Dow Intraday Charts 13 Dec - 17 Dec

[TraderTony]

TTony - A solution might be to take a trade entry - get a breakeven stop in as soon as you can and maybe set a 50/75 point limit, then switch the monitor off for an hour or two.....

risk - minimal / reward - could be plenty......!

Obviously try and anticipate likely 'big move' days/situations - as you well know on 'consolidation' days often the best you can do is scalp 10-20 points here and there....

HTH

TS - that's certainly a thought worthy of consideration. As is often the case, I feel more positive after a night's sleep and the increased perspective it usually brings.

Looking back, this month has been interesting so far. Since August, when I went 'full time' I have been modestly positive every month. However, I cut right back to one or two contracts whilst tweaking the approach and looking for consistency. This month I have upped the number of contracts to nearer the level I believe I need to trade to pay the bills in order to see if I can sustain the performance. Well, so far I am still profitable, but my average is down a little and I believe, despite my best intentions, I have been more cautious because of the extra size. Hopefully this will diminish quickly as I get back in the swing of trading more contracts.

The other change has been a move towards more profitable days, even if the average profitability is possibly lower. This is an interesting one for me as I have a clear personal preference for ultimately being able to make my money every day with a high degree of certainty. For a long time my day trading dream has been to average 20 points a day with very few losing days and this month I've been closer to that than ever before. I see this as the way to pay my bills whilst using long term position trading to build wealth (for example, I've had a long position on the Nasdaq since late October which is far bigger than my day trading stakes).

However, I would be a lot more comfortable if I could add a few of the big moves to my day trading performance and that would work wonders on the daily average. I have a couple of ideas building on TS's suggestion. Firstly, when in positions I will start paying more attention to the 7ema which I added to the charts yesterday to keep me in moves. Secondly, if and when I get to 25 or 30 points profit for the day I will change my approach to look for large moves, allowing myself a maximum subsequent loss of 10 points. So, let's say I've done well and closed trades for 25 points profits. Thereafter, when I enter a subsequent trade I will use my normal 10 point maximum stop but look to move that stop up to b/e asap. Thereafter I let it run, as TS suggested, for 50 points. Whether I'll actually be able to switch off the monitors is another question, but I get the point! If I get stopped out, I can keep trying, but subject to not giving back more than 10 points of my earlier profit.

Thanks as ever for the comments.

 

[TraderTony]

Broadband down for 2 hours at lunchtime (UK time) with no obvious explanation from BT other than "It could be a neighbour's Christmas lights" which is more than a little disconcerting. Thankfully my connection is usually very reliable.

10:01 1) L 10686. Looking for run to yesterday's highs. Running up above 7ema nicely. Possible resistance at 699 (earlier high), 700 or 706 (yesterday's HOD). Takes out one. Then next. Then next. Blimey. Ugly reversal bar above yesterday's HOD. Tempted to close big time. But will wait.
10:17 EXIT: +17. Good start.

10:46 2) S 10685. For a continuation down below 100 ema. Nope. No follow through. Actually jumped in too soon.
10:50 EXIT: -2. Back to upside instead. Then down but I didn't take the next one for absolutely no good reason (except perhaps having just been stopped out going short, but that should be no excuse). Lovely looking head and shoulders. That was a bad miss - and we're talking Tierry Henry on Sunday from the 6 yard line with keeper Cech no where near the goal. That bad.

11:12 3) S 10665. Trying to join the party for the second leg down. Going no where. Then finally breaks just as I am hovering to exit. Not following through so well this time though. Needs to break 650 area (yesterday's long congestion patch). Go on. Breaks below then huge reversal bar back up.
11:28 EXIT: +7. Should have just got out on the reversal bar for an extra 5. Incidentally, the original entry would have closed at the same time for +32 had I taken it.

11:42 4) S 10660. Don't like it but no valid reason for not taking it.
11:43 EXIT: -4. Mmm.

11:43 5) L 10664. Reversing immediately to upside (a new trick for me and probably not a sensible one).. But it is failing to take out the swing high at 67. Then a small run but no follow through. Then a bit more but what will happen if it reaches the pivot at 75. Wishful thinking.
11:55 EXIT: +1. Well, the 7 ema did me no favours at all there as I gave back 8 points. Win some lose some. Only I forgot to take the win some.

All quiet until the sudden breakout at 13:10 but no clear entry for me.

Well, all the action since 11:30 was in one 1m bar.

