Mar 072012

Today was a tough day.  I put my thoughts in the chart but I did want to say something about the 49 short.  I tweeted in an exchange with Paul that I would rather get long support than short the 49 resistance.  I said that there was potential support at 47 which is only 2 pts away.

I was not able to get long because I was waiting for the support zone.  I don’t mind missing those, it’s the right thing to do (per my plan).  However when I do miss one I must be very careful about rushing into another trade to try and make up what I missed.  And that’s exactly what I did with a short at 49.  Is it at the zone?  Yes.  Should I have entered there?  No for several reasons.  First is 47 is likely to be support.  Second, it just failed to close the gap so Dalton says to go with these moves.  Third, when fading, you want to take the trade deep into the zone, not at the front.  (Thanks to EMP for this idea and the corollary is when going with trend you want to take it at the front, at least partially, to avoid missing it).   This mistake cost me a 10 tick loss which wiped out the 11 ticks I had made in globex.  And I know better.  Shame on me.

The plan is rather simple.  But some how I always manage to make it more complicated.  Better luck next time.



  8 Responses to “Review of 2012-03-07”

  1. Sounds harsh but i think your overcomplicating the market. Maybe simplify with less mechanical signals, less analytics and let go your intuitions (your ready for it). my 0.0001$

  2. You need a way to track intra-bar volume. I use Market Profile information to determine where I plan to trade but once the market gets into that region I switch to a scalping type chart so I can use volume or “Order Flow” to trade bar by bar. There is no way you can trade profitably without that information. It seems to me that you have a decent model for the big picture but you need another chart to use to trade with.

  3. Tyler, can you elaborate more on your scalping type of a chart and what you look for before entering a trade?


  4. I didn’t trade well yesterday. So I deserve what I got.

    Martin – thanks for the feedback. I agree about not overcomplicating it and less intuition. I have to respectfully disagree with less mechanical signals. The signals I use did very well yesterday, I just didn’t wait for it when I entered my short and I lost track of context.

    Tyler – I did not mean to imply that I do all my trading on a 5min chart. I use 1min, footprint, and a tick chart. When we get to the zone I look at those. I also use some order flow algorithms that I’ve developed, I’ll be sharing more about that publicly in the near future. Like Paul, I’d like more details on what you’re using if you would like to share. Thanks.

  5. Excuse me for my language, but:
    If you got context right all the other stuff is BS, especially that “order flow”, biggest scam in trading 🙂

    I lost track of context sooo many times BECAUSE of orderflow, or exited winners at b/e because orderflow showed it was going to do that or that.

    today I use the footprint as a “warning only” mechanism, execution is based on price only.

    My 2 ticks…

  6. Val, my friend is sitting in a prop firm reading order flow bar by bar right now. He makes an average of $3000 a day trading the ES from open until noon. I have built a chart to replicate what he is doing as best I can with out all the data feeds he gets. I am averaging $1,000 a day now and hope to double that soon. What you think was order flow probably wasn’t.

    Paul, I think you need a tick chart that can show you the small moves inside your zones. I have proprietary volume algos running but you can see basic support and resistance using a simple keltner channel. Trade from the center line out to the outer band. Exit at the outer band. Don’t be greedy and don’t take bad entries at the outer bands. You might look around and see what you can find in the way of an indicator that can show volume strength inside a bar. You can also consider looking at VWAP bands for the session and a three day VWAP band average.

  7. Your short entry between 16:30 and 17:30 or at 10:10 AM my time had no selling volume anywhere near it. All volume was up strong. I have a 3 day VWAP avg on my chart and I could see price making a push to reach it to get back in balance. VWAP was at 1,351.30 roughly. I was long at 10:02, 1,347.75 and out at 1,350.50. Reading price alone will not tell you what the market thinks of that price. Just because its trading t that price doesn’t mean that volume supports it.

  8. Isn’t JI6T.Z in DTN the same as the instrument you created? (ji6t not jL6t)

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