My journey to long term consistency

[DrSafari]

Preperation for 5-10-2016
I initially only drew the outer lines. I do not want to draw too many lines but I really felt the additional line at 2144.20 was necessary here. However that means I can't trade that narrow range, and I can only trade the bottom range if Maximum Range Breakout (MRB) + range is more than 5 points. So be it.

 

[DrSafari]

Here is the plan again, the content is the same but I used clearer description of concepts and added definition of said concepts.



Preperation
-----------
At the beginning of the month draw S&R lines for previous month
At the beginning of the week draw S&R lines for previous week, also include monthly if in range
At the beginning of the day draw S&R lines for previous day, also include weekly if in range

When you cannot draw any S&R for that day (only horizontal lines) there are no trades for that day.


Setup
-------
- Range of 3 points or more (unless range + Maximum Breakout Range (MBR) >= 5 points)
- MBR >= 1

-Look for taking a position when there is a MBR >=1 and a Range of >=3 (unless range + MBR >= 5 points)

Entry
-------
-When price reverses from Maximum Breakout Position (MBPos) for at leat 0.4 points take a position in that direction.
-Do not take position anymore if Difference position entry and MBPos is more than 60% of the Range.
-Put a trailing stop loss 0.1 points above/below MBPos
-When price is within 10% of other S&R level move the SL 0.1 points from current price
-Do not take position first half hour of market opening

Exit
----
-Exit position at end of day or automatically when SL is hit.




Definition of Range, Maximum Breakout Range (MBR) and Maximum Breakout Position (MBPos):

 

[DrSafari]

Short S&P500

Net P/L -0.24 points

Amount 1 Contracts

Opening Rate 2152.94
Close Rate 2153.18

Open Time 10/5/2016 4:19 PM
Close Time 10/5/2016 4:57 PM

Stop loss: 0.1 points above the MBR

Entry and exit, green and red line:




Reason of closure: trailing stop loss got hit at - 0.1 R

Comments
At some point in this trade I had 1 R profit, because it is trailing SL I was then break even, but then it turned against me which results in a more or less break even trade.

I took this trade because 2154.44 was a support level of 4-10-2016. It seemed to have gone 1 point above it and then bounced off it ... so that was my trigger. I seemed to be right but not right enough for my current system to make a profit. You can see price fluctuates at that line later on so I still believe in the validity of S&R but my implementation of a strategy surrounding it needs some work probably. I say probably because I am not going to make adjustments just yet. Just observations which I can use in any future adjustments.

It is a huge range. The next S&R line is almost 10 points lower. Therefor the spike 1 point above 2154.44 (the MBR) may not be a valid one to act on because the range is so big. An idea could be to not use an absolute value of 1 point but a relative value like 20% of the Range or something . If you look at the highest high on this chart, that is a decent MBR relative to the Range, and that would have resulted in a profitable trade. Afterwards it went down more but that isn't visible on this chart. But is on this one. The first orange circle is my trigger the second is where the lowest low is. I possible would have been stopped out at the red dot, but still at a profit.



I took two more trades acting on the same setup (small spikes 1 point above the 2154.44 line as you can see on the chart) They all resulted in losers. Will also document accordingly.

Btw that highest high on this chart also comes close to another level I defined on 4-10-2016 (2158.44)

 

[DrSafari]

Short S&P500

Net P/L -2.10 points

Amount 1 Contracts

Opening Rate 2153.7
Close Rate 2155.8

Open Time 10/5/2016 5:11 PM
Close Time 10/5/2016 5:48 PM

Stop loss: 0.1 points above the MBR

Entry and exit, green and red line:




Reason of closure: trailing stop loss got hit at - 1 R

Comments
Same comments as last trade since I acted on same setup. Another rule could be that I cannot act on the same setup if the first trade failed.

 

[DrSafari]

Short S&P500

Net P/L -3.76 points

Amount 1 Contracts

Opening Rate 2152.32
Close Rate 2156.18

Open Time 10/5/2016 5:02 PM
Close Time 10/5/2016 6:05 PM

Stop loss: 0.1 points above the MBR

Entry and exit, green and red line:
Same timeframe and pretty much same trade as previous two charts so not gonna post them anymore.



Reason of closure: trailing stop loss got hit at - 1 R

Comments
Same comments as last trades ....

 

[DrSafari]

Preparation for 06-10-2016:

 

[DrSafari]

Long S&P500

Net P/L -1.99 points

Amount 1 Contracts

Opening Rate 2146.93
Close Rate 2144.94

Open Time 10/6/2016 4:02 PM
Close Time 10/6/2016 5:07 PM

Stop loss: 0.1 points below the MBR

Entry and exit, green and red line 15 min chart this time:




Reason of closure: trailing stop loss got hit at - 1 R

Comments
Range was not at least 3 points so could not take a trade unless Range + MBR > 5 points which was the case. As you can see the idea was good but I got taken out by volatility, stop loss being too narrow. An idea could be to also make the SL relative to the MBR or something. Although I am pretty sure I would still be stopped out in this case.