14:10 6) L 10689. Risky but looking for another push up. Moves a little but cannot even reach HOD before a reversal bar.
14:19 EXIT +2. Held too long again - should have got out on the reversal bar with so little movement.

14:42 7) S 10676. For second thrust down but it is really struggling to take out the pivot.
14:45 EXIT: -4. This is a really unenjoyable day for me.

I try to identify the mood of the market as either flat/flip-flopping or trending. Today has been more lurching than either of these, as if it had its Christmas party earlier and is stumbling erratically home now.

15:10 8) L 10691. For at last chance at a run up. Erratic. Then up. Needs to smash through HOD/700 level. Go on. Damn. Through, then spikes straight back down again. Un real. Just cannot break up.
15:24 EXIT: +5. Well, I held and held and held and it got me know where again. I guess I picked a bad day to switch approach.

I do not believe this. Out at the worst point before it shoots back up. Without re-entering.

+22 from 8
+14 for the day after commissions
+145 for December after commissions (11 days of trading)

I never got to +25 so the 'death or glory' trades will have to wait for another day.

 

[tradesmart]

Good Stuff TTony – the expression “no one ever went skint taking a profit..” comes to mind…..!….. :cheesy:

Just one further thing that I find helps – I mark my charts with the recent (and past) major S&R levels and like to enter trades when RSI PD/ND coincides with those levels…

(I refer to charts in several timeframes to establish this as there can be ‘ghost’ divergences on the very short term charts that don’t deliver much…)

Also an 'educated' (!) guess on which S/R points the index is likely to run between as it forms it's various patterns can help in intraday and multi-day timeframes - and if you've got a parallel channel to work to, that's even better.....!

again HTH...

ps - your ongoing long position on the Naz is doing well - another new high today.....!

 

[ChartMan]

Distressing...can't connect to MyTrack so no charts tonight.

 

[tradesmart]

Commiserations CM…..

I reckon that the 'bottom line' was a 60 point triangle, with a target to equal the year high from last February….

But whether is gets there by the direct route is another matter……

 

[sall]

TraderTony,

Just was wondering how long did it take you to get out of the single contract trading phase,I'm still in sigle contract mode for this year wondering when I will get out. I know it's all down to individual's own management and skill, but would be interested to know how long it took you to accomplish the goal.

By the way I haven't posted charts or trades anything for a while, just due to being busy at work .. I will post once I'm free.
Cheers

Sall

 

[tradesmart]

Some evidence that this year the Dow has had the (reportedly) narrowest price range for 75 years (about 1000 points) – as the YM Mar 04 futures contract chart merges with the Mar 05 contract, the price is in the same range…..!!!

As the Dow is now in the vicinity of the 10750 ish year high, we could see signs of a ‘pause’ or pullback at major resistance, but a breakout could see the index quickly reach 11000 imho….

 

[roguetrader]

As the Dow is now in the vicinity of the 10750 ish year high, we could see signs of a ‘pause’ or pullback at major resistance, but a breakout could see the index quickly reach 11000 imho….

Interesting to note that 10775 ish is the 0.786 fib retrace from the all time high.

 

[TraderTony]

TS - more good advice and much appreciated.

Sall - this is a tough one. Generally I would say you should only add contracts once you start building up profits in your account, subject to a certain amount per contract.

My situation is a little different in that I have traded multiple contracts for quite a while but actually cut right back to one (or sometimes two when taking partial exits) when I started this 'for real' in the summer. This is because without my old income I knew I couldn't afford to mess up and was still experimenting wildly with approaches. Success with intra day trading had to that point been erratic at best. Whilst I still tweak my approach endlessly (and no doubt always will) I have been much much more settled since joining this forum and now have three plus steady months of very modest but fairly consistent profitability. However, I want (and need) to be able to start paying my bills from trading now so whilst continuing to work on performance I decided I needed to jump up the contracts this month (to 5 per trade) to see if I can sustain the profitability (both from my perspective and in terms of slippage etc). From here, all going well, I will add or subtract contracts as my balance goes up or down.

However, if you are not growing your account consistently there is absolutely no point trading more than the absolute minimum (or better still, using a simulator).

 

[DIN]

hmm it is a toughie. in an ideal world, when i know it is in my favour I try to add to the position. George Soros says that you have to earn the right be aggressive, but once there you HAVE to use that aggression when the opportunites present themselves.

I do feel that for long term success you have to earn that right and build slowly, otherwise the P&L can get silly and if you are not used to it, cam mess things up.

