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Waiting for a new setup so I'm analysis my trades.
Here's my analysis.
First one was an honest mistake, I identified a swing pivot that really wasn't. The market hadn't been open long and it was really just a minor high but not really a pivot.
Second trade was a perfect setup. Too bad I don't have my 2nd contract yet cause it would have been hit.
Third trade was the euro. I exited too early. It dropped down after that and would have hit my target.
Here's the stats:
You can see that my mistakes cost me $361. This is why I put a lot of effort into determining my mistakes and correcting them. That's a big chunk of change and would have made this morning session very profitable. Without my mistakes I would have made $386 but instead I got $25.
At this point in my trading my mistakes are what's holding me back. As you can see in this example, the first one was an honest mistake. The 2nd mistake was really me not following my rules. I don't have any rule allowing me to exit a trade prematurely. It's either target or stop.
So a lesson learned and at least I got my $25 while learning the lesson. Hopefully I'll get another setup before the morning is over.
Focusing on my mistakes while trading and publically humiliating myself really makes me pay attention and motivates me to do better. Now I'm very happy and that takes a lot of pressure off for the rest of the morning.
I haven't been annotating these charts but it's all the same deal, look for a lot of sellers at the low of the bar and then a reversal. They'll get stopped out if it continues and that'll be good for at least 10-15 ticks. Keep in mind you can't do this any time, you have to do this with a setup on the big picture. Things like cycles, double top, 1-2-3, divergences (LL on less volume), etc. If you have questions let me know.
Overall I am happy when I make my average amount for a session, which is $200 so I'm good. Profit factor 1.75 is good too. I like to be above 2 but that's ok. But my mistakes! I really need to work on that. I could have had an outstanding day and made $628. I know that it's not possible to be perfect and not have any mistakes, but 2 of my 3 mistakes were avoidable simply by following my rules. I must trust my setup and stick to the plan.
If I continue cutting winners short I'm going to post pictures of myself naked. If You have any other ideas for punishment please let me know.
Fundamentals, expectancy of fundamentals, BIS/CB actions - I'm not really concerned from a pure speculative trading perspective. I do base my trades though in the direction of the current flow and momentum of the market, with the understanding that my profit expectancy is within reasonable limits.
I guess the question arises so that we can somehow define those turning points? In the cycle thread those points where defined by a combination of HVC and sinewave, with Websouth's wave method it was defined by the wave flipping. Big mike looks at CMA for trend direction. TRO defined it somewhat by how price reacted at previous price levels.
I personally have stopped trying to catch exact tops and bottoms on higher timeframes. I just was wrong too often. If previous swings have been in the region of 100 pips, i don't need to catch the exact top to get a reasonable R:R on a smaller timeframe. I rather wait to see price reacting as I would expect it to at turning points. To help, I might consult various oscillators to see if they are oversold etc and then once the price flow of the market changes, I enter based on a similar method on a smaller timeframe in the higher timeframe direction - it's the same basic concept as the Cycle method really, and not fundamentally different from the wave or CMA method.
I really like what you are doing with order flow. I don't like to jump around with methods too often but it is my future goal to start learning to trade using market/volume profile combined with order flow and trade from unacceptable prices from an auction perspective to acceptable levels and use order flow to help with entries.
Let's be more specific. The things you cited do not directly cause price to move. What causes price to continue lower in your downtrend?
Yes but we got to think outside of the box. So for the moment forget cycles, waves, and all that.
This was my goal too. So I really slowed down on my trading since January and I've been working towards this goal. My first step was to get a new trading method that would allow me to introduce market profile & order flow into my existing tools. I plan to slowly build upon it. First I have to, as Mike says, "prove the edge".
Well, without diverging into the various market models, I'm assuming you are looking at basic demand and supply dynamics. The reasons I cited will either cause the demand or supply curve to shift, and prices react accordingly to equalize the quantity demanded/supplied. Of course, its market participants who equalize those prices. My downtrend will continue until until prices have dropped to the level that for every quantity supplied, there is an equal demand. Im still not concerned as to what caused the shift in demand/supply at a given price, only that prices are rejected at that level and and that I trade in the direction of price movement on a timeframe that gives me the risk/reward that i require.
I would think that with your order flow, you are looking to track demand and supply dynamics and use this to help with identifying your turning points as well as exits. I would be interested to see how this works on a much higher timeframe where the possibility of competitive behaviour is increased.
Well put. Let's flip it to the long side and do an analogy:
You're at an art dealer at an art auction and you're bidding on a collection of really rare and expensive paintings. As people come in to buy price is going up. Paintings started at $1000 and some sold for $1500 and now they're selling for $2500. You call your partners and they tell you the paintings are only worth $1500. What do you do?
Now we're back to timeframes and the questions I asked in an earlier post.
