Scaling in Scaling out - poor trade management example

Range plays at Levels

12th December 2012

Good read of market even though had no plan as FOMC.  Good trade selection and trade management last trade was placed too early and was nearly punished luckily escaped without a loss.  Don't pre-empt in danger zones.

Opening play

Good Quote PTJ

"Traders who are likely to succeed over time are those that take complete responsibility for their trades" Paul Tudor Jones

11th December 12

Trade 1 Closed for + 1 went on to hit +60 Good read of market very poor trade management

10th December 2012

Bears
1421 = HOD hold below there to test down to open 1416
or
Bulls
Price breaks 1421 and continues up to at least test of 1422 which is likely to hold

iphone notes November

Confidence is imperative but this has to be developed

Need to be more committed mentally to the task to ensure I form the correct beliefs necessary 

Best mindset = alpha we trust ourselves and our environment

The ego stops me from concentrating that's why I keep writing focus! My ego thinks I can stop paying attention but I can't, the ego will stop me developing 

It's IT7's mindset that probably mainly sets him apart from everyone else that he's developed.  This is quite obvious from looking at his trading days. 

Study more of my charts and trades. Also study IT7 and his charts but more look at his psychology of how he's trading 

Don't increase position size beyond appropriate amount

Don't follow trade signals

Don't trade into the FOMC grind = 1 hour before

Now you are Learing a bit more you are looking for the big move too much 

Don't take trades through minor levels DON'T TAKE TRADES THROUGH MINOR LEVELS FIND A BETTER ENTRY

After a massive move don't take trades looking for big moves it's much less likely

Remember to look at roughly what the minimum r:r should be some terrible trades have been taken in this respect 

BASE YOUR DAY RESULT AND REVIEW NOT ON PIPS WON/lost but on metrics performance e.g how well did you manage risk how were the entries how were the exits? How was your PA judgement how well did you recognise the type of day action

Grinding into a level isn't when to use a breakout play this is when you need pascience and stop placement think mf breakout. Learn when to use breakout plays and when to hold for a slower move  

Aggressive retest should move quickly if not then exit

Taking break out entries from levels looks to be a low probability play most the time my style and the time

I'm trading I think I prefer digging a deep entry or fading the better entry normally does materialise 

Fear and greed makes me hold onto the trades instead of actually taking in what is happening and the market structure as its unfolding

There is normally a small nuance that will let price show it's hand it is very hard to spot at times especially if you are in a trade and it is conflicting with your current direction.  You have to be open with a clear mind taking in every tick 

Look at how many bull/bear bars we had recently compared to the other to try and gauge who is in control. or how many we have going into a swing etc. use what you can to give you the nuances and the clues 

Right down emotions it helps especially negative emotions from losses bad trading etc. you need to transform feeling not just act on it. Also monitor positives it is important for developing emotional capital 

Keep track of your emotions. When you are most frustrated but most confident this is dangerous try and take a break and do relaxation exercises.

Use the thermometer exercise draw to thermometers one for frustration and one for confidence and note scores down regularly 

Some days the levels work and our respected very well take this into consideration 

Be careful about letting trading decisions be dictated by your p&l for the day. You did this earlier and paid the price  

Look at how many pushes you have per move 3 pushes sometimes signals the end of that pattern/move

End of day stats.

Grade:

Entries 

Exits

Gauging market structure 

Trade management

Psychological composure 

You need to be more dynamic 

Slow grinding session eg before presidential elections etc can be better to trade off the 1 minute

Look out for pivot levels that are some times in the middle of ranges but price will react to them again. They can be hard to see 

Need to look into switching positions why when a position is wrong do you not switch?

Every entry is different when you've got an entry that you are running with an extra tight stop something may happen that invalidates your trade very quickly therefore if your trade is invalidated is there now a trade in the opposite direction?  There may be trades where you are fading a move and if it goes against you the trade may still be valid or give you even more conviction that the trade is valid.  

Think about what sort of trade it is all trades need to be managed differently but also need a different psychological composure.

What is my biggest psychological barrier at the moment? Not being able to close losing trades! 

You do have a level of conviction on trades adjust the trade management accordingly. No trades are the same 

Overnight PA

19th and 23rd October - strong sell off - overnight rally
Look into others

iPhone notes 23rd October 2012

I seem to have 2 modes to trading im either over causiouc or under causiouc. Need to find happy medium

Is it reversion to the mean or trend?

