Loss: USD 88
Friday, February 13, 2009
ES Trades 2/13 - Crossfire
Taking a small loss and staying out from this point on. Friday 13th CNBC day. This whole voting thing is getting really repulsive.
ES 2/13 - Daily Trading Plan
ES Hourly
Pattern I'm looking to trade: Descending Broadening Wedge (DBW) & Pullback into Ascending Broadening Wedge (ABW)
ES pulled back steeply yesterday after breaking below the ABW (blue trendlines). If it continues to move up and closes above the floor of the ABW, I'll be very comfortable going long with my first target to be set at a point below the ceiling of the DBW.
If ES manages to break above 850 and stays above, I'll look for more longs. Targets: 866 - 873.
ES pulled back steeply yesterday after breaking below the ABW (blue trendlines). If it continues to move up and closes above the floor of the ABW, I'll be very comfortable going long with my first target to be set at a point below the ceiling of the DBW.
If ES manages to break above 850 and stays above, I'll look for more longs. Targets: 866 - 873.
Game Plan For Today
- Trade between the range of 831 - 836.75, and be prepared for ES to trade below 831 (supports at 828, 826, 823.25, 819.5).
- Go LONG as and when ES pierces and closes above floor of ABW. ULTIMATE Target: 850.
ES 2/12 - About The DBW-ABW Setup
ES 1min
One of my favorite patterns combination: the Descending Broadening Wedge (DBW) followed by an Ascending Broadening Wedge (ABW).This was the setup I've been trading for days on the hourly chart.
Briefly, this is how I trade the pattern:
I play a breakout of the DBW on the upside.
After the DBW has formed (meaning that price has broken above the 2 downtrend lines), I'll need to see a throw back to the DBW or a support line.
Then I'll draw a trendline that joins the 2 higher lows that are formed after the breakout. Next, I'll draw a trendline joining the joining the 2 peaks. This is my ABW.
Then I wait for price to hit the upper trendline. If the former breaks above the latter, I'll not chase. Only when price comes down and hit the lower trendline again (by now that would be the 3rd time price touches lower trendline) will I look for a signal to go long.
If price were to break below the lower trendline instead, I'll wait for a pull back. If during the pull back price were to pierce the lower trendline of the ABW, and close above it - that's a busted ABW. All the better. GO LONG.
My targets will be the levels where price TOUCHES the upper channel of the DBW.
I usually take profit at target 1, then wait to see what develops. If I see a partial rise, I'll abort any plans to enter another long.
A partial rise is a reliable warning of a break below the ABW, many times what comes after that is a measured move down. Good to sell short.
Thursday, February 12, 2009
ES 2/12 - Still Staying Out
With ES at the current level, if I were to trade, I would probably be looking to BUY.
Since it's apparently not a good time to do that now, I'm staying out.
Since it's apparently not a good time to do that now, I'm staying out.
About Indicators
Slait asked in the comment section:
Shoul´d be possible to explain how you use the indicators you plot?
My reply:
I don't use the indicators. I have put them back on for the 100th time just to see if I will even take a look at them. I am still not watching them. Not even the basic one like the moving averages. I go long and sell short under them, and go long and sell short above them. So they are basically there for show only.
Pardon me for not being able to tell you something that I hardly use. I mean, I've used them in months of backtesting, and through that I came to accept that because good signals don't come often, I'll probably never be able to use them to trade successfully. Coz if I were to follow them faithfully, I'll not be able to scalp.
I'm a scalper. I watch very basic things like horizontal price lines and trendlines. I plan my trades based on chart patterns. And I keep tabs on whether the patterns still hold when I'm watching the market. I rely a lot on Fibonacci levels too, and I like to see that they coincide with major support and resistance.
The other thing I look at is market depth. I won't enter a trade without having observed it for a while first. On a daily basis, I stare at it for 12 hours minimum.
The only indicator that I've used a few times is the NYSE Tick. But I've stopped looking at that too. I have only one pair of eyes and a very small brain. I can only process so much data in matters of minutes and seconds :-)
Sorry I'm not able to help FOR NOW. I'm doing a forward testing on some of those indicators you see there. I'll do a posting whenever I have any findings.
Shoul´d be possible to explain how you use the indicators you plot?
My reply:
I don't use the indicators. I have put them back on for the 100th time just to see if I will even take a look at them. I am still not watching them. Not even the basic one like the moving averages. I go long and sell short under them, and go long and sell short above them. So they are basically there for show only.
