Me Vs Wallstreet's latest post caught my attention, coz it talked about something D and I can definitely relate to.
During yesterday's trading session, D and I started off trading in opposite directions. I kept buying where he was selling. Soon it became clear that he was going counter-trend at the wrong time.
After 2 consecutive losing trades, he started taking cues from me
At one point, when I entered long on the ES, he went in long on TF.
After his order was filled, he asked if price was really going to go up.
I told him I had no idea.
He got a little flabbergasted. So I had to explain that it all depended on whether enough people were jumping in - if there weren't, we'd just gotta run.
I then asked where his "run point" was.
He had no idea.
I suggested that he scratched his position coz I had entered at a place where it would take him just a few ticks to know if he was right - and he wasn't.
He didn't want to bail. So I said fine, then he'd just have to see if price would come back up to a level where he can cover at a smaller loss, or at breakeven, or even with a little profit.
He asked if price would find support at the level I marked "support".
Again, I said I had no idea.
He gave up.
I pointed out another place that he should cover at a loss of 200, or risk 500 to see if price will bounce.
He asked if the long legged doji after the long bearish candle would halt price (I had told him to run after the completion of the long legged doji).
I said I had no idea.
Most of the time, these dojis don't reverse price on a downtrend, and the best answer I could give him was "I had no idea" coz really, I hadn't the slightest clue if that particular doji would be an exception.
He eventually bailed at loss of 400, right after the close of another long bearish candle that came after the doji.
I waited for the bounce, and got out with 300 gain.
D was disheartened, but I didn't console him (yes, I was mean). I asked on what setup had he entered. He gave me a blank look. Then he said it just looked like price was going up. I asked if he recognized that the small bullish candle he was looking at could very likely turn out to be part of a falling 3 method (completion of the method was right before the doji appeared). Yes, yes, I was nasty.
He asked what gave me the confidence to hold on to my position. I replied that I had entered on a very familiar setup, and knew where I would run. Before price got anywhere close to my stop, I was starting to see bear traps being setup, so I had no reason to run. Had it been the other way round ie. bull traps seen instead, I would be ready to bail before my stop was hit.
With me, it was all about seeing what's unfolding at every step and I just act accordingly.
Go with the flow; keep in mind that the only certainty about the market is that certainty doesn't exist.
The best we can do is to be very selective and trade only setups we recognize (coz we've seen them enough times and had backstudied them), accept that this very particular trade that we're putting on could just turn out to be among the 10, 20 or 30% that don't work out, and bail after the pattern we had entered on has clearly failed.
Right now, I'm printing out all the charts with my favorite setup highlighted, and I'm sticking them up on hard cardboards (I bought a dozen really huge ones) so D can stare at the setup day and night. When he starts to see them in his dreams, he can then start trading real money again. LOL!! Yes, he's volunteered to start paper trading (which he's never done!!).
And he's switching to ES!
And opening an account with Inifinity just to daytrade futures.
GIRL POWER!!!!!
During yesterday's trading session, D and I started off trading in opposite directions. I kept buying where he was selling. Soon it became clear that he was going counter-trend at the wrong time.
After 2 consecutive losing trades, he started taking cues from me
At one point, when I entered long on the ES, he went in long on TF.
After his order was filled, he asked if price was really going to go up.
I told him I had no idea.
He got a little flabbergasted. So I had to explain that it all depended on whether enough people were jumping in - if there weren't, we'd just gotta run.
I then asked where his "run point" was.
He had no idea.
I suggested that he scratched his position coz I had entered at a place where it would take him just a few ticks to know if he was right - and he wasn't.
He didn't want to bail. So I said fine, then he'd just have to see if price would come back up to a level where he can cover at a smaller loss, or at breakeven, or even with a little profit.
He asked if price would find support at the level I marked "support".
Again, I said I had no idea.
He gave up.
I pointed out another place that he should cover at a loss of 200, or risk 500 to see if price will bounce.
He asked if the long legged doji after the long bearish candle would halt price (I had told him to run after the completion of the long legged doji).
I said I had no idea.
Most of the time, these dojis don't reverse price on a downtrend, and the best answer I could give him was "I had no idea" coz really, I hadn't the slightest clue if that particular doji would be an exception.
He eventually bailed at loss of 400, right after the close of another long bearish candle that came after the doji.
I waited for the bounce, and got out with 300 gain.
D was disheartened, but I didn't console him (yes, I was mean). I asked on what setup had he entered. He gave me a blank look. Then he said it just looked like price was going up. I asked if he recognized that the small bullish candle he was looking at could very likely turn out to be part of a falling 3 method (completion of the method was right before the doji appeared). Yes, yes, I was nasty.
