Poking the ER2

[jessop]

Hi,

This is the kick off entry for my new journal and I’ll explain why I’m doing it later:

Background

Intraday ER2 Futures Trader – ER2 clearly the best ‘bang per buck’ contract around – certainly for my edge
I spent 9 months developing a trading plan & charting techniques and have been live since 1/5/05
Self taught (read all TA & psychological books etc)
Don’t use any indicators – just price, volume, and 3 ‘secret weapon’ data feeds
I have an eight page trading plan with supporting risk/reward analysis spreadsheet
I do end of day detailed trading logs & an end of week summary analysis weeks trading
I have the luxury of working part-time in the mornings (in the UK) and have my afternoons free for trading the US market 5 days a week
I have an understanding wife who trusts me to do what is in our collective best interest
I have a reasonable account size – but I have limited myself to 1 contract until I can ‘consistently’ hit the daily targets in the trading plan
I use Esignal (various 1 & 2min charts), IB & Ninja – have a backup broadband service and a full office setup
I am a very positive person and my main driver behind trading is financial independence.
Mark Douglas’s ‘Trading in the Zone’ is my main emotional trading reference.
I’m a typical Jung type INTJ personality…if I didn’t feel I could make a good living trading I wouldn’t be here today.


Anyway….to cut to the chase ….the reason for the Journal

I don’t normally go for chatrooms or forum posting…..however:

1) I have a trading plan and charting techniques that give me a great edge…..but I am the weakest link …….and I need to kick my a**e into gear….my current trading problems are the usual ‘fear’ based hesitation & cutting profits short etc

2) So my plan is to write down each day – the times my signals were triggered and where my entries and exits were and a little trade commentary on my emotions etc

3) I’m afraid it is a selfish attempt to get me to stop ‘fearing being wrong’ – by public humiliation if I wimp out on entries & exits - so let’s see how it goes.

4) I am not selling any services or willing to show the charts/secret weapons – so please don’t ask – this a part of a psychological game I’m playing ….

5) But having said that I also want to put a little bit back for all I have learnt from the WWW

 

[jessop]

Here is the summary from 7th Sept:

Signals as per chart below:

S1 – Taken at 14:37 - nice entry and pretty good exit using signal

S2 – Still in S1 trade

S3 – Took the signal at 15:17 – watched oil price and wimped out break even and then watched it go 2 pts+ - exit signal was at 15:42

S4 – Not taken – oil price watching again - waiting for signal and oil movement to align – stupid, just take signals period

S5 – Taken the signal at 16:54 – stopped out on low at 17:02

S6 – Not taken – don’t usually hold through news & wimped out

S7 – Not taken – had a breakout bias – my signal was really defined by the oil price bounce of $64 – but at least I didn’t watch QM this time

S8 – Taken the signal at 20:01 – ok entry – exit on failure to break certain data levels – good decision – but didn’t have a reversal signal

Signals 5 out of 8 taken (inc S2) – I’ve never taken more than 50% of my signals – obviously the exits are still pretty poor ……. but there are so many points on offer I just have to be patient with myself….and stop watching the QM chart

 

[jessop]

BTW

E = entry,
C = Close trade,
S = stopped

on the chart above

 

[jessop]

Not my best day – a good news / bad news kind of day - entries pretty ok / exits total **** - chart below with Signals(Sn), Entries (E) & exits (C)

S1 (S) – Not taken – no real excuse

S2 (L) – Nice entry on signal –at 15:08 (676.1) – exited 0.2 pts later rather than wait for exit signal 677.50

S3 (L) – Took the signal at 15:24 (676.9) – nice entry again – however, I don’t normally through news (esp oil news) because it is usually a coin toss play – this time it went my way – but I was out b/e

S4 (S) – Another nice entry at 15:40 (678.1) – this time I was freaked out by the NQ/YM continuing to tick up – oil price dropped and 1.5pt later my exit signal – I actually came out -0.1 pts - LOL

S5 (L) – Not taken – not in good mood at this stage

S6 (S) – Not taken – still in cooling off period – signals being triggered by oil gyrations around $64

S7 (L) – Not taken – still in cooling off period - signals being triggered by oil gyrations around $64

S8 (S) – nice entry at 18:20 (678.30) – was holding for my 676.2 target – almost exited at 677.50 as support held – walked away from desk for 4 mins so no temptation to watch oil price – then came back and watched it attempt $64 again – good exit at 677.30 on an exit signal (shock horror) – then it went on to hit my target

S9 (S) – entry at 19:47 (676.8) – held for 4 minutes – saw resistance and b****y exited b/e – should have at least held for a test of 676.20 – 2+ b****y pts on that table

S10 (L) – signal at 20:26 – but still in cooling off after the S9 exit – rally to close on vapours it looks like to me

