Wednesday, August 22, 2007

Trading Results for FTD Wednesday

made +3.5 pts. today.

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Trade3: Long ES@1461.75, initial stop=1459, target=1464
exited @1460.25, risk=2.75, loss=1.50

Trade4: long ES@1461.25, initial stop=1460.25, lost 1.0pt.

Trade5: long ES@1461, initial stop=1459, target=1464.
exited @1465.75, risk=2pts, profit=4.75pts

The orange arrow highlights a trade that I spotted in real-time, but did not take. I got a +ve TICK extreme, but the price was in a downtrend at the time, so the play was to fade the TICK extreme, esp. since it couldn't even tag the upper line of the Keltner Channel. It would have been good for +1.25pt. profit.

Trade1 was a play of the trend continuation. Pullback stopped right at the VWAP (which was just below the 23.6% Fib RT of the overnite run-up that peaked @1467 about 5min. into the session), so I went long expecting a re-test of 1466. I was correct in the decision to make the trade, but managed the trade poorly, as I moved my stop too much and too soon.

Trade2 was bit of a mistake. I saw that ES broke out around 1039a, and wanted to catch that move. But I entered after the breakout (mistake #1), and entered too close to a possible resistance level (VWAP) (mistake #2). I was fortunate this time that the mistake did not cost me. Exited once I realized the mistake that I made.

Trade3 was an attempt to play what I call the "First Thrust-Pullback" off the reversal @1456. I entered a bit too early and wasn't prepared to use a wide stop, so I exited for the loss.

Trade4 I wasn't sure what I was doing, probably trying to time the end of the pullback I think. That is probably considered another mistake.

At this point, I got a little flustered. I took a look at the time and thought there was still time for a big move to happen. I had manually drawn some trendlines (which were accidentally erased from the above volume chart), and could see that ES was still in a volatility squeeze. I decided to put an alert onto XLF. The rationale was that a true breakout in ES would require participation by the financial sector. The alert was for a break above 34.37 in XLF. Once that alert went off, I went long ES @1461. It ran up to 1466 before stalling. ES would go on to eventually climb another 3pts, but not before retracing over 2pts. I wasn't interested in holding thru a retrace, and I knew it, so I exited @1465.75.

Today's performance was encouraging. Things that I did right:
- set an alert on XLF. I think I will do more of that, not just for XLF, but for all of the indicies. I think I will even add this to my list of trade setups.
- waited patiently for my setups to setup.
- remained focus by talking to myself. Using Google docs, I've written down a list of the setups that I am looking for, kept it handy in one of my browser tabs, and periodically reviewed this list of setups just to re-orient myself.
- I started and ended the session on a winning note. Yes, I realize expectancy is supposed to be more important, but I cannot emphasize enough how those wins were very important for my psyche. Only when my confidence is restored can I shift my focus away from win rate, and towards expectancy.

Room for improvement:
- improve my discipline. I kind of lost focus and that led to my mistake with Trade4.
- remain objective. I'd like to say that I practiced letting some of my trade setups pass by without taking a trade. But unfortunately, that was not the case in trade2, where I saw my setup occur, and missed out on it, so I lost my objectivity which led to the mistake.

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