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Today was a real interesting day... Still only managed to get one trade in as I was mostly watching the action on my cell phone while commuting, and then I was busy for the afternoon session.
Including all my raw notes this time for completeness since there was so much interesting action this morning, directly relevant to the trend reversal chapter I had just finished in Brooks...
Bars 1-4 - Slowly going to EMA. Large wicks. Bulls trying to take control but cannot.
*
Bar 7 - Low 1, bears may still have it. Need a second entry of sorts.
*
Bars 9 & 10 - Big Bears, seems buyers have given up
Bars 11-12 - Small inside bars that cannot break above the EMA. This is probably the second entry from Bar 7.
*
Bars 13-14 - More big bears. Overshot bear channel, so look for correction, maybe two legs.
*
Bars 15-19 - Strong bull movement. Roughly two legs if you count the doji. Took out the previous lower low and lower high from the bear trend down. Possible trend reversal, but expect a correction. Given the volatility, the correction is probably tradeable with-trend (bear)
*
Bars 20-26 - Two legged correction down. Formed a higher low. Further confirmation of the trend reversal.
*
Bar 30 - ends first leg up, nice pause at EMA. Breakout above would be H2 @ EMA.
* Context change, bull trend…
Trade: Entered on the H2 @ 2471.25, exited shortly after @ 2472.25 when we were close to overhead support (2472.5 or 2472.75).
I'm noticing an interesting pattern in my trades that is problematic. I am quick to exit winning positions as price approaches S/R levels. I'm getting burned when price cuts through them and I get left out of the market. A better approach may be to hold on to see if they bounce off the S/R and then consider exiting. Would likely get the same price and let some of the winners run longer...
A couple trades today that resulted in a breakeven day for me and a couple bucks for IB
Context was a gap open lower - not a ton of reason I could see, except perhaps cooling down from a couple big days. Will let price lead the way today. First handful of bars didn't really have a lot of conviction, so I was still in a bearish mindset.
Trade #1 (-0.25 pts)
By bar 7 a reasonable leg down had finally been completed. The bar #7 was a large doji, almost looking a bit like a reversal. In any case, it was the second time that buyers pushed up a large bar and we were now pretty far away from the EMA20. Paired with bar 8 that was a small inside bull bar and I was anticipating a pullback up near the EMA so figured we were good for a quick scalp of a point. I was slow getting the order in so got a fill at 2465, one tick above ideal. I had a limit order to sell at 2466 but we only touched that level for a second, and I didn't get filled. The next bar was ugly inside bear and scared me out of my position. My exit strategy was poor however - I kept moving my limit order down by a tick only to watch price also drop another tick. Eventually I settled with a one tick loss, where the correct thing would have been to just exit immediately at market which likely would have yielded a tick or two in profit.
Trade #2 (+0.25 pts)
A trendline break and nice leg up changed my context to bullish. Was looking for a good entry above EMA. Found one after a nice pullback to 2468. Held on for a couple legs up, but then a trendline was violated, and action was very rangebound on the bottom half of the EMA. I just exited the position at market for a one tick gain. I really missed the best entry for this trend, the first pullback to the EMA about 45 minutes before, but I wasn't at my computer. The price you pay...
Trade 1 (-1.25pts):
Bear channel had been established. Sell off a Low3 (was tough to count, but this is my best guess) after bouncing off top channel line. Continuing with my desire to stop scalping so much I swung the position for a while and then got stopped out on a strong channel break. The warning sign of a bull trend change could have been spotted by observing the channel turned into a wedge, and that we were approaching the low of yesterday's session. I figured the reversal wouldn't be so abrupt so I could keep an eye on things. A better approach for getting out my scalping habits may be to start scalping part of my position and letting the rest swing w/ a breakeven stop.
Trade 2 (-1.25pts):
After the breakout from the channel / wedge I figured we were good for a pullback to either test the extreme or create a higher low. Plan was to scalp this one since possible trend reversal. It looked like we had two legs up (counting the doji after the breakout), including an EMA gap bar so I shorted on the new low right below the EMA. Action very quickly stopped me out and the trend reversal was swift and strong.
Context changing to bull, start looking for long entries...
