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Ave daily range is now at 25, and std deviation is at 10. This is the first time these numbers have come down in a while. The market state is now classified as volatile bull.
This was one of the days when I was trying to trade whilst working and travelling. This short trading session was done whilst sitting in a cafe in Florence airport.
Results:
Setup chart:
Entry chart:
Trade 1: breakeven. Price was in green territory, and there was a SQC breakout. All conditions were satisfied, with the framing OK up to the HOD.On the entry, all conditions of the Dixon were satisfied, and I entered at 2 ticks above the DC mean.
Trade management - I moved my stop to breakeven once I had +4 ticks, but then got stopped out. Perhaps I should have exited at +3 or +4, especially given the proximity of the HOD?
Note - at this point I noticed some frustration and impatience. Impatience seems to be quite a theme for me, I need to do some work to understand what underlies it.
Trade 2: - 3 ticks. I was calling this a 'support & continuation' trade, after the SQC above. However, it didn't actually make it back to the river, so perhaps it's premature to call that a support & continuation trade? There's a distinction I need to make between a Dixon pullback (usually just 6 ticks or so, to the DC mean on the 350 tick chart), and a pullback to the edge of the river on the 1 min chart (usually more than 6 ticks). Also, the HOD was very close, which raises questions about framing. And there was some stochastic divergence on the 350 tick.
Trade 3: +3 ticks. This was a case of finding support at the near side of the river. The HOD was close, so framing difficult. Also, momentum wasn't great, as there had just been a doji. Also, I entered +4 ticks up from the DC mean! (+2 up from the cloud)
Trade 4: +1 ticks. This was an SQC breakout. Not quite, technically speaking. I'm seeing with the SQC's that I'm getting in quite late, because I have to wait for a pullback - I'm thinking that I need to try an alternative approach to those trades - rather get in straight away. I entered 6 ticks away from the DC mean! If I'd waited for the pullback would have been a nice easy trade for 4-6 ticks.
Finished on +1 ticks.
Lessons learnt:
Stop entering so far away from the DC mean!
Only look at stochastic divergence when it's a double top / bottom
I might start entering the SQC before there's a pullback
I might start taking counter-trend RLCO trades, when they pullback, just for 3-4 ticks
I was travelling this day, so I traded it on replay the following Monday (yesterday). Results are OK, but it looks like even the off day on Friday and the weekend had made me rusty. Plus perhaps the lack of review blogs - these seem to really help me to focus my thinking and resolve.
Here are the results:
Setup chart:
Entry chart:
Looking back at the charts, I notice:
I didn't take a trade at 15.52 because it was a counter-trend RLCO trade. Also, it was still early (before 4pm). However, perhaps I can take these RLCO counter-trend trades, maybe just after price enters the river?
Did well not to take trades around 4pm as we were heading into a consolidation.
Trade 1 was a SQC breakout (except the river was by no means narrow!). It was actually more like a continuation trade. On my entry I chased too far and ended up entering 2.5 ticks below DC mean. It was completely unnecessary because price did come back.
Trade 2 I re-entered, this time on the DC mean. Turned out to be a much better trade. I took an exit at +4, but would easily have made my entire day's target with a simple trailing stop. Pity.
(1) Don't let greed get the better of you, and don't trade after your hours / when you can't fully focus:
Having had a mixed day, I finally left the office at 5pm with a $30 in the bag, just under half my current daily target. However, upon reaching home I switched my computer back on and looked at the screens. A few minutes later I found myself in a trade - which went my way for 5 minutes, but then turned on me and went horribly south, meaning that I ended the day $100 down instead of $40 up. It was not a great trade, rather it was a case of wanting to jump on to a trend that I might have traded into a bit earlier if I'd still been at my screens. I ended up trading well into the trend (in a high risk position, more on that in point two). It was pure greed and maybe a bit of regret for having missed this and one or two other nice moves that had played out in the time I'd been away from the screens. Plus I was trying to make the trade in between preparing dinner and helping my wife with the baby.
(2) I'm getting a better understanding of what a couple of traders have referred to in their books / notes as 'high risk' trades. This trade tonight fit that description. It could possibly have worked out, and for a while there it looked like it would. However, it was a high risk entry to a trading position. There was nothing about the price action to give me a relatively good idea that price wouldn't suddenly reverse on me, and (relatedly) no obvious place for my stop to go. I was trying to trade with a short term trend that had already been running for an hour or more, without even waiting for a pullback or some kind of support level to be formed. I guess that's why the consolidation range breakout and RLCO techniques are ways of making low risk entries - you have a recent level just under where you make the trade that serves as a support.
Finally, just as an afterthought (and perhaps an obvious one), I'm struck by the difference between trading equities and trading currencies, in the sense of how different the long and the short sides can be. I guess I must just guard against putting too much faith in the bias of stocks to move up rather than down
Final final thought - on the emotional impact of making bad decisions like this one tonight. (1) It was impacted by me knowing that I hadn't made my target for the day, and hoping that I could 'easily' 'sneak' in one last trade to make that profit. Wow, that went badly. And then straight away observing my internal dialogue - 'you're such an idiot', etc. , but with quite a wack of negative emotion. And I guess what I'm learning is (1) to just sit with that emotion, and not try to do anything with it - definitely don't revenge trade, and probably just get away from your screens for at least a few hours, if not till the next day. (2) Learning that there is no such thing as an 'easy' trade, at least not a low risk easy trade. Or perhaps, to put it differently, I should be looking for 'low-risk' entry points, not 'easy trades'!
Why you dont try the same thing with HTF , eg. ES 12/4 (SiProRenko bars or any other Renko type bars) to have a better S/N ratio ? you will probably have better results.