When you are in a trade and you are more than 50% sure it is going to move against you just get out don't sit and hope because that's then all you are doing hoping not trading

Closing trades is your absolute nemesis right now you need to be able to close losing trades IT SHOULD NOT BE HITTING FULL STOP FOR THIS TYPE OF TRADING you know if you are wrong so close an be confident in your trading that you can regain the points 

Don't trade against ledging in an uptrend

Don't trade against a probing spike after a big sell off. It's basically a buying tail you've seen this action many times think of the CV diamond formation

Be very cautious with any trading after a big move

MANAGE RISK DON'T MANAGE RETURN

When you are in a trade and you know feel the hypothesis is wrong i.e. you wouldn't get in the trade now GET OUT or better reverse the trade if appropriate 

After big trends each day overnight seems to do the opposite look into this

Got to stop the hesitation need to work on this you decide if you are going to do something at a level if price gets there you do it.  If ou can't resolve this you will not progress

Why is it that sometimes you do the opposite of what you know is right the market gets you thinking the opposite is correct. Experience tells you the correct option

Sometimes it maybe important to stop and say what are you doing? Why are you not trading the way you normally trade?

When going into a trading box or hitting a level is second time back sometimes the quickest move? Then 3rd will often break the level. Look into this 

15th - 18th Trades

IMPORTANT iPhone notes 18th October

It's frame of mind that dictates the losing and winning days not setups. What are you doing are you studying or are you trading. What mindset are you in trying to snipe the best trade or trying to trade what the market is showing you the latter is what you should always be in watching the ticks analysing the market flow.

You are too focused on the concept 'get in where you know you are wrong the quickest' this is an important topic but needs to be utilised in the right context it is not always pertinent at the moment I just use it to focus on swing highs lows and get in as close to that but this isn't always right there is a lot more to the market than this. Focus on developing this idea more

Identify the principles and natural law that governs the rules you seek. What are these?

Look at trades not in money terms but was it the right setup and was it managed well don't base it on money lost or won

You have a short bias and find it difficult to take longs this needs to be resolved. Look at long setups in more detail what is it that is stopping you from taking these?

Stop doing trades that are revolved around I'm going to try it here because I can get in really close to where I am wrong! They never work!STOP THEM NOW

IMPORTANT

Look out for the days where you nearly place a few trades but don't try then go on to work perfectly so you try and find a trade to make up for the missed points WHEN THIS HAPPENS YOU ALMOST ALWAYS LOSE

Bull market price open lower then go up and vice versa. 

Novices look at the intraday price action pros look at what's come before 

Strong Trend days

Look at the week ahead

Good Quote

So, read everything and learn the basic concepts of supply and demand, market structure, and really understand how and why a market behaves the way it does and you are on your way to an indicator free price action trading approach. The short answer is informed screen time.

Volatility Periods

Hourly Analysis

Look at hourly charts of S&P, NASDAQ, DOW, DXY sometimes the other charts give a better perspective of future price direction for all the indices.

DXY - DOW Correlation

Trend Lines and SR on hourly

9th - 12th October 2012 trades

9th October 2012

10th October 2012

11th October 2012

12th October 2012

iphone notes 13th October

Use opening range s/r

Placebo effect

Taking positives out of all situations

The idea is to not make huge ticks everyday it is to manage risk and consistently make more than you lose. You can only take what is available and that is normally a lot less than you see in hindsight

Gartman letter - trade only with the major trend or do not trade at all - weekly charts looking at long trend only trade when a major level is broken

Start writing at the start of the week - views e.g. Risk on or off favour shorts or longs look at TGL

Stop choking - put things into perspective actions need to be fluid

Bandwidth - perception

Focus on managing risk more than profits - this will make profits in time! You are a risk manager first and foremost

As soon as you make profits you will go from risk averse to risk seeking - this is inevitable and it needs to be managed

Emotional triggers will make you change even more so than financial

Holding trades is a problem - confidence

I was right about every move today but only pulled 8 points - why?

