Jay's Journal

[jasont]

March 14th Trade Setup

Here are the areas I'm looking for on the 14th March:

Resistance

1323.75-1324.50
1328-1328.75
1336.25
1340.50-1341.25

Support

1313.75-1313
1309.25-1308.50
1299.25-1298.50
1295.25-1294.50
1289-1288.25

At the moment the market looks like it is at the 1305 area so at this point the first few supports are already turning to resistance. My thoughts are that we may not see a clear direction for tomorrow. Market seems to be pretty indecisive after yesterdays move but the range was pretty substantial. VIX looks like it is currently ranging at the slightly top end of the spectrum but hardly looking like we are oversold. I don't really have a direction bias for tomorrow so I'm pretty neutral.

My focus for tomorrow is on the S&R zones. Recently I haven't been giving them as much credit as I should and the market is bouncing from them pretty well. I am going to pay close attention to those areas and watch for a change in momentum and strength. I have just read an article by Brett Steenbarger that mentions grading myself based on how well I follow the day's goals.

I might try this out and see if I find it of any benefit. So a 'C' will be given for me watching the S&R zones and picking up on a change of direction or continuation through the zone. An 'A' will be given if I pick up on the areas and make use of them by trading. The trade must line up with my plan though, I'm not going to go long at support if there is hesitation yet the day seems to be strongly down trending. An 'F' will be given if I fail to watch the S&R zones and don't pick up on the interesting movement around them.

 

[firewalker99]

My focus for tomorrow is on the S&R zones.

Just a question, you mention S&R "zones" but the intervals you indicate as potential S/R are very small (0.75 points). How do you define how wide these zones are? Have you considered that the average bar or candle on your prefered timeframe is about 2 points?

 

[jasont]

Hey Firewalker,

That's a good question. I have a similar philosophy to Db in that the bars to me only represent volatility and even though a 5 minute candle has a start and finish, the trade keeps going after it and is continuous. What I mean is that even though you may I may trade a 5 minute bar, there are people trading 1,2,10,30 minute bars etc. So my average bar size could be 2 points yet another persons could be 6 points because they are a longer time frame. So instead of basing my zones on the average bar size, which as you mentioned is 2 points on most days, I tend to base it on areas where the most people would be stuck and the most desperate to get their position to break even.

Unfortunately how big the zone is usually is dependent on factors I can't give hard rules to. As I mention, the zones in my opinion can many times be an art more than a science. I will say that I try to keep them as small as possible and try to avoid going above 1 point as much as possible. I like to place my stops behind those areas and if they are bigger then 1 point, often times it results in having an unnecessarily large risk.

The reason I can't make the zones as simple as 2 points because that is 'often' the average size of a bar is that volatility changes each day. In some cases, my opinion is that using the average is not the best method of statistical evidence for future performance.

Do keep in mind that my S&R zones are not cut and dry. There is no law telling the market that because Jay has his S&R at 1313, the market cannot pass that area. All it takes for an S&R to be blown out is one order that attracts follow through so I don't trade the areas as though they can't go through them. I usually stay out until I see the market can't be pushed over it and stay there, that is when I look to trade. I guess that results in many missed opportunities and a small window to trade but over time I think I will develop the timing to get it much better.

Sometimes my zones work perfectly like today's trading. The market opened two points above the 1324.50 zone, came back and then popped right up to the 1324.50 area and dropped from there. Other times they don't even cause as much as a stall. The rest of yesterday seemed to ignore my zones completely.

 

[jasont]

Trading for 14th March & Weekly Wrap Up

Unfortunately I was feeling quite tired about an hour before the market opened on Friday and was due to be up early on Saturday so I didn't trade. Unfortunate too because it looks like it was a great day to be watching. A massive drop in the first half hour that is the biggest during market move I have seen since trading. Very quick too. Not to worry, I will stick with my plan of only trading whilst feeling 100%.

The Weekly Wrap Up

I name this week, the week of excuses. Whether or not they are valid excuses is yet to be decided upon. I had the first two days this week where I simply wanted to watch the market and get used to the opening again. They were good because I was paying close attention to the action and able to notice the subtle changes of the market.

I saw opportunities to trade but chose not to because I set myself a goal of only observing and taking in the price action for a market open. Excuse number one, is it a valid reason not to trade or just a way to hide from placing trades?

On Wednesday I opened up the doors to trade and the market was pretty slow and steady. Not ideal for my trading style, I am happy to trade in the direction of a trend, I just like to see a worthy pullback before entering, on Wednesday it wasn't happening. In my impatience I chose to trade anyway and got chopped out on my first trade and was switched on enough to get out of my second trade that wasn't a great entry.

