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Thanks to Mickey for keeping me on the first page!
Today I wasnt at my monitor for the opening, as i had to take my daughter to school.
As it was, i missed the double bottom at the opening, and it is a setup I have traded in the past, so I likely would have taken it. It didnt quite make yeaserdays low, but it looked like a good signal in hindsight. Of course, all the signals in hindsight are easy to pick out, a child could do it, in hindsight.
First trade hit my stop by +2 ticks. This was example of a very good trade that just didnt work out.
I got a chance at a second entry long, which i took, and I got 42 ticks out of it.
Trade 3 was a failed short at BE on thin volume. I thought we were at the top of the Range, therefore i thought a short was a HPT. It broke support, but didnt hold, so I closed it out manually. Was the right move there.
Given that volume seemed to be winding down, and that I wasnt sure if beyond 108 was a reasonable target, I went long on the 2 leg PB to the TL. I was going to be aggressive with my stop at the first sign of trouble, and then again on my last trade. +8 and +13 respectively.
One good move, but as i look at the 5 minute now, looks like a double top at 108.07 would have been an excellent 2nd entry short at 107.97.
but i was finished after trade 5...too late in the day, everyone is heading home for an early weekend.
Seems to be working well. Gonna keep doing what i have been doing. I have afew refinements in mind, but only to enhance my current parameters.
I use Price Action for trading, but I encorporate Market Profile to give me context on the market for the RTH. I believe that Price Action identifies the opportunities, and market profile identifies areas of support and resistance, as well as providing an aid to planning a strategy.
If a market is balanced, there is no change in price. Its flat, or stagnent, or stuck in a range... market profile seems like it can help to identify levels of imbalance. The migration of price from one balanced area to another balanced area, either higher or lower is how we make money.
Where i have been helped is in one key area. It has helped me to identify in myself, a long bias.
A few weeks ago, I was aware that I had a tendency to go long on trades more than short thoughout the trading session. I wanted to find out why. And did this have an impact on profitability.
On the whole, I had more long trades but, overall, they were not as profitable on average as my short trades. Is it because of the market? Are we in a bull trend? Is it because I am new to trading, and therefore have limited experince with the derivatives markets in general? Is it because of my wealth management background? That I often counsel clients to buy and hold core accounts?(i could get enough money for a small hedgefund together, but thats an entirely different topic)
Market profile has helped to remove that bias, so now I better trade what the market gives me, not what i think it should give me.
Quick question, are you considering dropping the ema from your charts? I've been looking at a naked one and one with the ema. I'm not convinced its necessary. I like it from the standpoint that I know almost everyone else that day trades has a 5m with a 20EMA on it....so from that perspective its good to see what others might be thinking but from a strict trading standpoint, is it needed?
Your thoughts???????????
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
I have thought the same thing. Is it necessary? Truthfully on the matter, not really... If eveyone else is using it, whats the harm? use it mostly for a visual reference, but I could likely do without it.
The same is true for drawing and redrawing trend lines, and lines of Support/resistance. Usful as a visual reference, but not strickly necessary, at least to my way of thinking. I guess the best explanation is that how can an indicator, of historical prices, be a predictor of future prices? Simply it cannot. But the the same can be said of any indicator. Thats why on all Mutual Funds prospectuses is the disclaimer "Past performance is not an indication of future results" This time it could be different.
Trading is more about psychology. not only your own, but that of the other market participants. Where do they see support and resistance? can I figure out what the crowd is doing or going to do, and do the oppoosite? At least more times right than wrong, or at least enough right, that I can get a good profit to make up for the times I am going to be wrong. And I am going to be wrong. Thats the art behind the science, and the reason I am a discrestionary trader. That, and the fact my programming skils are pathetic.
I think, as we have chatted about briefly, Market Profiling has some benefit for me in that it has helped me put the market into an understandable context for me. At least today it did, and these last few weeks as I have become more familiar with it. I am bulding my own charts for that pupose, but, my bread and butter is the 5 minute, 20 EMA. Really, its been the only chart I have used for months, and I see no reason to change. I llok at a 30 minute to see previous histoirical prices, just to see where price has been, and perhaps could go again.
I know this is a long winded answer, but you touched on something that have have given more than a little thought to.
Always begin a new week full of optimism. What is going to happen this week?
I was at the airport yesterday. A friend of mine is coompleting the finishing touches on his airplane that he has had rebuilt, and is preparing for a check ride. Its a 1961 Mooney, but it has been gone through prop to tail. new or rebuilt everything. Very cool, but awfully small cockpit. It has 210 HP, and crusies at around 175 miles and hour. He will get his airworthyness certificate this week. I always wanted to get my pilots liscence, and I still may, if I can convince my wife. She hates flying. Maybe he will sell me a half share of his plane. Its an excellent cross country plane...maybe after a few hundred more positive trading days
A profitable trader needs to be confident. Confident that the trades will be there, that the setups will be clear, and that he will continue to be profitable. Confident that he has an edge, that will allow him to earn a living. Otherwize, what would be the point? Why would anyone want to sit staring at monitor unless it wasnt means to an end? Simply, a trader has to have a plan. A trading plan, a money management plan, a life plan.
I did ok today. Really only 2 bg moves for me on the CL.
