Working on Consistent Profitability

[bigsnack]

I can give you a bit of advice if you would like. You mentioned you wanted some insight on your trade 4. That was not an ideal trade IMO, simply for the fact that we were making higher highs and higher lows. There was no solid support turned to resistance to lean on either. I went long there at 7:45 when resistance flipped and became support, unfortunately you were selling into newly found strength.

Trade 5 you were late on. There was money to be made on a short here, but closer to the 39.75's area once support had become resistance. Honestly once you were stopped out on this one, you should have immediately reversed and gone long since resistance at 38's did not hold and immediately was retested as support.

Trade 6 was the right idea. I would have had my limit order at 41.50's (R turned S), so I wouldn't have been filled ( I don't trade afternoons much anymore).

Trade 7 was my kind of trade, although the push upward was a bit long in the tooth at that point. If I had entered here it would have been at the same price with the same result - B/E stop.

3 trades for me today. Short right at the open as S turned R, a second short at 6:39 as again S turned R, and then the long at 7:45 as R turned S.

 

[tlow]

Quote from bigsnack:

I can give you a bit of advice if you would like. You mentioned you wanted some insight on your trade 4. That was not an ideal trade IMO, simply for the fact that we were making higher highs and higher lows. There was no solid support turned to resistance to lean on either. I went long there at 7:45 when resistance flipped and became support, unfortunately you were selling into newly found strength.

Trade 5 you were late on. There was money to be made on a short here, but closer to the 39.75's area once support had become resistance. Honestly once you were stopped out on this one, you should have immediately reversed and gone long since resistance at 38's did not hold and immediately was retested as support.

Trade 6 was the right idea. I would have had my limit order at 41.50's (R turned S), so I wouldn't have been filled ( I don't trade afternoons much anymore).

Trade 7 was my kind of trade, although the push upward was a bit long in the tooth at that point. If I had entered here it would have been at the same price with the same result - B/E stop.

3 trades for me today. Short right at the open as S turned R, a second short at 6:39 as again S turned R, and then the long at 7:45 as R turned S.

On trade 4, does it matter that it had tested that area a bunch of times before, ya the market was in an uptrend, but it also had turned fairly choppy at that point...does that make a difference?

Trade 5, i was playing the breakdown below the support level, so I wasn't looking to go short at the top where the resistance was...but as you said, should've been earlier, or waited for better confirmation for the break downwards to continue...and yes, I know I should've flipped to the long side...I think that may be a bit advanced for me at this point. I usually need a minute or two to regather my thoughts after a trade doesnt work out.

Thanks for the tips/insight.

 

[bigsnack]

Quote from tlow:

On trade 4, does it matter that it had tested that area a bunch of times before, ya the market was in an uptrend, but it also had turned fairly choppy at that point...does that make a difference?

In my experience, the first test of any major level is where you will see the strongest reaction. Multiple tests and/or chop around an area shows me that the the area is actually more likely to fail, not hold.

What I can say about large levels is this: It's an important area to watch and nothing more. For me, the more recent uptrend takes precedence over the fact that we are approaching R. Now, if we had approached R, and then a smaller timeframe S had turned to R on increasing volume, now you have a solid backbone for a shorting opportunity. Order of operations for me is:

1. ID S and R
2. Wait for S or R to trade
3. Note the context of how the level was traded into (high volume, sharp move, slow drift, low volume, etc.)
4. Wait for one of my ideal small timeframe setups to occur at or near S or R. NOTE: I personally am not concerned at getting in right at S or R. What I am looking for is confirmation once we are there that other trades are doing what I want to be doing. Oftentimes my entry is 6 - 8 ticks away from S or R, but if I wait for confirmation I have a higher amount of confidence that I am going to reach my first target.

Let me know if this helps or hurts.

 

[NoDoji]

Quote from tlow:


Trade 1:

6:36- Short 1136.00 Stop 1138.50 Target 1133.00
6:40- Move stop to B/E
6:43- Buy to cover at 1134.00

Your stop was at b/e, so trust your target.

