JillyB's Blog

[JillyB]

I'm Back!

Hi Everyone,

Just to let you know that I haven't dropped off the face of the earth. After leaving work at the beginning of September last year and going away on holiday, I took some time off before I commenced my new business in November 2005.

I can honestly say that it was quite strange in a way. Like most of you, probably, I've been working since I was 16 (I got my qualifications on a part-time and evening basis at University). So I've never been in that situation where I could really have more than two weeks away from work - not since I was at school and we had the long six weeks holiday in the summer. It was quite a strange feeling knowing that Monday didn't hearald the onset of work/problems that had been waiting for me to get back and deal with them.

The business did take up a lot of my time for the next couple of months - but never entirely took me away from trading. My previous strategy that I was working on in my journal is still around, in a way, but only on a 1 hour candle piercing the outer bollinger settings.

I now also trade overnight, when the 18.00 candle on the Dow has been a strong bear/bull candle - 80 points or more - I look to trade this at midnight for a bounce/retrace and take the trade off at 9.00am the following morning. Since I've been doing this - October 2005 - I've only had one losing trade and 17 winning trades. Admittedly they are few and far between - sometimes you can go 2 weeks without a trade occuring, but when the do - and like CMC you have access to the markets overnight - it's a nice little earner!

The main trading system I've been working on and one that I now feel extremely comfortable with, is based on the trading range of the previous day, coupled with yesterdays close and todays open. I have worked on a method that I have been able to write down and even put into a computer programme, which makes it easier to analyse at the time the market opens. I felt that the action of making it into a computer programme would test the theory, if you like, it didn't leave room for emotion or gut feeling. I would literally put in the numbers and the programme would then tell me which trading pattern was the likely outcome.

Great - or so I thought. And I admit there is nothing wrong with the programme (much). It was arrived at with a lot of back-testing and is being fine-tuned with more detailed entry points in real-time trading and it currently has a 90%+ success rate. The problem is with the operator. ME!

I've got entering the trade down to a fine art. If it says - wait until the index is at 11,140 (as it did today) for a SELL back down to the low of the previous day. I entered perfectly ( and in this instance got out fine too - but that is a rareity). After this is says enter at 11,128 (4 points below the low - according to CMC) for a BUY trade up to 11,181. I got in fine, but then chickened out for 10 points.

My excuse today are the rougue spikes on the dow charts from CMC, but it's not just today. It happened yesterday and the day before that as well. Every time the system tells me the exit point (which is subsequently hit) I chicken out too early for less profits than I should have taken.

My trading journal notebook that sits at the side of my computer has COWARD! in big red letters, as well as TRUST THE TRADE! written across it. So why can't I? It's psycological, I realise that, but with 39 points left on the table today and 68 yesterday, I really need to get to grips with this.

I have my stops placed now and I have it rigidly fixed in my brain that it is better to accept a small loss than be out of the trading game for good, but why can't I get into my head that I also need to let the profits run. That when I am sat on top of computer watching the priced flicker up and down, it is going to have small retraces and bounces (todays spikes were an exception) that I have to let these happen in order for the price to get up to my target.

I'm hoping that the act of writing this down in my T2W journal will clarify this point in my head and encourage me to stick with my trade tomorrow and let the profits roll in.

Good night and good trading.
Jilly

 

[JillyB]

An Example

Just thought I would add this to give you an idea of what I'm talking about.

At the moment CMC have the Dow at 11,211 - if it is at this level or between 11,203 and 11,218 tomorrow at the open - then the trade will be this.

BUY at 11,207 to go up to 11,224 by 2.40-2.50pm.
Look for a reversal signal on a 2 or 3 min chart above 11,224 for a SELL trade back down to the close at 11,197 (this can possibly go down further by up to 40 points). Again look for a reversal signal on a 2 or 3 min chart for BUY trade back up to the open at 11,211. This final reversal can be after the lunchtime consolidation, between 6-7pm UK time.