I didn't place any more trades for the rest of the day because the market kept slowly moving up. Excuse number two, was the slow market move the reason for not placing any more trades or was I afraid to get back into the market after my poor entries?

Thursday saw me making assessments about the market, which is fine, but then I went further to make predictions. The assessment was good, unfortunately stroking my ego, yet I didn't have the kahunas to actually put a trade on. I stated it was too slow moving and that I don't like to trade a slow market, yet I look at the action on Thursday now and see it moved pretty well before the big turn around. Excuse number three, was it really a slow market or was I using that excuse to prevent myself from trading?

Looking back at the week I made 2 trades in two days. This is out of character with my past trading during simulation when I was making 2-3 trades per day. In fact since I have been trading with my capital, the most trades I have made in a week has been 5 and that was my first week. It was a decent loss for that week but half of that was caused by mistakes made from not understanding my order platform. At least I was making trades then and I could properly assess what was going right and what was going wrong.

I have gone back to my results and placed my weekly results into a graph and realized that I began with a large drop from the first few days of trading, but since then I have become roughly break even. The only issue with that is whether it is caused by the reduction of contracts or if it's an improvement in my trading since the first few days.

Next Weeks Focus

I have always been someone who enjoyed facing my fears. The only way we can overcome our fears is by engulfing ourselves in the object of fear for an extended period of time until we realize, it isn't really as bad as we first perceived. I have ridden my motorcycle on a race track doing over 150kmph around corners close to the ground, I have solo sky dived from 14,000 feet. I have performed in on stage in front of hundreds of people at a time and I said your cool if you pee your pants... (wait no Billy Maddison said that )

I guess the point I am making is that I have done some pretty outrageous things. I can't say that I did anyone of those things without fearing them. In fact many of those I was afraid and felt nervous before doing them, especially the skydiving. Yet, I jumped out of the plane, sucked in my teeth and twisted the throttle of my motorcycle, stepped out on stage and said the words I had been rehearsing. As my feet touched the ground, I got off my motorcycle and stepped backstage, I felt a feeling of accomplishment and would say "it's not as bad as I thought".

So if my fear is pulling the trigger, instead of cautiously wading around and building my nervous emotions, maybe I should just plunge in. Like when you dip your toe in a cold pool on a hot day, you think, now way I can face how cold the water is. If you continue to circle the pool dipping your toe in, the worse you make the fear of actually getting in. Instead if you just jump in, at first it's cold, but then you get used to it and suddenly it's not that bad.

The focus for next week may have a few people on here urging me otherwise, I'm going to deliberately over trade. You can attempt to take a band aid off slowly because it's stuck to your hairs, or you can rip it off quickly. Only problem with doing it slowly is that once you get half way and stop, you have to build up the courage again to continue. If it stops and then gets stuck back on again, the fear of taking it off becomes even greater because you know how much it hurt the first time.

When I say over trade, I'm not talking about trading without a plan. I'm just talking about trading every single trade that matches up with my plan. Just for one week I am going to go all out and jump in and out of trades. I am being too cautious and the way to find a happy medium is to know your limits. Right now I haven't set the limits of too much trading, I certainly have set them right now with too little trading. Trading one contract I surely couldn't make much of a dent in my account so I will go for it. I don't know limits unless I push the boundaries.

 

[dbphoenix]

Taking every trade that your plan calls for is not overtrading; it's following your plan. If you don't take every trade, then you are saying -- consciously or not -- that you're smarter than your plan. If you ARE smarter than your plan, then rework your plan. Otherwise, follow it. If you can't, then you're not trading; you're gambling.

Eventually you may develop an intuitive sense than enables you to pre-empt your plan at key moments. But it's unlikely that you're there yet.

 

[jasont]

You're right Db. My plan is a mix of discretionary and mechanical trading. That is why I spent so much time simulation trading, so I could develop the right mix between the two. I've traded a mechanical systems and followed them to the letter until I found myself placing trades I knew the market wasn't following. At that point I realized I was not a part of my trading, I was simply an observer.

To me, being an observer is not what trading is about. Oddly enough, watching the markets gives me a certain peace and tranquility. I like seeing the emotional waves of people in the market and finding the weak spots in the Armour. If I already had enough money to live the rest of my life without trading or working, I would still trade and watch the markets just because I love the game.

