Mar 042012

I’m not going to post my plan every day.  I thought of several reasons:

  • My plan changes during the day
  • It’s easier to just draw my areas on my chart than write it out in text
  • I didn’t take many of the trades that was on my plan (missed some, passed on others, etc.)
  • I took trades that weren’t in my plan based on context (friday’s short at IBL)

Overall I just don’t think I can plan everything out.  I can identify the areas where I want to trade but I think most people can do that.  It’s what to do when it gets there and how to manage the trade that is difficult.

Last year I was a subscriber of eminiplayer’s site.  I liked his daily plan and I liked comparing my levels with his.   On January 20th I did not renew my subscription because I wanted to see if I could do well on my own.  I don’t know if this is a coincidence or not but that’s also when I started losing money.  The second half of January was not good and February was not good either.  Last week I rejoined and I did ok last week, a marked improvement from the weeks before.

A lot of times my levels line up with eminiplayer’s, and when they don’t his usually work better and I can learn from it.  And I think reading his plan and having his levels increases my confidence which is really important when it comes time to pull the trigger.  Last week I made enough trading at his levels to pay for many months of his subscriber fee.

Lately I’ve met a few other eminiplayer subscribers and have started exchanging some ideas.  I think this is a major advantage of his service:  By using a common set of levels, it’s much easier to compare the trades we took or didn’t take.  I’ve tried organizing forums here for people to share homework and trades but with everyone using different levels and approaches, it was a bit chaotic.  So I’m looking for ways to collaborate with other eminiplayer subscribers.  If you’re interested in collaborating please let me know.  I’m thinking about creating a private area for subscribers to post trades and give each other feedback.  Let me know if you think this would be useful.

Bund is building acceptance at the top of its trading range.  I have previously said longs are risky here, but it might be ready to break out.  So I have to be open for both scenarios.

Stoxx is in a similar situation as the Bund, which is interesting because these used to be inversely correlated.  Stoxx still looks bullish.

ES is looking like it’s getting weak.  I have noted lately that buyers are not willing to initiate at higher prices.  This is necessary for us to continue higher.  Well that or squeeze shorts.  Which is what happened after the drop on Wednesday.  1387 is a major reference above, the question is will we get there before pulling back.  I have no idea.  I’m more open to the short side though, provided I see some weakness (like friday breaking below the IBL).

Good luck to you in your trading.



Jan 252012

I’ve avoid speculating about what the market may do because I don’t really find it useful.  But the past week has been very suspicious.  My trading was great the first two weeks and since then it’s been not very good.  I’d be slightly negative the past week and a half had it not been for some overconfidence on my part to let some small losers turn into bigger ones.   When we broke out of the multi-day balance to the upside, I was sure buyers would support it on a pullback.  But no.  Then we broke out to the downside and I was sure sellers would keep it from going back up into balance.  But no.  Those should have been smaller losses but I thought they were great opportunities and went with larger size and larger stops and.. well.. larger losses!

But that’s not what this post is supposed to be about.  In my opinion the market is not behaving normally.  I see that many other traders are not doing well.  But profits & losses aside, it’s just frustrating.

So I start wondering.  What if some traders know something we don’t.  What if they drove price up in order to unload?  What will happen if some bad news comes out?  There is so much volume up here that if bad news does come out, we could get a very powerful move back down.  And if the bad news doesn’t pan out, we could get a very powerful move up.

I read yesterday that the COT report showed the largest net short position on the Euro in a long time.  And then the Euro rallied.  That could have played a role in ES moving up.  But those Euro shorts could be hedging against a real disaster and if that disaster comes the hedgers will be protected and the speculators will have huge losses.

News is coming out about Greece and it’s not good.  Now Merkel is not so enthusiastic.   Soros expects Greece to exit the Euro.  I think it’s about to hit the fan.  And with ES extended so far up I think it’s not going to be pretty.

Now I’m not swing trading so really that was all just curiosity on my part, so what does it mean for day trading?  All I know there is my trading isn’t working the past few weeks, partly because the setups haven’t panned out and partly because I’ve made mistakes.  So I’m cutting back and being very careful, even just watching.  I think the best bet here is to wait until ES makes its move and then go with it.  As we got faked out twice we have to be patient and wait for the real move.  Which should be obvious.

So if you’re not doing well lately don’t fret it.  Just relax a bit, the markets will be there next week.  If my kids weren’t in school we’d take a vacation right now, but that’s not possible.  So maybe a mental vacation.



Dec 072011

The recent move in ES has been a huge surprise to me, but it goes to show the power of one-timeframing on the daily chart.  I’ve taken several shorts that “normally” would go to the prior low of day but have not.  Shorts have not been paying up for me.  I get a good short and then give it back with a few losses.  My brain remembers the good short and I keep trying.  If I had just traded the long side I would have done much better.  “Now that’s hindsight” you say, but is it?  If we make a strict rule no shorting a market that is one-timeframing higher, many shorts could have been avoided.

What really surprises me about the move is I don’t see much bullishness in the news.  France and other European countries are about the lose their AAA.  The Greek deficit reductions are falling short.  A recession looms that will ruin all the currently overly optimistic budget plans.  The list goes on and on.  The Euro has not been as strong as ES and that’s unusual.  It seems where in a really special situation here where normal statistics and setups may not apply.

Last week was my 2nd losing week in 7 months.  As usual, I let a few losses get too big and unusually, that happened several days in a row.  This week I’m at my average but several trades that would have made lots of money just didn’t pan out and those that did had me on the sidelines.  I find the past 2 weeks has been difficult.

So here’s what I’m working on:

I continue to try and limit losses to 5 pts total which means 2.5 pts trading 2 contracts and if I need a bigger stop I trade 1.  I’ve pretty much kept to that the past 4 days and I’m encouraged as I don’t want a repeat of the large losses from last week.

I need to improve on trading with the trend.  Yesterday I had a good short after the open and was targetting the prior low of day.  What I didn’t realize is that ES fell right into a buy setup for higher timeframes.  I exited my short based on the order flow but I saw the long setup but for some reason I didn’t take it.  Well not “some reason” I know exactly the “reason”, I was not nimble enough to abandon my short bias and I did give the higher timeframe setup priority.  Even worse I re-shorted on the pullback to 54.25 (as I planned, written in my tweets yesterday) and took a loss, giving back half the winnings on the short.

I’m yet again refining my plan.  This has been an ongoing process that will definitely continue.

The advantage to all this is I’m learning a ton.  With the volatility I’m making more trades and that means more opportunities to learn from what worked and what didn’t work.  If we can survive this I think we’ll be much better traders.

Here’s what I’m seeing on the daily chart:

I think we test 1275.25 and I’ll be aggressive on shorts there, and if I can manage it, I would hold a profitable short overnight.  I see us pulling back from 1275.25 and possibly testing the gap area which corresponds to the bottom of my micro-composite.  We may make it to 89.25 but I’d be surprised if we do that without a pullback.  But a lot of this depends on the news out of Europe and the spin they give it.  We’re nearly the top of the micr-composite.

Here in France there is talk of cutting budgets even more.  France is determined to keep its AAA but the reality is France may have already lost it.  France is a very socialist country (as most European countries) and the healthcare and unemployment benefits are taking its toll.  France can’t afford it.  And France can’t afford to rack up more debt.  So something is going to have to give.  The French take to their “rights” so if they do reduce benefits we’ll see lots of protests.

All of this has me thinking this is playing out exactly as those in charge want.  The idea is simple:  Lend a country so much that it can never pay it back and then you own that country.  The problem is this could spiral out of control and there may not be anything left to own.  And they don’t want that.