Flawless 'No fuss' execution.

Short 1/2 size from open, based on past stats. i.e. Days with buying tails tend to have bearish follow up, contrary to conventional thinking.

Though pre EU close was dull with small range, it gave me opportunity to scale-in another 1/2. I was pleased that my patience was good and I added only AFTER seeing weakness rather than in anticipation.

My exits were pre-determined. i.e Scale out @ 50% ATR and full exit at EOD. Easy peasy.

One potential area for improvement is with final exit. I got 75% of daily ATR but I could have used 100% ATR target instead of EOD order to maximize profit. However, the downside is missing out on monster days. Not an easy decision. Perhaps, I shouldn't expect those monster moves, especially to the downside, when we are close to ATH.




Screenshot 2024-10-08 at 6.33.02 AM

Rule breaking is always just 1 trade away.

My stats were long yesterday but I initiated a short. I can't even remember my rationale now but I'm sure there was one.

As per the data, a gap UP opening after a down day has a 60% win rate and 1.5 profit factor for bulls, which is pretty good, but I bet against them. Silly trade and I am glad that I was NOT rewarded.

However, I stuck to my other rule of 'NEVER add to my loser' and hence the damage was minimal.



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I remembered my rationale for short entry now. I added one 'extra' variable of 10 DMA in my analysis. Price was above 20 and 200 DMA but below 10. Usually I add additional inputs only when I have a neutral signal to help me decide on my bias. On this occasion, it was unwarranted as the signal was pretty bullish.

When I added my 3rd variable, the profit factor did reduce from 1.5 to 0.9 but the win rate was still above 60%. Hence, my signal became 'weak long' from strong long'. Definitely not bearish and hence my short trade was not a smart one.

I also consider my 'target's which can sometimes compliment my bias. Based on my stats, we had a 2/3rd chance of testing previous day high compared to 1/3rd chance of testing the low. Another bullish signal I overlooked.

Lesson learnt.

FOLLOW THE DAMN RULES.

Enjoying those posts, thanks!

October 15 2024.

I'm back to trading after being in the sidelines for few days due to family health issues.

ES is breaking out and made a new ATH. Though I should be long, stats are fairly neutral. However, if add other variables like gap behaviour and seasonality, it's actually mildly bearish and not at all in favor of longs.


1a


Currently, 10 minutes after RTH open, there is still no conviction from either side and price is accepted at this level of Y-Close 5910. My game plan is fuzzy now and I need the players to show their hands first. If sellers were able to create a deep pullback, I may end up buying but I'm not buying at this current level. I may consider cautious short above Y-H ONLY if sellers show up. I don't want to be the first to fade here.

Finally Sellers took the initiative and pushed the price down to 5877. A nice range of almost 40 pts to work with.

As I mentioned in my last post, I bought the dip and I'm long from 83. Price was at 93 when I started typing but down again to the 85 now. I loaded up again to reach my max size. I will lighten up if we make a new low of the day and take partial loss with the rest for 'end of the day'. My profit target is opening print for 1/2 and the rest is above Y-H.

Note that there is a 65% likelihood that we will see a higher high and I'm banking on that.

Nothing much to report. Couple of small losses and wins.

'All time high' are generally hard to trade for me due to the compressed daily range. I haven't succumbed to my tendency to short ATH and just following my signals.

Interestingly, my longs were losers and shorts were winners last week. Still very tentative in my trading with less than 1/2 my usual size but likely to ramp up this week. However, I don't see myself trading aggressively until US election results.

October 21 2024 Update

My short bias was executed ok'ish' with plenty of room for improvement.


Screenshot 2024-10-21 at 9.22.41 PM


My short entry from RTH open @ 5896 was reasonable. I could have waited for the 'gap closure' to happen first before initiating my short, but the risk is market going down 'without' me. FOMO? Absolutely. But the risk of 10 pts MAE is worth taking for the potential gain of 30 pts. I also could have added @ 5906 i.e Y-close but that would break my rule of never adding to a loser.

I did try to scale in once the downtrend started but it was simply too quick for me to get a safer scaling point. However, after banking my 30 points, I was able to short the dead cat bounce for another quick 8 points and happy with that. Done for the day with +38 points.

Not everything is hunky-dory though. I did loose some from my DAX long earlier today. It's a good trade though. i.e. aligned with the trend when the price is at all time high. Not my fault.

DAX trading update.

I shorted DAX today based on the stats. i.e. A down day after ATH, has a >60% chance that we will have a lower low next on daily chart.

Though this trade worked, I didn't really squeeze this winner and could have handled it lot better.

First is the entry location - I have a tendency to get in 'too early' in the trade and I made the same mistake again. I was expecting a reversal but got in before the tides turned. No damage done, as the resistance above was pretty strong, but something I should work on. FOMO is the barrier, as I mentioned in my previous entry.

Second is scaling in - Despite my best effort, I couldn't increase my size. Long standing issue mainly due to my limit orders being too conservative. Related to my risk aversion and making slow progress in this area. Using market orders for scaling is a quick fix but with a small price disadvantage.

Finally, exit location - Leaving lot of profits on the table and leaving the party too early. Good progress made this year using ATR based targets but not perfect yet. Though I grabbed 75 points today, which is >50% daily ATR, and it looks cute in the chart below, price actually went down another 70 points after I got out!

I'm not too disappointed but aware that I'm not maximizing my profits yet. Will keep working hard at it.
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Joy or pain?

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I think it's one of the major challenges in trading. It's very common to have scenario like the one above where price can move to extremes without me onboard. Regret can be a very strong emotion and easily overcomes the joy from the profit. The key here is to be mindful of our initial expectation. i.e 'before' we placed the trade and the execution plan.

In this case, price moved almost 100 points after I grabbed 75 points profit. However, I have minimal regret as my plan was NOT to hold for 175 points. I DID plan to re-short after grabbing my profits but hesitated due to the price action i.e. minimal rebound for better entry location. I will definitely work on that but the key is not to have remorse or regret as I grabbed my intended profit. Next goal is to be available to gracefully accept more when the market is in a giving mode.