward.

Anyway... I'm thinking of putting this journal on hold for a few weeks. I know I just started, but I can already feel the huge responsibility that comes from posting, and it might be messing me up because everyone has an opinion, which is fine, but everyone is trading differently, and that is the problem. Ideally, it would have been nice for someone to help me along with the way I want to trade based on what I can see, but this is clearly impossible since many either don't trade this way, but especially because they have no idea what I'm doing (sometimes I don't even know! LOL)

 

[k p]

Well as I was typing all that up, price made a run for 4524, the high put in after the open. I saw a trade present itself, so I took it. Couldn't stand the the pressure, so I got out for 2 ticks, right before it drops. I mark where the 2 pt stop was, and where the 5 pt target was. Seeing the small range today, I had my platform set up for 5 point targets. I think I would have gotten three 5 point targets today and 1 BE trade, which would have made up for yesterday quite nicely, but its impossible to say what would have happened.

I got out because I knew that since I couldn't take the trades I wanted to earlier, then I'm messing with the idea that you have to take each trade as it presents itself. If I skip some, I might be skipping the good ones and only taking the bad ones. If this one broke out and stopped me out, I would be down on myself for the failed trade, but really, if I took all the trades I wanted to today, it would still be an up day, and that in my opinion is the proper trader's mindset. So if I couldn't have the proper mindset earlier today, then I should have just gone back to bed.. which is where I'm going now.