Are you freaking kidding me?
1

Sometimes good is not good enough.

I executed my bearish bias reasonably well with Nikkei today.

I added to my winner. Though I scaled out too soon, it was intentional at logical location @ LOD as the relative volume was low with risk of range day like YM yesterday.

Once we had the test of LOD, volume picked up and I did well on holding on to my winner. It was NOT easy and very tempting to go flat but I decided to wait till the end of the trend. I also know that, statistically, low of the day is very likely to be tested overnight and hence there was no rush in covering my shorts. Though I was very patient, I couldn't wait till 39100 test. Urghh. Hence I left some, at least 10 ticks, on the table. Will try harder in improving discipline/patience muscle.

n

HumbleTrader 

I also know that, statistically, low of the day is very likely to be tested overnight and hence there was no rush in covering my shorts.

I will be bit more specific here.

1. After a red daily candle, there is a 75% chance that the low will be successfully tested during the overnight price action. This is based on 1925 samples in the last 20 years.
   
2. If I drill down to specifics like the current environment, i.e, weak bullish, it's even better at >80% (450/558).
   
3. If you add an additional variable that the closing price is in the lowest 1/4 of daily candle, then it's an unbelievable 90% chance (323/349).

So, there is really no excuse to take early profits and not wait for LOD test. Except, there is one. The odds of 'gap up' opening the following day is >60% in all the 3 scenarios from above. Hence, you don't want to be too greedy in taking profits and that's my rationale for hasty exit today.

My short bias in YM was executed well in 'entering' the trade. It's a breakout short which tends me to make me anxious. I was expecting a rebound but it went straight down for another 200 pts. Though I grabbed 100+, I was mildly disappointed due to my inability to increase my position size. I blame this on 'recency bias'. Yesterday was very range bound and choppy in YM. My trading in DAX today was also frustrating due to the chop and I expected similar price action with YM today. Hence, hesitated to add to my winner and missed some profit opportunity.

YM



DAX


I'm surprised that I sound like whining after 3 winning trades in Nikkei, DAX and YM today. I think it's a good sign as 'good is not enough' for me anymore. I'm always thinking about maximizing profit potential by sizing up and improving my exit strategy.

I sat out on Nikkei today for 2 reasons.

1. Waking up @ 5 AM local time before Nikkei opens is getting harder as I often don't go to bed around midnight. US market closing time is 1:30 AM local time. I may give up US indices altogether but need few more weeks of familiarity with Nikkei. I like its 'thick' book which is as good as ES and it's clean swings. However, the ETH moves are too big and gaps are much bigger compared to US indices. Hence I need more data and time to assess my edge.

2. BIG gap up or gap down openings are still extremely hard to trade for me, especially to trade along the gap direction i.e not fading. Paradoxically, those are the easiest trades in terms of MAE and often very profitable. When I saw a 2% gap down, my typical retail mentality of 'It has fallen too low' kicked in & prevented me from shorting Nikkei today. It's 3% down now!

Great execution, despite my 'over-trading'.


My entries may look messy but it's a beauty for me.

I executed my bullish bias really well. I decided to 'dance in and out' rather than keep accumulating my position as the price action was choppy. I grabbed 230 pts during the opening hour range of 250 pts. The nightlight of this trade is that I took very little risk and aligned myself with the trend nicely. During deeper pullbacks, I went flat to minimize risk from trend reversion. Then I bought again only after seeing more strength. Perfect!

I am flat now but will buy again if we make new HOD. RVol is unusually high and hence there may be more to this bullish move. I am ruling out reversal either as we are hitting higher frame resistance and price seems to be rolling over. Will see.


YM

August Nikkei trial

I have decided to trade ONLY Nikkei for the next month. I have learnt in the last few weeks that my indicators and trading style works well with Nikkei and the price action is fairly similar to ES.

I will stop trading DAX during this time and will use that period to do more homework and analysis. I will be recording my screen the entire 6 hours and will review them too.

I will stop trading US indices too. I admit that it's going to be hard. However, I realized that my focus is not at its peak due to the starting time of 7 PM local time. Staying up late affects my AM Nikkei performance too. However, this may change when I go back to Canada later next month.

My bullish bias in Nikkei was executed well today. Just like YM last night, I decided to get in and out with 1 position rather than scaling in, due to the 'rangey' price action. It's more likely after a big trend day, in general.

I had 3 good long trades and the last one is likely a loser (will be closed @ EOD) . That's a breakout long! No big surprise there.


NK

Losers need some luck too


My final long was at the worst possible location. That's the curse of breakout entries. It will punish the traders with poor discipline but has the allure of minimal MAE when it works.

I initially planned to hold on to my long position till the end of the day. That's based on the observation of pathetic volume on a Friday and hence the higher likelihood of +ve close. However, that premise changed when we made 3 failed attempts to make a higher high and volume picking up in down moves. As soon as I got out, we had a mini plunge of 300 pts in 30 minutes. That's the daily ATR!

I like my losers too. Especially when you get a lucky escape like this one.

NK2

So much fireworks going on in the market, particularly the one I trade i.e Nikkei. Even US indices are not spared.

However, I have been on the sidelines as the moves are extreme and i'ts very easy to get whiplashed. For instance, the usual daily ATR for Nikkei is around 500 points. Volatility spiked last week and it's gone through the roof subsequently. 2100 pts today!. Though it's frustrating that I'm NOT part of these big moves, often called as 'pay days', I have to admit that my system has NO clear edge with these moves & I'm not sure about my emotional readiness. It's easy to make random trades but I know, from past experience, that I lose money consistently in this environment. Part of the reason is due to the emotional hijacking of by my limbic brain and the rest is due to my tendency to focus on 'dollars' rather than points.

I think there is a fundamental shift going on in the markets, particularly with the interest rates & currencies, which is beginning to shift capital allocation. Or, may be everyone is wrapping up before they go on summer holidays. What do I know?

Took the plunge

My short bias was hard to execute this week due to HUGE gaps and the spike in volatility. After staying on the sidelines for a couple of day, I felt I adapted reasonably well and took the plunge today.

I decided that SPY was a better tool to trade as I can better manage risk by adjusting position sizing. It also has the advantage of RTH open entry and EOD exit options, which worked well for me in the past to trade with less emotion.

I went short from RTH open and took a pretty nice profit of 50 MES points equivalent. Then shorted the bounce again and grabbed another 20. Now short again and likely to hold till the end of the day.

Overall, a rewarding day due to my ability to quickly adapt to this high volatile environment.


SPY