Quote from tlow:


Trade 2:

7:00- Short stop order at 1129.00 Trailing stop of 3 pts Target 1124.00
7:02- move stop to B/E
7:03- stopped out at B/E

+0.00 pts

Great entry, great target (measured move), decent management

Quote from tlow:


Trade 3:

7:44- Long 1135.25 Stop 1132.75 Target 1137.50
7:55- Sell to close at 1134.75

-0.50 pts

I thought this was a great entry. You never know how strong a breakout will be, but the setup was solid. You were with the trend and price was close enough to the next R level to be tested that your target stood an excellent chance of being filled. Consider trailing your stop at previous pivot points when trading ES with the trend. That would've kept you in until your target was reached.

Quote from tlow:


Trade 4:

10:40- Short 1141.25 Stop 1142.50 Target 1137.50
10:53- Stopped out buy to cover at 1142.50

-1.25 pts

No short signals here. Price has been consolidating in a range with stable support. Any short trade taken here would be a range trade, and range trades are best taken in the direction of the previous trend, with counter-trend trades reserved for a break of the range in the opposite direction. So a short wouldn't be triggered here unless price broke down 1137.50.

Quote from tlow:


Trade 5:

11:54- Short 1137.00 Stop 1139.00 Target 1133.00
12:08- Stopped out buy to cover at 1139.00

-2.00 pts

This was basically a very late short entry. I think you had the right idea, just very late in the timing. I was out of the office and returned to see the up trend line had broken and I entered what I considered a bit of a late short @ 1139.25. The TL break was 1141.00 and the 20 MA break was 1140.50. If I'd gotten this optimal entry, I would've gotten my 4-pt min profit target, but being late I ended up out b/e after forever and a day. Shame on me for not reversing long like you had the sense to!

Quote from tlow:


Trade 6:

12:35- Long 1142.25 Stop 1140.75 Target 1146.25
12:41- Move stop to 1141.75
12:44- Stopped out at 1141.75

-0.50 pts

Great idea, very slightly late entry. Optimal entry price between 1141.00 and 1141.25. But moving the stop to 1141.75 was problematic just as you said. If you were trailing a break of each closed bar's low to manage the trade, the stop would've been trailed at 1141.50 at that point. It sucks how 1-tick can get you; I've had that happen to me many times. I think in the long run it's always best to trust initial stops and targets when trading with the trend, though it's not always easy to do.

I think your small mistakes will be resolved with a little extra focus. I honestly think that's why I trade mainly CL now. It's so fast, it keeps you on alert. Blink too hard and you miss the move of the day

 

[tlow]

Nod, like usual, you give great advice and great lessons.

On trade 3, I realized why I was mad at myself for the trade, I got in on a downbar. The entry was late and I didn't take it right on the breakout, so price came back on my order and that how I got filled. So I was mad at myself for going in on the downside of a retest.

Trade 4,
Im understanding more what you are BigSnack are trying to get across. I think you or maybe Boli commented before about taking consolidation/range trades and sticking with the trend if Im going to do it. So I should've gone long...I've made this mistakes a couple times now, not sure why I can't get it through my thick skull.

Thanks bigsnack and Nod for pointing this out.

Trade 5,

Nod and bigsnack or anyone else, where would have the short entry been? On the break back below the support line of 1141.25-1141.75? I would have a hard time taking that trade since I would have a hard time differentiating a pullback vs. reversal. Nod, are you using both the TL break and the 20ema as your confirmation?


Also, Nod, I read what you wrote in Matcha's journal as well...some good little learning nuggets in there

 

[NoDoji]

Quote from tlow:

Trade 5,

Nod and bigsnack or anyone else, where would have the short entry been? On the break back below the support line of 1141.25-1141.75? I would have a hard time taking that trade since I would have a hard time differentiating a pullback vs. reversal. Nod, are you using both the TL break and the 20ema as your confirmation?

