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  #31 (permalink)
 
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 Fade 
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If I were to have traded this on the initial breakdown, my Stop-Loss would have been one tick above the high of the breakout candle. If I had traded the long breakout, my Stop-Loss would have been one tick below the low of the breakout candle.

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  #32 (permalink)
 
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Baby Range


Baby range on top of the larger range. Theoretical Stop-Loss shown (not the first one though).

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  #33 (permalink)
 
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Supply


I'd definitely be nervous with all that potential supply on the left of the chart. Will be neat to see how it turns out.

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  #34 (permalink)
 
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 Fade 
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Stopped Out


Would have been Stopped Out at 11:15 AM. Max unrealized PnL, assuming perfect execution and including commissions was $18.76. That's enough for beer or some cat food. It's unlikely that I would have exited right at the high or entered right at the close in real trading though. At least the Stop-Loss would have protected me from the rest of the selloff if I'd held on through the failure!

Edit: Messed up the last post that was basically the same as this one, so had to repost it. Whoops!

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  #35 (permalink)
 
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 Fade 
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I've got other stuff that I need to take care of, so that's all for today.

Daily Review of Weekly Goals:

1. So while I didn't actually trade, I did make posts about what I would have done if I had traded, so I'm not 100% on whether or not I violated this rule.

I wondered if what I thought was a range was wide enough to trade like a trend, but because I didn't know, I didn't try it out. I think it was Ed Seykota who said something about not being involved in the market if you don't understand what's happening. Suits me just fine!

2. Same as yesterday. No trades, no exiting early.

3. A bit confused with this one as well, because I posted the theoretical trades with the 1-minute chart, which isn't a timeframe that I'm currently testing.

Overall, I'd say that today gets the ranking of: ?

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  #36 (permalink)
 
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 Fade 
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Market Context

This is the part that I'm struggling with the most. In general, I look for reversals to form in areas that make sense based off of what I think the context of the situation is. Specifically, I look for Head and Shoulders patterns, Three Push patterns (at least, I think that's what they're called; I've been calling them "Three Push Wedge" patterns because I read a comment by somebody talking about Al Brooks and reversals/wedges, and that's the name I likely misremembered), and then what most people call Double Bottoms/Tops, although because I'm too particular about some things, I personally only classify Double Tops/Bottoms as patterns with equal highs or lows. If the highs/lows aren't equal, then they're something else. However, if I were looking at stocks on say, a daily timeframe, then I probably wouldn't be so specific with the equal extremes.

Again, the problem though is that these patterns fail REGULARLY. If you just trade a Head and Shoulders pattern because you see one form on a chart, or your brain tricks you into thinking you see one form, then you'll probably lose some cat food money. That's been my experience anyway, and the cats are never thrilled. Something that's helped me, but hasn't entirely solved the issue yet, is focusing on WHERE those patterns are forming.

In general, tops should form at TOPS and bottoms should form at BOTTOMS. Seems simple enough, but in the moment when your brain starts going off about all of the reasons you should be entering this trade, it can be too easy to ignore the fact that the bearish Head and Shoulders pattern is forming after a downtrend has been underway for a bit. I think that there may be ultra-specific situations when a top can form after a down move, but I'm still looking into that, and so as a general rule: Bearish reversals MUST form after an up move (the longer the better), and Bullish reversals MUST form after a down move (the longer the better).

Another thing I try to keep in mind is: How much junk is in the way of the move from the reversal? In this case, "junk" refers to all of the nearby support underneath a bearish reversal or all of the resistance above a bullish reversal. If there's a lot of junk, then I expect retracements. If the move is strong enough though, it'll blow past a good bit or all of the junk. So, what do you do? Do you enter on the breakout if that applies the pattern you're trading, or do you wait for a potential retracement? I personally wait for the potential retracement currently, because it feels safer. FOMO of course kicks in, because you're afraid that if you don't enter on the initial move, you'll miss the train. The fact is: You're going to miss the train sometimes if you wait for a retracement, and you have to find a way to be okay with that. Or don't, it's your life, you do you.

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  #37 (permalink)
 
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 Fade 
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How to (maybe) Gauge Market Context

This isn't the way to do it, but it seems to be a way to do it. I remember when I started out, I was using the 5-minute timeframe I think, and I'd take trades based on signals that were generated by the MACD indicator. That era ended suuuuper well. I have screenshots that show how zoomed into that timeframe I was. I was totally oblivious to trends and ranges. It was just that one timeframe, super zoomed in.

At this point, I believe that you need to know what the market is doing as a whole before you zoom in. An easy way to do this is to scrunch up whatever timeframe you're using until your candlesticks/bars/other looks almost like a line chart. Zoom out, basically. It seems like this gives you a better view of what's happening, and where you're located within that.

From there, I try to find the areas that produced the what, which is just price movement, up or down. Prices go up, or they go down, and where price starts to go up or down seems like it can be important. After you find areas that you're interested in, mark them up and zoom back in. When price reaches or returns to one of the areas you marked up, watch the price action. Enter if warranted.

I'm not sure if this will be helpful to anyone, but I hope so. If I could save people some time and money, especially if they're just starting out, that would be cool. Just as an added disclaimer, again, I'm not a consistently profitable trader yet, and all of this could just be some random BS that my imagination conjured up out of wishful thinking. Time will tell!


5-Minute Zoomed In




5-Minute Zoomed Out

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  #38 (permalink)
 
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 Fade 
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MES Pre-Market:

On the 1-minute chart, two swing lows were taken out this morning on what looks like a reaction to the CPI release this morning.

The 5-minute chart shows that we're still in an uptrend from my perspective, while the 30-minute chart shows another story.

I'll try to be mindful of the potential overhead supply from the 30-minute chart, as well as the potential demand from the 5-minute chart. Not that those charts themselves are the reason that the supply/demand exists.

I took the pictures earlier, so some of the price action between when I took them and when I'm posting this isn't shown. I might start writing first from now on, and then taking the pictures.


MES, 1-Minute Chart


MES, 5-Minute Chart


MES, 30-Minute Chart

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  #39 (permalink)
 
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 Fade 
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Daily Review of Weekly Goals:

1. Did alright until the end. I thought price was moving sideways at one point, and decided to step back. Went to the restroom, got lost in thought, came back to the screen, saw a setup, forgot that price seemed to be sideways, and entered a trade. I realized what I'd done pretty quickly, and made myself exit the trade. The trade would have been profitable had I held on, but I violated the rule so it doesn't matter.

2. There were more opportunities today. I didn't exit before price surpassed the prior extreme on any of the trades, but I did exit out of fear on the first trade. There didn't seem to be any real evidence to warrant exiting early in hindsight though. The next trades didn't work out, but I held on until I was proven wrong. There was a point where price looked like it was reversing against me, and in an area that I was concerned about, but I didn't include any rules for that when I wrote out the goal, so I ignored it.

Either next week, or after I've successfully followed rule no. 2 enough to be comfortable with adding to it, I'll incorporate figuring out when it's legitimately okay to exit a trade early, based on price action and not fear.

3. Did good with no. 3 today. Didn't deviate from the timeframe, except to post some stuff this morning about the pre-market. I don't think I'll keep doing the pre-market stuff. I'm just going to focus on the weekly goals.

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  #40 (permalink)
 
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 Fade 
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Decided against the Weinstein thing.

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