6 trades today. 1st was a BE, then I was expecting a move higher, but I was a little early so I got stopped out. I hate when that in the first hour...stopped out I mean. 2nd trade -16
I saw the strength of the bulls come in, but I wasnt completely convinced. Neither were they, cause it was working its way down, slowly. Aggressive on my stop, as i took profits when it apeared the bulls ran out of gas. +11+6
2 legs down, took trade at 10:07:41. 2 legs down and 2nd entry long. +11
9:48:55 I went long, off of what I saw was support, and after I saw the retest of 105.58. Held the trade till 11:22:22. Almost an hour. That was it for the session, as I had an appointment shortly after noon, and I had no more time for another trade.
This was my best trade, as I felt I exersized patience
Not trading premarket, as the volume is not there, and the RTH provides better signals.
I have the 05-12 contract up, as I wan to watch teh volume. The 05-12 contract dropped 100 ticks right near teh opening. My take on this, after the 04-12 followed, is that heavy selling took place to secure a lower price for long. Missed that entry, as it was unexpected.
5 trades today.
-15+6-15+36+20= +32
Last trade was looking to test 107, in fact I had my target set there.
But, I got taken out on the pullback, but it did work its way to that price, eventually.
Thats the life of a part time trader. I have to go to work for 12:30, and I had to tighten my stop.Would have much rather hung around till 2:30.
i was getting ready to go, and was hurrying to type my journal entry here on futures.io (formerly BMT), and I glace over at my trading computer to see the CL is continuing to climb, and that it went higher after I got stopped on the pull back,
The setuyp, which i didnt take, went higher, so maybe this is going to run to 108.50, and make a run at the highs of last week.
Anyway, after a pullback, at neat the HOD, i see and opportunity for a 2nd entry long. Now, its a distance aaway from the EMA, but it seems to have momentum. I get in with a view that I will bail fast if it stalls. I do, and it does, so I only get 9 ticks. But thats fine with me.
Overall, its a tough trading day. Its a week of changes, news today, contract rollover and so on. Meh...not sure ho this affects, I guess I am just too green to really pay much attention to it. I nkow it has an effect, but I guess its better to stay away, like many talk about. But, somebody is trading, beacuse the contracts dont go to 0, so not every trader is following that line of reasoning.
I am spending most of my time working on the emotional side of trading, and not the the technical side. Michael Martin wrote in his book The Inner Voice Of Trading, that each of us, from the time we went to school, have been rewarded for accuracy, for getting things right. We become accustomed to the accuracy model of learning and reward.
Most people are drawn to the how to aspects of trading, versus the innner aspects of emotions and phsychology, which constitute, in Martins words, for 60% to 80% of trading success. If we are unable to take a loss, surrender to the loss, adn e=recognise that losses are in fact a part of trading, we can never be a successful trader. Never... the reason, of course, is that no one can be 100% right, on every single trade.
He uses this illustration. Suppose you were given the choice of 2 exams, and its possible to get more than 100% on the exam. What would you choose?
Exam 1 is 50 true/false questions worth 2 points each, Exam 2 is 4 essay questions worth 30 points each. Would you go for easy 2 pointers where you would get 40 correct, or for 75% accuracy of the essay questions?
Martins students cannot chose 1, they must chose 2. That is the high expected value choice, and in trading, one must make high expected value choices. Outlier events occur daily, that even the best traders miss. Most of the time you will be wrong in your choices. But you cant live with regret. You can still miss out yet be wildly successful.
Martin states this.
1. Trading profiatbly is about mathematical expectation.
2. Knowng yourself is more important than what you know.
The best way to learn how to lower your score in golf, is to practice from the hole backwards. 50% of your strokes are attributed to putting. 2 putts per hole. Spend 50% of your time putting. In fact, spend 80% of your practice on shots from 100 yards in. The other 20% on shots greater than 100 yards, including driving the ball. Its simple mathematics. Focus on the highest value endeavors. Vitually anyone can putt. Its the easiest shot, and the easiest to improve. Next come short shots. Spend you time on the high value activities.
But most new golfers do what? Buy a bucket and try to pound it as far as they can. But hitting the golfball far has very little to do with playing the game of golf well. Its only really 20% of the game. If anyone wants to learn how to break 90 in 30 days or less, send me a PM, i will send you an outline of how to do it, that is 95% successfull, if you do it, or, if you want to do it.
So, how did I do today?
7 trades today.
+1BE-15-13+18+5+6+20=+22
The first 3 trades were really about the fact that I expected support at 106. After 4 trades, I was down 9 ticks.
Passed/missed on the trade after the big HOD candle on the 5 minute. I didnt like the doji on the PB. I was also influenced by the fact that the 2 SL earlier in the session influenced my decision to some degree. Anyway, for my rules, it was still a hard trade to take as it was a hard trade to see.
Looked at 105.80 to 105.70 as support, but was on thin volume, so i was trying to massage a good entry at that level after the report.
Trade 3 was a winner for 20 ticks. Trend was down, and I got a good entry.
Nexzt few trades were a grind. Got taken out on the pullbacks, for small winners and BE. But i'll take them. Bull markets often climb a wall of worry.
Then came the 35000 contract dump at 11:30. Who is that? The Chinese, The Arabs, Exxon? Biggest candle I ever saw, real time. I had a trade working long, and of course, I got BE on that.
Sat on my hands for almost an hour, trying to figure out what I just witnessed.
3 more trades after that, when the market seemd to return to rationality. The tails on the next support area was more managable for me. Only 15 ticks tails, not 50.
Last trade was my best trade, 2 legs back to the TL, buying support.
11 trades
-15-15+20+7+11+1BE+13+1BE+8+11+25=+67
Picture of my last trade. Only one I had time for, as I really had to manage every trade very closely.
