Nov 292010

Today was a test of patience.  The markets were really slow & range-bound most of the session and then something happened to stir things up.  The bund first tested lower.  My plan was to get short so I did not take any longs.  I did practice some sim trades on other markets to keep me occupied (ended up slightly negative but I wasn’t very selective).  I also caught up on some reading.

I tweeted this chart when the Bund appeared to be balancing:

I waited patiently for my plan to unfold, which it did.  I went short at the unfair highs.  I was slightly early and took a second entry at the next CLVN:

My cost basis wasn’t very good so I just looked to get out with a small profit (8 ticks).  I should have been more patient because it dropped down another 5 ticks or so.  I’m too quick to take profits and that’s why my expectancy is so low.  But on the other hand my cost basis was bad and any pullback back up to the top for a retest would have given me a loss.  I guess I’m a perfectionist.  If my entry isn’t perfect I’m looking to scratch.

The bund bounced off the DVPOC and then went up to rest the highs.  I attempted a short here (not shown on chart), it went against me 6 ticks and at that point I realized I didn’t want to be short and I shouldn’t have taken the trade.  The rest of the high was off the DVPOC so we weren’t really balancing now, we were slowly moving higher.  So I scratched that trade.

I give myself a B today. I was patient and traded my plan, I just should have scaled out more intelligently on the first trade to improve my cost basis and hold a little longer.  But overall any day I trade my plan is a good day.  I used to say any day that is positive is a good day but now I realize I need to focus more on trading my plan and the P/L will be fine.  Being positive while not trading the plan is not good.

  2 Responses to “Bund Results Nov 29”

  1. Congrats on following your plan. I think that’s where our focus should be. When the trade plan is good, i.e. has an edge, and one follows it then the profits should come. The One Good Trade Book has really helped me to identify some weaknesses in my trading and where I should take steps to improve. Thanks for the recommendation.

    Today I was more patient and did not overtrade. I followed my plan except for when I traded at the confluence of a composite and O/N HVN. Sure enough that trade ended in a 5 tick loss. My 2nd short was closer to the unfair high. After hitting my target of 2 ES pts net for the day I stopped trading live (this was after my 2nd trade). I was looking to hold longer, and sure enough price did continue lower but I was only holding one unit and decided to exit upon signs of a retracement. As I gain more confidence and experience I hope to make one good trade after another each and every day.

    Question: When the market is balanced you look to buy unfair lows and sell unfair highs. On the chart at the top, what led you to believe that the market was balanced? I normally think of a balanced market as one with a bell shaped profile. In this case it looks like there are four little bell shaped curves. The profile on your chart at the bottom looks more developed as a balance area than the one at the top.


  2. Good job on hitting your goal for ES, during premarket too!

    The answer to your question is that I was avoiding trading in the balance area. Whether the market was balanced or not I cannot be for certain. But I knew I wasn’t trading in the middle. My preference was for the short side since the recent movement was down. It seemed like price spent a lot of time in the balance area and for that reason I was open to taking a long if the market made a double bottom.

    The bell-shaped curve shows a “mature” balance area. Often the market will continue rotating until the balance area is mature. But it doesn’t have to be mature for the current day if recent action in the previous days makes it mature.

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