I have guides of my plan written down on paper that sit in front of me. I deliberately say guides because they are not hard rules that must be obeyed no matter what. Instead I know my odds of a trade turning out in my favor. To make my plan solid rules takes my best skills out of the market. It is like trying to place on paper the rules of a conversation. Some people may laugh out loud and are not afraid to do so, yet others may just chuckle and smile. Words on paper can't tell you how to distinguish the two different people to see if you're entertaining them or not, only small subtle signs that change with each different person can do that. For me, the market is different everyday but if you can pick up on it's nuances for the day, you've already put the odds in your favor.

I'm not sure if you'll agree with what I'm saying or understand what I'm on about. I have a plan which is made up of guides, I don't believe trading should ever by crystallized into a set plan to be followed no matter what. People have to put decisions into their trading to follow the plan or not. If a market has been up trending for a long period of time and then a couple of EMA's cross which triggers an entry, entering on that is like suicide. People know better than that. I have been following my guides however last week I saw opportunities to trade that I didn't take. I am thinking I may post a description on what my trading mentality is and how I simplify the markets later today. It helped me find turning points in the market and governs my trading.

 

[jasont]

17th March Trade Setup

Here are the zones I am watching for on the 17th March:

Resistance

1394.25
1301-1302
1307
1316-1316.75
1323.75-1324.50

Support

1284.75-1284
1280.5-1280
1275-1274.50
1268.25

After reviewing my bias on the day, I'm going to be less direct in placing a direction. The news and indicators do point to a continuation of the downtrend we saw on Friday. If we pass the 1268.25 area it could pick up momentum on the downside. The VIX however is indicating that we are overly excited in the selling on the short term so it could open up the door to a reversal though.

At this stage things are indicating further downward movement so that may be the safe trade however things could change very quickly and as always I'll keep an open mind to both sides.

 

[jasont]

Surfing The Market

I have mentioned this elsewhere on the forums briefly but I thought I’d post it to help people reading my journal understand what it is exactly that I am on about with my style of trading. Hopefully some people can get an “aha” moment out of it to simplify their own trading methods.

When I first began trading I was looking for trend lines, ema’s, stochastic indicators, RSI’s indicators, volume, double tops/bottoms, head and shoulder patterns… the list went on. In fact for every pattern, Einstein would be sitting next to me saying it had an equal and opposite pattern that contradicted the message. Things were becoming increasingly frustrating and very complex.

This didn’t fit with who I am. I don’t like to concern myself with the small details, I like the overall picture and the details will figure themselves out. I had a mentor back in 2006 who said something to me that has stuck with me ever since. He said the market just moves in waves, that’s all. It was odd, I didn’t realise I needed this valuable lesson but it formed the basis for how I would look at the market forever.

Before I fully bought this idea of the market is simply waves, I had to look at it through a new pair of eyes. I removed every single indicator from my charts, volume, trend lines, ema’s etc. Nothing could remain on my screen. From there I spent quite a bit of time looking at the market in its purest form. After a while I found exactly what my mentor was saying. For every different time frame I could see the price moved in waves. Up and down. Pretty basic really but when you think about surfers, they will tell you every wave is different. Some rise quick and fall hard, others rise quickly and then slowly roll providing a good ride.

So looking at a weekly chart I could see smooth waves, a daily chart would show choppy waves and the further down you get, the more waves you had. In fact with my trading now I can see the 5 minute chart has nice rolling waves as opposed to the 2 minute chart that has quick and choppy waves. No waves are better than others, just some people see the quick choppy waves better and some people see the slow moving waves better.

After seeing this I began to think philosophically about this occurrence. Being someone that thinks in concepts I began to search for the reason that this occurs. Beyond the obvious supply and demand, I found answers outside the trading arena. I found in philosophy that for one thing to exist the opposite also had to exist. This is a big key to how I trade now. For high to exist, low has to exist. To know hot, we must also know cold. To be wet, we first must be dry. The list goes on and would take way too long to go through all of the examples I have come up with. No doubt it’s pretty self explanatory.

So how did this help me improve my trading outlook. I began to think in terms of what is certain in an uncertain market. For rising markets to exist, we must have falling markets. So I discovered that the one certainty which is guaranteed no matter what people could possibly say, a market must fall after it has risen. It must rise after it has fallen. So we know that this is our base to work from in trading. There are two key questions that arise from this base however, ‘when will it fall after rising’ and ‘how far will it fall after rising’.

Those two questions are the best questions I ever asked. So I began watching the market with just price, looking for what happens. Just like a wave in the ocean, there is an inbetween period of rise and fall. That is what I was looking for and what I now look for. Sometimes you pick up on the change too late and sometimes you’re too early, but with time, the pros don’t miss waves, they let them pass.

