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The three markets I follow are all exhibiting interesting trending conditions. 6E has been in a remarkably beautiful forex-style low volatility downtrend for over a year. GC has been rolling higher since June. These both have very clear structures on the daily charts.
Meanwhile ES has been flopping around like a fish on a deck for a year but hasn't been without some very tradable trends in the midst of all that. August was a high volatility sideways purgatory but september has seen it threaten new highs once more.
What is a swing trader to do? With juicy looking trends everywhere we look, something always smells fishy. How late in a trend is it too late to take pullback entries? We know trends often last longer than an average person would think. So we have to ignore our doubts. But late in trends, we do need to exercise caution.
I could justify a short in M6E, a long in MGC, and a long in MES. But I don't want to enter all of these in the same day, knowing the structure I'm seeing is likely correlated and if I get shat on by one I will likely get shat on by all 3. I'll prioritize an entry in M6E since it just looks the sweetest at the moment. A combination of weak and tame. And I'll keep my eyes out on the others.
Gold is opening the week strong after holding multiple defenses below 1500 last week. This is still a congested area in the low 1500s but the train is showing a little glimmer of maybe leaving the station. The fact that this is part of a fairly prolonged up move makes a leap of faith long entry more interesting.
S&P held its own last week against bears attempting to break 2990. I'd say that bodes well for longs, but the Friday smack-down on high volume is a little concerning. I'm neutral here and want to see it tip a little further to one side or the other before getting involved.
The idea from last week to go short Euro/dollar proved sensible. It continues to find buyers below 1.11 and this week I'll be watching to see if that shows any sign of continuing. If it can't crawl above 1.1100 on this latest bounce and shows signs of turning over again, the bottom might finally fall out. On the other hand, if buyers can retest 1.1140 again this thing might finally pop higher.
MGC
Last week I mentioned a potential long opportunity in MGC and indeed it did start to pop off. I got in around 1522 and rode it up to the top but then it sputtered and I got nothing. Now we have just about the cleanest H&S top I've seen in a long time. I'll be looking to sell short on any decent rips, say in the 1490s or even 1510s.
MES
Started cleanly broke below 2980 and retraced, consolidated for a couple days, then dumped again. I pulled off a few intraday trades on the way down. On Friday as it dropped I looked at the August resistance-turned-support at 2945 and the over-extension to the downside and decided to put in a limit buy at 2966.25. By pure luck this turned out to be a very nice swing entry, and closed at target today (Monday) at 2988.75. Most of my trades are SIM right now, including this swing trade.
This now looks like a failed H&S top, but bulls still have their work cut out for them. If they can keep the pressure up into the 2990s I may try to buy.
M6E
Continues to look ill. This latest wave down is probably nearing its conclusion, but still has room to run down to 1.0850. Whatever factors are driving the weakness in this instrument, they don't show any signs of giving up. We can see that the rips up have been violent and sharp, so in this part of the chart I will be very careful on either side for a swing. I will happily play the short side intraday after any wave higher into resistance, or on any potential trend-day-down.
OK, time for a few reflections
1. What I've posted here in the journal does not paint the full picture of what I've been up to, and doesn't give much detail on execution. This is fine. I'm still trading mostly SIM. There are some loose ends that I want to tighten up.
2. I have been using very wide stops that should very rarely get hit within the typical duration of my trades. This has proved true, and so far, has worked well. I still take losses, but not usually by getting stopped out.
3. The way I am calculating how far to put stops and targets could be more sophisticated. I have run some statistics and created a custom indicator to help with that, but the effect of the near-term historical volatility is not sufficiently weighted in my calculations. I want to make a better tool for this.
4. I switched from 1-hour to 30-minute charts for intra-day trades. I am liking this better - it draws a better distinction from my swing-chart and seems to put me in more sensible positions with an expected intraday trade duration of a few hours. Still meaty.
5. Ugh, record keeping. TOS export is a joke. NT at least has some performance metrics but has plenty of short comings of its own. In some distant future I will streamline this but for now, Ugh, record keeping. Sucks.
