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This is a discussion on YM journal within the Trading Journals forums, part of the Reception category; A tiny Spider short before the open, covered at lower pivot / 50% retracement (not marked) at 1113. Long ES ...

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Old Mar 18, 2004, 10:12pm   #81
 
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The meek and the mild

frugi started this thread A tiny Spider short before the open, covered at lower pivot / 50% retracement (not marked) at 1113. Long ES same place. Sold these at top of down sloping channel for a couple. Osama spike hit my limit order to sell at upper pivot 1126: had a limit cover at 1125 which was hit in less than a second! Shame I hadn't bracketed 3 points there, but was nervous shorting the UP when it was ABOVE a double top at 1125, so not too gutted.

Sold the desc triangle false break with a few more Spiders, stopped out on the breakout up where I reversed to long, and - shock horror - managed to follow the uptrend to the now triple top and reversed to short at the 10 day EMA. Covered this at 8.45 as I don't like to trade in the last 15 mins.

All in all quite a good day, though I perhaps should have been a little more aggressive.

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Old Mar 25, 2004, 12:09am   #82
 
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Commentary soon!

frugi started this thread .
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Old Mar 25, 2004, 12:19am   #83
 
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frugi started this thread Cause I know u all depend on it, not

No, seriously, some interesting price action today that even I vaguely understood. Will add comments when my circumspection does not entirely derive from the reflection at the bottom of my wine glass, or something

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Old Mar 25, 2004, 1:58am   #84
 
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Stultifyingly obvious observations

frugi started this thread 1. ES has a personality.

I read somewhere that "every stock has its signature" and I'm beginning to understand what that means. General principles of price action may be universal through all markets, but the best way to trade one market is to watch it (for a good long time at that - I've got about another 32000 bars to go ), and learn its patterns, idiosyncrasies and character.

The market is a mass of people and certain types of people will always be drawn to ES - thus, partly at least, its nature is shaped?

2. ES is riddled with scared low cap traders who can't bear to use more than 0.5-2 pt stops. I am often one of them. Nowt wrong with a tiny stop if you're a full time multi lot titanium spherical'd scalper (or a big fish with a tiny mouth [thanks Voodoo]) but I mean the poor small fry who are desperate to ride a trend yet can't afford enough risk to get on its back: sadly they are taken out, time and time again, before the big opposite move.

3. Going out a timeframe or two is absolutely invaluable at a point of conflict. What looks like crucial support to the 1/5 min traders is 2 pts away from 60 min /daily more significant support. Did u say 2 points? Damn, I'm stopped out again!

This means there may be room to second guess in ES. The prettiest patterns often provide the shi**est outcomes...everyone's looking at blatant support, the big fellas drop a few hundred contracts on the poor scared minnows, the next tier feeders (sardines?) grab few on the way down with a wider stop and a point or two below the minnows surrender their longs to the big shorts and the sardines are now scared but strangely confident as the market starts to turn.

This doesn't mean that one should always buy below support; certainly not beyond a point or three. If there is nothing on the wider charts that says "Hey I might have one over the scared 1/5 min crowd (a retracement level or a trend line on the daily chart, for instance) then don't try to catch a falling knife.

Clear? No: Therein lies a hefty percentage of the difficulty of trading - you have to be quicker, more objective and braver than the crowd without it savaging you for your contrarian insolence, emotion to the fore.

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Old Mar 25, 2004, 10:17am   #85
 
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Good observations, Frugi. I too believe that each instrument has it's own personality. Learn that and it's another piece of the edge that one needs.
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Old Mar 25, 2004, 10:36pm   #86
 
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Nowt to see here I fear

frugi started this thread Scalp, scalp, scalp when I should have been long, out and doing summat else with a 0.3% trailer (preferably fabricated by Ifor Williams, er... ) to look after me interests. If there's 10 points to be had out of an all day trend you can be sure I won't grab them! Loss <$200 though so at least I'm satisfied with my money management, if peeved at my lack of opportunism and mettle. More upside tomorrow I reckon...a pullback to 1100 would be handy first.
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Old Nov 22, 2004, 1:50am   #87
 
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Once more into the breech

frugi started this thread Well, the months have passed and another opportunity presents itself to young, jaded Frugi to make a dunce of himself in front of a familiar audience.

I've reread the whole thread and realised, with some shock, that only now do some of the superb pieces of advice offered by the likes of BBB, sidinuk, Cman etc. make real, pragmatic, meaningful sense to me. Same goes for a lot of the stuff I've read. It is one thing to read something and say to oneself, "Yes, I must do that" in a vague theoretical way but quite another to actually incorporate it as a useful rule, as part of a system. I guess I'm slower than the rest!

