Reply To Comments

The good thing about not having to plan for pre-market trades is that I have plenty of time to read and write. LOL!

Am responding to Emini Player, JE and Cory's comments here.

EP:
I do track my winning vs losing trades. But I do that only on a half-yearly basis. For 2008, the review can be found on one of the links on the left.

Regarding the way that professionals play -

I agree that their way is much easier on the heart. Michael (the pioneer in basic trading courses here) trades this way, and teases me all the time about my scurrying in and out of the market :-) But Michael is financed by pure trading profits. His psychological barrier is not even a tenth of mine. I am financed mostly by my own savings (although it's not an emergency fund or money that I need to put food on the table), and it hurts A LOT when it's taken from me. I can't stand it when I get stopped out. It's slow bleeding, but I can still die from it.

Most importantly, I'm just NOT the type that can sit still and wait for price to hit target. I am very hyper, and I'm a control freak. Getting in and out is not half as stressful as sitting and waiting to be stopped out or for target to be hit. It drives me nuts. I don't think I'll ever trade that way. Yes, my current profit is small, but the dollar amount per day is not what I'm focusing on. I'm counting points and tracking consistency. Once I get both right, I'm trading more contracts. Am still working on the stops still. Before I read your comment, I was thinking about setting a 6-tick fixed stop and entering only when the setup is right for such a stop. That's for now. In the long run, I'm still much more comfortable with a mental stop that takes into account the prevailing market volatility. But that will come only after I've learned how to handle the emotional bit.

Thanks so much for telling me about your broker. I will ask D. He handles my account and everything related to form filling. I just trade. LOL! So you have mentors? Good for you! I've never had one, and wonder what it's like to have someone kick my ass.

JE:
Thanks for your note. It's so kind!! Warms my heart :-) So sorry about what you went through. Good that you've recovered (you have, I gather) and are trading again (I'm assuming you are, since you're watching the market). I've heard too many sob stories from traders who are doing well now, and am convinced that it will take years and years of practice to master the art of trading. Ray Barros' is legendary. On the other hand, I know also those who hadn't been burnt ever, in their decades of trading. Michael Woo, a well-known trading coach here, and someone I really look up to and love chatting with, is a rare breed. He's traded for more than 20 years. When I teased him that he has no sob stories to tell (here, sob stories SELL!), he protested and said he lost money on gold when he first started out. I asked him how big the damage was, he replied that it was HUGE. Then I asked if it wiped out his account, he replied that it was nowhere near that. My conclusion to that is that he indeed has NIL sob story to tell. LOL!! I don't know how many out there are as brilliant as him. I believe that most have gone through rough rides in their trading journey. Except for those with really great mentors, and the mentees are NOT doctors or lawyers by training LOL!

Thank you for liking my writing. I tend to communicate better with animals, so it's really comforting whenever I come across a human that actually understands my gibberish :-)

Cory:
Gosh, you are good! I'm going to be using that list as my beacon and roadmap. I'm serious.
Do you have a blog, Cory? Think I asked that once months back. Are you a member on EliteTrader forum? We seem to have a lot in common as far as trading goes. Would really love to read about your experiences if you're sharing them via your blog or a forum.

ES 3/18 - Fib Targets

Still holding my no-good trade. Will let it go probably near pivot, if it gets there. Or at 769, which is Fib ext 138.2 (using the high to first swing low as the seed), or at around 758. Am wondering if today's doing the exact opposite of yesterday. Will see how things unfold.

ES 3min (Yesterday)

The above shows ES hitting fib 423.6 target at market close. On a strong trending day, it has hit that TWICE (seed had a tight range though) before. The downward move to yesterday's low hit 211.8 in a matter of an hour. Had I been more attentive, I should have taken that as a sign that what ES would do next was to go for the targets on the other (up) side. Before the low was hit, ES had been stopped repeatedly by 138.2, which was just too far below its potential.

ES 3min (Today)

This chart shows seeds for both first down move and first up move for today (pink is down, blue is up). ES has a tendency to stop at levels 211.8 and 138.2. On trending days, it usually exceeds 423.6 by the end of the active trading session.

As I've mentioned, am not planning new trades for now. Am just waiting for a place to get out

I Want Out

Nursing a scalp gone really bad. My focus now is on exit. Not planning anything else until I've closed my position. And I definitely will close it today. Even a gapped up star on daily chart will not make me hold the short position. We're no where near price top. An evening star only works there (price peaks). What I'm seeing on both daily and hourly charts are telling me a rather bullish story (now, that sounds really familiar....did I say that a couple of days back??? why the hell did I keep selling then???)