6. And yet, record keeping is one of the best defenses against unmitigated stupidity. Forcing myself to put in the entry criteria before pulling the trigger is one of the best ways to avoid impulsive mistake entries.
7. Especially now that I have wide stops, more important than having a good plan for what entries to take, is having a good plan for exiting a trade that starts to turn over. "Exit when the trade is no longer right" is something I have to spend more time detailing and sticking to. This is the biggest "loose end" that I need to sort through before coming off sim. Entries are easy by comparison to exits. Entries are the opening of promise and fortune. Exits are the denial of ego and hope. How can you have any pudding if you don't eat your meat?
Made the transition to LIVE for swing trading only last week. There are a few reasons I need to keep intra-day trading on sim for now. 1, still working toward having faith in the system. And 2, I still have some logistical / technical challenges to work out leaving trades in NT unattended while I am away at work. I can use CQG-mobile or a remote desktop solution to monitor - have to set it up.
One thing that I'm kind of excited about is I've started entering my Ideas in a formulaic way into a spreadsheet. So, even if I miss a trade due to lack of execution, I will have a record of it. Let me explain why:
You are a trader, but you haven't fully "turned the corner." You know your stuff, you have good days, you have bad days. You kind of break even overall, maybe lose a little money over time but nothing like the first couple accounts you blew up. You're getting better, but you just haven't cracked the code completely yet. And yet, as burned out as you might be, you keep striving onward. You say, it's because you know yourself well enough to know that ... there's just one or two last things to figure out, and you can get there. But you haven't put your finger on it. You look at your trading history and you think, shit, I am actually not bad at this, if I just executed all of the things I know I should do, but somehow, I keep flubbing it.
It's this inability to "put my finger on it" that I am trying to get closer to. It's the ideas, the right ideas, the ones that I'm not getting everything I need to out of. The ones I'm letting get away, or letting myself get chopped out of for losses that could have been winners. If I can measure my ability to come up with good ideas ... not good trades, but good ideas ... then I can lean on that confidence to focus on what it will take to turn those good ideas into money.
Or, if the ideas are just bad, objectively bad, I can re-assess my own self perception. Because right now my perception is that I am a trader who has good ideas but needs to improve executing them. The only way to objectively determine if that's true, is for me to record those ideas, and their outcome, regardless of the trading performance associated with them. I do believe that a healthy biproduct of this approach is going to be more forethought going into each trade, and an avoidance of impulse trades, which overall should be great news for my actual results.
On to the charts.
MGC (positioned short)
My first live swing trade in a while, had a limit order get filled on a breakout-pullback short opportunity in GC. Entered at 1493.4.
MES
Earlier last week I'd been thinking I'd look for a short if MES popped up to 2955 and then turned around. It didn't turn around, which makes the short idea a little less appetizing right here. Friday was a good show of strength, even with the now-looking-very-obvious turnaround at 2990. I think I will be a spectator here until more structure develops or if it breaks over 2990 (bullish) or back bellow 2955 (bearish).
M6E
Could M6E finally be ready to pop higher, for real? I'm watching closely. The area just under 1.1100 is a battleground. Ideally, it will test 1.1070 area and hold firm, pressing back into the resistance that held the highs last week, and maybe form a little pullback for an entry. I don't love the idea of chasing it higher after it has looked so unhealthy for so long, so taking this recent strength with a grain of salt. Generally I'm not looking for big targets though, so if this up-move has another wave higher there's plenty of room to ride it.
My MGC trade went over half-way to my target and then came back. I pulled the plug on it for a small loss. Not seeing much cause for a re-entry in either direction until MGC starts to move some more.
