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Of the 16 or so zones I was watching this week, across 8 instruments, 5 triggered. I took one entry.
New positions this week
M6B
Entry: Long 3 Lots @ 1.3405
Initial Stop: 1.3275
Initial Risk: .85 R
Current Risk: .85 R
I got into the pound ahead of NFP, and the reaction to the number corresponded with my technical view, moving higher. Unfortunately, the following day gave a big sell-off and this chart is now looking a lot less strong than it once did. This trade may be going bust this week, but the weekly chart will still look reasonably strong down into the low 1.30s, so I'll be keeping an eye on the pound long regardless of how this position ends.
Old Positions
None
Skipped / Missed this week
CL
I don't trade the futures contract, so getting a position in oil via the UCO and SCO ETFs can be tricky. The futures obviously move all night long and especially strongly from 6AM, with the ETFs only beginning trading at 6:30 (LA time). I ended up with limits in the market that just never got filled. I am still getting my sea legs here so understandably playing conservative. I didn't manage to grab an entry on the short side from 68, nor on the long side from 66. Both prices I was waiting for, and the market responded to them as expected. I'll keep an eye out for a dip this week that might represent a second chance to buy in.
GC
GC climbed its way back over 1260, where I was interested in a short position. Although it started to show some weakness, GC could climb a little higher before entering. Again, playing conservatively here but GC can be wild and I didn't have the right risk per ATR ... this could easily climb to 1275 and I'd rather enter at a little better price. So far the market is reacting to 1260 as expected though and may run off without me.
TLT
Twenty-year bonds ETF hit my zone of interest for a short. However, it has not shown significant weakness or reaction at this spot just yet. Will be keeping a close eye on this one in the coming week.
A few questions before I move to the remaining analysis. Am I looking for multi-week holds? Or am I interested in quick stabs over a couple days, with tighter stops and targets? Should I just leave orders waiting in the market at the prices I am interested in? Or should I use alerts and re-evaluate the reaction in those areas when they are hit? My intention is to keep a close eye on how the market responds to my levels of interest, and consider alternative strategies as needed. For now, I'm looking for larger moves and not using overnight resting entry orders.
I commented on my open position in M6B in the previous post. Here I'll discuss the other markets I am watching.
NQESYM
All three of these are in the same boat. I was looking for a bit of a dip to buy last week, but it didn't come. They're running off to all time highs and I'm not chasing. Will be looking for a 2% correction before looking for a long entry. Not looking short. No need to post a chart. Still, I will place some alerts below the current price and see if anything touches.
M6E
This daily is a rough looking chart. The market has spent a lot of time consolidating around 1900. I'm not inclined to try to swing the edges of this range, though I might be tempted to do so. I'm more interested to search for signs of which side of the range is likely to break next, and try to anticipate it. This is a tricky move to execute. The current action is weak, and pressure is hanging tough on the bottom side of the range. If we continue to see strong sellers stepping in around 1850, I could take a stab at a short position. Contrarily, if the market tries to break 1800 but quickly recovers, I may be tempted to the long side. But it appears to be leaning short to me right now. This dollar-bullish idea of course flies right in the face of my dollar-bearish position in 6B, so this idea is a sort of hedge as it's unlikely both of these can be right.
In the prior post I commented on my continued wait-and-watch approach on the long side in Oil, the short side in Gold, and the short side in 20yr notes. Here are weekly charts of each for context.
Perhaps all the questions were rhetorical, but its Sun even and I'm relaxing so as to above:
Generally you seem to be counter-trend trading (yes?). I don't follow the instruments above but generally some things tend to run and some things (instruments) not. e.g currencies once they get into a move can last a long time ( not talking pairs here.)
I would think setting alerts and then checking to see if a reversal is confirmed would be better. You would miss the exact high or low but if you take setups with a measured move you can get on board for a longer ride.
Doing a mid-week review here as I've been taking it easy during the holidays, not planning to get back in the full swing of things until the 2nd week of the new year.
@aquarian1 thank you for your comment. Rhetorical or not, I wouldn't be posting here if I didn't seek the feedback of the esteemed community for better or worse. Yes, your comment regarding my setups being counter-trend, or reversal focused, is basically accurate. Trend being a matter of time-frames, I guess my primary intent is really to trade with the trend, but by fading the lower time frame in favor of the higher time-frame. However I am not necessarily 100% married to that tactic.
The problem I am seeing with the set-an-alert-and-see-if-a-reversal-is-confirmed approach is that due to my own personal limits of time that I can jump in front of a screen or a phone and calculate the righteousness of an order, I am missing an inordinate amount of entries. I may just need more practice at it, or as you eluded to, not be so damn particular about getting my specific price... if it starts to run away, just hold my nose and buy or sell the market as long as my risk parameters allow for it.
I am going to start thinking about the "grade" of each of my trade ideas as they setup, and if there is something I consider very juicy that I want to be in, I may choose to be less selective in my entry criteria once the alert triggers, or allow myself to chase the trade a little bit if I happen to miss the perfect entry by a few hours. We'll see.
On to the recap. Here I review the active or closed trades since my last post.
New positions
MGC
Entry: Short 1 Lot @ 1265.30
Initial Stop: 1281
Initial Risk: .5 R
Result: Loss of .5R
Old Positions
M6B
Entry: Long 3 Lots @ 1.3405
Initial Stop: 1.3275
Initial Risk: .85 R
Current Risk: .85 R
In an upcoming post I will look at the other markets I track for additional opportunities.
