Day 4, and 1 reset later.

Tuesday, I blew up my account on the first trade that I took. It sucked, but then so did my trading plan. Since then I've reworked the plan so be a little more realistic, and am now ready to try again. This time around I am limiting the amount of contracts traded to 2, holding a static 4 point stop loss on all trades, and setting an initial take profit of 10 points. Additionally, I am setting a daily loss limit of $400, and a daily profit target of $1000.

Time and again I find myself sucked into trying to trade small timeframes as a way to manage risk, and out of fear of losing. I don't think this is the way forward. To compensate for this, I've removed these charts from my arsenal. From this point forward I'll be taking signals from the 15-minute chart. Even this timeframe might ultimately prove to be too small, but I like the price action better than the 1-hour chart and I have to start getting used to the same tools for the sake of consistency. I also like the range on the 15-minute from swing high to low. If this range is greater than 15-points, then for me this is great first indication as the whether I should be trading or not.



The signals that I will be taking are the classic #TheStrat reversals at classical daily inflection points, daily OLHC, and swing pivots, all while in full time continuity to at least the daily. My favorite chart is the 4-hour chart. I wish I had the balls to take signals from this chart alone. I've never tried, but as I move forward, I think I'll be attempting to do just that. I keep the 15-minute chart on the right monitor, and these chart or on the center monitor. I think the trick here is take the 15- minute trade when it conforms to the 4-hour chart. to manage the risk 15 minutes at a time.



This next go around I expect to use these parameters and this this set up exclusively until I either pass or fail this evaluation. Because I had a coupon code, I was able to purchase the evaluation for half off, so this reset was in essence, a freebie, but I sincerely hope that I will not need another. I think if I can stick to my game plan, I have a chance.

Inside day inside a gigantic 4-hour bar

Overnight the 13-minute chart showed what was until a second ago a clear uptrend, complete with higher highs and higher lows, but continuity is all over the place, the ES is green on the week with a weakly green day inside day, inside a large 4-hour bar. The closing price seems to be holding as support above the 1-hour time frame, and to round things out, this is the last day of the week, but the first day of a new month (the flip). Oh, and its April Fools.





The ES has made gains in the 2 weeks, but the 2-day trend has been to the downside. The average overnight range is weak, just 9-points. All of this tells me to expect a choppy day with ranging price action. Its still worth keeping an eye on, the only constant in the market is that its always changing. Important clues that I will be looking for today are: Will the short-term trend higher continue with the price holding above the closing price of 4541? Will we take out the range of this monstrous "mother bar" with a high at 4557.50 and a low of 4526.25?

Finally, as I start the day, I am thinking about what still needs improvement in my game. Its adding to. The simple truth is I have no idea how this works and don't have any rules in place to do so, but I think it might be an important improvement to do so. To start out, I am dropping my contract size to 1 contract as I enter trades, and adding a contract when the trade has gone 5-points in my direction.

Pulled way back.

Did some further soul searching regarding my trading this weekend while I worked nights at the mine- I just want to trade well, so its back to basics. It's back to fundamentals. This is not another revolution, rather its a final refining of what I know to be true. Once again, here are the charts that I use. I've paired down my selection to the weekly, daily, 4- and 1-hour charts. This is how they are laid out. On my left monitor is the higher timeframes. The purpose here is to understand how these participants, separated by time and price, are affecting the market.



The 4-hour chart holds a position of prominence on this monitor because I am somehow drawn to this particular timeframe. I can't fully explain why this is, but I've now given into it. Now, instead of obsessively watching the ES play out in minutes, I am teaching myself to consume it in 4- and 1-hour chunks. On my right monitor is the 1-hour chart.



My thought process when considering a trade right now goes something like this- How does this 1-hour candle fit into the story that the 4-hour chart is telling me, and does it match with what's happening daily and weekly? Is what I am seeing actionable on either the 4- or 1- hour, and if so, what are the levels? Finally, is it time to trade? If it is time, what is a realistic and likely profit target?

This worked for me yesterday. Coming off of night shift I was able to look at the ES in this fashion. At 8:00 am the ES printed a sizeable outside bar on the 1-hour chart that broke above the swing high. This corresponded well with the 4-hour hammer candle holding above the MA, so I took the trade, setting my stop-loss below the 1-hour outside bar, and my profit target at a significant looking swing low from 2 days ago. I took the trade and went to bed.

I awoke around 1:00 in the afternoon. I came down to the office and checked on my trade. I was pleased to find it in profit. I closed the trade for 16 points and went to back to bed. This was most likely the best trade that I have ever made, not because of the money involved, but for how and why I took it. This is how I want to trade now and in the future.

Here it is.

The trades that I am looking for happen between 7:30 and 2:00 mountain time. Today while I slept this set took place- starting at 10:00 AM is the 3-2 reversal to the downside while in full timeframe continuity in the same direction. This one would have been difficult for me to watch and hold as another reversal takes place mid trade, a 1-3-2 reversal again to the downside. This would have been a great second entry.



The takeaway from all this for me is to now outline my trade ideas with these risk to reward brackets when I get the actionable signal on the 1-hour chart. If I am too squeamish to take the trade there and then, at least I can watch the trade play out, or identify these second entry bars that I have seen so often, who knows, these might even be a better set-up and a better trade?