I've mismanaged my trade big time. And I've broken my number one rule about not keeping a trade overnight.

I can continue to hold the trade and HOPE for the best - and if the best happened, I would have learned nothing. Or I could bail now, take a USD1k loss, and resume practice on scalping the way I did before. It's been 6 months now, and I still can't repeat what I did in Sept/Oct last year. Back then, running was my forte. Probably has something to do with the fact that I was entering on 5 contracts (ER2) each trade. I remember saying back then that I had wanted to reduce to trading just 1 contract so I can learn to HOLD a position, but was wary of a very likely consequence ie. that I'll get sloppy and not run when I'm wrong. 6 monts later, I'm living that very nightmare. Self-fulfilling prophesy, maybe. But it's looking more like I actually DID know myself very well then.

Now, I'm simply baffled. I don't know for sure why I had to fix what isn't broken. Perhaps it was the profit amount that freaked me out. It's extremely unproductive to think that if you can earn that much, you can also lose that much, coz I hadn't gotten there by gambling. I acknowledge that the market needs to be willing to move in the first place, but the rest is really just pure money management and focus. I was so willing to scratch whenever price didn't move in my direction immediately, or when it went against me by ticks! I was also willing to take ticks for profits. On rare occasions, I got a few points in under a minute. I always depended on the market to give me whatever it wanted to give within that single 3 or 5 min candle, and I was out.

Maybe what I really need to do is to go back and take a look at how I traded then. My style was certainly a lot less complicated. I look at chart patterns and only trade 2 to 3 of them, and I kept my eyes on the key S & R levels. And with the ER2 (TF now), I would use fib to buy/sell on retracement on a trending day. That was all. Nothing else. I didn't care about pivot points. And I didn't care about previous days' highs and lows. As far as I was concerned, they would have been key S & R on the higher timeframe, which I would plot on my 3 or 5 minute chart. Entries were ususally based on 1 min. I was able to focus on the "NOW" - no prediction on whether support or resistance was going to hold coz price was at historical high/low and such, or that it had gone up/down for days so it ought to be retracing, etc, etc.

Seriously, are other human minds able to process that much in a matter of minutes or even seconds? Am I the only one that has a brain that can only focus on ONE thing at a time? In scalping, for me, it would be on what price is doing NOW (eg. price is at support, and has formed a hammer; the next candle opens below the open of the hammer and is moving down - so the only thing I'll be thinking is that price is behaving oddly, and that I should just wait to see what happens next).

I really want to get out of this confused state. I have a very short attention span (I can't even stay depressed for more than 24 hours for crying out loud), and I'm wondering why I haven't gotten sick of being confused yet!!

ES Trades 3/17 - Sleeping with Open Position

Apparently I've not finished configuring my updated TWS....haven't gotten down to doing anything about the layout either.

I've finally turned another scalp into a daytrade, which is starting to look very much like a good swing trade.

If I remember correctly, the last time I kept a trade overnight was as far back as 6 months ago.

I've gone from being extremely conservative and nervous to out-and-out fearless. Great.

Am turning in. It's 1:30am here, and I haven't slept in a long time.

Thanks, LT and Cory, for your comments. Just read them. Still deciphering LT's message though....

And thanks, MVW, just read yours seconds ago. I'm not letting anyone take my money. So I'm totally going to keep my trade. LOL!

ES 3/17 & Rant

ES 3min

Levels that I'm watching. Plus 776 & 782.

I have no idea if ES wants to test the high or the low, and I have no idea how I'm going to go about trading today. So far, using stops has been EXTREMELY uncomfortable and unnatural. If it takes doing something that feels totally unnatural to trade well, I'll choose sitting on a losing position over using a stop ANYTIME. Ok, that's not fair. Sitting on a losing position is absolutely in my blood, but damn, it's gotta be the most uncomfortable thing to do!

So far, scratching without waiting to be proven wrong, or outright sitting when my trade has not been proven a bad one has worked FOR ME (save the few times that I totally lost my mind and decided to inflict some REAL pain in order to learn). Trading without a hard stop has been stressful, but I feel in control. Putting in stupid bracket orders or simply a hard stop makes me feel like a really lousy stuntman that needs a safety net, or more aptly, a leashed dog.