Pardon me for not being able to tell you something that I hardly use. I mean, I've used them in months of backtesting, and through that I came to accept that because good signals don't come often, I'll probably never be able to use them to trade successfully. Coz if I were to follow them faithfully, I'll not be able to scalp.
I'm a scalper. I watch very basic things like horizontal price lines and trendlines. I plan my trades based on chart patterns. And I keep tabs on whether the patterns still hold when I'm watching the market. I rely a lot on Fibonacci levels too, and I like to see that they coincide with major support and resistance.
The other thing I look at is market depth. I won't enter a trade without having observed it for a while first. On a daily basis, I stare at it for 12 hours minimum.
The only indicator that I've used a few times is the NYSE Tick. But I've stopped looking at that too. I have only one pair of eyes and a very small brain. I can only process so much data in matters of minutes and seconds :-)
Sorry I'm not able to help FOR NOW. I'm doing a forward testing on some of those indicators you see there. I'll do a posting whenever I have any findings.
ES 2/12
Am having problem uploading images.
Briefly, I'm seeing an Inverted Cup With Handle in the making. The pattern will only confirm if ES breaks below 819.5, which is the right cup rim.
ES (the "handle" part of the ICWH) has been trading along the base of an Ascending Broadening Wedge. I really can't imagine that ES is going to break out of the ICWH. In other words, I think that the breaking below of the ABW is a false breakout, and ES is likely to climb back up into the ABW.
Simply put, I'm still holding on to the view that ES will go back up to at least 885, if not 1000. In addition to this pattern that I've mentioned, I'm also seeing the development of a 3 Rising Valley sort of pattern.
I'm still a bull for now. A really moronic one perhaps.
Haven't the time to come up with a game plan for today's session.
Briefly, I'm seeing an Inverted Cup With Handle in the making. The pattern will only confirm if ES breaks below 819.5, which is the right cup rim.
ES (the "handle" part of the ICWH) has been trading along the base of an Ascending Broadening Wedge. I really can't imagine that ES is going to break out of the ICWH. In other words, I think that the breaking below of the ABW is a false breakout, and ES is likely to climb back up into the ABW.
Simply put, I'm still holding on to the view that ES will go back up to at least 885, if not 1000. In addition to this pattern that I've mentioned, I'm also seeing the development of a 3 Rising Valley sort of pattern.
I'm still a bull for now. A really moronic one perhaps.
Haven't the time to come up with a game plan for today's session.
ES 2/11 - Not Trading
Crazy market that's been chopping around within my "no-trade" zone.
Can't buy, can't sell.
Staying out.
Can't buy, can't sell.
Staying out.
Wednesday, February 11, 2009
My Trades, My Way
What I'm about to say is highly controversial, and likely to raise many eyebrows. So, if you are really new to trading, I suggest you skip this post.
Ever since I started trading, I've always had the bad habit of leaving profits on the table - way too much. Bad habit number 2: I hardly use a hard stop. Because of these really bad practices, I've had no negative months. Now, I don't know if that's a good thing. Apparently, there are traders out there who are making a million a year who complain about not having a negative month. The reason: they see their consistency as a sign that they've not been working hard enough.
Never mind that the logics simply baffles me - I'm not here to understand them.
I just want to understand me.
For many weeks now, I've cared so much about my trading that I've literally given up living a normal life. I care so much about not losing what I've made that I stare at my charts the moment I put on a trade until I exit. I go into every trade not wanting to lose. So, I scratched my trades fairly often, and other times I hold a losing trade until I see that the risk to hold on til it becomes profitable is getting ridiculous. I haven't done this based on any kind of calculation, but I notice that it always takes me 7 points in ES and TF to know that strategic exits are no longer relevant - that I'll probably have to resort to PRAYING for days and weeks for the trade to come back. I don't hold my trades overnight - so waiting days and weeks is an idea that I simply can't entertain.
For reasons that I haven't quite figured out, I started getting frustrated with my style of trading. I desperately wanted to master the art of giving up control - my goal is that one day I'll be able to put in a bracket order, then go do my dishes and laundry or to bed. The more accurate I am with where the market's going to trade to, the angrier I get with myself for not being able to commit to trading my plan by simply putting on a bracket order.
I tentatively concluded that my biggest problem is fear - fear of never becoming a consistently profitable trader. Note: consistency to me is 99.9% winning DAYS.
