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Maletor's Daily Market Review


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Maletor's Daily Market Review

  #1 (permalink)
Maletor
Boston
 
Posts: 88 since Jun 2009
Thanks Given: 7
Thanks Received: 27

A little history about me.

I started trading stocks about 18 months ago.

I shorted all the banks and bought up all the gold miners because it was the *hot* thing to do.
This was just before the Obama crash of 2008, but at the time I thought it was the credit crisis.
I thought I was pretty cool and I used to look around on Motley Fool CAPS trying to get hot stock tips from their "top traders"
Then, I moved over to options on the SPY, thinking I'd really discovered the best way to play the markets.

All the while I figured I knew it all and millionaire status was right around the corner, while my equity curve looked like a huge trading range, not the slow and steady slope up we all glean for.

Then, I discovered gurus (and opened a futures account). I found one from the CME group that seemed ok, and was ok, but my bottom line was not improving.
And yes, of course, I spent money on trading plans. Luckily, it didn't cost me much money to figure out that was not the answer.

Indicators too, and systems based off them. I've tried probably 100s of them. They all look so good, but do not work in market conditions. (You know, the kind of conditions where things change over time?)

I started to read as much as I could get my hands on. The first book is by Edwards and McGee and it was written in the late 1800s about trading. It's on the MTA's Chartered Market Technician level 1 reading list. The internet really is poor when it comes to finding good reliable information about trading. Too many snake oil salesman dominate the market. So I read the rest of the books for level 1 (of 3) and I started trading with just volume, trend and horizontal lines, and a 20EMA (something I learned from the guru.) The reading list is really great by the way, and I imagine the recognition of being a CMT is a great thing to put on a resume, though I haven't yet taken the test.

My equity curve was still bouncing around though! So, I went over to simulated mode to grab some real experience. Not the academic type. I gradually did better and better over the course of 3 months and now I can consistently make at least a point a day, on average, in the ES.

Then I discovered a trader by the name of Al Brooks who also just uses a 20EMA and a Elliot Wave on steroids.
His 20 years experience is brilliant. He should really be on the CMT list.
I've been using his style ever since.

I hope you find this journal helpful and if you have any questions please let me know. I'd be happy to answer them.

Happy trading!

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  #2 (permalink)
 
Big Mike's Avatar
 Big Mike 
Manta, Ecuador
Site Administrator
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Swing Trader
 
Experience: Advanced
Platform: Custom solution
Broker: IBKR
Trading: Stocks & Futures
Frequency: Every few days
Duration: Weeks
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Maletor,

Awesome job.

I never could get BetterVolume to work, the Ninja version just isn't any good whereas the TradeStation version is 'native'.

Today was a tough day on the ES, glad to see you pulled off positive PnL! Looking forward to more of these...

Edit: And you beat me at Tetris to boot!!!
Mike

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  #3 (permalink)
Maletor
Boston
 
Posts: 88 since Jun 2009
Thanks Given: 7
Thanks Received: 27


Thanks Mike.

In case there is any confusion in the chart I have my candles set up so if the HA trend is down the candles are outlined red and vice versa for uptrend.

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  #4 (permalink)
Maletor
Boston
 
Posts: 88 since Jun 2009
Thanks Given: 7
Thanks Received: 27

Here are my trades for today.

ES
+1
-6

ZN
-5

First one is a textbook "kicker" candlestick formation.
Two dojis and it's a rule of mine to bail out of the market. No need to sit in traffic if I don't have to.

In retrospect, they were really gravestone dojis so I could have stayed in, but no less I exited for a scratch.

Next one was an aggressive short. Same setup, but a little too far from the guppies.

The ZN trade was also risky. The higher time frame stochastic crossed the 80 and for the short time I've been watching the ZN the stochastic has huge significance. I was going to bail for another scratch but the market came down so fast I couldn't drag my stop up fast enough.

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  #5 (permalink)
Maletor
Boston
 
Posts: 88 since Jun 2009
Thanks Given: 7
Thanks Received: 27

Swimming up stream again here, but the hammer is a pretty reliable reversal signal, especially on volume constant charts.

The 50% retrace also signaled it was wise to get in.

I was fighting the trend of the day, but staying within the multi-day trend.

ZN
-12 ticks

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  #6 (permalink)
 
Big Mike's Avatar
 Big Mike 
Manta, Ecuador
Site Administrator
Developer
Swing Trader
 
Experience: Advanced
Platform: Custom solution
Broker: IBKR
Trading: Stocks & Futures
Frequency: Every few days
Duration: Weeks
Posts: 50,439 since Jun 2009
Thanks Given: 33,202
Thanks Received: 101,598

I didn't know what a pinbar was, so did a quick search and found the attachments. I will check them out (from forexfactory).



Mike

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Maletor's Daily Market Review-pin-bars-introduction.pdf   Maletor's Daily Market Review-pin-bars-advanced.pdf  
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  #7 (permalink)
Maletor
Boston
 
Posts: 88 since Jun 2009
Thanks Given: 7
Thanks Received: 27

Here's some recent EUR/USD price action.
I hate charts with too many lines, but this one is just too good to pass up.

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  #8 (permalink)
Maletor
Boston
 
Posts: 88 since Jun 2009
Thanks Given: 7
Thanks Received: 27

No trades today.
Back to the drawing board.

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  #9 (permalink)
Maletor
Boston
 
Posts: 88 since Jun 2009
Thanks Given: 7
Thanks Received: 27

Here's what I came up with over the weekend.

Sharky - you're range charts are fantastic. The 20/20 ZLag, is a beautiful thing, thank you for introducing them to me.

I just wanted to add my own little spice to it.

For a short time I traded 50% retracements on the the ES. It worked wonderfully well when it worked, but not so much when it didn't. I had to stop trading them, because my style was not about finding huge runners.

My style is getting 2-6 ticks and being right about 3 out of 4 times.

With 50% retracements I can be sure something fundamental has changed in the trend to make my trade invalid. And also I can pinpoint my entry with laser sharp accuracy. There is no price action/candlesticks that trades with to the tick accuracy as often as 50% does.

There is definitely a little bit of art involved because you have to define swings and then there are extensions. That beings said, I think a pretty successful trading plan can be drawn up from them combined with what Sharky has generously shown us.

One novelty about ambushes as I have come to understand them is that when you get a swing that works, hold onto that swing, it's more powerful/probable than any other swings. Those are your "boys" so to speak and they are seeing and shorting the exact same levels you are, which is in my opinion why when these things work out they have either to the tick accuracy or are completely blown out.

(Ambushes are not uncommon to floor traders at all, in fact, one common practice is to "run the stops" [on the ambush traders], creating a huge covering rally/ sell off and possible trend change.)

Here's a chart.
Yellow - 50%
Red - 61.8% (trend failure)
Blue - -23.6% (runner target)

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  #10 (permalink)
Maletor
Boston
 
Posts: 88 since Jun 2009
Thanks Given: 7
Thanks Received: 27


ES
+8

ZN
+8
+8
+8

Charts attached

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Last Updated on July 15, 2009


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