All figures for the DOW are taken from CMC.

11.30 4th April
Just to update the above. CMC now has the Dow at 11,201 - after some exceedingly strange candles between 10.20-10.45am.

As the open would be near to yesterdays close, this would alter the above trade to:-

BUY at 11,197 to go up to 11,224.
Look for a reversal signal on a 2 or 3 min chart above 11,224 for a SELL trade back down to the close at 11,197

Similar but not the fall on the reversal that the previous outcome had. The variations are why I won't know for definite until the market opens what is going to happen.

 

[JillyB]

I did it!

Yes I did it! I stuck with my trading plan and didn't bail out for small profits.

The Dow opened today at 10,200/04 (CMC figures). This meant that the revision I added to the earlier journal entry was the correct Trading Plan for today.

In other words -
BUY at 11,196 to go up to the previous high at 11,224
SELL at 11,228 to go down to the open at 11,200

The first trade wasn't triggered - the index only dropped 2 points - not the required 4 and I suppose I could have jumped in and traded it, but I didn't.

The second part of the trade went perfectly. I traded at 11,228/32 for a SELL. Although it lingered at this high level for a while - those bulls just weren't giving up - it finally started to descend. Now this is the part where I usually chicken out with a small profit. But today I had been preparing myself to stick with it. My Limit orders were placed and there was no way on God's earth that I was going to touch them.

Ok, so I admit there were moments when I practically had to wrap myself in an imaginary straight-jacket to stop myself reaching for the BUY button. But I managed to restrain myself.

Then as I watched it drop to my exit point and the trade cut out, I will admit to feeling really pleased with myself. I had finally managed to banish one of my trading demons. I hope that it is never going to return, as I have now proved to myself that I have the ability to stick with the Trading Plan and let the profits run to the pre-determined get out point.

Probably like many traders, I keep a trading journal at the side of my computer as I trade. I record, not only the entry points of each trade and the exit points, but also what went right and what I did wrong. I have a system of colour coded felt tipped pens for this. Green is for the good points - where I got it right. Blue is for notes - things I need to be aware of, or watch out for next time. Red is for the mistakes I made with the trade.

I find the colour coding makes it easier for me to see at a glance what went wrong, where and why. I know the red pen thing is a bit like being back at school, but for me it works. I can quite clearly see from the journal that my over-riding fault, is that I have a tendency to cut trades short and lose out on the available profits. These are the times when I end up kicking myself and wishing for 'Groundhog Day' where we could have a re-run of todays trading and I could get it right. Fortunately there is always tomorrow.

Today has no red pen, just green, which is gratifying!
I think I shall leave it there and go and make myself a well deserved cup of tea.

Bye Everyone

 

[JillyB]

Not a Good Day!

So what is the old saying - Pride comes before a fall!

I admit I was really pleased with myself yesterday - and I think I let it get to me today.

Todays trades were
BUY at 11,218/22 up to the previous close at 11,232/36, this may POSSIBLY go on to the previous high at 11,249/53.
Then look for a reversal signal for a SELL back down to the low at 11,160/64.
(All figures are taken from CMC charts)

I have put the word POSSIBLY in capitals as someone - not a million miles away - chose to ignore a doji on the 5 min chart at 14.45 just after the price had hit 11,232/36, and didn't she pay the price!

Neither did I get out at my stop - cardinal sin here too! I rode it all the way down and most of the way back up again, deciding to get out for a smaller loss at 10,201/05. Less than 10 minutes later I see it continue up to my break-even point and at the moment it is at 11,234/38.

Fiddle-sticks!!! (If I put what i really wanted to say I think the 'Powers that Be' would edit this entry!)

So, more importantly, what have I learnt:

That the trading plan wasn't wrong (I can't enter this as a failure from the plans point of view - just that I thought I was better than it was.)

I ignored the warning signs - doji on a 5 min chart.

I ignored my stop.

