Jun 122012
 

If you find these reviews hepful, please leave a comment.

I’d like to show the levels I use but I get them from different charts and duplicating them on another chart for the review is extra work.  So I know the charts I have on the review are not the most interesting, but unfortunately I use MD for charting and Ninja for executing and so it’s impossible to show chart markers on MD.  I could draw them in but that’s extra work too and I think it’s better showing actual chart markers.  What do you think?

If you’re interested in Bund charts & review, let me know too.

While I’m at it, the interest in my order flow signals has been disappointing.  I thought there’d be more interest.  So I’m debating making some of the components of the signals available in an indicator that you can download.  The advantage of this is you can use it on any market that you want and you’re completely independent.  The disadvantage is this will only work on Ninjatrader (though it will work on the free Ninjatrader) and it would be realtime only.  If there is interest in this then I will pursue it.  In this case, I would stop using the signal chart for the review and instead I’d show the chart with the indicator.  So lots of things to consider and I’d like to get some feedback on all this.

With all that out of the way, yesterday was tricky for me.  Here is the plan I tweeted:

ES RTH Plan: Overnight ES gapped up and tested 1342 and then came back down testing the MC high at 1327.75.

UP Scenarios:

U1 : Close gap at 1323 and possibly rotate to 1320 CLVN and then go higher. Here I want to look for longs at these two levels. If 1320 is broken then this scenario is not in play.

U2 : Gap-n-go. Get long on pullbacks, paying attention to 1327.75 and 1337.25.

Down Scenarios:

D1 : Fake up and find resistance between 1330.25-33.75 (possibly 1335) and then down to fill gap and gain acceptance in friday’s range.

D2 : Down to fill gap and either 1323 or 1320 act as resistance and we get selling and fall back into MC.

I think up is more likely and those are pretty straightforward. The risk is not knowing if it’s a U1,U2, or D1 scenario. So I will watch resistance levels for clues.

Good luck.

 

I knew we had a down scenario and I knew I should not fade but rather sell pullbacks.  However I was not able to follow-through on that and I’m a bit disappointed in myself for it.  There were very small pullbacks and I found reasons not to take them.  And then after we went quite far I tried a long.  It stopped out but damage was minimal.  I tried another and this worked, at least I got my first scale.  But this is why fading is not good for me.  I was holding long and missed the short (where I got my scale).

This seems to happen a lot to me when fading.  First, not only is fading a low probability trade, but it causes me to miss the high probability trades.  Now yesterday was truly unusual in that we had a huge range and I felt the R:R favored the upside.  Which it did.  But the probabilities did not.  And every trade has both R:R and probability.  Usually when R:R is really good, the probability goes down.  And that’s what happened yesterday.

I don’t mean to make a big deal out of all that, the damage was minimal (-2.5 pts in RTH).  But it should be a learning experience and reinforce my belief that I should avoid fading a trend day, even if I have a valid setup and even if it has gone the average daily range.

 

 

  6 Responses to “Review of Monday 06/11/2012 & thoughts on fading”

  1. Although I have always been a silent observer I find your postings very interesting and helpful.
    As for the Bund I’ve been looking at that lately as it seems to trend better than the other commonly followed instruments.
    So your thoughts/postings on the Bund would be much appreciated. As a matter of interest in France what RTHs for the Bund do you use?

  2. I use the full session for the bund so 8am-10pm. Volume drops off after the European cash markets close at 5:30pm, usually by 6pm the volume is very thin. So one could use 5:30 or 6pm, but I just use the full session that way I don’t need to deal with RTH & afterhours.

    When I say RTH I’m usually referring to ES. For ES I use RTH only for levels and homework. Although I often have second thoughts about that since ES is a 24h market.

    Thank you very much for the feedback. I think there are a lot of silent readers and it’s good to know you’re out there.

  3. Thank’s for the prompt reply.
    I’ve no doubt that there are many others out here … silently waiting, watching and (hopefully) learning.

  4. Hi, I’m another “silent reader”.
    Just wanted to say: a) great blog generally b) some great trades
    I find your thought process the most interesting – recently you spoke about not fading trend days. I had this same problem recently trading EUR/USD (trying to fade the “oversold” down-trend and then watching the market go straight through the reversal point and hit my stop-loss 🙂

  5. Still out there Mike silently watching, reading, listening. Keep up the good work.
    Is it me or do you appear to have turned a corner in your trading ? I get the feeling some sort of shift has happened to consistent profits ?
    All the best.
    Jason.

  6. Thanks Adam & Jason for the Feedback.

    Jason – I do believe I have “turned the corner” “again”, however what is suspicious is that this corner started approximately 5 weeks ago which is precisely when volatility picked up and we started having 16 pt days. So my main concern is “what if volatility stops”? Last year I was doing very well with the volatility in the second half of the year. And when that volatility disappeared in the first 4 months of this year, I fell off my rocker. So I think it’s very important that one be able to adapt and trade profitably in both high & low volatility. This is one of the reasons I’m studying Bund, it has higher volatility than ES (and fits my timezone).

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