He asked what gave me the confidence to hold on to my position. I replied that I had entered on a very familiar setup, and knew where I would run. Before price got anywhere close to my stop, I was starting to see bear traps being setup, so I had no reason to run. Had it been the other way round ie. bull traps seen instead, I would be ready to bail before my stop was hit.
With me, it was all about seeing what's unfolding at every step and I just act accordingly.
Go with the flow; keep in mind that the only certainty about the market is that certainty doesn't exist.
The best we can do is to be very selective and trade only setups we recognize (coz we've seen them enough times and had backstudied them), accept that this very particular trade that we're putting on could just turn out to be among the 10, 20 or 30% that don't work out, and bail after the pattern we had entered on has clearly failed.
Right now, I'm printing out all the charts with my favorite setup highlighted, and I'm sticking them up on hard cardboards (I bought a dozen really huge ones) so D can stare at the setup day and night. When he starts to see them in his dreams, he can then start trading real money again. LOL!! Yes, he's volunteered to start paper trading (which he's never done!!).
And he's switching to ES!
And opening an account with Inifinity just to daytrade futures.
GIRL POWER!!!!!
15 comments:
LOL...you should be a trading coach :D
Haha. Glad to read you again so soon Jules =)
D is trading ES? Welcome him for me, will ya.
D should start his own blog! LOL!!!
The book is great so far Jules. I have read most of Al Brooks' stuff so I know where he's coming from but this is so much further in depth than the Futures magazine articles and the online seminar.
Jules,
You go girl!
LT
do you use depth of market to determine whether to enter or exit the market?
just curious =) thought I heard you talking about it before and was really interested in your thoughts on its use (I'm slowly getting into using it).
Yes, Ryan, I do. Level II is my love :-) I look out for where the big contracts are (after seeing the pattern I want to see on my chart and determining the S/R - then what I'll do is to see what happens on market depth at those levels), and see if more contracts are coming in above it. When they do, and disappear quickly, I'll wait. So when I buy, I really want to see huge offers disappearing while number of bids continue to go up. When offers are snapped up and price doesn't budge, I'll wait. And I want to see the huge bids moving up to the higher levels, and as they do, they attract more and more bids.
To sum up, I still start with my charts. Market depth is to tell me how likely it is that price will move my way immediately and for how long.
EP,
I can't. I'll drive whoever I coach up the wall! LOL!
Ryan,
I'm still enjoying my holiday :-) Will be posting occasionally. I think. :-)
Sage,
I welcome him too. We provide each other with liquidity. I like to buy, he likes to sell. LOL!
Daytrader,
D hates reading, and hates writing even more. I often wonder how he aced his exams. It helps to have a surgeon mother and an architect father.
LT,
Thank you :-) You have a great trading week! Have you started to trade for your friends yet? I'm thinking of trading for Pilot. He's been trading forex - buying korean won LOL! Ok, for valid reason. If I make him any money, it will be his wedding gift. Hahaha...
Mmm, Jules. I love the level 2.
Thanks for the chart/lvl2 combo suggestion =D
I also love level 2, and having it integrated into my charts was a dream come true, because I don't have time to concentrate on both fast moving candles and fast moving level 2s. Check out my post:
http://edsfreedom.blogspot.com/2009/04/0-1-2-nice-new-indicator.html
FYI mirus futures is a broker i use for futures TF is $4 rt and $4.20 for ES. They use ninja trader with zenfire. I also use Infinity, but i really hate the way there platform looks. Just imo hope that helps. Im not sure if you are sim trading but you can open and free demo with mirus futures and its real simple to do.
Ed,
what you have there is something like a footprint chart?
Tsimpon,
Guess you were talking to Ed? He uses zenfire I think...Thanks for sharing about mirus. I'm happy with the rates that Infinity has offered me :-) Not sure which platform you were referring to....I actually like their DOM, and trade from there. I trade live :-)
Yes Jules, the chart I have there is a snapshot in real-time of the level_2 at that time. The histogram there changes and matches the DOM/level_2.
I guess most scalpers trade off the DOM so level_2 is there already, but I trade off the charts, which this ninjascript indicator for level_2 really helps.
I didn't know what a footprint chart was, just looked it up, seems interesting, I like, must research it more, :). What my chart is still missing is a visual representation of how level 2 changed into time and sales.
so this is a on-a-trading-break trade since it is a non-trade trade you are not required to hold, just a quick in and out. I like it.:)
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