I got out too quickly on the way back up - was there a red candle in the bull movment? Not one, yet still I chickened out.

Still I keep telling myself that I am still up on the week and that this is still part of the learning process. It's just that yesterday, I thought it was all starting to come together - there was light at the end of a dark tunnel - only today some has gone and snuffed out the match.

As they say 'Tomorrow is another day.'

 

[JillyB]

Beware - Trade 58!

Trade 58 - this is what I have named it - and I am beginning to dread those days when it pops up on my trading plan.

'Beware the mysterious Trade 58'

It's the most unreliable, unfathomable trade I have and it will never follow a set plan. Unfortunately its also one of the most common.

The only thing I can say is that the first trade is usually (88%) of the time a BUY trade - occassionally though this does go wrong too!

So today would have been BUY at 11,228/32 up to the high of the mornings trading with a get out between 2.45 -2.50pm.

So far so good!

Now this is where it all goes awry.

Trade 58 from 3pm can do one of two things. It can continue the BUY trade until about 5pm going above the previous high.
Or
It can reverse and do a SELL trade down to the previous low at 11,161/65 - as it did today.

The thing is that as yet I haven't found a signal that indicates which one it's going to do and believe me I've tried just about everything I know. I guess it's just destined to remain a mystery.

I admit to not trading it today. Yesterdays loss was still weighing on my mind and that is not good when you're trading. Together with the dreaded Trade 58, I felt the odds were not exactly in my favour, so I'm having a long weekend.

Very busy and nerve wracking one too. I'm dancing tomorrow in front of 400 people and I can tell you I will be having some Dutch Courage before I go on.

It's a local charity event. Eight Guernsey dancers - of which I'm one - have taken eight local celebrities and taught them one ballroom and one latin dance in 12 weeks. Tomorrow is the big showdance complete with professional judges and the audience vote. And I'm scared!!!!!

I'll let you know how it goes.

Jilly

 

[hungvir]

It's an excellent read, Jilly. Keep it up. Look forward to hearing from you about the dance.

Best,

Hung

 

[JillyB]

3rd Place!

Didn't do too bad with the dancing at the weekend. My partner, local newspaper reporter - Nigel, and I came in joint 3rd place. So I'm really chuffed.

For anyone that dances - if I say that Nigel was the top placed male celebrity - you will know that this makes it more important. (For those that don't dance - female celebrities have it easier as their male professional partners can lead them around the floor. It's harder for the male celebrities to do this as they are still learning.)

Anyway todays trades - a piddling 4 points off the Dow.
It's that Trade 58 again!!!
Need I say more.

Entry point at 11,136/40 for a BUY trade and I scalped 4 points off this. The maximum I could have achieved was 12 points at 3.15pm. So not too bad.

As I said in my previous journal entry this is one trade that defies all logic. Except today I did think I'd found something that would give a definite type of signal for when it is going to be a BUY trade and hold until 5pm.

The theory is that when there has been a significant drop the day before and the close is less than 20 points from the low, then if it is a Trade 58 the following day it always ends up being a BUY trade.

I only have info on back-testing this from the 24th October 2005 to date and for all 19 times Trade 58 has occurred, this scenario happened 7 times and was successful each time. I still don't think there's enough data here to make a definite statement, but it is something I will keep my eye on.

Out of interest Fridays low was 11,103 and the close 11,119 - which was a 16 point difference and should indicate a BUY and hold trade. We shall see.

(All trading figures are taken from CMC)

 

[JillyB]

Old Habits!

They say 'old habits die hard' and they weren't kidding!

Same old problem today. Entry point - not too bad, a little hesitation but fairly respectable. Won't give myself a black mark for it.

However the exit point - I managed to do my usual cowardly exit and leave ££'s on the table. I even had my limit order set at the trading plan get out point of 11,135/39 - which would have given me 33 points, but no I chose to wimp it and only take 11 points.

To start with I will outline todays trades.