I'm tired of wanting to do what's right. Why can't what's right be whatever that makes you money 80 - 90% of the time?? Now I've simply gone from feeling stressful to MORE stressful coz I really don't know what the hell I'm doing.

Why does wanting to be JUST me ALWAYS feel so wrong???

Admirable Politics?

I am not American, and I don't like to talk about politics, the economy and general social ills. Because they are unnecessarily complicated, and generally inherently depressing. But I've reached the point that I need to unload some pent up indignation. After days of reading stories like this, I have been visualizing slapping the person I used to admire.

What baffles me is, why is he even reprimanding?? Those are not just a bunch of school kids that are acting up.

If he is not merely putting up an act, then he's simply incompetent. I believe his hands are tied. But hadn't he come into office with some sort of a game plan to take command?

First you have a puppet Bush. Now you have a softie, whose desire to be a folklore hero is even more unpalatable than his predecessor's thirst for oil.

Americans don't need a hero as a President. They need a Hitler, or a Saddam, to weed out the ills in their society.

They need someone like Jack Bauer in 24, a Jack Bristow in Alias, and a Bryan Mills in Taken.

A man's gotta do what a man's gotta do!!

When my Dad used to see something seriously wrong, he would always go,"If I were the government...I would......".

Right now, I really feel like saying:

If I were Obama, I would stop apologizing - stop talking altogether in fact - stop wanting to be a GOOD MAN ("Good" is the antonym of "Politics". So I take back my word that I thought America needed a "good" man as a president. As my brilliant brother, the Pilot had said, the only good man who chose to be a politician - and he did so only coz no one else would fight - is Gandhi), and JUST BE A JACK BAUER.

Actually Bryan Mills is even better. Cool headed guy who's always in control - hardly surprising given that he spends most of his time thinking and TAKING ACTIONS rather than talking. I love the way he goes for the neck, the key organs, and the repeated punches on the face til the crooks totally stop moving. He doesn't spare anyone who got in the way of his saving his daughter, a defenceless teenager who had gone on a tour with her crazy cousin coz she didn't know better, and was kidnapped (sounds familiar huh? Can you blame a young girl when even adults of today clearly show that they are not any wiser?). That's what you do to selfish, wicked people who harm the innocents. And I don't care about the reasons they are selfish. They could be doing everything for their family. But hey, all of us have got a family, but we don't go around destroying others' so we can live in huge mansions and holiday at the bahamas every summer!!

The people of America need a Bryan Mills.

Lost, Again

Frustrating day. Nothing's working. Just realized that my TWS setting has always been stored on my server ie. no local copy.

My cats are as crazy as my charts.

The universe has conspired against me again.

It's strange that a person who has the entire house to herself for the most part of the day is desperately needing space.

Everything around me that moves distracts me. Every sound I hear annoys me. It's a clear sign that I've lost my focus.

And I don't even know how and when that happened.

Was telling D last night that I don't have the luxury of taking things one step at a time.

I feel like a total failure, and I've wasted my life.

Got My Old TWS Back

Got my old version back. Took 5 different funny faces from D to make me laugh again. I just don't understand why men must fix what ain't broken!!

Dinner now. Trade later.

SUPER MAD!!!!!!!!!!!!!!

I AM SUPER PISSED!!

D updated my TWS over the weekend, and when I logged on today, booktrader looked different (no more market depth!!), and the configuration for my bracket orders looked alien!! The worst part was that there was just no way that I could re-configure bracket orders, and no information whatsoever on how I can view market depth again! Sure I was pointed to their website (I happen to know the URL!!!!!), but once in, I was left strandled at their homepage, not knowing what I was supposed to subscribe to in order to see my original tape!

In frustration, I had put in a wrong order TWICE!!!! BLINDED BY RAGE!!!

D's not home yet (2 hours late), which is totally fine had IB not screwed me. He had to call at precisely the time that I was about to implode.

I HATE CHANGES!! I HATE UPDATES!!! AND I UTTERLY HATE USING BRACKET ORDERS!!!!!!!!!!!!!!!!!

D said he's coming home to fix everything. But I'm too mad to be able to focus anymore. I WANT BLOOD!!!!!

ARGGGGGGHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

ES 3/16

ES 3min

ES looks bullish for now. Buying first decent throwback. Selling double tops and Inverted Head and Shoulders. Watching 669, 776, 782 resistance and signs of bears fading gap.

In a nutshell, playing by ear.