Now this brings me to my gripe with jumping on a market that has already moved a fair way, such as I see in breakout trading. I’m not saying breakout trading doesn’t work or any such thing, in fact it has to work for markets to go somewhere. What I am saying is that trading a breakout is like jumping on the wave in the middle. I’m not sure if it’s going to collapse on me right away or if it will continue for a long time to come. What I can be certain about in the market is that another wave will come.

However just because I see the turns better than the distance, there are probably traders out there that can judge with good odds how long a market will go down or up for. That just isn’t my talent. That is what makes my plan a guide as opposed to rules. I have areas that the market is most likely to be the turn of a wave, however the wave turns according to nature, not according to when I think it should turn. You can know the best time to be surfing the day before is at 6.34am yet on the day the best waves may come at 6.45am. You just have to be prepared at 6.20am and waiting to see when the best waves come in.

 

[jasont]

Emotional Vs Intellectual Response

Ok I noted earlier that my focus for this week would be to over trade my plan. After some nudging by Db, it occurred that my over trading response to not placing many trades was an emotional one rather than an intellectual one. I have done something similar before in the past and from memory, it only served to create a bigger mess to clean up.

In fact, looking logically at my plan, I haven't under traded, I just haven't had many opportunities to trade. As a result of being frustrated I thought placing more trades would help. This is not the case and with serious meditation over the subject, I have deemed it to be a poor solution. I'm just happy I figured this out before I began foolishly trying to trade everything under the sun. It is just hard when I recognize opportunities that aren't meeting the criteria of my plan sometimes. The trade opportunities I see could be traded but they are not in my plan because the odds don't sway enough in my favor.

Weekly Focus

So now, the focus for the week is to follow my plan. I will only trade when I feel 100% as always. I will only place trades in line with my major market patterns and based on the 5 minute chart. I am also going give myself a 2 point stop trading point. If I gain 2 points for the day, I'll call it a night and go to bed. I am limiting myself to two attempts to trade the one particular trading idea and if both of those fail, I don't trade until the following idea. In that instance I will take a 10 minute break and regroup. As always a rule of three hard stops hit in a day and I stop trading for the day.

 

[dbphoenix]

Excellent work. And here's an avatar you might like to have:

.

 

[jasont]

Thanks Db. The Wave was very fitting and I tried to make it my Avatar but for some reason the Avatar section doesn't let me save the image. I'm guessing I need more posts or something.

 

[dbphoenix]

You may have to save it to your computer and upload it from there.

I tried explaining this wave business once upon a time, but nobody understood what I was talking about. You've done a much better job.

 

[jasont]

I tried doing it from my PC but wouldn't save for me, not exactly sure what's going on there. T2W was down earlier for a while so not sure if that has something to do with it.

So you too see the market in waves? Thanks for the compliment on my explanation, hopefully at least one person gets something out of it.

 

[jasont]

17th March Trading

Here is the thoughts during the trading day of 17th March:

Looks like another massive gap at the open is likely. Currently appears as though it will be a 30 point drop. Where it goes from there will definitely be interesting. For me these big gaps are certainly not what I am accustomed to. The market does seem to be irregularly volatile of recent. Maybe it's due to my newness in trading with only 2 years under my belt but it didn't appear this edgy back in 2006.

An interesting read on Bloomberg says if the S&P drops below 1252.12 it will slip into a bear market. Call me fresh but I never realized they has a technical dropping point limit to call a bear market upon. You learn something new everyday.

9:31 Big gao down, open at 1259.75 followed by an immediate rise. I just want to watch this market for the moment and see whats happening.

9:35 Market appears to be moving very quickly right now, it would be a rough ride if I thought of entering in the middle of this. Best to stay on the sidelines until it settles down a little bit.

9:44 The reason I don't like trading such a fast market is because it doesn't give me enough time to judge when my position is on the wrong side. That results in my hard stop being hit which I try to avoid as much as possible by noticing changes in the market. Big volume has been trading already which is very interesting.

9:54 I still seem to be having trouble adjusting to night trading as I am feeling a bit tired. Market has been rejected off the 1274 area, I wonder if the market is strong enough to push through it. Market is still wildly moving through prices right now, trading a tight stop is sure to have me chewed up without perfect timing which I'm not looking to attempt. It seriously looks like it is cutting through points like butter.

10:02 Having trouble keeping concentration right now and this is resulting in a lack of attention on the market. I'm not firing when it comes to picking up the changes in the market at the moment. No trades according to my plan have popped up just yet so it is a matter of waiting and watching.

10:11 Placed a short order at 1274 to take advantage of the slow down at the support turn resistance area with Tick Indicating a slow down as well. Sat there for a while and kept pushing up everytime the market moved it lower. Stop was at 1276, profit target was at 1272.50. Got out for a scratch as the market didn't look like it was more than a stall. Felt panicked during the trade and a bit fearful, good indicaton it was not the place to enter. Good exit.