BUY trade at 11,164/68 up to high at 11,183/87 (Entry point not hit - so no trade).

SELL trade at 11,183/87 to go down to previous close at 11,135/39

Below is the chart I was trading - it's a 1 minute chart which I use at the open of the Dow (well a minute is a long time when you're trading and the Dow can be very spikey to start with.)

As you can see the initial BUY trade was a no-show as the entry point wasn't hit. Then suddenly at 14.32pm it spiked through the previous high. After that it caught it's breath and pushed upward again - was it going to have another go at the high? No, it didn't quite make it, and after realising this I took a trade below the previous high - but knowing that there were enough points between the high and close to make it worthwhile.

So what went wrong? I have a tendency to 'sit' on a trade and watch it's every move and today was no exception. I think I would be better going to watch some TV and leaving it to it, then I wouldn't have to endure the pull-backs and wondering if I should have taken the profit when I had a chance.

I really do struggle with this. I have a Trading Plan that works and suits me really well. I have good entry points, and I do make points, just not enough of them as I always get out too early.

Now at 4.30pm I'm finished for the day. I've traded both the trades that my plan gave me for today and I'm now left wishing I could replay it and stick with my trading plan to take those extra points.

Hindsight is a wonderful thing!

 

[frugi]

Hi JillyB,

May I ask how you included an image in your journal as I didn't think this was possible? Thanks.

Frugi

 

[JillyB]

Reconsider Entry Points

Well, it's that Trade 58 again.

All I know today is that it is a BUY at the open until 2.45 -2.50pm.

The open was at 11,106/10 and my entry point was 11,103 (3 points below), except that it wasn't hit.

I'm noticing of late that I'm missing trades because my entry point hasn't been hit. I'm wondering if I should reconsider this entry point to be 'at the open' instead.

It's just that sometimes it can bounce around a bit in the opening 5 minutes and to catch an additional 3 or 4 points at this time can be quite advantageous - taking care of the spread - or thereabouts.

But is it worth it?

I can see that I'm missing out on potentially good trades because I'm waiting for this entry level to be hit. Before I know it the index has stormed away upwards (as today) and I'm left with no points and kicking myself for not taking the trade.

Especially today as it's the dreaded Trade 58 and the BUY trade at the start is the only trade I can be certain of with this.

There was an achievable 20 points + spread for the offing today and I just sat there and watched it! Fiddlesticks!!

 

[JillyB]

Nervous Exits - Again

Today the Dow was dogged by low volume ahead of the holiday weekend and this made me nervous.

Todays trade was - Trade 24

At the open (yes I changed this to make sure I didn't miss anymore trades) BUY to go up to the close at 11,125/29.

Then a SELL trade back down to the open at 11,116.

This time I was in at 11,115 - I wasn't going to miss this trade today. But the index was in an uncertain mood and it dawdled around not knowing which way to go, so instead of taking 6 points - 1 bagged a reluctant 2. (Still it's a profit).

After dropping right back again (at which time I was thankful I had taken my profit - small though it be) it then shot through the target figure of 11,125.

These bull candles make me wary, as they usually hearald more upward movement before the reversal takes place. On other trades I have the caviat that if the candle is inordinately bullish/or bearish, the look for an entry point 35-40 points above/below the initial target (in this case 11,125).

I snatched a scalp trade of another 2 points on the first retrace and then watched it climb again. The target entry price of 11,165 was hit - and what happens? My mother phones.

Good old mum!

An hour later - yes, she can talk! The index has topped at 11,179 and already has started to fall back below my entry point. It has confirmed my caviat of the reversal entry point 35-40 points above the target for bullish moves. Now it stands at 11,118 - which by anyones standing would have been an excellent profit.

These are times though, when I do need to look at the overall target entry and exit points. At 5.30 we were still around 11,139, which would have left a nice few points for the taking before it reached the exit point of 11,116.