ES - Fulcrum

ES Hourly

What I see when I put on a Bull's hat:
i) Price stopped by pivot at around 754, OR ii) by 752, leaving half of gap unfilled,
then plunges to 729 support, from where it takes off for 776.25 resistance, clears it, then go straight for 836 target

What I REALLY See:
1) Price making a dash for 776.25, creating a classic bull trap, then comes back down towards 737 and stalls there, creating a bear trap; bears run, price shoots up to 796.5, then free-falls to floor of dotted white uptrendline

2) Price falling to 729, finding support temporarily, goes back up, only to be stopped by 745, forms a classic partial rise, then plunges down to 720 or possibly 707 (either way, finding support at floor of dotted white uptrendline)

Ok, what I see is what I WANT TO SEE (I mean, don't we always see what we want to see?....ok, enough mf for now...) . A 3-rising valley type of bottom is simply more convincing, at least visually. Something that stands on one leg looks precariously like it's going to topple, sooner or later.

Again, will draft my game plan for today only at 5am EST.

Phantom Of The Pits (1)

Phantom Of The Pits was asked:

After more than three decades of trading, why haven't you written a book sooner?

Phantom's response:

I have, but they have all seemed to become outdated because knowledge is quicker in coming than in writing. I always wanted to have it exact. I have made mistakes, and to give my mistakes to others seemed to be admitting I was wrong often.

It has taken years to understand that being wrong is what trading is all about.

Just Gotta Love Facebook

Personal ALL TIME favorite:

ES Trades 3/13

Choppy day. Not totally unexpected. Setups kept failing, and I kept having to sit on my hands. Probably a good thing though.

Stopped out once, and that was definitely the best thing that happened today. Allowed me to get back in the game instead of having to sit for hours to nurse a single very sick trade. Totally been there - too many times - and never want to go there again.

With a safety net in place, I should have taken profit instead of getting stopped out. All the trades were almost immediately profitable - entering on MSL & MSH, inside bars worked well. Missed 2 trades that broke out upwards - I hesitated even though the trigger was an inside bar for both, coz as always, I simply couldn't BUY.

Was convinced by the TICK (which has spent most of its time in the positive region ), eventually, that RESISTANCE IS FUTILE. It's just not a day to sell.

Lost at leaset 5 points coz I didn't take profit the way that I've gotten very good at doing. I let a trade get stopped out, and scratched another instead. All because I was still wanting to give taking profit at target a shot.

I'm convinced now that I have a certain style of trading that I can't change. It's not in my blood to let anything go auto-pilot. A stop only serves to save me from serious damages. The only way that I can trade comfortably is to watch my chart, THE TAPE, and the TICK ,and bail at the first sign of trouble. Scalping is the only mode that I can trade without going crazy.

Will stick to trading the few setups I'm familiar with (yes, I'm scalping high probability setups. What a waste).

Focus is back on achieving consistent results, and if by Sept I don't get another nasty incident, will start adding contracts.

ES - Fibonacci, Keltner Channel & 3 Bullish Reversal Patterns

ES 3min from Mar 12

This was from yesterday's session, sequel to the 3 rising valleys .

The pattern indeed developed into a cup with handle.

My habit has been to look for channels and broadening wedges to trade. In this case, the first thing I saw was the Ascending Broadening Wedge. By the time that a handle was formed, I was waiting for price to come down to touch the floor of the wedge for the 3rd time. Broadening wedge at day/year's low or at midway between high and low usually sees price hitting the ceiling of the wedge and breaking out after bouncing from its floor for the 3rd time.

Trigger candle will be the 3rd candle of the MSL. The only thing about the candlestick pattern (it's NOT an engulfing pattern aka outside bar) that suggests a bullish reversal is perhaps that the bullish candle is a marubozu. Get in 1 tick above the high of this candle, and trade all the way up to the ceiling of the channel. If you take a seed (highlighted in blue - refer to chart above) from the non active trading hours, you can usually expect a 261.8 to 423.6% run with this pattern (as seen on chart).

I usually will trade the pattern on the short side. I will go for the throw backs. Especially the 2nd one, after ES has formed a swing low, and then a double top, accompanied by a spinning top with long upper shadow. My kind of pattern.

I've briefly mentioned Keltner Channel before (re how I used it with the NYSE TICK when trading the TF). The chart above shows how it can be used with Fib ext. Note that the fib ext is for an upward move. Once fib 132.8 or 161.8 target has been hit, and price has traded out of channel, it's a sign of an exhaustion of the upward move. A short entry can be considered but only from the upper band of the channel. I usually will wait for price to move back into the channel (ie. usually the lower peak). Avoid shorting before price has hit at least 138.2 target, or before price has first gone out of the channel, coz it will make another attempt to do so, and that's usually when you're SELLING (been there).