10:14 Slow uptrend is evident, no real dips either up or down. Seems to be a common occurrence continuing on from last weeks patterns. I just tried to short the market at 1274 again but it just escaped my entry, not willing to leave the order in there due to the slow trend right now. Slow trends in my opinion make it harder to see the turnaround than a faster one.

10:18 Turns out I had the right turning point, just was a bit too early on the entry. Possibly an indication to have a bit more patience and wait for a little more conformation before jumping in. Tick hasn't really come into good play just yet.

10:27 Seeing a bit of a stronger run in the upward direction now. Last pullback was rather small and feeble. S&R Zones seem to be having little impact on a day like today with such a big gap open. Volatility is seeing very little hesitation occurring at the zones.

10:39 Doh, missed an entry at 1276.25 to enter long on the bounce of an SMA and Tick Divergence. I was looking at an email that just came through, I think it might be a good idea to turn off the auto send/recieve function. It appears I lose a few seconds that could be the difference between entering a trade and missing it.

10:45 Market seems to be having shorter pushes upward right now, potentially opening the door for a substantial move down. If so, would it be a pullback in an uptrending day or the mark of a reversal. Either way the S&P was making new highs for the day whilst the YM and NQ were staying flat. I must say it is unbelievable that of 5 days I have watched the market now at the open, 3 of those have been solid trending without major pullbacks. The two days that were showing good back and forth movement were the two I was just watching. I think it is spurred on by these big gaps at the open, big gap down, slow and steady trend up, big gap up, slow and steady trend down.

10:51 Right now it would seem betting against this up trend is suicide. I keep seeing moments of hesitation and just as I think it may be a good opportunity to trade, it finds some strength to keep going. I'd join the trend but it has gone to the point where you don't know if you're jumping in at the middle or the early stages of something bigger. Getting on a dip in the long direction is part of my plan when looking at the 2 minute chart but I said I would focus on basing my entries from the 5 minute because they are my personal better odds trades. Right now the 5 minute is giving me very little to work with.

11:01 Time to call it a night. I attempted to trade a few times but had missed opportunities and the one I did get was not moving how I'd like to see it. Overall it was not a bad day considering the action we saw. A remedy for the sort of day we are seeing may be necessary. Switching to the shorter time frame of 2 minutes may be best in these types of conditions so I can better find opportunities.

Daily Wrap Up

Ok, what an interesting day it was. I am getting a bit frustrated with the massive gap that results in a slow steady trend developing afterwards. Today didn't provide me with many good opportunities to get in on the long side using the 5 minute chart. The one opportunity I did see managed to escape me just by a few seconds. However, looking at the 2 minute chart and I was doing so last night, I saw a few opportunities to enter with bounces off the 15 period SMA.

I did set myself some rules before trading yesterday that stated only entering trades according to the 5 minute chart yet that may need to be adjusted for days like today. After experiencing 3 days in a row of slow moving trends at the open, I can see a need to use the 2 Minute chart and it can be reliable. I just need to attune myself to the choppiness it brings. Back to the waves, the 2 minute has more ups and downs than the 5 minute chart.

My one trade I entered on the short side was an entry according to my rules but I managed to jump on a touch early. After an initial stall it looked as though it had some more puff behind it. I am not afraid to admit that I panicked a bit and had a feeling as though I had to get out of this trade, at times like these I listen to the warning signals and I put an order in to get out asap. I got out at break even before the area I had my hard stop was hit and then the market came back down.

It wasn't a big move down but would have been enough to scalp had I waited a touch longer. I'm actually not too disappointed with the trade, I entered a bit early but on good information and was able to hit the exit button when I realized I wasn't feeling good about the trade. Mechanical traders would say it's foolish to get out of a trade on those feelings because they are natural, I tend to think that those feelings are telling me I'm in a place I shouldn't be.

The psychology I have read in regards to the emotional mind and rational mind says that the emotional mind can trigger self preservation thoughts before the rational mind has a chance to process the information. You just need to figure out if you should act on those or if they are unwarranted.

Now to assess how I traded according to my focus plan I set. I was feeling 100% whilst trading until the end of my trading day where I began to get a bit tired. I did see the market beginning to turn around as I was getting off but decided I would be too tired to continue watching. I only placed trades in line with the 5 minute chart patterns and even managed to do so when I saw 2 minute chart trades appear. I was happy with that but will address that for tomorrows trading as it took me out of the game a bit.