If by now I haven't made you fall off your chair, this will at least raise your eyebrow: I think setting a target and a loss is BS (precisely why I said this is a censored post). I often wonder, so if the market doesn't do as I have calculated that it will do, it should take my money for my lack of prophetic skill?
I trust my charts to tell me everything I need to know to develop a trading idea. I trust the market depth to tell me the right time to execute the idea. I don't ever queue in line to enter and exit. I don't put in my target for reasons that I've mentioned above. When I want out, I hit the price above or below market and I'm out instantly. When I want in, it's the same procedure.
Many will see that as an utterly bad deal. To each his own. To me, there's never a perfect price to get in at. But there's a perfect MOMENT: when market's offering an opportunity. It's like taking a train. You can't ask a train to come to you. You have to follow its schedule. When one comes along, you hop on. If you insist on getting on a train at exactly 08:03:03, you might never get on one.
I'm speaking purely from my own experience. I might form stories and hypothesis about the market but that's really just to give me a boundary within which I can express my trading ideas. My decision on each trade is made in real-time, and I don't really care where I said I'll enter. I operate within a 5 to 10 point zone, and I will enter at any point within that. And the zone moves when there're new support and resistance. And I'll exit as and when I pick up something that makes me feel uncomfortable about staying. It's mostly momentum, but many times, it's because of newly developed chart patterns that give clues as to whether I'm still on the right side of the market.
And because of that, I can change my view many times in a day. So I get in and out, all for the sake of maintaining zero loss at the end of the day. Seriously, I really don't like losing money, whether it's my own capital, or trading profits. I just don't see any sense in that. If I have found a way to consistently NOT give money to the market, at my own expense (of having to give up the really big moves), I don't see why I should let "probability" even come into the picture.
I believe in giving the market a max of 7 points everyday in exchange for a chance to see how my trading idea would work out. I do my best not to let it take any of it, and I'm definitely not offering them by way of "stops".
I wanted to find out if it's ridiculous to expect a target to be hit, and I chose today coz I thought it's a good day to kill 2 birds with one stone. The other thing I wanted to find out was how much pain I can take.
Conclusion 1: it's ridiculous to expect a target to be hit 100% of the time. And when it doesn't get hit, you get penalized. So, I'm not doing it - setting targets and just letting it go auto-pilot. If I'm not in a trade wanting 100% for it to be a winning trade, why would I put it on in the first place? Why do I want to go into a trade that offers me a 50% chance that I'll get the prize and 50% that I'll lose my own money?
Conclusion 2: I can take a lot of pain. Surprisingly. But i'll definitely cry buckets tmrw to get the negative ions out of my system.
Conclusion 3: I should never trade a day like today. From now on, no trading for me on FOMC, non-farm payroll, and Fed talk days. And definitely no trading the few days before and after Xmas and new year.
Conclusion 4: There's nothing wrong with the way I've been trading. I've been overly critical of myself, and kicking myself too hard. I am done with focusing on how much I used to make. Uncertainty is something I can smell every moment I'm in the market these days, and my trading style is simply a manifestation of my sense of insecurity, which I am going to start to see as being totally acceptable.
Ever since I started trading, I've always had the bad habit of leaving profits on the table - way too much. Bad habit number 2: I hardly use a hard stop. Because of these really bad practices, I've had no negative months. Now, I don't know if that's a good thing. Apparently, there are traders out there who are making a million a year who complain about not having a negative month. The reason: they see their consistency as a sign that they've not been working hard enough.
Never mind that the logics simply baffles me - I'm not here to understand them.
I just want to understand me.
For many weeks now, I've cared so much about my trading that I've literally given up living a normal life. I care so much about not losing what I've made that I stare at my charts the moment I put on a trade until I exit. I go into every trade not wanting to lose. So, I scratched my trades fairly often, and other times I hold a losing trade until I see that the risk to hold on til it becomes profitable is getting ridiculous. I haven't done this based on any kind of calculation, but I notice that it always takes me 7 points in ES and TF to know that strategic exits are no longer relevant - that I'll probably have to resort to PRAYING for days and weeks for the trade to come back. I don't hold my trades overnight - so waiting days and weeks is an idea that I simply can't entertain.
