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I am going to participate in the June journal challenge. I have been trading for four years now. I have a journal already and will be sharing that here.
This is a live account, albeit a small one. The idea is to grow it for the purposes of this challenge. The scale structure is one micro lot per trade for each $1000 in the account. Current balance is around 1500.
I trade around liquidity and volume. I also use MSFT, AAPL, and NVDA to track liquidity for the futures market. I cross trade, meaning that I use the ES and NQ charts but place orders on the micros.
Couple of things that may become interesting as this goes on:
1. I am not a full-time trader, though I am strongly considering heading in that direction.
2. I am a lawyer and still have a law practice going, so days that I can’t trade, it’s because I am in court.
3. Yes, I am that lawyer—the one from my Twitter and LinkedIn pages. I learned a long time ago that I cannot hide, and even when I can, it’s not worth the effort.
Here are my playbook trades that you will see in this journal.
1. Great Wall of Liquidity (GWoL).
In this setup, there is overwhelming liquidity on one side of the price. When there are more buyers and nearly no sellers, what does price do? It goes for a run, away from the liquidity. Here is an image from Quantower’s DOM Surface (I have since moved over to Bookmap). There will be another one in the first post of the journal.
I like the bears on Kodiak Island in Alaska for two simple reasons. First, their huge. Second, they hunt you back. Other than that, this is nothing more than a delta squeeze.
3. PACKhunter.
Sometimes, it is just good to go with the momentum. For this trade to be on the table, MSFT, AAPL, NVDA, ES, and NQ, or a supermajority thereof, must be going in the same direction.
But first, another caveat. On Thursday, I failed to clear a resting limit order on the MES. Friday morning, it filled, but I don’t trade Friday’s because I am on the radio co-hosting a talk show.
Friday, after the bell, I sat down to review the trades for the week and saw an open order in the MES. I was short 1 contract. Sunday at 5PM, I closed it out for a loss. Of course, it wasn’t trading in my favor—if you want the market to sell off, just let me know and I’ll get long.
That accounts for a $27ish loss on the day—really, it was closer to $200, but I am happy to get out of it with my account still intact.
Here was my pre and post market analysis.
Mon Jun 03 2024 08:19:05 GMT-0500
PREMARKET ANALYSIS:
1. Liquidity zones.
ASK on ES
EQUAL on NQ
ASK on AAPL
ASK on MSFT BID on NVDA
2. Significant News.
Roaring Kitty says he has a $175 million position in GME.
NVDA is approaching AAPL's market cap.
Quiet otherwise.
3. Sentiment
Two of the big 3 (NVDA, MSFT, AAPL) have liquidity on the ask.
4. TTW
It's Monday. I am looking for the #GWoL or #KODIAK.delta
Market came up to good highs before closing out last week. Lots of buy orders in the book at the start of the session. However, the market sold off. It was led by MSFT, then NVDA. AAPL had resistance it couldn't get past. This set up a move to the downside. MSFT ate through the resting buy orders.
I had a moment with ES and ended up as a trapped buyer. I didn't panic, continued to read the chart and the order flow and saw the end of the move. Held on to scratch that trade. I need to work on holding trades for better exits.
This is the highlighted trade of the day. Stats are below the highlights. Please head over to the challenge page and give it a thanks.
Playbook: GWoL
Heavy liquidity on the bid. Nothing appearing above it. This is an imbalance. I have a limit order frontrunning liquidity. I have a profit target before liquidity again.
Note AAPL, which is bouncing off support the same time that the ES is at the liquidity level on the bid.
Here’s one more, GWoL
I have a rule. Never be a buyer at the top and never be a seller near the lows. I call that the “worst trade in the book.” I strive to be a cautious buyer at the lows and a cautious seller at the highs. I look for price relative to the VWAP, liquidity at the low/high, and see what MSFT, AAPL, and NVDA are doing. For example, today, MSFT ripped through liquidity on its sell off. If MSFT is not bouncing on liquidity, I have little confidence that the NQ is going to bounce either.
1. Liquidity zones.
Traded only the afternoon because I had court in Texarkana. No chance to check for premarket liquidity.
2. Significant News.
Jobs report was not good, which usually means the market responds favorably.
3. Sentiment
Price has been in a range for most of the day.
4. TTW
Trade the edges.
IN MARKET ANALYSIS:
POST MARKET ANALYSIS:
Had a late afternoon rally. However, I traded the plan and didn't get into any bids. Looks like I cleared the loss from the weekend overnight trade. That's nice.
GME fell. If the kitty has a long stake, things may not work out this time. Maybe he will YOLO. Me, I want to live to die another day.