Trade 3: After a really long advance there was a two legged pullback to the EMA. Bought the High2 and action just sat in a tight range for over an hour. Given that we were in such a tight range I didn't have an opinion any longer on where price may take us. Figured there might be a false breakout that I'd be able to play, so I just exited my position at BE to wait for a more confident setup. Sure enough, the moment I sold price takes off so at this point I'm frustrated and call it a day. After revisiting the chapter of ranges tonight I realize I might have been OK keeping the position since the range was on the top side of the EMA, meaning a breakout up was more likely.
One trade to write about today with both a scalp and swing portion to it...
Massive gap higher on the open today. Two legged correction down towards the EMA. Didn't quite reach it when the High2 showed up, but close enough so I went long with 2 contracts, getting filled at 2474. Immediately placed a limit order at 2475 to scalp a point for one contract and swung the other with a breakeven stop. A couple hours later I got out at the first lower low just as a pullback started. There were a few reasons for the exit really, none much stronger than the other: 1) We've already had at least two legs up, more like three, 2) Depending on how you drew the trendlines this was a wedge at the top, and you could also plot price as having just overshot the channel line (required a bit more imagination), 3) We were heading into the middle of the session which has been real dry of late, and 4) I was happy to pull 4pts out of a trade these days even though that wasn't explicitly a profit target.
Only one trade to write about today as I only had a bit of time to sit in front of the computer.
This will also be my last journal entry for the July competition as I am going to be away tomorrow and Monday. I'd really appreciate votes for the competition here:
I've been very excited about this! Journaling is proving to be an excellent way to organize thoughts. And, knowing I will have to publish it for all to see later has probably helped me from making some real bone-head moves :)
Journal here, with …
. It's been a great experience this month being super rigorous with the process.
Trade #1 (+1pt):
I feel like a broken record writing about this trade. Gap open higher, two legged move down to the EMA. Buy the High2 with a stop at 2477.25, set a limit sell order for 2478.25.
I've spent the past couple months trading NQ exclusively using naked charts and Al Brooks price action methods... Here were the results for the month of October. I keep everything in a spreadsheet these days - faster than typing posts on here I find, and my stats get collected at the same time which I need to do anyway.
Trades 19
Wins 12
Losses 7
Win % 63.16%
Loss % 36.84%
Avg Win 5.54
Avg Loss -5.79
Avg Risk for Wins 5.33
Avg Risk for Loss 5.5
Avg Risk 5.39
Win pts 66.5
Loss pts -40.5
Notes:
- The winrate seems a little high to be sustainable.
- Would like to get Avg Win > Avg Loss.
- Looking at the logs I see a couple examples that might explain this. Occasionally I'd exit before the profit target was hit because of something I saw on the charts (BE or small profit). In almost every example I ended up being wrong and the target was hit. On the flipside, I *never* exited before the stop was hit when things started moving against me. So... I always lose 1x Risk, but was not always making the ~2x Risk of my target.
At one point in my trading, I was so fearful to put on trades and was filled with hesitation. I have a couple of journals on here; I was borderline nuts I guess I still am. I think it stemmed from not knowing what I was doing regarding technique. As there is so much BS out there on the web, books, and youtube full of S. I mean they are good to learn from, the theory that is. As years progressed, I still hesitate, but I think what helps is just pulling the trigger on valid setups holding to your targets and working towards being better every day. The more you do that, the more brain muscles you will make. Fall get back up rinse repeat. You will fall, I still fall, things will click, you'll make mistakes, and then you'll get back up and go at it again. I think folks often focus too much on the emotional aspects of things; I know I did. I think it's good to be aware; I am probably more aware than the common person. Tell yourself just to think technical, and everything will be alright. Trading opens your mind up and makes you question the mental conditioning you been indoctrinated with from birth. Anyways, keep moving forward, growing into that person you want to be. It may not be tomorrow, but that doesn't mean it can't be. One other thing that might help you grow is finding a good mentor that trades for a living. There are people out there that will help, and they aren't selling BS systems, and it won't cost you 5k up front. Just remember if it doesn't work in any time frame just say no. The last thing I will leave you with is "Get comfortable being uncomfortable." Bust out the Les Brown, Team Fearless, Eric Thomas, or anybody that motivates you. Keep grinding and keep hustling.