Who's managing most the money bulls or bears etc

Look at small gaps in price is it better to sell straight after? Do they normally retrace

Trade management is still really bad scared of taking loss like mf says you need pacience for some trades or close and re enter look into what's going on

Flexible mindset is always key have a vision but be ready to change you will have to do this a lot

Look at how markets react to crisis events - rate them on strength

Stocks rule in terms of correlation

Careful at looking at markets as laggards and leaders look at them as strong and weak markets if they are correlated

How often do trades hit target that is the statistic to record

12th October notes

http://www.youtube.com/watch?v=ew1L6SLpHgM

What would improve my trading right now:

• More room to breathe on trades
• Holding to targets
• Not over managing from the 1m
• Trade Entry (patience)
• Wider stops
• Better execution waiting for a better entry at times but these times are fairly obvious
• I'f I'm fading a move it has to be done correctly, trade management needs to be different
• Reasses the trade decisions that revolve around 'I'll go in here with a really tight stop'  They rarely seem to work
• The first trade I have made every day this week has been virtually the best possible trade I could have made for the hours I have traded but has been poorly managed due to the reasons above
• Looking at todays trades (and most the trades this week) setting my stop and target and leaving the trade would have been best
• Most of what I trade at the moment is congestion, study the movement more
• I'm getting the directions right, I'm failing due to poor trade management/poor entry

9th October trading

Lesson from today: Need better confidence in holding trades all trades went on to hit target bar 1 but all were closed early for small profits.  Need to know when patience is required due to low volume grind as well.

IMPORTANT - Always monitor

• Candle strength e.g. are the biggest candles bull or bear?
• Swing strength e.g. momentum of the swings compared with the previous
• Swing projection e.g. how far has price pushed past the previous swing
• Probing spikes or H&S patterns
• Candle patterns (don't put too much weight on these)
• Candle shadows clustering especially on the 1m
• Retests of levels

Things to look out for:

• Is it a pullback or a test reversal?

1. Does it fake out one side then reverse?
2. How long has it been at the level?
3. Is it at an important level?

iphone notes

Monitor trend on 3m and 1m separate and update all the time on the screen

Log trades w/t type of trade/setup and trend on 3m and 1m at that point

Grade the setup on how good the entry was

Mark the most recent swing that you are using to gauge trend direction

Don't just analyse swing high /low look at the strength of the swing then pullback sometimes even if it doesn't break swing high low it still can give you a good sign

Feedback loop - what are you doing right and wrong in a trade, take out what's bad and keep what's good

Market replay - feedback loop

Try and put the entry trigger where the opposite traders are going to exit their trade

If price is moving it has a target - where is the target? Maybe use multiple scenarios

Mf breakout places his trades based on stop position - could look into this?

Look for structure on the 3m maybe look into just using 3m as trading time frame and get in on pullback on the 1m

Look into tradersmarts

Place price into the higher time frame context

Review process:
What did you expect to happen
What did happen
Why was there a difference
What can you learn from this


Use opening range s/r

Placebo effect

Taking positives out of all situations

The idea is to not make huge ticks everyday it is to manage risk and consistently make more than you lose. You can only take what is available and that is normally a lot less than you see in hindsight

Gartman letter - trade only with the major trend or do not trade at all - weekly charts looking at long trend only trade when a major level is broken

Start writing at the start of the week - views e.g. Risk on or off favour shorts or longs look at TGL

Stop choking - put things into perspective actions need to be fluid

Bandwidth - perception

Focus on managing risk more than profits - this will make profits in time! You are a risk manager first and foremost

As soon as you make profits you will go from risk averse to risk seeking - this is inevitable and it needs to be managed

Emotional triggers will make you change even more so than financial

Rules

Daily set-up checklist:
Plot on chart:
• Pivots
• Previous day high/low
• Previous day POC, VALH and VALL
• S&P – Current day POC, VALH and VALL
• S/R Levels
Rules:
First observations:
• Where are we trending relative to the most recent swing?
• Do we have an obvious bias for direction?
• Are we in a range period?
• Where is the next expectation level?
• Is there any obvious trapped orderflow?
• How is the 3m looking for bias?
• Do we have any scenarios?
• Will the next trade we are looking for be high/low-probability
A level where we look for a test = Current high/low of the day or a level where at least 2 swings have stopped.
A Zone = Several swing highs stopped in close proximity but not exactly this is supply/demand zone take test trades but they will need more room to breathe so adjust trading accordingly
New trend = Price breaks a previous swing in the opposite direction by around at least 8-10 pips we are now looking for PBs in the new direction should price act accordingly.

Trading box nuance

SR pivot analysis

Wild Swing Analysis part 1

19th September 2012

Previous Analysis

Things to do at the weekend

Screen checklist

Pivots, previous day high/low

Price Action chekclist

First Basic Analysis:

Where are the most recent swings?
Where is the expectation (S/R level) in the direction of the trend?