For reasons that I haven't quite figured out, I started getting frustrated with my style of trading. I desperately wanted to master the art of giving up control - my goal is that one day I'll be able to put in a bracket order, then go do my dishes and laundry or to bed. The more accurate I am with where the market's going to trade to, the angrier I get with myself for not being able to commit to trading my plan by simply putting on a bracket order.
I tentatively concluded that my biggest problem is fear - fear of never becoming a consistently profitable trader. Note: consistency to me is 99.9% winning DAYS.
If by now I haven't made you fall off your chair, this will at least raise your eyebrow: I think setting a target and a loss is BS (precisely why I said this is a censored post). I often wonder, so if the market doesn't do as I have calculated that it will do, it should take my money for my lack of prophetic skill?
I trust my charts to tell me everything I need to know to develop a trading idea. I trust the market depth to tell me the right time to execute the idea. I don't ever queue in line to enter and exit. I don't put in my target for reasons that I've mentioned above. When I want out, I hit the price above or below market and I'm out instantly. When I want in, it's the same procedure.
Many will see that as an utterly bad deal. To each his own. To me, there's never a perfect price to get in at. But there's a perfect MOMENT: when market's offering an opportunity. It's like taking a train. You can't ask a train to come to you. You have to follow its schedule. When one comes along, you hop on. If you insist on getting on a train at exactly 08:03:03, you might never get on one.
I'm speaking purely from my own experience. I might form stories and hypothesis about the market but that's really just to give me a boundary within which I can express my trading ideas. My decision on each trade is made in real-time, and I don't really care where I said I'll enter. I operate within a 5 to 10 point zone, and I will enter at any point within that. And the zone moves when there're new support and resistance. And I'll exit as and when I pick up something that makes me feel uncomfortable about staying. It's mostly momentum, but many times, it's because of newly developed chart patterns that give clues as to whether I'm still on the right side of the market.
And because of that, I can change my view many times in a day. So I get in and out, all for the sake of maintaining zero loss at the end of the day. Seriously, I really don't like losing money, whether it's my own capital, or trading profits. I just don't see any sense in that. If I have found a way to consistently NOT give money to the market, at my own expense (of having to give up the really big moves), I don't see why I should let "probability" even come into the picture.
I believe in giving the market a max of 7 points everyday in exchange for a chance to see how my trading idea would work out. I do my best not to let it take any of it, and I'm definitely not offering them by way of "stops".
I wanted to find out if it's ridiculous to expect a target to be hit, and I chose today coz I thought it's a good day to kill 2 birds with one stone. The other thing I wanted to find out was how much pain I can take.
Conclusion 1: it's ridiculous to expect a target to be hit 100% of the time. And when it doesn't get hit, you get penalized. So, I'm not doing it - setting targets and just letting it go auto-pilot. If I'm not in a trade wanting 100% for it to be a winning trade, why would I put it on in the first place? Why do I want to go into a trade that offers me a 50% chance that I'll get the prize and 50% that I'll lose my own money?
Conclusion 2: I can take a lot of pain. Surprisingly. But i'll definitely cry buckets tmrw to get the negative ions out of my system.
Conclusion 3: I should never trade a day like today. From now on, no trading for me on FOMC, non-farm payroll, and Fed talk days. And definitely no trading the few days before and after Xmas and new year.
Conclusion 4: There's nothing wrong with the way I've been trading. I've been overly critical of myself, and kicking myself too hard. I am done with focusing on how much I used to make. Uncertainty is something I can smell every moment I'm in the market these days, and my trading style is simply a manifestation of my sense of insecurity, which I am going to start to see as being totally acceptable.
I need a brand new set of ground rules.
ES 2/11
ES 10min
Pattern I'm looking to trade: Breakout of Ascending Broadening Wedge
Plan A (for breakout below ABW)
Entry Points (Shorts): Below 826, at no specific points
Exit Points: 817, 813, 807
Plan B (for busted breakout)
Entry Point (Longs): above 832.5, at no specific points
Exit Points: 840, 849
ES Trade 2/10 (After Action Review) & ES 2/11 (Trading Idea)
I'm not publishing the details of my one and only trade from yesterday (after US market open), coz I don't want anyone who is really new to trading to see a very bad example.
Briefly, I used my entire gains from last week (USD 1250) to find out a few things I HAVE TO know FOR SURE so that I can stop whinning about not being able to trade my plan. It's the way I learn, and the way I stretch myself. I don't like my fear, coz it hinders my trading. Forcing myself to stare at what I fear the most about trading in the eye is the only way I could rid myself of it. I survived it, and am a little taken aback that my heart beat NORMALLY in that 3 agonizing hours. I slept well too after getting stopped out. I'm a stronger person today, and I'm still liking the way I plan my trades.