Entries - 5 out of 10 - not to shabby for me % wise
Exits – worse than p**s poor – maybe I should just use a trailing stop and walk away from desk – but that’s the coward’s way out !!
Signals – only thing keeping me sane
Points today +1.1pts (not including comms)

Onwards and upwards…..as they say in football at least I’m getting into the positions to score………

 

[jessop]

Better morning thanks to S4 – poor afternoon - still hypnotised by the oil price too much

S1 (L) – Entry 14:53 (677.6) - actually left trade alone - it didn’t break thru resistance at 678.30 – then came back and hit my reduced stop at 677.5

S2 (L) – failed to take signal

S3 (S) – failed to take signal – worried about b/out above 679.10 resistance

S4 (L) – Entry at 16:09 (678.2) – almost exited three times with the oil price reactions and 679.1 resistance – exited slightly early at 16:50 (680.50) – exit signal was at 17:02

S5 (S) – Failed to take signal - Lunch

S6 (L) – Failed to take signal – Lunch

S7 (S) – Failed to take signal

S8 (S) – Failed to take signal

S9 (L) – Failed to take signal

Marginal continuation trade (L) – 19:32 (680.7) stopped 680 – ran straight into S10

S10 (S) – Failed to take signal – still in marginal trade

S11 (S) – Entry 20:08 (680.5) – entry on S11 – got exit signal when the market exhibited too much strength in one of data feeds & closed at 680.6

S12 (L) – Failed to take signal

Entries - 3 out of 12 & one non-signal trade
Exits – two ok – two stopped out
Points today +1.4pts (not including comms)

Onwards and upwards…..

 

[jessop]

Had my chances again – a very nice day on the ER2 - a better day for exits because they were all automatic !!

I managed to not watch QM/YM/NQ all day and it definitely improved my exits compared to last week’s performance – my reduced stop kicked me in the nuts today to compensate…….

S1 (S) – Entry 15:13 (681.3) - actually left trade alone – had 680 as target – missed the signal for S2 at 15:20 when it was +0.7pts – it then ran back to hit reduced stop at 681.5

S2 (L) – still in S1

S3 (L) – failed to take signal – saw it play out and did sweet FA

S4 (L) – Nice entry at 16:04 (682.4) – 682.20 acting as good support – left it alone – stopped out on my reduced stop on the exact low of 16:14 bar – then up she goes

S5 (L) – Nice entry at 16:56 (683.1) – left it alone – hit my predefined Profit Target stop at 684.3

S6 (S) – failed to take signal – lunch

S7 (S) – failed to take signal – lunch

S8 (L) – failed to take signal - saw it play out and did sweet FA

Entries – three taken – two biggies not taken though not good
Exits – all stopped out - reduced stops need looking at again (when 0.5 in profit my stop moves up from -0.6 to -0.2 from entry)
Points today +0.8pts (not including comms)

Onwards and upwards…..

 

[jessop]

Poor concentration and general indecision in morning session – got two nice trades nailed which turned the day around (but had plenty of misses too)……not complaining though best live day

S1 (L) – Entry 14:46 (678.9) – exited at 14:51 (679.1) on resistance at 679.30

S2 (S) – failed to take

S3 (L) – failed to take

S4 (S) – failed to take

S5 (L) – Nice entry at 16:13 (676.1) – held and got mini continuation signal at 16:30-31 exited at 16:42 (677.50)

S6 (S) – Great entry at 16:46 (677.6) - exited on minor tick up in data source – exit b/e at 16:48 (677.6)

S7 (L) – failed to take signal – lunch

S8 (L) – failed to take signal – lunch

S9 (L) – failed to take signal

S10 (L) – Great entry at 19:06 (678.5) – exploded thru 679.30 and then I got exit signal at 19:16 (680.8) – thought I might have exited too early – not anymore !!

Entries – four taken
Exits – two nice ones - one very poor
Points today +3.9pts (not including comms)

Onwards and upwards…..

 

[jessop]

Well I had a lesson in trend today and I well and truly flunked it – a serious down day and I managed to take 4 Longs !!

This is even though Short signals S4 & S7 said this was quite a sick market.

S1 (L) – Entry 15:11 (676.3) – went 0.7 into profit – then spiked down next bar and stopped me out at 15:16 (675.7)

S2 (L) – Entry 15:49 (675.3) I got out at 15:52 (675.5) because it couldn’t hold 675.50 level

S3 (S) – failed to take

S4 (S) – failed to take

S5 (L) – failed to take

S6 (L) – failed to take

S7 (S) – failed to take

S8 (L) – I thought a nice entry on a clean signal at 19:09 (672.2) – got steamrollered by bar 19:12 as oil spiked up - stopped (671.6)

S9 (L) – One of my favourite bottoming signals – entered at 20:26 (669.7) – after movement I put my stop to b/e – it got hit - I also ignored an exit signal at 20:46 because I thought it would run up into the close

Entries – four taken all Counter trend
Exits – nothing to say really
Points today -1pt (not including comms)

Onwards and upwards…..with the trend

 

[jessop]

More opportunities and a few more lessons….