---------------------------------------

Getting in at the right point what does this mean to how hard the trade should be to manage (Investigate)? How close to the point it is not normally going to be perfect

Grade the trade low probability/High probability? Grade the previous price action trades

This is discretionary trading but I need to come up with a basic set of rules for now:
What are we counting as a level e.g. at least 2 swings where price has stopped or a naked swing high low i.e. the high or low of the day at that time
When is the trend broken e.g. when it breaks the previous swing high/low with force by a good amount i.e. 10 pips then we are looking for a pullback in the new direction with the expectation to test the next level
Careful when you have a level or a zone e.g. a zone is several swings stopping in an area a level is swings stopping almost to the pip.  You have to adjust trading size and stops accordingly and allow for extra room for a zone trade to breath
How do you define a rotational period? e.g. 3 consecutive swings on both sides stopping in a level or zone
In a rotational period what side do you then have a bias for do you use the bigger 3m picture to help and go with the bigger swing bias?
You have to be careful when looking at the bias changing as its breaking a swing but is it also then testing the next level always bear in mind has it broken the previous swing which is therefore bias change but at the same time is it testing the next expectation level?
With the test you then go with the expectation of the level holding
On a change of bias what happens when the next swing up or down can't break the previous! This is important
Is it important to have scenarios for both an upwards and a downwards move from this situation
After it breaks above a range and confirms trend it may swing down and then move up to test that naked swing, should this be treated as a normal test?
On tests look for price acceptance above/below the level
Think is this a high or low probability set up
Be intuitive watch the depth of the pullback not just where the swings reach
You have to know when to say no bias stand aside for a clearer move


Look at the difference between when to use the bias/swings on the 3m and when to use the 1m look at todays action remember to look at expectation and when we get to a level we are expecting a test and the test to hold.

In depth analysis of Friday trading

In depth swing analysis

FOMC Analysis

Probing spike

11th September 2012

Tough price action today lessons learned:

• Knowing when to put more weight on the 3m not the 1m and vice versa.

• Poor trade management cutting my losers is getting more of problem even when I am positive I am know wrong just holding in hope of it coming back is the road to ruin when trading like this.  Being able to cut losers is imperative to this style.

• Focus today was poor probably due to the weekend which is something that I need to think about.

4th September IMPORTANT POST

This is going to be an important post.  Firstly I had the best trading day so far on Friday and then the worst trading today.  What are the key reasons.

I came in with a bias that was completely wrong.  The bias was fair enough at first opening drive go with the trend but price soon proved me wrong but I kept ignoring the fact.  The reason I traded so well on Friday was I had a bias but I was flipping it all the time as price unfolded today I did not and was almost arrogant about my opinion.

I committed one of the cardinal sins of trading for the first time I moved my stop and was punished severely which is good as I know this can never happen again.

I'm learning to watch the price swings on the lower time frame and really enjoying it but the longer time frame 3m was actually painting a more obvious picture of where price wanted to go rather than over analyzing the finer details sometimes you need to look at the more obvious signs that price is giving you.  It is about knowing when to use the right analysis or put more emphasis on one side of PA than the other.

Looking for swings not breaking previous highs/lows is important but if a huge level is being defended this can be the most prevalent piece of PA at the time.  Look for the level to break and then change the bias otherwise less focus on the detailed PA just get in the trade with the strength.

No trading past analysis

31st August 2012 Lessons

1)Focus 100% on the charts you need to be immersed in the price to trade this is the only way.

2)Be more confident to take the trades when the swings show you where price does not want to go.  Especially when the swings can't break previous swing highs lows on multiple tests and then fail to even reach the level.

31st August 2012 Detailed Analysis

Focus was massively important today watching every tick this needs to continue.

31st August

1st entry poor entered off 3m not 1m need pull back on 1m entered at the bottom of swing on 1m

2nd trade:

Looked like complex pullback weak hands were shorts in uptrend going to test previous day high where stall had occured. Exited too early knew it was going to stop again at highs but the trade had showed me I was right so should have held until it tested highs

29th August 2012

TREND AND EXPECTATION

FOCUS, TREND AND EXPECTATION

28th August Trade Analysis

Today was a day when if I placed all the trades I thought about placing I would have made money but I was trying to stick to my rules which actually didn't work out on this occasion.  I feel like the hours I have to trade are difficult and sometimes I am waiting around for a trade that is then too obvious I need to be more intuitive trading with the strength and not with the weak hands.

Range day

Expectations

Using the Lance Begg's expectations theory I need to start utilising this more.  Look at price where is it likely to head to next.  Monitor how often this happens, plus have multiple scenarios if the first expecation occurs then what is the next likely scenario?