journal of trader formally known as wasp

[dbphoenix]

Not really interested in standard deviations but the confidence part is important. How you reach your levels of confidence, be it %'s, backtests, forward tests or live trading, aquiring a level of confidence is vital to be able to pull the trigger and stay in a trade until your strat tells you to exit.

When I said that my remarks had nothing to do with "levels of confidence", I was referring to statistical levels of confidence. Naturally one has to be confident in what he's doing, and the more confidence he has, assuming that what he is doing is succeeding, the better. And finding the equivalent statistical level of confidence may be interesting, if he's into that sort of thing, but it's hardly necessary.

Db

 

[wasp]

Thursday

Zzzzzzzzz...

A quieter day and a small loss overall but not a real problem...

The last trade I was far too late into but c'est la vie... Everything was as per plan so all cool.

Done my 5 trades today so time for something else.

 

[wasp]

Eric

update.

 

[dbphoenix]

update.

Sorry for butting in, but since the following post was made 60 posts ago, it might be overlooked, and it shouldn't be, since it illustrates a point I've being trying -- for the most part, unsuccessfully -- to make.

Since May there has been 3 attempts at the support level at 21. The last most recent attempt has a longer lower wick and an increase of volume. It doesn't seem to want to go lower and therefore I shall go long monday morning with a stop at 20 and trail my position should it move higher!

Here you looked at what was in front of you. You didn't attempt to predict, forecast, anticipate, target, prognosticate. You just looked at what was in front of you, assessed the probabilities (though perhaps not in so many words), then decided that you would go long on Monday with a trailing stop beginning with 20. And that's it.

If I may ask, (a) what is your assessment at this point and (b) what do you plan to do from here?

Db

 

[wasp]

Here you looked at what was in front of you. You didn't attempt to predict, forecast, anticipate, target, prognosticate. You just looked at what was in front of you, assessed the probabilities (though perhaps not in so many words), then decided that you would go long on Monday with a trailing stop beginning with 20. And that's it.

If I may ask, (a) what is your assessment at this point and (b) what do you plan to do from here?

Db

Ok, the 4 attempts at a low worked out to prove enough and after a tussle the following day, it pushed it back up to the downward diagonal trend line by the end of the 2nd day.

The following day it jumped up through it and although didn't finish at the high, it definately had some zest and finished higher on the day. Today has been an upward push to finish on the highs, and also above S/R level that has blocked price a few times.

The fact that it has surpassed that 1st level clearly to finish above it to me says we will move up again tomorrow to hit the next S/R level. Whether we can push through or not is not something I can't say but, right now I have moved my stop behind the 1st S/R level and I will be watching to see how it reacts to the 2nd point and if there's not an immediate reversal and it does close above there, again, I'll move the stop behind that 2nd level.

Depending how it reacts tomorrow will decifer how long I'll stay in. A close above the 2nd will keep me in till Monday with the stop below the 2nd... A close below the 2nd and I will close the position and reaccess.

Oh, and volume has been rising solidly with price showing that that, for the time being, buyers are very much in control.

 

[dbphoenix]

Ok, the 4 attempts at a low worked out to prove enough and after a tussle the following day, it pushed it back up to the downward diagonal trend line by the end of the 2nd day.

The following day it jumped up through it and although didn't finish at the high, it definately had some zest and finished higher on the day. Today has been an upward push to finish on the highs, and also above S/R level that has blocked price a few times.

The fact that it has surpassed that 1st level clearly to finish above it to me says we will move up again tomorrow to hit the next S/R level. Whether we can push through or not is not something I can't say but, right now I have moved my stop behind the 1st S/R level and I will be watching to see how it reacts to the 2nd point and if there's not an immediate reversal and it does close above there, again, I'll move the stop behind that 2nd level.

Depending how it reacts tomorrow will decifer how long I'll stay in. A close above the 2nd will keep me in till Monday with the stop below the 2nd... A close below the 2nd and I will close the position and reaccess.

Oh, and volume has been rising solidly with price showing that that, for the time being, buyers are very much in control.

Nice. And for those who read this, I'd like to point out that, rather than form a bias, wasp provides himself with several scenarios and tactics to employ, each of which is contingent on the particular scenario that unfolds. He doesn't get his panties in a twist about what's going to happen or not happen. He may not even care what happens. Regardless of what happens, he knows what he's going to do as a result of whatever happens. This enables him to assess what's in front of him without a lot emotional coloration.

As for the volume, yes, buyers are in control because, as you say, price is rising. However, what may be more important is that the increase in trading activity shows that buyers are not just in control but are more eager than the sellers who are also out in force. What happens re this level of activity as price nears R will be interesting to watch.

One quibble, which may or may not be important to you depending on how much you rely on trendlines. The trendline here* was broken in June and the stock has been basing sideways ever since. I may have mentioned earlier that this looked to be an accumulative base, but that will prove to be true or not if and when there's a breakout. But it's important for the trader to note this sideways movement and its possible significance and he might not do so if he thinks that the stock is still in a downtrend.