Still 4 points is 4 points and I've learnt something today - which, by my reckoning, is worth a heck of lot more than 4 points. The notes have been written and Trade 24 has had an additional line added to give the caviat of bull candles - as a few other trades have.

Trade 24, by the way, is a bit of an oddity, as it can also be the trade of a major bear move - with a sell off happening all day. How do you tell? Because the pre market movement - since 8am has been in a steady downtrend. Today didn't have that steady trend, therefore the trade became one in which there was an initial upward movement before a later sell off.

 

[JillyB]

So what does today hold in store?

What are my thoughts on todays price action on the Dow? Whatever it is, it will probably be on lower volume due to the holiday.

At the moment the Dow stands at 11,139/43 on CMC.
If it remains at (or just slightly above or below this) then the todays trades would be as follows.

BUY at (or just below) the open to go up to around 11,179/83. This should happen prior to 3pm.
Following this look for a SELL trade to go back down to around 11,130/34.

I thought if I posted this now - prior to the open - then you can see the system at work. It's not as if I'm always posting after the event and saying 'Wow look at what I've just done!'

The only thing that may change is where the Dow opens at today - but if it is around 11,139 ish or above, then the trade should hold.

I'll post later to let you know how it's going.

 

[JillyB]

A Lower Open

So, todays open was at 11,126/30, 13 points lower than it was earlier in the morning when I did the previous journal entry. This changed the rules and the trade.

The reasons for this are: that at 11,126 the open was below last Thursdays close (where as 11,139 was above it). It was also near the close (close was at 11,130). So that meant todays trades were.

Trade 6
SELL at the open or just above to go down to the previous low at 11,099.
Then look for a reversal and
BUY back up to the open at 11,126

In fact the Dow opened and went up. I went for a sell trade at 11,134, but was requoted and decided not to take it. I figured someone was trying to tell me something - don't ask me why - call it womens intuition. Anyway I was glad that I didn't take it, as the index proceeded up to a high of 11,156 - 30 points above the open.

It was only from this lofty height that it started to fall back again. (By this time I had given up and was sat outside enjoying the sunshine - well there has been precious little of it this Bank Holiday!). The index continued to go down and is now at 11,092 which has hit the trade exit point of 11,099.

If I'd entered this trade it would have been somewhat of a roller coaster ride and - as you will see from earlier posts - I'm not too good at roller-coasters. I really would have had the urge to take profits as soon as they came through. However I cannot enter it as a failed trade against my system in my trading diary. It has reversed and hit the exit point given. Plus it would have made (taking it from the open, not my own entry point) 23 points after the spread, which wouldn't be a bad days trading.

Trade 6 says to look for a reversal BUY trade back up to the open at 11,126. This may happen at the start of the afternoon session. However as we are going out tonight, I'm not going to be able to follow it. I will check back tomorrow and report on what has happened.

 

[JillyB]

Steep Fall, Small Reversal

Well the Dow fell more than I expected - another 60 points more. But the reversal signal did show on the charts just after 7pm. There was a strong bullish engulfing candle on the 5min chart - but for more clarity the 7pm candle on a 30 min chart was a doji - heralding change.

The bounce wasn't as high as the trade said, but it would still have made around 30 points if you'd left it on until the close of business.

So I think 7/10 for the trading system on this one. It got the fall correct and the reversal, but just not the range. Still by trading the method there would have been just over +50 point profit - so would that still be classed as a failure?

 

[JillyB]

The Theory that didn't Work

In past journal entries I've discussed the entry point for my trades on the Dow. Initially (if it was for a BUY trade at the open) I would wait until the Index had dropped 3-4 points and then get in, thus maximising a bit more of the profit.

However I found that by waiting for this entry point, instead of entering the trade at the open, I was missing quite a few trades. It seemed that 50% of the time the Index would not afford these better entry points and I was left with no trade and no points.

So the theory was revised to always trade at the open.