Briefly, I used my entire gains from last week (USD 1250) to find out a few things I HAVE TO know FOR SURE so that I can stop whinning about not being able to trade my plan. It's the way I learn, and the way I stretch myself. I don't like my fear, coz it hinders my trading. Forcing myself to stare at what I fear the most about trading in the eye is the only way I could rid myself of it. I survived it, and am a little taken aback that my heart beat NORMALLY in that 3 agonizing hours. I slept well too after getting stopped out. I'm a stronger person today, and I'm still liking the way I plan my trades.
As a matter of fact, I have been executing my plans. That's why I really want to kick myself for having complained that I haven't traded my plan.
What I've not been doing is to take the profit that I ESTIMATED I could reasonably expect from that particular trade. After yesterday, I finally appreciated my very initial reason for not wanting to wait for that projected profit to fall on my lap.
It takes a lot of confidence to just put in your target and let it get hit. It's a luxury that belongs to only those that have spent years and years learning from the market, observing the probabilities of scenarios actually playing out as projected. One day I will get there, and although I would kill to make that day come this week, I know for a fact that that day is sometime in the hopefully not so distant future.
In the mean time, I will stick to my plan, but adopt a flexible approach to profit taking. I need consistent, or more aptly - routined - profits to build my confidence and accumulate my capital to the point where I can afford more aggressive play, and grow from there.
Moving on, below's my idea for today's trading.
What I've not been doing is to take the profit that I ESTIMATED I could reasonably expect from that particular trade. After yesterday, I finally appreciated my very initial reason for not wanting to wait for that projected profit to fall on my lap.
It takes a lot of confidence to just put in your target and let it get hit. It's a luxury that belongs to only those that have spent years and years learning from the market, observing the probabilities of scenarios actually playing out as projected. One day I will get there, and although I would kill to make that day come this week, I know for a fact that that day is sometime in the hopefully not so distant future.
In the mean time, I will stick to my plan, but adopt a flexible approach to profit taking. I need consistent, or more aptly - routined - profits to build my confidence and accumulate my capital to the point where I can afford more aggressive play, and grow from there.
Moving on, below's my idea for today's trading.
ES Hourly
This is still my primary view / hypothesis of how the market is playing out. What's slightly different now is that the head has expanded and the right shoulder has shifted to...er...more right.
In my chart above, the "head" is highlighted in grey.
That's a longer term play (ie. the Inverted Head & Shoulder), and one that requires ES to trade above 876.
For now, I'm seeing a Head & Shoulder in the making (both left shoulder and head are highlighted in blue). The right shoulder does not necessarily have to reach 850 (where the left shoulder is), it's possible that ES could turn back down to support after hitting 842 (fib retracement 50%) or 837 (fib retracement 38.2%).
There's support at the red uptrend line, which should affect the performance of the Measured Move Down (not if ES pulls back to fib 50% though - in which case, the 2nd leg of the MMD should reach the trendline at around the time that it's completed - around 45 points). I'm inclined to think that ES would resume its downward move after hitting 837. If that happens, I'll take either 815 or the trendline support as target.
I'll be using the 5 or 10min chart for basis of my trading plan for today.
In my chart above, the "head" is highlighted in grey.
That's a longer term play (ie. the Inverted Head & Shoulder), and one that requires ES to trade above 876.
For now, I'm seeing a Head & Shoulder in the making (both left shoulder and head are highlighted in blue). The right shoulder does not necessarily have to reach 850 (where the left shoulder is), it's possible that ES could turn back down to support after hitting 842 (fib retracement 50%) or 837 (fib retracement 38.2%).
There's support at the red uptrend line, which should affect the performance of the Measured Move Down (not if ES pulls back to fib 50% though - in which case, the 2nd leg of the MMD should reach the trendline at around the time that it's completed - around 45 points). I'm inclined to think that ES would resume its downward move after hitting 837. If that happens, I'll take either 815 or the trendline support as target.
I'll be using the 5 or 10min chart for basis of my trading plan for today.
My Trades, My Way
I've deleted this post coz the more I read it, the more I feel it's really bad influence.
I needed to rant yesterday, and everyone was asleep.