So now I have more of a rigid plan that is neither mindlessly mechanical nor too loose and ill-defined to accurately follow. I've tried trading only strict mechanical criteria, such as the 7-9 breakout on the Euro, and found them to be unsatisfactory; as BBB put it 'your heart's not in it'. And I loathe the robotic inefficency. I've also tried pretending I am good enough to trade purely on gut feeling, observation and experience, and clearly wasn't. I had some sort of system but it wasn't tight enough. So I have compromised with a proper rule based selection of setups that suit my temperament, but these are rules that, crucially, still require a human to observe and make the final decisions.

I'm trading YM mini dow on a one minute chart and looking for a few setups.

First off, money management (tightened up):

Max loss per trade $180, i.e 1 contract 36 pts, 2 contracts 18 pts, 3 contracts 12 pts or 4 contracts 9 pts. These are maximums and losses in practice should be less.

Goal $150 per day, on average. (Yes, I'm scoffing too and will be happy to break even or suffer small losses for a few weeks. The idea is to avoid large ones!)

Setups:

Wait an hour or so to see if a trend develops. Trend = ADX (14,14) > 30 on the 5 min YM while (Naz, Dow, SPX) are all above/below their 20EMAs/ 5 min. This could happen at any time in the day (be especially wary after prolonged consolidation / range contraction). TICK bouncing off zero or thereabouts (i.e no +/- extremes) and sometimes printing >1000 may warn of impending trend (& confirm it later) before ADX rises above 30.

1. If trending look for Grail entries, i.e pullbacks to the 100 EMA / 1 min, with a target of the previous high or low (or 10 pts, whichever is greater). Stop must be no greater than the target and ideally <half. If trading >1 contract sell all but one at the target and move the stop to b/e on the remaining, letting it run till stopped, the close or 30 pts profit. ADX>30 tends to catch trends late so I'm not looking for huge targets, just safe, reliable trades.

2. If no trend look for modified "Chartman gamble entry" on a three peak bump top/bottom that forms over 25+ minutes and features a TICK and RSI* divergence with price. Ideally this will form at previous res/sup or another significant point on a larger timeframe. The bumps should be evenly spaced HHs/LLs but a little artistic licence is allowed, e.g. a low followed by a double bottom or a H&S/inv H&S would be allowed . The stop should be a little <15 pts. Lock in 5 pts at 20 pts profit with all contracts. Try to exit at pattern targets or obvious s/r. If trading more than 1 contract, take 10 pts profit on the first one(s) and let t'other run as per previous rules.

If a trend develops in an opposite direction to any open position then remain alert as it may need to be closed swiftly, ideally on a countertrend pullback to the 100 EMA.

3. If it is trending, especially if we are at a daily high/low near the close of trading, I may still enter on the above setup but with only one contract and a target of the 100 EMA.

4. Discretionary scalp. Very subjective. Tiny <10 pt stop. 10 pt target. At least 3 bits of TA confirmation, e.g a breakout res/sup switch test bouncing off 100 EMA and a century number with TICK bouncing off zero, a time pivot, a DT, DB, TL, 123, 53 pattern etc. Using tiny stops and high probability targets I can experiment with other setups cheaply. Some of them may become bread and butter!

I'll be taking it easy for a while trying to refine certain rules and familiarise myself with the setups. I am a little sheepish about allowing indicators back onto the screen, but am the sort of person that needs fixed definitions for at least some elements and divergence has oft been kind to me.

I may or may not post results and the above rules are subject to continual re-evaluation

*Welles Wilder 14

Last edited by frugi; Jan 12, 2005 at 1:00am. Reason: Setup 1 should be +/- 2 pts not 5
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Old Nov 22, 2004, 10:28am   #88
 
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Frugi - what testing have you done of your new system?

Thanks for the time and effort you put into this thread - it's very educational to follow someone's progress.
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Old Nov 22, 2004, 4:22pm   #89
 
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frugi started this thread Hi blackcab. Testing has consisted of

1. plagiarising other people's already proven systems, or bits of their systems, and
2. slightly adapting them after countless hours of observation and some live trades.

Testing has not finished - this is a process of evolution.

It's a relief to be able to trust my own eyes instead of a spreadsheet!

Cheers for the support :-)
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Old Nov 23, 2004, 12:19am   #90
 
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frugi started this thread No trades today except the opening scalp for -2. Tempting to take the triangle BO long but it isn't specified in the system so I didn't. I missed a dubious Grail long while out for tea, worth 10.

Dubious because the trend was explosive, not bothering to kiss the 100 EMA once during its precipitious ascent, as the safe Grailer would wish; when a buy signal eventually occured I would have bought into a down trend. The top was past. This was no pullback in an uptrend (compare its size to the others, look at the 1/5/10 mintrend lines)

Arguments in favour of taking it: the rules say so, ABC correction.

No regrets there, nor would there be if I'd thrown in a contract for 10.
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