I didn't attempt to trade the same idea more than twice which was good and I didn't have any hard stops hit. So in regards to following my days focus I will award myself an 'A' for following my plan. Seems a bit weird giving myself an 'A' for following a plan when I missed opportunities but that is the nature of the game. I don't get an A for bringing in big profits, I get an 'A' for following my focus for the day. If anyone disputes me doing so please let me know so I can see if I'm cheating myself.

 

[jasont]

Trade Setup For 18th March 2008

Here are the Zones I'm looking for on 18th March:

Resistance

1283.50-1284
1289.25-1289.75
1294.25
1301-1302
1307

Support

1274-1273.25
1265.75-1265
1258.25-1257.75
1262.75-1262

My outlook for tomorrow is a bit mixed. We do look like we are struggling to go lower immediately yet it wouldn't surprise me to see us go below the lows made yesterday in the next few days. The VIX is giving some buy signals in the immediate term so I would think we are likely to see some consolidation at the very least and a possible rise. However things are up in the air right now and with the pummeling of bad news hitting the market these days it would take a fair bit to move it. As usual my outlooks are really just to give me a pre market game plan, these types of trade ideas are not my strong point. I always look for what the market is telling me on the day and I am open to what ever happens.

My Focus

In light of what we have been seeing lately with the big gaps and steady trends, I am allowing myself to watch the 2 minute chart for trades. I am only going to use the 2 minute chart for trades when we are seeing a strong steady trend similar in nature to yesterdays.

The 15 SMA is usually a good indication for me that we are trending well because the market tends to bounce off it (See image of previous post). Any use of the 2 minute chart outside of this purpose is not part of my plan so only to be incorporated when we see a good trend with very minimal pullbacks. That will help me stay on the right side of the market and have opportunity.

Like yesterday I will be only trading when I feel 100% and in line with my major market patterns. The two point profit point for the day will still remain and so will the 3 hard stops being hit as well. Again the 10 minute break will be implemented if I make two attempts to trade the one idea unsuccessfully. I feel like I haven't been paying as much attention to the Tick lately so I'm going to assess the Tick at least every 20 minutes in my day's journal.

I am also feeling at times I am missing the market opportunities when I write in my journal in too small intervals. So I am going to attempt to refrain from writing too much. I don't want to put a limit on my entries but I will be mindful of writing too much and missing important trade action. I wrote less entries in the last trading day and I think it helped me keep my concentration on the market.

 

[jasont]

Trading for 18th March

Here is the thought process and trades for 18th March:

Again it looks like we will have a big gap open. This time it will be a gap up to 1303 area. The overnight market seems to have been steadily rising the whole time. I must remember to assess the Tick at least every 20 minutes to make sure I am paying attention to it. It seems I have given it less weight since trading the open. The journal will also be less frequent so I don't miss as many key moves in the market.

9:30 Opened just a touch above the 1302 resistance and made a small move up before stalling. Ordinarily these moves have reversed course pretty quickly at the open. This could be different.

9:35 Tick has opened showing stocks are optimistic. Hard to say until 30 minutes in though as that is when it becomes more effective. I didn't realize at first but the opening move found support at the 1301 area. I wouldn't be expecting too much from it though.

9:41 Tick is coming up very neutral right now. Market is neutral at this point showing no clear direction just yet. It is strange we haven't dropped from here yet.

9:54 Saw the market stalling with some tick divergence and minor double top. Was short at 1305 with tight stop at 1306. Profit target was initially at 1303.25, market moved down but not with enough conviction. Moved stop to 1303.50 but wasn't taken and then moved to 1303.75 and was taken. Good trade although during it I could feel my emotions going. Heart was racing, but I began deep breathing and focused on the charts and what it was doing and the feeling dissipated. Once market was at 1304 I moved my hard stop in to 1305 to prevent a quick reversal and to only risk break even.

9:59 Glad I only scalped the market as it seems like it make be taking on another slow trend at this point in the upward direction. Tick is staying above the 0 line so it seems the market is in good bullish condition at the moment.

10:07 Not comfortable shorting anything at this point. The Tick is showing optimism from the stocks as a whole. Safer bet seems to be going with the slow up trend using the 2 minute chart with bounces off the SMA. NQ seems out of place by not making a new high when the ES and YM have.

10:15 For some reason I can't bring myself to trade the 2 minute chart with the SMA. I guess it is due to not spending enough time watching the 2 minute chart to read the turnarounds. Just as I said that I thought I saw a good opportunity to trade and placed a buy at 1304.25 with a stop at 1303.50. Market didn't look right to me so I got out at 1304 for a 1 tick loss. Looks like it is now turning back up and possibly should have trusted my instincts. I place my stop too tight as well because I wanted to preserve my gain so far. Weird considering I know having too tight a stop is the best way to lose.

