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I decided to just draw S/R today and trade that with trend lines....I like it so far...
Of course I used my fib tools, etc, but not worrying about a moving average left me free to see S/R. I didnt trade it perfectly today but it was decent. I had two trade management mistakes which cost me at least 40 ticks.
Yesterday I listened to the webinar with FT71. I have to say, that was a fantastic webinar. In particular, I liked a couple of things he had to say.
2. Scale out has its emotional and equity curve advantages. Intellectually, I have always known that scaling out is the way to go to get that monkey off my back in terms of minimizing risk very quickly. However, I also know that AIAO is the mathematical superior way to trade IF a trader behaves rationally and holds his or her trades to completion and is willing to hold through the inevitable ups and downs of a trade thats in the money....and the short answer is no....most traders including me behave irrationally upon entering a trade. We seemingly lose the ability to think once a trade is on, but if we can get rid of risk quickly, then trade management becomes much easier.
Yesterday after FT71 proved that scaling out is better for your equity curve and easier on your psyche, I made the emotional connection to scaling out. I'll never trade another way again.
Today's chart represents a combination of my scale out positions. I wont detail them since I don't want anyone emulating me, people need to come up with what works for themselves. Just make it workable on your instrument and time frame.
Now to today's trading. Price came up to resistance just before the pit open, came back down and broke a trend line and support, I entered at the break, scaled out right away and moved stop to BE+1, price continued down and and I got my second scale right away. Not much time in that portion of the trade, last position stopped at +1
Second trade was a retest of the break down area, price tested resistance, closed down, I took the trade, saw support to the left as well as a possible triple bottom and just bailed. NOTHING invalidated the original premise of the trade and yet I acted irrationally, Cost me my first two scales.
Then came the 300 tick rally and 150 tick pull back. Just waited through all that. price found support around 106.33, which happened to coincide with the bottom of the large volume bar, I waited for a touch and rebound, I got a pull back with a smallish bar to enter and I was able to scale out my first two positions fairly easily.
Third through fifth trades were no so well executed, you can see them on the chart.
I would have liked to have gotten part of the 300 ticks but there was no way to anticipate that and almost impossible to just jump in with anything remotely resembling good risk management. So just have to pass and wait it out.
Emotionally, the scale out thing worked well today, less money to be sure than if I held AIAO but I think FT71 is correct, the early scales will save my bacon on the times I behave irrationally.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
Thanks Given: 1,713
Thanks Received: 3,863
Not that the magnitude of the move higher was predictable but there were some telling signs that catered to a long opportunity from yesterday's RTH close area.
The market bounced off of yesterday's resistance that held the market practically all day until the buyers won control and moved the market higher into the pit close. It made sense for the market to test that today since it was so close to the RTH close.
By looking at the volume down there, it was pretty clear that there were buyers absorbing price up. I think the remainder of that move was news driven but I find it funny how news and rumors always come in at key trade areas. I realize you don't use the volume ladder but just wanted to show what happened down there.
Great job today though! As I've said multiple times on nexusfi.com (formerly BMT), I'm a firm believer in scaling out of your position. We enter a trade based on a set up/hypothesis but we aren't sure if we will be right or how far the move will go which is why you want to utilize scale outs that are reasonable and easily attainable based on an average move for the market in which you're trading while leaving a runner on the books to take you as far as the move will go. You want to take risk off as your position moves in your favor guaranteeing either a smaller loss (if you're wrong), a break even or winner even if your trailer is stopped out. Your runner's exit is up to you of course which will come from your trading preferences, etc.
I think I might use the profile if it looked a pretty as yours... I am reluctant to use the GOM stuff as I have heard from several people how time intensive it is to set up and maintain. I don't have the skills to do that nor do I have the inclination. I'm surprised that NT doesn't have it native. Pretty much all the major platforms have it and if NT wants to be a major player, you'd think they would implement.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
Narrow range day. Just took the trades at support and resistance as I thought I should and scaled out a bit early. I made three mistakes. One early I took a full stop out on, then later on, I stopped and reversed twice. This cost me two stop outs, the commissions on the trades and the lost profit on the original trade that eventually worked to the first two scales. The swing on that was around 45 ticks....with out that mistake sequence and adding the profit from the original trade, it would have been a slightly profitable day. As it was, ended the day down -34.
No charts today.....
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
I kept them the same for the early portion of the day until it was apparent the range was pretty small... I should have tighten up more than I did but you never know...
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
I should mention I am on sim for two weeks. My kid is on spring break and that makes me the primary caregiver....so rather than try to trade and take care of her, I just elected to sim trade and get in some practice.
Now the thoughts...
the chart attached has a couple of circles....last night I marked some areas of support and resistance. The two heavy yellow lines at the top and bottom are the areas I marked as important for today..
The top line was dead on....and hence my dilemma. In light of @FT71's "confirmation is for Catholics" comment, do you just sell market when you get to a location like that or do you wait for "confirmation" like a bar closing in the direction of the proposed trade? I've never done anything like that before but I know people do it......often times it appears as though the trade is just stepping in front of the bus....price was going straight up from a support area....why would I think I could just sell the level without some sort of confirmation or indication things would go my way? I am open to ideas about this. Currently I only buy and sell tops of blue bars or sell bottoms of red bars....momentum....but there wasn't much today.....
I am open to suggestions about how to do this.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
Thanks Given: 1,713
Thanks Received: 3,863
That top yellow line was approximately Friday's Value Area High (VAH) for the RTH session. That was the top end of the range where price was accepted. This can serve as support or resistance based on the next trading session to determine if price is still accepted in the previous area of value. With today being an inside day, you could've established a short entry there had you felt the markets were going to remain an inside day or maybe test the lower end of Friday's value area (which it did). The second area where you circled was a retracement to the RTH open and the third was a retracement to vwap. You could've established positions off all of those but with today being an inside day, it was best to buy or sell the support or resistance.
I initiate entries off of areas of significance such as that provided elevated volume is present. I don't typically have an order just sitting there, I wait to see what the reaction is first (via the volume ladder and DOM) and then try to get an entry as close as possible to that area. Entries don't have to be precisely the level but should be fairly close (within a few ticks). If you have a resting order, the market will often make a flush at an important area to try and grab stops of smaller traders. What will happen is you'll see a bunch of trades fire off real fast and then you'll see a steady flow of orders step in from there. This is for CL however. Other markets behave differently. CL is a beast and it will always overshoot areas that are meaningful. Anyway, hope that helps.
I read alot of ur early post, Im kinda following ya..your experiences resonate w/ me. But I want to share w/ u about my internet issue so it might help u w/ ur issue.
I unfortunitly have at&t, u may have someone else? but, Ive discovered that they do whats called "dropping packetes" ..thats when they intentionaly drop connection in order to stop free downloading by thousands of people, thus causing a start over..that saves at&t alot of $$.
So I have kept an ongoing log of drops daily sinse x-mass, when I discovered this. The times of drop conn is like clock work, changes from week to week starting on sunday for the rest of the week. I can bet a $100 moments befor the drop that it will occur..like, all week same times, 2:17 5:17 11:17 12:17 the min. & hr are same all week then it changes to 9:46 10:46 12:46 1:46 All weeeek same times.
So maybe pay attention to the time each time u have a drop & see if theirs consistency, my case its not the wires as they try to say, if it were wires or equipment their would be sparatic times of drop, not a programed time.
Hope that helps. If not, then it felt good to vent. I havent pulled $ out of trading account so wife wont let me switch, but as soon as I do, Im dropping at&t!!