Bollinger Band and Regression Bands should work the same way. I don't use BB coz it makes my chart look really ugly. The bulges and throttling and all. Just not pretty. If I'm staring at something for the most part of my waking hours, it cannot be UGLY!

That's why it's ok if D is.

MUAHAHAHAHA!!!!!

ES - Cup W Handle & Fibonacci

ES Hourly

What I see:

- ES coming down from ceiling of broadening channel, possibly going for 740.25 support (also Fib retracement 23.6), or to 729 (also Fib retracement 50).

- A bull would want a 50% retracement - coz a drop to that point is the pattern we've come to know as a partial decline, a fairly reliable indication that price will break above the channel.

ES Hourly with Fib Retracement & Extension

I see a very bullish, rosy picture:

- A cup with handle formation in the making (the cup is that whole grayish area there)

- If we have a partial decline ie. if ES pulls back to fib retracement 50% (seed highlighted in green on above chart) at 729, and ES breaks above 750, we should have our complete cup

- If we have a cup (comes with the handle of course - IF we get our partial decline), there's a possibility that ES will at least hit Fib Ext 423.6 (seed is highlighted in blue on the chart) or resistance at around 800 (won't happen today though).

- For the first time in a long time, the faster EMAs have gone above the 200EMA

- Where ES went up by way of the 1st leg of a measured move was exactly the point of a bullish crossover of the 20 and 50 EMAs

I'm not concerned about this being just a dead cat bounce, or a sucker's or bear market rally. It could be. But that's D's problem (he invests. OK, so I'm a little concerned ). All I'm interested in getting out of my charts are the best areas to place my entries and exits for intraday plays.

I'm not going to plan anything until 5am EST.

Will trade mainly the active hours from now on.

I've had enough of the non-active hours - drained me to the point that by the time market opens, my brain's half dead. Prices crawl around in a haphazard fashion, and almost always never break out (resulting in my fear of buying breakouts after having traded those hours for a while). Well, you can't expect breakouts without volume....

Tape is easy to read though - so if chart's not too ugly, I might still take a scalp here and there. But I'll rather use that 12 hours to read - books, blogs, anything.

ES Trade 3/12

Sat on my hands for more than 15 hours (what can I say, I have problem trading bullish patterns), and finally decided to go for a break out play. Was fooled into covering too early - by a dark cloud cover! I should have known better. Anyway, I gave it a shot.

No more breakout plays for me.

Told D last night that I was going to go back to trade the active trading hours. Looks like I have to tell him again. Coz he's waiting up for me, and I have to turn in now....

ES 3/12 - 3 Rising Valleys

ES 3min

A pattern I've seen often enough...Didn't take the trade coz it's not my practice to buy an upward breakout. Maybe one day I will. I most definitely should!

A rather reliable reversal pattern to play. Look for it around day's low and near major support (712 in this case). High probability trade as the expectation is for price to break on the downside of the triangle (ie. betting on bears running).

First exit target's the start of the pattern (715.75). If it develops into a cup with handle, 2nd target could easily be at day's high (fib ext 261.8 -"seed" is that drop before the 3rd valley). Enter 0.25 point above the high of the trigger candle for the MSL at 3rd valley. That's the way I would play it. My exit target would have been at 714 (which is actually the confirmation for the pattern) , or maybe even at 713.5 (I don't buy breakouts). It would have been a nice scalp - too bad that entry is less than 3 points from my exit target.

Definitely going into my depository.

ES 3/12

ES Hourly

Nothing much to say except that I can't see ES going up without revisiting support at 665 - 680.

As far as trading goes, will stick to scalping if there's no quality setup to trade. Using stop loss.

Am now spending a fair bit of time looking for the setups that I've been trading - those that had worked for me, and those that had gone against me in lightning speed (am particularly interested in the latter). All will go into my chart setup warehouse...

ES Trade 3/11 - Scalping Setup

Above's my scalp. Went in at higher MSL, trigger candle is an inside bar, entered 0.25 point above trigger, stop loss at 0.25 below.

This is one of the patterns that I'll BUY. I don't care if price will break out of range, coz I always get out before price hits resistance. It's a scalp after all.