Then on Monday - which was a SELL trade at the open - the Index decided to go up by a massive 30 points + before falling away again. Here a better entry point would have been easy to achieve. So what made this happen, I began to wonder? Was it that, just before the open the Index was already in that uptrend and it had merely continued it? It seemed a distinct possibility.

The theory was that if the Index was showing a trend on the 14.20 & 14.25 candles (as for Monday these were green candles - in an uptrend) that this would likely continue into the open.

The theory seemed fair enough.

Except that today it didn't happen. The 14.20 & 14.25 candles were red (bearish) candles, but there the trend halted. At 14.30 it went up, and the open of today has turned out to be the low of today. So another theory hits the dust.

It seems it safer to trade at the open and take the hit of it going the wrong way. It does, and did (on Monday) reverse and still hit the target that the trading plan gave me of 11,099. So who am I to argue. It's fairly safe profits - a bit hairy getting there, but then nothings perfect is it?

So to todays trade. It's that Trade 58 again.

BUY at the open and hold until 2.45pm - 3pm. From there it can either reverse or continue going up (as it did today). I have no concrete signal to tell me, as yet, which one of these it is going to do. It's only if the close is near the low of the previous day, that I can tell it will go up all day - other than that, it's trade until 3pm and then bail out.

Today would have missed a great deal of profit, but then that's life. My system isn't perfect, it just aims to take safe profits out of the market for those (unlike me) who are patient enough to let it do its work.

As for tomorrow? My partner asks me this question sometimes in a morning - So what do you think the market will do today?
To which I reply - Well, it'll go up a bit and down a bit and if you watch it, you may even see it go sideways!

I'll have more idea towards tomorrow lunchtime as to what it's going to do, so I'll try and post then.

As for now? Well I'm still trading. I have - what I call - an Overnight Trade on. Placed at midnight and taken off between 9am - 10am in the morning. I've found this little trade quite reliable (famous last words - a bit like the kiss of death for the trade). If the Index is strong on the 6pm candle on a 3hr chart - total rise/fall between 3pm and 6pm candles being +80 points, and no major reversal on the 9pm candle, then trade a reversal at midnight.

I'm in at 11,270,75 and have a limit order on at 11,260 for 10 points. I'll update you on this in the morning.

 

[JillyB]

The Kiss of Death

I did say it would be, didn't I? And so it turned out to be.

In the past these overnight trades have proved to be quite profitable, averaging 16 points after the spread (that includes the one any only previous losing trade as well). That is why I do them. However today was not to be.

The entry point was correct, the exit point was fine and I traded my plan. It was just one of those things that the market went against me. Still even with todays loss, the system still has a success rate of 89.5%, which is pretty reliable I'd say.

So for the start of today I am down 16 points (11 plus 5 point spread). But I have to chalk that down to experience. I did everything according to the book - I have nothing to berate myself about.

 

[JillyB]

The Pepsi Max has nothing on this.

Wow! What a roller coaster todays trading has been!

Now (contrary to popular opinion) I'm not a person who enjoys being scared. Not for me, those white-knuckle rides at the theme parks. In fact the last time (and I swore it would be the last time) I ever did something like that was a Blackpool, when I foolishly agreed to go on the Pepsi Max. I was with an ex-boyfriend and didn't want to look silly, so I agreed to go on it. Never again! I wanted to get off before we even got to the top of the ramp and all I did for the entire ride was hold on as tight as I could with my eyes firmly closed. No, I tell a lie there, I did open my eyes at one point, only to find myself at 90 degrees to the vertical going around a sharp bend. I swiftly closed them again.

Todays trading has been a bit like that. I have my eyes open now - you'll be pleased to hear - just!

Today was Trade 13. This is a new trade, the only other time it has occurred in my trading plan was the day I wrote it. So it was a cautious day too.

The trade says.

SELL at the open (yes, we've had this discussion yesterday) to go down to the previous close at 11,260/64.

Then look for a reversal and a BUY trade up to the high of yesterday at 11,278/82.