Lesson 1 today – don’t f**k about with your stops…..

Lesson 2, that I need to use 1min charts alongside my main 2min chart views to highlight certain signals more clearly and get the timing of entry tighter.

Lesson 3, take the signals and leave your bias out of it

S1 (S) – failed to take – the signal was very clear on the 2min chart, but I normally use the 1min for the first 30mins until the 2min charts gets up and running – therefore missed it

S2 (L) – Entry 14:58 (670.1) got stopped out at (669.5)

NON SIGNAL - An oil price gamble trade 15:33 (669.2) stopped at 15:36 (668.6) – this is my worse trade of the week – a non-signal play

S3 (S) – failed to take

S4 (L) – failed to take – this is the signal I love but I should have been looking at 1min chart as well as 2min because the entry was clearer on 1min

S5 (L) – failed to take – same as S4

S6 (L) – Nice entry 17:57 (668.1) as price moved up I tightened stop (trying to be too clever by half) – however, I tightened it too much and didn’t leave it enough room – it moved down slightly and stopped me on the exact low of bar 18:04 – then up she goes for 1.5pts

S7 (L) – failed to take – no excuses with this one it was pretty clear

S8 (S) – failed to take – not brave enough – my bias said breakout north – my signal said weakness and entry 20:05

Entries – two taken – 1 non-signal play
Exits – well S6 was an over tightening ****-up
Points today -1.4pts (not including comms)

Onwards and upwards…..

 

[joeMcnicholl]

jessop

May I ask, the failed trades? Why dont you take these

 

[jessop]

Hi Joe,

I'm afraid for me its a mixture of fear, poor concentration, contrary bias, signals just before news, oil price gyrations, just not being brave enough sometimes. But there is no excuse for not taking a signal.......period.

I've been trying to complete the 20 trade exercise from Douglas's book for nearly 4 months and the closest I've got is just over 50% of signals taken.

For me the game would be a lot easier if I was taking them all, even if I just took a 1pt profit out of each one (very achievable) I would be laughing.

But I love the ER2, and I love the offerings it gives us mere mortals every day !!

Cheers

 

[jessop]

Well a funny old day …the good news was that I caught the bottom nicely…the bad news was that was it….found it very hard to read in the morning session (probably the quadruple witching)

S1 (S) – failed to take
S2 (L) – failed to take
S3 (S) – failed to take
S4 (L) – failed to take – trouble following the action here
S5 (L) – Entry 17:10 (669.7) off solid 669.60 support - exited way to early (in hindsight) at 17:42 (670.50)
S6 (L) – failed to take – p***ed off after S5 exit – researching 3 / 10 min charts
S7 (L) – failed to take - still researching


Entries – one – a good one though !!

Exits – this kind of trade needs to be held for 5-6 pts not 0.7pts - I will check out 3 & 10 min charts because S5 looked like a good hold on those charts. I suspect that my edge & me maybe more suitable for positional plays rather than 1min scalps….

Points today +0.7pts (not including comms)

Onwards and upwards…..

 

[joeMcnicholl]

jessop

If you are trading off a 1 min charts on the Russel2000.this will Kill you over time.Do exactly what you doing,but up it to a 5 or 10 min chart.I am sure this will be better for you.to my thinking,I dont think you are psychology up for scalps.

joe

 

[jessop]

Joe,

I think quality rather than quantity may be the answer indeed.....I still like the 1min for precise timing when I see an Intraday reversal looming. But a 3 / 5 & maybe 10 min view may keep me out of some of the c**p I can get myself into.

Cheers

 

[jessop]

FWIW - this is the closest I've found to the Trading Holy Grail in my time .......taken from a trading site in the US

Anyone who contemplates trading should ask themselves one simple question....."Why Do I Want To Trade?" There are many wrong answers to this question, and only one right one....."I Want To Find Out Who I Really Am"

When you trade your monitor will do a funny thing. It will become a mirror. A special type of mirror. A mirror that reflects your self-confidence, your self-esteem, your self-worth. The numbers and lines you see on your screen are just that, numbers and lines. Market information. At your choosing, when you decide to become part of those numbers and lines (putting on/off the trade) a sort of test begins. A test about you.

• If you see the test as threatening, you will feel threatened.
• If you see the test as war, you will be engaging in war.
• If you see the test as one more failure, you will fail.
• If you see the test as the need to prove yourself right, you will administered the pain of being wrong.
• If you see the test as certainty, you will be rudely introduced to uncertainty.
• If you see the test as a battle of wills, you will sacrifice your soul.
• If you see the test as fear or loss of money, you will be giving away your scared money.