Looking for this 4-hour entry

Overnight the ES prints this strong sell-off. For me, the question becomes how to I get in on this? Do I just sell it, hoping that the big-fish sellers will continue to drive the price lower? I don't think so. I'm thinking about solid, time-tested fundamentals, about what I learned yesterday, and about not letting my fear and greed control me. Here, I have marked-up the trade I would be in if I were able to stay awake all night and trade, expect now, it happens to be on the 4-hour chart.



The trade that I am looking for today will look a lot like yesterday's 1-hour based trade. It should retrace back above the entry price, but not higher than the stop-loss of the framed trade, and then once again start moving lower.



To enter this trade, I will be using the levels from the 4-hour chart, but I will be looking for a price action confirmation at those levels at the 1-hour timeframe. By all indications the market is in a healthy downtrend, and there is a strong level below it at 4444.75 that could be tested. This is my target. There are only 3 possibilities today and every day. The ES will continue to sell off, or it will chop sideways, or will change its trend. I'm betting today that for now, the selling will continue.

55-point 4-hour Doji's and the FOMC day blues

Forgive me father, fore I have simmed.

Anything is tradable half the time, even yesterday. I'm starting to think that trading well is deciding which half of the time you are going to trade. Conventional wisdom seems to be not to trade FOMC days because the news release causes unpredictable volatility. It is for this reason that I simmed yesterday. I believe that you can learn something every day you attempt to trade.

What I learned yesterday is that I can probably trade the first half of a FOMC day if there already is some reason to trade. Yesterday there was a good-looking down trend on the ES started the day before and confirmed overnight with a high forming at the opening price overnight. There was a also a good-looking target below at 444.75- the swing low on the 4-hour chart, and the price was close enough to test it- it did. The 2:00 AM candle on the 1-hour was a great trigger candle.



This would have been in effect a 65-point trade, but you would have had to been awake at 2 AM to catch it, and it was on an FOMC day. The other problem with this trade is while it did hit it's intended target, it only did so in the middle of FOMC volatility which took the price so high before it hit the target, it would have shook out even the most cold-blooded trader if they were monitoring the trade live.

I started trading at the open, I was a little late on my first trade, but my first trade was a successful short on a 1-3 continuation. I set my profit target at 10-points based on the FOMC release at noon. This was a good trade. The last 2 trades although also winners, were not so good.



Trade #2 I bought right as the price cleared above the chop zone building up to the FOMC release. I hit my 10-point profit target in about a minute. Trade #3, I tried the same thing but sold under the chop zone. I still booked a profit here of 3-points, but I got out because of the volatility- I was feeling queasy at that point.

There would have been a million different ways to trade yesterday, and about half of them would have been profitable. I would have booked 23 points yesterday, but over half of my trades would have been high risk. I would have booked a larger profit if I would have set followed jumped halfway into the original trade idea and let it run. All food for thought.

Once again I learned a lot from trying.

Finding relevant landmarks

Today saw the ES searching for liquidity at 4444 and 4500. What this portends for the market tomorrow I do not know, suffice to say that by looking at it from longer timeframes I can see the possibilities. Aiding in this endeavor is the way that my charts are currently configured. Here on the 1-hour chart I've now added the daily closing price, this along with the swing highs and lows from the 1-hour chart, and a gaussian MA paint, for me at least, paints a very interesting picture. I'm not entirely sure yet what that picture is yet, but I think when its finally revealed, it'll be worth something- to me at least.



I don't know what it is yet, but I think it's something almost formulaic, like code- something like- IF "THE OPENING PRICE" STAYS BELOW "THE CLOSING PRICE" AND "YESTERDAYS TREND" =-1 THEN "TODAYS TREND" = -1. Such was Wednesday. The same statement, but with opposite values would hold true for Monday. Tomorow, if I were to wake up and see that the ES had traded all night and held above the "OPENING PRICE" and the MA, then I might be feeling bullish. Like I said, I don't have the full picture yet, but I can there's something there.

The future- and futures, is ripe with possibilities, and really, the market is poised to go either way tomorrow.

I'd go long

Can't trade today, but I'd go long- that is if the ES stayed above 4495. Overnight Buyers once again tested yesterday's high of @4417, so the move that I would be looking at would be a strong move past that. my target would be 4430, but a strong move higher should move past that. Everything I see right now is saying the ES is in a mini uptrend, but any weakness @4417 cold mean that I'm wrong. A move to the downside should take the market backs to 4444.



Long term I would watch the 8-12 AM 4-hour candle for direction either way. So far the daily wants to go 2-up, but if we flip the day, it will go 3 down.

Waiting for 444.75 to break

I think the 4-hour chart shows it the best. The ES has failed to go break 444.75, but the selling pressure is there. Will it break today? I think there is a good possibility it will.



My Plan today is to watch the range that has formed overnight from 4450 to 4483. Overnight it appears to be consolidating, so I'm looking to sell off the high points, looking for that break to the downside.



My low target for the day is 4415- the last swing low from the 4-hour chart. The 1-hour chart makes this range look more like a slight pull back and the price stays under the MA here, I think that will indicate the move lower that I am looking for.

michaelroth 

Forgive me father, fore I have simmed.

LOL I'm a simmer too!

When I recently busted my Leeloo eval, the ending balance was +$720, while my sim account was at $22k...