I think what you are saying in point 2 is that you don't have the time to review for a reversal confirmation.
In point 1 you are saying you trade in line with the longer trend?
Looking at your chart MGC Daily, the trend on this chart was up at the time of your short entry you circled, and you indicate you expected price to reverse - this would be counter trend on the daily time frame of the chart.
In my way of looking at this, all areas of S/r are POTENTIAL turn points, that is price can push straight through the turn or not. Every setup has a signal bar proceeding the trigger.
As it is daily you have lots of time. You get an entire day to review and if your entry rule(s) is clear such as:
If price stalls at 1268 to 1270
AND
I get a day with a lower low and a lower high
THEN
I willl....
Or something along those lines.
(However, I certainly wouldn't recommend an entry which is "holding your nose" except on special formations. Though I don't see that in the attached chart.)
@aquarian1 thank you for taking the time to demonstrate that point. It makes sense, and I can't argue with the logic. I freely admit that I jumped the gun on that MGC entry. What I've been doing is zooming IN to the lower hourly timeframes looking for confirmation that the reversal is likely. That is what is occasionally duping me into early entries. Your advise to wait for confirmation of a change in the HH/HL or LH/LL pattern on the daily is well taken and certainly would have kept me out of this failed GC trade.
Again, this is a work in progress and I'm posting transparently here as I tool around and hopefully settle into a consistent method. I decided to review a few of my missed trades in more detail in search of improving my tactics for taking entries. Below I will quote some portions from my Dec. 10 post and reflect on what happened after.
Here's a current chart of what has transpired in CL since then, zooming into the H4:
A couple thoughts come to mind. After the alert is triggered, in this case if one lets a full daily bar complete, price has already moved about 100 ticks into the trade. But even so, there was still more meat on the trade.
Back to December 10:
And now the current daily chart:
Here's what I think I can say. 1: I like the idea of stopping myself into entries, rather than trying to limit in as I have been. Based off these examples, a bar-break stop-in entry style would have worked nicely. 2: In going down to the hourly chart when planning an entry after an alert triggers (often on my mobile), I may be going too low. The lowest I should go is the H4, and sometimes sticking with the daily would save me some grief.
Will ponder this some more and maybe try out the following guidelines. 1: Alert gets triggered. 2: Look at the chart and wait for a minimum of one 4-hour bar to develop. 3: Depending on structure, using the H4 or D1 timeframe, place a buy-stop entry on a break of the high (for a long) or a sell-stop entry on a break of the low (for a short). Don't use good-till-cancel for these entries. 4: If you don't get filled that day, re-evaluate and re-enter after the close if necessary.
Still long M6B a couple lots. That chart still looks healthy. Here's a look at the other markets I'm monitoring.
GC Weekly / Daily
Gold hasn't had a lower daily close since Dec 20. Approaching the difficult 1350 area. Not excited about the short side but will keep an open mind if price struggles closer to 1350. Possibility of a significant retrace lower is there. Long side is interesting after a pull back into 1305.
6E Weekly / Daily
Euro approaches long term highs, having (so far) successfully defended its breakout over 1.1900. The upside potential for a multi-month long hold here can't be ignored. I'll be watching for a pullback to the 1.20 area. On the daily we see struggling to maintain over 1.2100 at the moment.
CL Weekly / Daily
CL is another story of long term highs. We might expect price to come back and test the 58 - 60 area to see if this breakout has muster. I'll be waiting for that to try and hop on long. We can see the over-extension on the weekly into 62 even but that doesn't mean it has to pullback here. I'm weary of the shortside given the strong buying that has continued into January, but I'll watch for weakness in the 62.50 area as a possible opportunity.
20r Notes (TLT) Weekly / Daily
Although TLT was unable to sustain buying in December over 128, it has so far held onto its range. Not super enthused about the sloppy range here, but I'll be watching the way price behaves around 125-124.50 to see about a buy for another trip up to 129. Not the greatest looking chart though and I can easily see this dropping down to 122 so will try to take my time and let the PA prove itself.
Equities (YM / ES / NQ) - Showing ES here Weekly / Daily Here:
I was out on vacation the past couple weeks but that's no excuse for missing the year-opening long move. NQ gave a nice pullback at the end of 2017 and was ripe for a buy on Jan 2. The other indexes followed along. I missed it, no big deal, but it's just a good reminder of something I really want to remember this year:
The US equities bull run is still innocent until proven guilty.
In other words, there's no reason not to expect ES 3000s this year at some point. Keep looking for pullbacks and breakouts and buy. Will there be shakedowns and breakdowns? sure. But until further notice this market continues to outperform expectations by a long shot. If I have to I'll take losses on ES longs at 2710, at 2670, at 2620, and not feel bad about it, because that's where the trade is for now. The challenge is to measure caution against opportunity. Find more creative ways to get long if pullbacks don't materialize. And if the shit hits the fan, to manage risk, and recognize that a pullback may not be a pullback anymore.
Great looking charts Flying Monkey. I agree with you in that we will have an ebb and flow of the YM and ES. I don't expect any falling knife to occur in these instruments. Rather I see these instruments stair stepping higher possibly to 3000 if not higher, JP.