• If you see and believe the test to be an exchange of information, you now become the one to confirm or deny information.
• If you believe the test to be one of giving up what you want in order to get it, you will get it. Get it?

There is an irony in trading of both price and time. It is exactly what you have to give of yourself in order to trade it with understanding.

 

[jessop]

A few new additions to the setup & rules……I added a 5 min chart for the trend and primary signals and then use the 2min charts to time the entry…..take all signals in direction of the trend and any primary reversal signals.

S1 (L) – failed to take – CT play so declined
S2 (S) – entered at 15:56 (673.8) – exited early for 672.3
S3 (L) – failed to take – CT play (probably should have taken this one with a 1pt profit target etc)
S4 (S) – entered at 17:50 (672.7) – exited using signal for 672.5
S5 (S) – failed to take – looking into why the 18:30-18:40 spike up occurred on little volume (like it really matters !!)

Entries – two ok – the best one of the day not taken!!
Exits – one slightly early and one on signal
Points today +1.7pts (not including comms)

Onwards and upwards…..

 

[jessop]

I missed the first 30 mins due to business commitments….and then had one signal with trend ..... and quite a drop

S1 (S) – entered at 16:42 (673.8) – exited for 671.9 on a signal and initial profit target 672. I had no intention of holding through the news because that is a total lottery. But then again a 1:12 risk reward ratio does look attractive in hindsight.

S2 – failed to take

Entries – one good one
Exits – exit to trading plan – but painful to watch later!!
Points today +1.9pts (not including comms)

Onwards and upwards…..

 

[jessop]

When people say that you can’t trade when you are tired and grouchy …. listen to them. The last two days I have just started a new freelance IT contract in the mornings and have been trying to survive on 5 hours sleep and Red Bull. This doesn’t mix very well with newbie trading.

S1 - failed to take – it was a screaming long on 5 min & 2 min and I just wouldn’t press the button – my fear of loss too much today !!
S2 - failed to take – ditto – except screaming short this time
Decided to walk away and chill.

Plan to Sim tomorrow (another 5 hours sleep day) and then go back live on Friday because that’s my day off…..

Entries – none
Exits – none
Points today $zilch (not including comms)

Onwards …..to bed

 

[badtrader]

I work shifts.morings this week, up at 5am till 2pm.then bloody trading and not making much if any money from this bloody game. show me how to make money anyone,few!

 

[jessop]

Well a pretty good Sim day - but they should be shouldn’t they really!!

I gave most signals a go – and got a few nice results on the new 5Min only chart setup. The speed of the 5min candle printing is a bit tricky for me at the moment after my usual 1-2min charts. However, on the flip side of the coin I’m finding certain continuation signals are very solid in 5 Min mode (eg. S7, S8), after I binned them in 2 min and definitely 1min TFs. So that is a real bonus.

However, my assumption that moving to 5min from 2min with the same signals was a minor tweak to the trading plan is proving flaky. There are a few new signal setups and a new indicator (which I’ve always wanted to use but it looked like it was on acid in 1& 2 min TFs and so got on my nerves) So it is a major update of entry & exit rules in the plan. Anyway enough of that……

S0 – signal in premarket – from new setup - didn’t take in though
S1 – nice entry if a little late 650.8 (14:38) – couldn’t believe the speed of the drop but maybe that’s just me and 5min candles – exit at 647.3
S2 – entry at 651.8 (15:20) – stopped out at 650.8 – but thought the signal was still valid so went in again at 651.8 (15:30) but managed to get stopped out at 650.9 in same 5min candle – it then kicked in for a 1.5 pt rise
S3 - entered at 652.20 (15:46) and got out at 650.80
S4 – the entry for S4 was the exit point for S3 – but reversing is not a strong point at the moment – entry at 651.30 (16:11) – exit at 651.60 as buying dried up
S5 – entry at 650.2 (16:47) – buying tailed off and down for stop out 649.2
S6 – at lunch so I missed the reversal and big buying
S7 - nice continuation signal – entry at 652.0 (18:32) and great exit at 654.3
S8 – another continuation signal – but took it very late - 653.4 (19:39) out at 653.8 – a bit early given the breakout was a hot favourite – but you had to hold thru the PB to test 653.6

Given the update of the trading plan 5min entry and exit rules and my timing of 5 min candles I’m Siming tomorrow …..

Entries – mostly good – but timing a bit off
Exits – mostly good – but S8 was way too early
Points today +5pts (not including comms) – one of my best days (Siming of course) but 5Min is also keeping me out of a lot of rubbish I use to take…..however, it reminds me how my trading challenges are 90%+ mental ones !!

Onwards and upwards……….