10:24 The SMA on the 2 minute was broken to the downside so it was a good exit that I took on the last trade. Market seems to be ranging between 1301-1307. not much action going on right now. Market may be quiet due to the Fed announcement later today.

10:31 I must say I am happy with my S&R zones as the market seems to be ranging between my 1301-02 and 1307 areas. Passed the 1307 area by a couple of ticks but came back. New zone made of 1307-1307.50. Tick is still remaining above the 0 line and might just now be breaking. Bbands on the Tick are looking ridiculous. Bottom line is meeting the 0 line, very odd and I've never seen that happen before.

10:38 What happened to the interesting opens I saw on the first two days last week? I am getting pretty bored of these slow markets. Today more so because there is nothing much going on at all. I have trouble maintaining concentration during these times because it is currently 1.40am over here and to stay awake I need something interesting. I'm guessing I'm not the only one disappointed in the opening moves of the market lately. These types of days occured on the odd occasion for the afternoon trade. Maybe I'll ask around and see if this opening market action is normal. With the Tick looking like it does, I can't see anything worth trading. Who would have thought I'd become the guy frustrated at a slow market...

10:50 Well I'm going to vent some irritation right here and say the Tick looks like a piece of ****. The bastage is flat as a tack. I can't make head or tails of which way the stocks are swaying, I know they are refusing to be pushed lower but they aren't exactly showing me that they are happy about pushing higher. I'm not one to complain, in fact I despise complaining, for some reason this market is bringing out the worst in me.

10:54 We have a breakout of the range. Both ES and YM are moving to higher highs yet the NQ is still failing to make higher ground. Who's in the lead here, the NQ or the ES? I'm presuming everyone today is trading by the beach on their towels whilst sipping pina coladas. My bet is that no one is going to pay much attention to their laptops until they see Ben Bernanke strolling by in nothing but flip flops and a thong bikini. That's enough to make anyone divulge themselves in their computer screen. Yuck.

11:02 Away she goes and so do I. I'm calling it a day. I think I'm best turning of the screen before I place a trade simply for something to do.

Daily Wrap Up

Well what a day. It once again took the form of a slow moving trend but at least this time I was able to look a little deeper and find some spots to trade. The first trade was well timed although I did feel my nerves kick in initially. After a minute or so I was fine and back to looking for where the market was picking up strength again. My initial profit target wasn't taken in the time I thought it should have been so I moved it up and was taken for 1.25 point profit.

The second trade was based on the 2 minute chart and although it had the right idea, I was a bit too early on it and tried to place my stop a little too tight. The reason I placed my stop tight was partially due to not wanting to lose my current gains, which was a silly reason but also I didn't see a good place to hide it behind. I was happy how I managed the trade as it would have hit my hard stop had I left it.

In regards to following my focus for the day, I am giving myself a 'B'. I only traded when I felt 100%, I made a conscious note of watching and writing down my thoughts on the Tick in at least 20 min intervals. I also refrained from writing in the journal too much and it allowed me to pay more attention to the market.

The reason I don't get an 'A' is because I traded my long position in the 2 minute chart after it had broken the SMA. I saw the market turning a bit under the SMA and thought the bounce would be a little late however that wasn't in my focus. I did manage to recognize the slow moving trend however I didn't pay as much attention to the 2 minute chart as I would have liked.

So the result of the day ended up being a 1 point gain. So far this week I am doing better with placing trades, I have made 3 trades this week which is more than I did for all of last week. It shows that I am getting my confidence back in pulling the trigger although I have a lot of work to do from here. I look forward to building on the consistency I have shown this week.

 

[jasont]

Trade Setup For 19th March

Here are the zones for the 19th March I'll be looking for:

Resistance

1336.25
1340.50-1341.25
1346.75
1351.75-1351.25

Support

1325.50-1324.50
1319.25-1318.50
1304.25-1303.50
1297-1296.25

My outlook for today is that if we can break the 1336 area we might see some good movement forward. It appears as though we are starting to flatten out our downward progression on the daily charts for the DJIA. We appear a long way from being in good condition but short term we could see some good upward moves. After yesterday the VIX reversed from the buy signal and is back to neutral.

If we saw a downward move today I'd be surprised if it was a big one but it could happen. I'm pretty neutral at the moment with a slightly bullish bias but think we may have a day to settle and regroup. As usual my forecasts are not my strongest point so I don't put too much weight on them. I just use them to give me an idea what is going on in the macro environment in comparison to the shorter time frames I trade. Of course I am always on the lookout for what the day is telling me and try to adapt to what the market is showing me.