Also, Nod, I read what you wrote in Matcha's journal as well...some good little learning nuggets in there

I like entry anywhere between 1141 (TL break) and 1140 (20 MA break). The 2:15pm ET bar is a key bar because of the way it closes. It attracts trend-following longs off the trend line, draws in more of them on the break through the previous bar's high, and everyone's expecting a breakout to 1145.50 or better. Instead, that bar retraces more than 50% of itself and so the key to who will now gain control lies in the ability of price to break through that bar's high (bulls in control) or break through that bar's low (bears getting hungry).

Entering short on a break through that bar's low is an early entry, and there's some risk of getting trapped short, but it's a trend line break, so well worth a go in my opinion. I had no problem shorting later at 1139.25 because the momentum should carry it through to the range low and give plenty of wiggle room to hold for target or get out if it fails.

What I wrote in Matcha's journal came from frustrating first-hand experience :eek:

 

[bigsnack]

Quote from tlow:

Nod and bigsnack or anyone else, where would have the short entry been? On the break back below the support line of 1141.25-1141.75? I would have a hard time taking that trade since I would have a hard time differentiating a pullback vs. reversal. Nod, are you using both the TL break and the 20ema as your confirmation?

Tlow, bearing in mind that I didn't take this trade and hindsight is 20/20, I can see 2 entries. 11:25 presented the first aggressive entry (41.50 tried to act as support but failed, coinciding with with a TICK close below -425, which is confirmation for me), and the safer entry was 39.75's after a clear level of support is broken and is then serving as resistance. Also note that the 1140 price area came into play multiple times already earlier in the session. 11:36 would be the exact entry time for the second entry.

 

[bigsnack]

I'm interested to see how you fared today considering the rangebound price action that we were in for the first 90 minutes.

 

[tlow]

haha so far not good...

Here are my trades so far.

Trade 1:

7:21- short 1137.00 Stop 1139.25 Target 1133.50
7:27- move stop to 1138.25
7:30- stopped out at 1138.25

-1.00 pts

I realized kinda half way into this trade was somewhat similar to yesterday just on the short side....I really shoulda been short earlier instead of playing the break down below 1137.25 area...thoughts?

Trade 2:
7:31- Flip long 1138.50, Stop 1136.00 Target 1142.00
7:38- sold at 1137.75

-0.75 pts

I was thinking of doing the Flip when I was on the wrong side, but I realized I was going against the trend, so I just exited when I realized my mistake. Also, I wasn't totally sure if this was just a retest or if we were going to continue back in the channel.

At this point I feel like I am 1 leg to late in everything im doing. I think Im starting to get the right idea just not implementing correctly...am I wrong/misguided?

Trade 3:

8:40- Short 1141.50 Stop 1142.50 Target 1138.00
8:57- Stopped out 1142.50

-1.00 pts

Tried to short off the resistance area at 1142.00. Looking back, Im not sure if this was the right idea or not, there was definitely a bit of resistance there b/c price stalled for like 15 mins, but then it continued higher. The channel at that point wasn't as nice and neat as it was from 6:30-7:15ish. so maybe the trade didn't hold as much water? Not sure, what do you think?

 

[bigsnack]

Tlow -

Today was tougher for me as well. Here is what I see regarding the trades you took.

Trade 1 - I was with you on this trade. I took it and was handed a +1 stop out. Here's why I moved my stop and took the +1. You correctly identified S turned R. Now, when price began testing below 36.25's, you can use your knowledge of support and resistance to anticipate that what was previously support should now become resistance again. Therefore, if the downward pressure is going to continue, 36.25's should be the next price that will be sold into. When we moved back into the 37 / 37.25's area, the bearish case was over for me.

Trade 2 - Again I was looking for the same thing with you here, but it seems as though you were a bit too anxious with your entry. I waited for R turned S at 7:37, and took a B/E stop out.

Trade 3 - This appears to be a revisit of the same mistake you made yesterday, where you are selling into newfound strength. Yes the area was previous resistance, but we are retesting that area while making higher highs and higher lows. I was long at 8:18 at 38.25's (R turned S). It's not just the level itself that is important, it's how we get there and what has just happened when the level trades. Make sense?