Tony,

before you went full time, how confident were you in what you were doing? I sometimes wonder whether I am just waiting for the perfect moment.....which may never arrive. did you set yourself targets to reach before making the switch? also, how did you get your wife to buy into it?!

 

[ChartMan]

Two day's divergence so I guess tomorrow will push up a bit to make the three days....

 

[ChartMan]

Perfect bounce off 64 for a gamble long at the open! Two targets off the one position was unusual- take tou pick from a bull flag or a triangle- just 5 points between the two targets. More than a coincidence that one was at yesterday's HOD at 705. Same at the top, a choice of a bull flag or a triangle to T3. 3 slope change into another perfect 64 bounce with PD off 60 mins and a nice rise into the close.
I missed yesterday's clear cut H&S....you don't often see them....
Enough room to push up a little and then a drop into the close to finish at 664. I wish. :cheesy:

 

[TraderTony]

10:36 1) L 10698. Roller coaster first bar. Then up nicely. Long wicks off 707, 708 level. I would normally look to take 10 here with this happening but will hold for close below the 7ema again.
10:46 EXIT: +5. Holding is giving it back again, just like yesterday.

10:57 2) L 10705. Could have gone in a little earlier. Up nicely but bounces right off yesterday's HOD at 718. I'd normally take profits here for +12 but again will hold. And again it doesn't look good.
11:07 EXIT: +5.

I know this approach will keep me in some really big moves sooner or later but to be honest, so far, I hate it. I think for me giving points back hurts more than missing them in the first place. I seem to enjoy quick wins. But then I do need to change something to get my averages up so I'll persist for a little and maybe consider splitting my position until I get more comfortable with holding.

11:16 3) L 10713. Back in again. Up and breaks HOD. Needs to hold and push on without reversal spike. Nope. Again, it hit +10 but is coming back down now.
11:23 EXIT: +3 This is not going well.

11:30 4) L 10722. Up to new high. No follow through and reversal for potential double top. I'll hold again.
11:34 EXIT: -2. Nope, I do not like this at all.

All this is doing so far is stopping me out right at the bottom of every retracement.

4 good long entries on a market that has done nothing but go up and all I have is +7 after costs to show for it. Very very frustrating.

I guess I should have just made one change at a time, i.e. kept going as I have been for the quick points until I hit the new 25/30 point threshold and only then look to change approach and hold for longer. I would almost certainly have landed 30 off the first 3 today and now would be looking for the big kahuna. Or at least retain a quick win as an option if I feel it isn't going to run. Let's try that instead (so watch the next one run and run).

Numbers out at 12 so I won't take any more trades before then.

But again, had I known nothing about them I would have entered long just before 12 and had a winning trade. This happens a lot. Other than Fed announcements, I wonder if everyday releases should just be ignored?

13:27 5) S 10717. For second move down off 100 ema. In too soon. Arghh. Will hold with stop outside swing high at 724. Sideways. Then breaks. Bounces at swing low. Now I'm going to look for 10.
14:03 EXIT: +10. Wow. Good job as that one sprang straight back again. No follow through yet today. I got very lucky there and could easily have taken a loss.

Miss the next entry after the retracement back again to the 100 and this one moved some. Easy 10 to 700 but it goes on and on. Wouldn't you know it! Just under 20 using the 7ema as the exit.

14:52 6) S 10688. For another move down. Going well but has to take out swing low. Bouncing back hard. I don't like this. Stop to b/e +1.
14:53 EXIT: +1. Well, that time I'm out too soon at top tick of the pullback before it tests the low again. This time the 7ema would have kept me in for a win. But we knew that was going to happen, didn't we. Bounces off LOD with big PD. And watch it climb. Bizarre. But look how the 7ema would have kept you in all the way up!!

15:45 7) S 10723. Very late but a PD similar to yesterday which I declined. Going for a quick 10 before the close. Oops. Not going down yet. Stop above swing high. Then finally breaks.
15:57 EXIT; +6. Now that's cutting it fine. Could have got the 10 if I'd held but too late to risk it.

An well, never got to +25 so no big kahuna trade attempt again today. It'll happen soon!

+28 from 7
+21 for the day after commissions
+166 for December after comms (12 days of trading)

 

[TraderTony]

Tony,

before you went full time, how confident were you in what you were doing? I sometimes wonder whether I am just waiting for the perfect moment.....which may never arrive. did you set yourself targets to reach before making the switch? also, how did you get your wife to buy into it?!