My Focus

My focus is the same as yesterday with the rules I have made. Only trading the major market patterns and I will continue to write about the Tick and my thoughts at least every 20 minutes. I am still going to keep my journal entries to a minimum so I can focus on the market action.

Something else I am going to bring in is deep breathing when entering a trade. This is to combat the nervous feelings I had yesterday and the breathing seemed to help. I also need to make sure I am focusing on the market when I'm in a trade so my attention needs to be directed towards the 5 minute chart and the Tick instead of the order bar. The order bar is only to be glanced at to check the solid orders are still in the market. These should help place the focus where it needs to be when having orders in the market.

 

[tune]

Something else I am going to bring in is deep breathing when entering a trade. This is to combat the nervous feelings I had yesterday and the breathing seemed to help.

You might find this interesting.

Increase Your Endurance and Reduce Stress With One Simple Technique | Set Higher Standards

 

[jasont]

Trading for 19th March

Here are the entries during trading for the 19th March:

9:30 Gap up at the open to 1338. Looks like it's climbing higher. Data stream was lagging so had to reconnect.

9:34 1341.25 showing some good resistance right now. Not sure if it will hold though. Tick shows stocks opened pretty positively.

9:42 Flat in the beginning again. Seems we don't really want to go anywhere just yet. Caught in between the two Resistance areas right now. Wait.. we just have a break to the upside, interesting to see if it sticks. All the stocks aren't fully trading just yet so its hard to tell whether it will hold.

9:54 Market hasn't taken any clear direction just yet, might be seeing a decent pullback just now. I am actually a bit drowsy so not sure whether I'll be placing trades today or not. Tick is finally in action though.

10:01 Saw an opportunity to trade long but decided it's best to wait out the next couple of swings to see what the sentiment it. Had the people stuck from yesterdays close with today's gap coupled with Tick showing less enthusiasm for selling.

10:09 Feel like I'm falling asleep here, my eyes are drooping. I feel good about watching the market right now which is why I haven't removed myself from the screen. The peaceful feeling I used to get watching the market has come back. It's what I love most about trading. Those times when you are so in focus on the market that everything else doesn't exist.

10:21 Just missed an opportunity to get in for a long trade with a bounce off the EMA and Tick divergence. Had the order in at 1333.75 and it had touched just above and took off. Can't do much about that I guess. Looks like it would have been a nice trade too.

10:24 I'm abnormally tired tonight. I think I may have to call it quits for the day and get some rest. I had a big day today and it must have just taken it out of me. Disappointing though as I was feeling pretty calm and focused. Maybe thats due to the tiredness. Nah, it actually feels like it did when I was trading consistently with my simulation account. Like I'm in the zone. Sadly I'm going to log off and look to have some rest for tomorrow night.

Daily Wrap Up

Ok first I'll mention that I was pretty disappointed with being so tired. I am looking forward to having our daylight savings time bring the market open back to 11.30pm instead of 12.30am. However I guess I can't help that and the only thing I can control is what I do whilst I am tired.

Now whilst I was watching the market I felt good. My awareness was good and I did try to enter a trade however was just a bit too late. I'm not too fussed about those times and I am happy that I don't chase the market which would increase my risk. The market was slow but not as slow as it has been the past week or so which is promising. I think the smaller sized gap at the open resulted in some more back and forth action.

In regards to my focus I set out yesterday I will give myself an 'A'. It doesn't seem quite right considering I wasn't on the market for long but I followed the focus. I hit the point where I was not 100% and as a result I switched off the trading screen. I was noting the Tick at least every 20 minutes and I was basing my trades on the 5 minute chart as we had not developed a slow trend. I would have liked to have been in some trades to work on the during trade objectives but unfortunately I only saw one solid opportunity that I could have entered.

 

[jasont]

Thanks for that great read Tune. I personally use a method I learned whilst training in Brazilian Jiu Jitsu (BJJ). At first to let the nerves out I breathe out heavily through my mouth whilst making a shoo sound a few times on the same outward breath. Then I breathe in through my nose deeply. I may do this 3-4 times and then continue the deep breathing through my nose.

It actually helps me to think about times when I have been training whilst doing this because in BJJ you need to be relaxed so you can feel where the other person is moving and if you panic, you open yourself up to holes in your armor. Anyone unfamiliar with what BJJ is, it's a martial art for use lying on the ground.

Once I do this to calm my nerves, things usually seem a lot clearer and I tend to be curious as opposed to tense. I think the nose breathing helps once I let out the build up of nerves with my mouth. Thanks Tune.