David Knight -Journal

[David Knight]

I want cheaper prices. (again)

I wanted 2502. The market went to 2502.93. That's irritating. That's exactly the reaon why sometimes I jump the gun. And to be honest, had I been paying attention I probably would have, since I didn't set a limit order.

And I don't want to go short at the current high.

Why? Because now the low could very well be in and the current high only gives us a 5.5 point range.

That looks like a burger short of a bun to me (well, not exactly but you know what I mean)

So unless we get a dramatic reversal that takes out the low 20% chance, there's an 80% chance we go higher.

How hard is TA? not hard.

All adds up to suggest that the 3 points I grabbed earlier were all she wrote most probably.

And that's ok..

 

[David Knight]

Trading Plan

Trading Plan- The Friday Factor

2017 so far 38 weeks

SPX closed down on 14 occasions (36%)

Max loss (Approx) 16 points
Min loss -1 point

Those stats appear to favour the bulls.

Combine those stats with the % of times that you will see-

1- A heavy decline
2- A heavy decline on the last day of the week.

Also factor in that it is rarely easy to make money on the short side.

The logical conclusion is I still want to buy 2502 if I get a chance

And I want to avoid shorting on a Friday (usually)

Also Consider-

What % of time do you see a Friday close at the top of the daily bar?

How would a back test based on those combined stats affect any decision to take a short position today?


Some General Thoughts- How to reduce the learning curve.

It's (eventually) easy for a trader to answer the 2 questions..

1- What is TA?
2- Does TA work?

In my opinion, it is better to arrive at a flawed conclusion and still get the desired results rather than going around in circles and never reaching a conclusion about anything.

The issue is not a contest to find which statement is true:

1- The close of a price bar is significant.
2- The close of a price bar is not significant.

The issue is to reach a conclusion.

Reach a conclusion and get on with trading.

Deal with what comes after that- risk control

Deal with emotion control.

You are going to dump 80% of whatever 'stuff' you ever learned about trading.

You're going to do that sooner or later. The sooner the better.

You'll prove that cliche 'I've forgotten more about trading than.. blah blah blah.'

I'm still doing it. Starting last month I no longer visit 2 really good sites. It's not that the content isn't good. It's just not adding to my bottom line and time is an increasingly valuable commodity (always was, just more appreciation now)

Usually, we tend to keep doing things way past their sell by date. Think about it. Habits, beliefs,.. relationships.

So, are you going to give XYZ idea one more try, or is now the time to dump it? I reckon there's an 80% chance you can do some 'fat reduction' somewher in your trading life right now...


Just sayin'

 

[Lee Shepherd]

@ David Knight

Great thread

You is good. (is that English)

 

[David Knight]

@ David Knight

Great thread

You is good. (is that English)

Thanks. Since you also left out the question mark, thereby making a statement, I guess so

Looking at the futures, I've concluded that I'd rather not chase price like a fish finger around a frying pan. (That was also English)

Translated

I'll settle for buying a pull back.

 

[David Knight]

I have missed out on a 38 point (so far) rally. Not good.

At least I did not attempt any short trades- worst kind of conditions for short trades.

So what went wrong?

I like to buy an early pull back and hold all day. Looking at the chart you might say: 'What's the problem, it looks ideal.' ?

I was looking for lower entries that didn't happen

By the time the obvious s/r enries take place I felt I could be entering near the end of the move.

If you're wondering how I can be this patient it's because I'm usually multi tasking. Rarely forced to watch the market closely- that would be a bloody bore these days.

Still, if I had some kind of management to answer to (I'm not talking about she who must be obeyed) I might find it difficult to justify recent results.

GAP

Will that gap at 2520 get filled ? If we see a retracement getting started that would be an obvious target.

Doesn't look likely at this point, but it would take a few people by surprise, so you can't ever rule it out.

It's not important what level a retracement starts from because we are in new highs territory.

 

[David Knight]

For those who like action and adventure...

this journal has been as quiet as an empty confession booth in a derelict church in a ghost town, in another dimension that doesn't exist...

But today we may see the start of a retracement that will not be allowed to travel too far on a Friday. (Friday factor)

So I should buy a dip but not hold for new highs. That is the logical simple plan.

There's a gap right in the middle of the 2 obvious price levels.

 

[David Knight]

The low was first in the last 7 days in a row so this suggests that as soon as you see the weakness it is more likely that we have seen the high today.

I tend to like those simple stats because there is no subjectivity about them in terms of observation.

Interpretation is another matter.

Having said that,, I feel more confident about believing the Dow high is in place than the SPX, just based on the prices.

(Remember an earlier post #118 chart 4 when the Dow high held and SPX did not? I predicted the other way around..)

 

[David Knight]

Dow took out it's high in the last few minutes friday and SPX high held- again the opposite to what I anticipated

High might already be in.

Still waiting to buy lower.

UPDATE

Market has pulled back - gap still open

 

[David Knight]

short 2554

stop 2,557

 

[David Knight]

COVER 2551 +3

Running +47

ADV/DEC doesn't favour shorts



Will buy lower/short higher

 

[David Knight]

long 2546

Target 2553

Will add lower if req

 

[David Knight]

Welcome to todays BORE ZONE..

Exactly the reason why trading is only tolerable for people who can multi task.

Never make a trade based on boredom- that's exactly what they want you to do...

 

[David Knight]

long 2546

Target 2553

Will add lower if req

Closed@2550 +4

Runnng +51

2553 target was only GFD - Futures failed to hit/exceed that cash level overnight

 

[David Knight]

If Tues High (2555) is not exceeded early on we may have a down day which suggests lower low than Tues. and a lower high.

That then suggests where I should/should not enter.

Good chance of buying lower today

With the market continuing to make H/H's the dip buyers may step in a bit too early..

 

[David Knight]

I'm interested in Buying 2549 if I can get it and will add lower if required.

 

[David Knight]

SHORT 2557

STOP 2559

Target GAP 2551


Dow which has recently been leading looks weaker today than SPX and has 3 gaps below.

 

[David Knight]

Covering here @ 2556 for +1

Running +52

I'ts more ikely to continue sideways or creep up rather than drop any further.

The 'Friday factor' strikes again

Won't be surprised if a retracement gets initiated on Sunday

 

[David Knight]

Trading Plan

Waiting to see if I can can get a lower long entry.

ADV/DECL has switched from slightly bullish to slightly bearish which helps the envisaged scenario shown on the charts..

 

[David Knight]

Long 2553.
Target 2558

Will add lower if req'd

Took me so long to annotate those charts that the market started dropping without me noticing

 

[David Knight]

2558 has been hit after the cash close. However, I am raising the target and have set a limit for 2563