Not deleting the comments though, in case Mark checks back.
I needed to rant yesterday, and everyone was asleep.
Not deleting the comments though, in case Mark checks back.
Tuesday, February 10, 2009
ES Trades 2/10 - No More Longs
ES Hourly
Not liking the look of this. Descending triangle near price top. Long at 853 and exited coz chart is starting to show signs of trouble...
This one here shows that scalping while working is very bad:
Will enter short when ES breaks below 850.ES' really looking like it wants to complete a double top for now. Am taking its breaking below 851.75 as confirmation.
ES 2/10
ES Hourly
Still trading this idea. But I'm having reservation now about ES' breaking above the broadening channel to hit 900 - 1000. It looks like it could form a triple top - I'm thinking it might test 873, and quite possibly 885, and plunge right down to 836.
Another scenario I'm imagining is a bearish reversal at 865.
ES 10min
I'm hypothesizing that ES is going to trade up to the ceiling of the Descending Broadening formation, and if it manages to break above the formation, then it should be aiming for 873 - 885.
Trading Plan A
Longs
Entry Points: 853, 860, 867
Exit Points: 862, 872, 882
Trading Plan B
Shorts
Entry Point: 862, 849
Exit Point: 835
I'll most likely be scalping today. Working, and will be back home only slightly before US market open.
I'm hypothesizing that ES is going to trade up to the ceiling of the Descending Broadening formation, and if it manages to break above the formation, then it should be aiming for 873 - 885.Trading Plan A
Longs
Entry Points: 853, 860, 867
Exit Points: 862, 872, 882
Trading Plan B
Shorts
Entry Point: 862, 849
Exit Point: 835
I'll most likely be scalping today. Working, and will be back home only slightly before US market open.
Monday, February 9, 2009
ES Trade 2/9 - Happy
ES 10min, 5min & 1min
Bailed at 864.5, which is 3.5 points away from my initial target.Reasons:
1) ES hit a high of 866.5 and came tumbling down to 862 slightly after US market open and I take that as a very bad sign, since it's not characteristic of a bullish market to fail to trade up to the previous session's close 10 minutes into the active trading session
2) My plan was to get out before the scheduled announcement of the bank rescue plan at 10am EST, even if I don't hit my profit target, and ES's retracing instead of advancing to close gap simply gave me more reason to bolt
D thought I would run when ES dived back down to 862. I hadn't run coz I needed to see buying really drying up as it climbed its way back to 866.5. Simply put, I needed a solid reason to exit my trade.
ES struggled up indeed and I could see that those who thought they were buying on a dip were the minority. The others were simply not jumping in. When price started coming down again, I had to take my profit. Couldn't leave it on the table when we were still trading below Fri's close 15mins into the session.
This time, I'm not upset at all that I didn't hold til I get what i want. I gave the market and ME a chance to test out my hypothesis. The scenario didn't work out as planned, and that's just too bad.
I did my best at sitting - I was objective, as well as realistic about how confident I should be. Knowing that my confidence is based on how well I'm analyzing what's happening INSIDE ME when market's no longer acting the way I anticipated it to, I have to get out before my heart messes with my head.
Market could very well get back up later in the day, but that's not my concern. If I really did sit and market indeed went my way to hit 868 and beyond, I would have considered that a fluke - something that's not going to happen on a CONSISTENT basis. And if I'm not going to work towards being consistent, I might as well not trade.
1) ES hit a high of 866.5 and came tumbling down to 862 slightly after US market open and I take that as a very bad sign, since it's not characteristic of a bullish market to fail to trade up to the previous session's close 10 minutes into the active trading session
2) My plan was to get out before the scheduled announcement of the bank rescue plan at 10am EST, even if I don't hit my profit target, and ES's retracing instead of advancing to close gap simply gave me more reason to bolt
D thought I would run when ES dived back down to 862. I hadn't run coz I needed to see buying really drying up as it climbed its way back to 866.5. Simply put, I needed a solid reason to exit my trade.
ES struggled up indeed and I could see that those who thought they were buying on a dip were the minority. The others were simply not jumping in. When price started coming down again, I had to take my profit. Couldn't leave it on the table when we were still trading below Fri's close 15mins into the session.
This time, I'm not upset at all that I didn't hold til I get what i want. I gave the market and ME a chance to test out my hypothesis. The scenario didn't work out as planned, and that's just too bad.