Both trades did achieve their targets, eventually, but what a white-knuckled ride to get there. I made a profit on both trades, I'm happy to say, and that balances out the loss from this morning. However I still chickened out too early - perhaps because it was a new trade and I lacked the confidence in it - never mind.

I have written in my trading diary - in red, signalling when I've got something wrong - that again I've GOT OUT TOO SOON!

The two trades - if traded correctly would have brought in over 20 points after the spread.

The method doesn't catch huge points, but it's consistent. Just wish the operator was!

 

[JillyB]

So which way today?

As I type the Dow (on CMC) is currently at 11,293/97 If it stays around this level - close to the top of yesterdays range - then we will have Trade 21. If it drops back to 11,290/94 or below we will have Trade10. Then if it really drops we will have something different again. However to work with the two suggested.

Trade 21 says BUY at the open to go up past the high at 11,298. This may reverse at either 2.50-3.10pm or keep on going until the evening session when it will then reverse for a SELL trade down to the previous close at 11,277/81.

Trade 10 says - suprisingly enough just about the same thing.

Now all we have to do is to sit and wait and see what happens.

 

[JillyB]

Up we go

I'm glad I posted my earlier entry, because it went to show that I'm not talking, or making trades, here with the benefit of hindsight.

I posted that the Dow would go up and go above the previous high and it has done. Now to look for the reversal. It has dropped back a little from the high, but the Dow likes to retest its highs, so I'm expecting it go back up before the reversal comes.

The system says either 2.50pm-3.10pm for the reversal or after lunch US time (7-7.30pm our time). Now it's just to sit and wait. LOOKS LIKE I'M WRONG ON THIS - HEADING DOWN NOW.

I've also been working on another theory for the Cable - some of you might have seen my posts on the thread 'Live cable trading' regarding Darvas boxes on a 5 min chart. I've also found (just today) and this is still work in progress that the breakouts from the boxes tend to happen in specific time zones. Breakouts outside these time zones can, and will, happen, but more often than not they are false breakouts.

I've only been able to back-test this though to the 3rd April on a 5 minute chart. So it's going to be very much tested in the field, so to speak.

The earliest trading zone is 7.25am-7.40am and the last 14.50pm - 15.05pm. As I'm more of a night-owl and don't get started in a morning until 9am, I've discounted the first three time zones and started with the one at 9.10am - 9.35am. Over the past 13 trading days has brought in (conservatively) 393 pips. That has included 2 losses and 41 wins. I generally take 5 pips after the spread, unless the breakout is a thrust candle and then go with it, trailing the stop up as the low of the previous 5 min candle. The only exception to this is a judgement call when we start to get long top shadows on the candles, which is an early sign of a pullback.

So tomorrow I'm not only going to post on the Dow, but on how the 'in the field' testing of the 5 min Darvas boxes on the cable is doing. Until then........

 

[JillyB]

Friday's No Show

Some of you may be wondering why I didn't post anything on Friday regarding the Dow. There was a good reason for this, I can assure you, and that was that this scenario hasn't happened before on the Dow - at least as far back as my data has gone.

When I punched in the figures for Friday - the last one being the opening price - the Trading Plan came back and said Trade 41 Help! In short this means that I haven't written Trade 41 as yet

I think the unusual factor about the trade was the open being 15 points above yesterdays high. This is something you won't see a great deal.

So instead I went back to trading the Cable with Darvas boxes and left the Dow to do it's stuff. This morning I will set about to analyse that movement and write Trade 41 for the next time it happens.

When, and if , it happens again will be the test of whether this works. Just as I said earlier in the week about being nervous when I had Trade 13 because it had only occured once before and that was the day I wrote the trade, it will take a couple of occurrances before I become confident with Trade 41 as well.

The Darvas theory however is still working a treat. It took 40 pips at 8.45am, 5 pips at 11.25am, 5 pips at 13.15pm and a final 20 pips at 15.35pm. I'm really getting to like this theory.