Good job.

Db

*for the five-month timeframe; over a longer timeframe, its uptrend has been broken, but it's still moving sideways and hasn't decided what it wants to do. There's lots of S between 25 and 35, so it could stay here for quite some time.

 

[wasp]

discipline

Hopefully by sticking to my plan of risk management (5 trades in a day) and my discipline to stick to it I will comfortably accept that cable has now dropped off another 80 pips.

In backtests it has happened and therefore I shouldn't and shall not be bothered by it either.

Its all part of the plan and missing occasional good, late moves by sticking to the plan is important. I think! :cheesy:

 

[trendie]

wasp:

does your strategy account for "trading sessions" ?
in that, the European session is between 7am -1pm or so.

but, the US session may add some volatility later in the day.
if you have tradeed your 5 trades by noon, you may miss out on afternoon volatility.

what would happen if you traded no more than 3 trades between 7am-1pm.
then kept your powder dry, and traded 3 after the US came on-line ?

total= 6 trades per day ( still placing a limit ). BUT, increase your chances of catching US mood ??

I am only testing your discipline, of course !!

 

[wasp]

wasp:

does your strategy account for "trading sessions" ?
in that, the European session is between 7am -1pm or so.

but, the US session may add some volatility later in the day.
if you have tradeed your 5 trades by noon, you may miss out on afternoon volatility.

what would happen if you traded no more than 3 trades between 7am-1pm.
then kept your powder dry, and traded 3 after the US came on-line ?

total= 6 trades per day ( still placing a limit ). BUT, increase your chances of catching US mood ??

I am only testing your discipline, of course !!

I have tested various ideas and strats relating to the times of days like you say and this was the one I was most comfortable with...

Only occasionally does this late move happen when I'm not in and it was only a couple of jumps after 1:30 that pushed me out, most of the time I can catch these runs.

It is/was a toss up between risk management and hours in a day I'm willing to put in especially when I start at 7am regardless. I know I can still make my goals when missing these occasional later moves and I get the evening free. I'd rather limit my losses on a day than overtrade and end up worse off.

Still gutting watching the drop this evening though

 

[wasp]

PS Trendie, did you say you were starting a journal too?

 

[dbphoenix]

I know I can still make my goals when missing these occasional later moves and I get the evening free. I'd rather limit my losses on a day than overtrade and end up worse off.

Smart

 

[wasp]

Bigger pictures

 

[wasp]

Not trading this and will only be watching from the sidelines for now as I want to test my wits against something that moves...

the trendlines are initial thoughts and points of importance IMO... more to come...


Volumes for August are extremely low compared to rest of data shown on the chart...


EDIT: Just checked this on metatraders charts and discovered I'm a bit late on this one

 

[trendie]

PS Trendie, did you say you were starting a journal too?

have an old journal. just word and numbers. (am on Area-51 Hybrid version 3.0 system)

prefer, like you, a visual journal to show trades in context of market moves.
more educational.
am on project at the moment - due to end end-August. (trading has been intermittent and swing (multi-day) due to project)
will be back to intra-day trading early September.

may re-start one then.
lets see how quickly I can blow 4 months of freelance consultancy money!!

 

[wasp]

lets see how quickly I can blow 4 months of freelance consultancy money!!

Thats the attitude Trendie...! :cheesy:

 

[wasp]

TFI Friday

Not a great end to the week...

Still had yesterdays drop which I missed in the back of my mind (which I shouldn't have) and it tainted my thoughts all day...

As for the day as a whole, it kept reversing back and no moves had any zealous to them as the push last night had taken care of most movement that was to come this week.

The last 2 trades I was so tempted to take profits but stuck to my plan and both reversed to B/E (I actually set it at +1... guess its a psycholgical thing) but still in accordance with my S/R exit trail strat.

all done, now I'm out it will go off in one direction with the greatest of ease...

I know the reason for my journal and my diescipline tests are so when days appear and the market does move, I don't get out early but it would have been nice to finish the week with a double figure trade...

Oh well... :|

 

[dbphoenix]

What size are you currently trading?

 

[wasp]

£20 per pip.

With capitalspreads (cue flaming!)

 

[dbphoenix]

£20 per pip.

With capitalspreads (cue flaming!)

Are you able to stick to your trading plan and maintain your discipline with that?

 

[wasp]

Yes for the most part.

The 2, well 3 problems I have, are

1) Dodgy execution by capitalspreads - will be changing broker soon probably once decided which?
2) Good decent size moves into recently unchartered areas with no S/R around to justify moving my stop behind
3) Days like today where it moves off and then pulls back to square one and I wish I'd taken profit en-route.

I know I have the option to take part of my profit and scale out but, this is how I worked my plan and I know it does work out best if I keep the whole size till the end.

I actually prefer trading this size opposed to small (ie £1 or £2) as when I trade that small I become far too complacent.