I did my best at sitting - I was objective, as well as realistic about how confident I should be. Knowing that my confidence is based on how well I'm analyzing what's happening INSIDE ME when market's no longer acting the way I anticipated it to, I have to get out before my heart messes with my head.
Market could very well get back up later in the day, but that's not my concern. If I really did sit and market indeed went my way to hit 868 and beyond, I would have considered that a fluke - something that's not going to happen on a CONSISTENT basis. And if I'm not going to work towards being consistent, I might as well not trade.
In a nutshell, I am happy with me today!
Profit: USD 262
ES Trade 2/9 - Totally Going To Trade My Plan
ES 10min, 5min & Hourly
ES making round bottoms on 5 and 10min, and formed a gapped down doji. Support at 858 for now.Entered at 859.25, and am holding this. It's a brand new week and I haven't got anything to lose. Ha.
Sunday, February 8, 2009
Steve Nison, Dr Brett & MY FACE
I'm going to be lazy about this (yes ,yes, I'm selling Nison and Dr Brett, whatever...if you don't wanna kill your eyes, just go right to comment section here)....
Rushing out to get my face done - need it to look perfect for almost a whole week of castings and print shots....
Screenshot of Mark's note on my comment section:
Screenshot of my reply:
Rushing out to get my face done - need it to look perfect for almost a whole week of castings and print shots....
Screenshot of Mark's note on my comment section:
Screenshot of my reply:
Saturday, February 7, 2009
ES 2/9 - About Bottoms, Busted Bearish Patterns & Such
ES Hourly
My thoughts on what I'm seeing:
Ascending Broadening (AB) Formation (pink trendlines) that's supposed to encase prices was busted on Thursday when ES punched through its base but quickly made a V-shape reversal back into the formation.
The busting of the pattern was hardly surprising, given that an AB formation that develops at significant lows usually breaks upwards.
Now that the pattern is busted, I'll be expecting to see an even better upward breakout performance. The psychology behind this has everything to do with bears being caught by surprise - their covering sent price soaring, and that triggered new buying and fueled the much awaited rally.
When you combine the Descending Broadening Wedge (blue trendlines) and AB formation , you should easily see a Wash-and-Rinse (aka Double Bottom - albeit a lopsided one) pattern. Using the measure rule for double bottom - I have come up with something like 893.5 as the ultimate exit target for this pattern.
I'm using the Double Bottom pattern to project my exit points because I can't use the AB formation to do any computation until ES actually breaks out of it. In any case, it doesn't really matter which figure I take, ES is ultimately going to be stopped by resistance at 900 (which is very close to the targeted exit for the double bottom pattern).
900 is target 3 on my chart. Targets 1 and 2 are all resistances above where ES closed on Friday.
It's apparent that I'm taking a bullish stance. How could I not when I'm seeing double bottoms, Inverted Head and Shoulders, and a recently busted bearish pattern on a chart that's actually making higher lows ( which are not spectacularly higher - and I take that as a good sign, since a healthy rally is usually anything but spectacular)?
I'm not going into the realm of market fundamentals - anyone who's been paying attention to macroeconomics and keeping close tabs on what the Obama administration has been doing about the mess they've inherited from their predecessor should know that we're not in a very good situation. When things get this bad, and you give investors a little something to look forward to, they are going to get EXCITED for a few days, until you start giving them reasons to believe that you just might not be able to deliver your promise within the stipulated timeframe.
I'm envisioning that the HOPE bit would drive ES to the 900 - 1000 level.
The REALIZATION part we should see when ES tumbles back down after hitting that major resistance (900-1000).
Rationalizing the market is such a breeze.
No wonder everyone's doing it.
The busting of the pattern was hardly surprising, given that an AB formation that develops at significant lows usually breaks upwards.
Now that the pattern is busted, I'll be expecting to see an even better upward breakout performance. The psychology behind this has everything to do with bears being caught by surprise - their covering sent price soaring, and that triggered new buying and fueled the much awaited rally.
When you combine the Descending Broadening Wedge (blue trendlines) and AB formation , you should easily see a Wash-and-Rinse (aka Double Bottom - albeit a lopsided one) pattern. Using the measure rule for double bottom - I have come up with something like 893.5 as the ultimate exit target for this pattern.
I'm using the Double Bottom pattern to project my exit points because I can't use the AB formation to do any computation until ES actually breaks out of it. In any case, it doesn't really matter which figure I take, ES is ultimately going to be stopped by resistance at 900 (which is very close to the targeted exit for the double bottom pattern).