Din - the bottom line is that I still have no certainty that I will make this work.

For me though it is something I just have to do. I've wanted to trade for a long long time but life has sent me on a variety of exciting detours along the way. I was due to join Goldman Sachs as a trainee trader over 15 years ago when I graduated but illness got in the way and kept me in bed for the best part of three years. As I recovered I followed a different path and ended up building a career in the marketing sector. However, through this entire period I was investing every spare penny in the stock market (following Jim Slater's Zulu principle for a long time) and I always believed that 'one day' this would be what I did for a living.

About six years ago I gave everything up to co-found a business. Whilst it was eventually a success, it took a long time before we made any money and I am glad now to have gone through that experience whereby you keep battling on through faith alone until eventually your vision comes true. For the first few years the business became my entire life and this was the only period of my adult life where I was not involved in the markets (unfortunately it was also the great bull run). However, about three years ago my fascination with the markets was re-awakened (again, with superb timing, just in time for the crash). I quickly moved to looking at shorter and shorter timeframes and eventually started intraday trading.

I knew this time that trading was all I wanted to do. My business partner and I had both started to lose interest in the business and we set about selling it. We managed to do this two years ago (almost to the day) but were contracted to working part time for at least 12 months (mornings only in the office for me so I could trade in the afternoons). Unfortunately the small plc we sold to turned out not to be in great shape and I got sucked in to running it for a while to try and save it from collapse. Whilst these efforts were successful, the shares we received in return for our business are now largely worthless. But that wasn't the point - I wanted a way out to trade.

Looking back, I probably stayed too long in the part time capacity. It was a very sensible solution - I kept a decent income (very decent for a part timer) but was free to trade virtually every day. And I certainly learned a huge amount over the 18 months I combined the roles. However, I think there were disadvantages too. To a large degree, I think I ended up doing two jobs badly by my own standards and feeling fairly miserable as a result. I was also more cavalier with my trading and suffered some big losses that I would not tolerate now. It's funny how, when you know your pot is finite, you become far more concerned about preserving it. Hence my decision to cut down to one contract at the very moment I went full time.

So, to sum up the rambling, I'm doing this because it is my absolute passion. I want to trade for the rest of my life (long beyond, I hope, my need for the profits). I believe I can make it work but every day I have doubts and I certainly do not know I will succeed. My greatest fear is failure because I cannot bear the prospect of having to do something else now I've tried this. But I also know how persistence, above everything else, does get the job done if you want something bad enough.

I guess there are times you just have to look fear in the eye and try to walk forward regardless. I'm also lucky (to answer your last question) in that the good lady has given me nothing but encouragement. In fact, she would have had me do this sooner as she believes life's too short to put your dreams on hold. And I think she's probably right.

 

[TraderTony]

P.S. Sadly no trading for me today as, ironically, I am back at the old day job for Christmas festivities. I wish you all well!

 

[ChartMan]

TT Interesting read.... you and I have travelled similar paths and have similar aspirations. I have yet to get any where near where you are, but it will come......

 

[TheBramble]

life's too short to put your dreams on hold. And I think she's probably right.

She's absolutely right.

But who's to say the process you've been through - which in retrospect didn't seem to be totally what you wanted to be doing at the time - wasn't the best way for you to arrive where you are now?

By way of an apology/reason for my intrusion into the DIC thread can I ask if I'm interpreting correctly today's primary support is at 10660/70 and resistance at 10725?

 

[DIN]

Tony,

thanks for the reply. bloody hell! you sound so like me it's scary. I respect and fully understand what you are trying to do and why you are trying to do it.

For the record, yest sold sp500 at 1204, bought back at 1199.

thankyou very much. If only everyday was as easy as this.....

 

[debs]

Trader Tony: Thanks for sharing your story with us. Your hard work and discipline are already showing in the results you post each day. This is also providing inspiration to the rest of us who are prepared to put in the time and effort- regardless of how long it takes.

With such determination, you cannot fail to succeed in reaching your goals............Debs

 

[tradesmart]

TTony – I’m sure that you will succeed if only because you’re good at cutting the losers – a tight stop is always your best friend..! Letting the winners run will become second nature soon…

can I ask if I'm interpreting correctly today's primary support is at 10660/70 and resistance at 10725?

You’re not wrong there Brambs imho

I’m also seeing a possible slope change developing from the main 10min channel…maybe there is the potential for another triangle in there too.......!

Quadruple Witching today.........