Prospective trades on Monday
I will try to analyze these potential trades based on what the s/r videos by seiden made me understand: that there's most covenient sections of the trends to predict. At least that's the way I figure this thing out, and my thinking originated from watching the videos, even though maybe that's not what they say.
Here's a summary of what I perceived to be true. The red circles in the picture below are the most predictable patterns, the ones I should bet on. In summary, in early to middle downtrend we should pick the down moves, but only as far as reaching the previously reached support, because it's not safe to bet on a breakout (it could be the beginning of a range, or the down trend could have stopped). As soon as a range begins and the down trend is oversold, or even sooner, when it's very oversold, we should start betting on the up moves, but again only the section of the move that brings us to the previous resistance. Viceversa for the uptrend.
These are the possible situations and the trades allowed:
OVERSOLD DOWN TREND, RANGE AFTER DOWN TREND, EARLY TO MIDDLE UP TREND: LONG ONLY.
VICEVERSA: SHORT ONLY.
UP TREND AFTER RANGE AFTER UP TREND (POTENTIAL FALSE BREAKOUT) and VICEVERSA: STAY OUT
Obviously one must adapt these strategies to the different markets: ES and YM tend to go up more than down, currencies go up as much as down, etc., so overbought in YM and ES is not the same as overbought in currencies.
Here's an analysis of the potential trades, future by future (I trade 9 of them), according to the principle described above, and according other knowledge. I am going to divide the groups by "UP MOVE" and "DOWN MOVE". The first group means I should be looking for an upmove because we're in an oversold down trend, range, or early up trend. The second group means I should be looking for a down move because we're in an overbought up trend, range, or early down trend. There will be a third group of UNCERTAIN situations.
UP MOVE
eur
Long from major support, very oversold. I can only go long on this guy if he goes back to the bottom of today. Or else it would not be safe. Most likely the intraday trend will be up, so I cannot go short upon overnight reversal, because it would be unsafe: it could keep rising even at night.
gbp
Long from major support, very oversold. I can only go long on this guy if he goes back to the bottom of today. Or else it would not be safe. Most likely the intraday trend will be up, so I cannot go short upon overnight reversal, because it would be unsafe: it could keep rising even at night.
jpy
Long from intermediate support,
very oversold. I do not expect this guy to bottom again. I will accept an intermediate support level and go long from that. Most likely the intraday trend will be up, so I cannot go short upon overnight reversal, because it would be unsafe: it could keep rising even at night.
gbl
Long from intermediate support, oversold. I do not expect this guy to get to its bottom again. I will accept an intermediate support level and go long from that (I should have gone long tonight before the close, but I was in the bath tub, and I hadn't planned it ahead). Most likely the intraday trend will be up, so I cannot go short upon overnight reversal, because it would be unsafe: it could keep rising even at night.
zn
Long from intermediate support,
very oversold. I do not expect this guy to get to its bottom again. I will accept an intermediate support level and go long from that (I could still go long now and it would make sense, but I feel that i'd be rushing to trade, and that might come from my trading addiction, so I'll postpone the execution by a few hours: next time I will have planned it ahead, so there will be no fear of trading addiction). Most likely the intraday trend will be up, so I cannot go short upon overnight reversal, because it would be unsafe: it could keep rising even at night.
DOWN MOVE
Only CL for now, but maybe GC, ES and YM in the near future.
cl
Short from major resistance, very overbought. This one is very easy in my opinion. It's very overbought and if it were to reach 83 again, I would certainly short it. With a stoploss above the record high of today. Hmm, I'll have to think about that: I don't want any false breakouts like yesterday. I guess I'll use a very tight stoploss, so if it has to be a false breakout it will only cost me 20 ticks. So, I'd wait for the reversal to happen, and then enter late, once it's quite distant from the resistance. Because I know how they can screw me in that area. This is otherwise the best trade there is. Very volatile as always the CL could give me my money back just with one trade. It currently owes me 3300.
UNCERTAIN
es
Problem: no nearby resistance and not overbought. It would seem like an early uptrend, but it's too overbought for risking it, as it could be a false breakout. This is not a safe play in either direction.
ym
Problem: no nearby resistance and not overbought. It would seem like an early uptrend, but it's too overbought for risking it, as it could be a false breakout. This is not a safe play in either direction.
gc
Not sure where it will go. This is not a safe play in either direction.
This is probably a rough draft and I'll need more work on this stuff, but it's giving me an idea of how asymmetrical my trading should be and how much work needs to be done in preparation for each trade. It's not going to be like for those traders who make 200 trades a day and make money every day: I cannot do it. They can, but I can't. So I'll have to use this method. Long planning, long waiting, long holding (holding the position open for hours). If I try and make those 5 minute trades, I end up losing my patience and losing my money. I almost don't know yet what s/r are, so I cannot keep on figuring out new s/r levels on an ever-changing 1 minute candles chart.
I guess things won't change much during the week. More or less, what is overbought will stay overbought for a whole week (if it rises, it will be even more overbought, whereas if it falls, it will be the beginning of a reversal which should last a while), and viceversa.
The problem are those range situations, where I cannot tell where it will go. On the other hand, those situations could also be played according to support and resistance, but I feel the outcome is less probable. Maybe I will change my mind in the next few weeks, if I can keep focused on this new method for a few weeks. This journal is a reminder of how many methods I changed. There's only so many more methods I can try before realizing and admitting that I am not improving but only changing over and over again.
However, if I can keep this one constant of carefully planning each trade, then I'll be ok, no matter what methods I try. In the sense that I could even decide to trade the 14.30 CET news, but if I plan it ahead it is ok, because actually I've always made money at 14.30. Because it just keeps on reversing every minute and giving you the money you'd make in many hours during other moments. It either goes up and down or it goes down and up. The part where it goes up is not easy to predict for me, but the second part, where it falls back is quite easy. It starts slowing down, and then it reverses and keeps going back to where it started. Anyway, this is to say that even this type of quick trades can be ok, if I plan it carefully and consider all its potential consequences. Like a failed stoploss or a false breakout and so. I must not put myself in a situation where I lose control of my trade and I lose thousands of dollars, no matter how unlikely that is. In the most extreme situation, I should say: "my risk is 2000 dollars, as it will happen once in 100 times". That is a stoploss. It's ridiculous but it's a stoploss, because I am keeping in mind my maximum predetermined loss.
If I could limit myself to 1 trade per day (the best opportunity I see) or even some days no trade at all, it would be a guarantee for profitability and for a trading that is not addictive. However, this change is already good enough and if I create too many rules I will simply quit in just a few days, so let's not create yet another requirement, since I don't like rules. The only rule should be planning hours ahead, watching s/r levels, and planning to have a stoploss and a takeprofit (which could be anticipated if it is almost reached and the market turns around after a few hours).