900 is target 3 on my chart. Targets 1 and 2 are all resistances above where ES closed on Friday.
It's apparent that I'm taking a bullish stance. How could I not when I'm seeing double bottoms, Inverted Head and Shoulders, and a recently busted bearish pattern on a chart that's actually making higher lows ( which are not spectacularly higher - and I take that as a good sign, since a healthy rally is usually anything but spectacular)?
I'm not going into the realm of market fundamentals - anyone who's been paying attention to macroeconomics and keeping close tabs on what the Obama administration has been doing about the mess they've inherited from their predecessor should know that we're not in a very good situation. When things get this bad, and you give investors a little something to look forward to, they are going to get EXCITED for a few days, until you start giving them reasons to believe that you just might not be able to deliver your promise within the stipulated timeframe.
I'm envisioning that the HOPE bit would drive ES to the 900 - 1000 level.
The REALIZATION part we should see when ES tumbles back down after hitting that major resistance (900-1000).
Rationalizing the market is such a breeze.
No wonder everyone's doing it.
For next week, I'm hypothesizing that either of these scenarios will unfold:
1) ES moves up to hit my target 1 at 876 (blue horizontal dotted line), then throws back to 856 (red horizontal line), which is a previous support turned resistance.
856 happens to be a fib retracement of 50% if we take 876 as the high ,and 836.5 (yellow dotted line) as the low.
If ES were to turn back up from there (ie. 856 - the red horizontal line), and hit the ceiling of the AB formation, that would qualify as a partial decline. Bullish pattern.
2) This is the scenario that I'm NOT convinced will develop: instead of pulling back to red horizontal line, ES lands on support at 850, or at base of AB formation, then bounce back up, only to reverse back down after being stopped by red horizontal line, or ceiling of AB formation, or 876 (my target 1).
If this really were to happen, I'll be looking out for a head and shoulder to form , especially if the base of the AB formation actually gives the HS a nice neckline. Bearish.
My target 1 for this breakout below the AB formation would be 816.
856 happens to be a fib retracement of 50% if we take 876 as the high ,and 836.5 (yellow dotted line) as the low.
If ES were to turn back up from there (ie. 856 - the red horizontal line), and hit the ceiling of the AB formation, that would qualify as a partial decline. Bullish pattern.
2) This is the scenario that I'm NOT convinced will develop: instead of pulling back to red horizontal line, ES lands on support at 850, or at base of AB formation, then bounce back up, only to reverse back down after being stopped by red horizontal line, or ceiling of AB formation, or 876 (my target 1).
If this really were to happen, I'll be looking out for a head and shoulder to form , especially if the base of the AB formation actually gives the HS a nice neckline. Bearish.
My target 1 for this breakout below the AB formation would be 816.
As much as I love playing with scenarios, I can't use them to make minute to minute - or second to second - decisions for scalps and daytrades. Not for the time being (I need a stronger heart and bigger account...). But they have been very useful in helping me to spot trends and patterns that are developing on lower timeframes, on which I usually formulate my plans for entries and exits.
NYSE data for the week of Feb 2:
Feb 2 & 3
Feb 4 & 5
Feb 6
Market doesn't look horribly weak to me.
Friday, February 6, 2009
ES Trades 2/6
I'm choosing to be a coward. Not getting in on the rally, coz I really want to maintain my positive week, and months.
I can't care less about the concept of "No risk, no gain" (or "no fun", as someone in the poker room once told me). I'm making my gains MY way.
Not having the nerve to trade my very bullish DBW plan when the market's staging such a spectacularly crazy rally is a little frustrating. I can't explain why I've chickened out. Maybe there's a part of me that's still intimidated by ES. Or maybe coz I just don't want to part with my hard earned money (I mean, I've not exactly been cruising through the past 2 months)
It's clear that ES has no resistance up to the 875 level. It might pause a little at 865 - 866, but it will not be stopped.
Just the way I'm reading all my charts. And the tape.
ES Hourly
ES 5min
For today: USD 150
Reasons, Reasons & More Reasons
Is it just me, or do we all see the inherent lunacy in these attempts to rationalize the market?I've been watching charts and tape for more than 12 hours straight now, and one thing that's clear to me is that neither the bulls nor the bears know what they are doing.
The other thing I know is that the market's not going down today no matter what.
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