M6E is a great example of a good idea that went to waste. Last week I said: "Ideally, it will test 1.1070 area and hold firm, pressing back into the resistance that held the highs last week, and maybe form a little pullback for an entry." And there it went - a pullback, and a squeeze into resistance. I was watching as it came back up into resistance and did not enter. It's easy to come up with reasons not to enter a trade like this - "it looks a little too extended here, I'll wait some more." But there's something about watching a squeeze like this play out in realtime ... if you've seen it enough times you can almost feel it getting ready to pop. Anyways, I missed it. On to the next one, and I guess try to learn from this. Any trade that works out, you can look back and find a couple good reasons for the entry. Any trade that fails, you can look back and find a couple good reasons you shouldn't have entered it. Let's see if I can get to the point here where I'm pre-meditating my ideas with enough clarity and commitment that I pull the trigger more consistently,
I entered a long trade in M6E as it has worked its way back toward the 1.1100 breakout point. Entered around 1.1135 and not looking for much - just a move back up to 1.1200 area.
MES is moving nicely higher and certainly looked enticing last week as it was starting to squeeze into resistance, but I was busy and skipped it. MGC is still flopping around 1500 and I'm probably best off avoiding it until it figures itself out.
I have been having very positive results the last two weeks with my intra-day trading. But I have a big personal project entirely unrelated to trading that I'm trying to tackle in November and I may need to divert a big chunk of my attention. I will try to keep up with the swing trading and posting here, but not certain. Daytrading will almost certainly take a break.
MES: Hey so it's been going up and every time it touches that green line there it just does it again. So, let's do that thing again, or at least give it a try.
M6E: Poor Euro. So sad. I have no firm trade plan here, but as we're at 1.10 support and had a nice reaction at the end of last week, I'll set an alert and see if buyers hold ground. If so, I'll be moderately motivated to try a long. Otherwise, the chart is generally a dumpster fire and is likely to dump or just churn meatgrinder style.
MGC: This is much more interesting than M6E on the long side, and bulls seem happy to defend 1450 so far. I will look for an attractive priced long near support.
Heading into the new year, trying to settle into a rhythm and make a decision on how I want to involve myself in the markets in the coming months.
Have to balance my time against other things important, pleasurable, meaningful. What seems reasonable now: Sunday swing setups, and one day / week intraday setups. Probably tuesdays or thursdays, depending how work / kids / etc are shaking out. Trying to be realistic and also allow for the pleasures of existence to make a regular appearance.
I'm fully converted back to "Alive" trading on all timeframes. 2020 looks like it's going to be another terrible year for the world. Maybe it can be a good year for you and yours, though. Let's see what shakes out.
My MES idea from 2 weeks back, getting long at the green line, was not too bad ... unfortunately I took a little loss instead of a nice win. Bailed on it before it turned back up.
Maybe I'll start posting my results here in this journal in 2020. I don't know. It can be fun.
Onto the ideas for the week.
In MES I like the the value around 3155. But I'll also be thinking fade around 3210.
M6E heading up into the top of its range, got rejected. I'm thinking this upward move needs to correct a bit. Like a short midway up, say 1.1235.
MGC remarkably contained. I like the short a little more, just seems like 1500 is a friendly number to play against. So short 1495 but I'll be eyeing long on the 1468 side also.
I ended last year with a win off that M6E short move mid-december. I checked out of the markets for the holidays and I'm a little miffed I missed the move up in Gold, which I'd been sort of waiting for. Still travelling and taking it easy for the first half of January, but getting the ball moving here.
In M6E I am interested in the long side around 1.1180 if price gets jammed up in the value area of this uptrend. But I won't count out the shorts in M6E as the broader picture is still very mixed. I might look for a deflection lower around 1.1235 or a fade from higher up around 1.1300.
There's that picture perfect MGC breakout I mentioned earlier. I'm not a big fan of fading a moving train, but I have to call this chart over-extended. There's just no structure but UP in this move so I'm going to keep an eye on it. One would think the prior highs around 1570 won't fall immediately. So a fade may have some merrit up there. If not, I'll just look for the market to pull back to prior resistance now support at 1530 for a bounce long. Full disclosure: I have absolutely no clue what the fundamentals behind this move are. Santa bought a lot of gold this year?
MES in a sideways expansion. I like value around 3195 for a long. Otherwise I'll tentatively look for a fade in the 3270s area. It's entirely possible the market will just shrug off the panic this week and resume trudging higher.