 

[DrSafari]

Preperation for the week:


Preparation for 10-10-2016:



No trades. Not that there weren't any opportunities but busy at work and at home so could not always watch charts. This is what happened that day and the orange circle is my setup being triggered. Would have resulted in an obvious win.

 

[DrSafari]

Preperation for 11-10-2016


The 2151.20 support level was also in the 10-10-2016 preperation chart as you can see. At the orange arrow my setup occured would have resulted in a winning trade. Was not present to paper trade though.

 

[DrSafari]

Preperation for 12-10-2016

Screenshot above is at 15:55. The orange dot indicitas where my setup was triggered. The Range was too narrow but the MBR + Range was >= 5 points so valid entry.

Next screenshot is taken a bit later. Orange dot represents possible entry. Same setup criteriae as above being triggered.



Even if I don't take trades I continue observing. Even though my first few trades with my current system were losers, these charts indicate I would have good winners too. Or there are discrepancies between me taking a paper position and just observing... that I am somehow not doing the same in real time as in hindsight. Let's just continue logging everything and see how it plays out.

 

[DrSafari]

Preperation for 13-10-2016


Range is too narrow to trade. (Can still take a trade when MBR +Range >= 5)

 

[DrSafari]

Okay I was too late to act on it but I am loggin a potential trade for 13-10-2016


It matches my setup* and would have been profitable.

(*) Range was too narrow but Range + MBR > 5 points so I could take it according to plan.

 

[DrSafari]

Preparation for 14-10-2016


A new support level seems to be forming at around 2133

 

[DrSafari]

Short S&P500

Net P/L +1.88 points

Amount 1 Contracts

Opening Rate 2134.94
Close Rate 2133.06

Open Time 10/14/2016 1:46 PM
Close Time 10/14/2016 2:26 PM

Stop loss: 4.00 points above current position.

Entry and exit:




Reason of closure: trailing stop loss got hit at + 0.5 R

Comments
Range was not at least 3 points so could not take a trade unless Range + MBR > 5 points which was the case. I put the SL above the highest high as always. However when price was nearing the 2133 level I realised this was a S&R level from 12-10-2016 so it could very well be that it would bounce off of that. So I narrowed my SL resulting in this profit because it did indeed do just that.

 

[DrSafari]

Preperation for week



Preparation for 17-10-2016


No trades

Preparation for 18-10-2016

 

[DrSafari]

Short S&P500

Net P/L -0.62 points

Amount 1 Contracts

Opening Rate 2133.44
Close Rate 2134.06

Open Time 10/18/2016 11:00 AM
Close Time 10/18/2016 12:31 PM

Stop loss: 2.00 points above current position.

Entry and exit:




Reason of closure: trailing stop loss got hit at - 0.25 R

Comments
Instead of going back into the Range it bounced off of it to take off in oposite direction. That's the risk of this strategy.

 

[DrSafari]

Preperation for 20-10-2016



Long S&P500

Net P/L -1.73 points

Amount 1 Contracts

Opening Rate 2129.8
Close Rate 2128.07

Open Time 10/20/2016 4:45 PM
Close Time 10/20/2016 4:54 PM

Stop loss: 2.40 points below opening position.

Entry and exit:




Reason of closure: trailing stop loss got hit at - 0.75 R

Comments
The 2128.42 line I drew was an S&R of 18-10-2016. You can see price nicely bouncing off of it. My idea was good but execution bad again. This again has a major MBR. I should calculate my SL relative to that. If I had set it wider it would have been a great trade. I know one thing, these S&R levels are legit, I only need to find a way to have an edge using this knowledge.

 

[DrSafari]

Preperation weekly


Preparation 24-10-2016


Preparation 24-10-2016 at 2:05 pm

New range has formed but it is pretty narrow.

 

[DrSafari]

There were no trades for 24-10-2016


Preparation 25-10-2016



One for 25-10-2016:

Long S&P500

Net P/L +0.64 points

Amount 1 Contracts

Opening Rate 2143.8
Close Rate 2144.44

Open Time 10/25/2016 3:46 PM
Close Time 10/25/2016 4:10 PM

Stop loss: below 2139.94

Entry and exit 15m chart this time:




Reason of closure: trailing stop loss got hit at + 0.3 R

Comments
The trade worked although price never returned to the S&R lines anymore. If the MBR is too big relative to the Range than I think the chance of it returning to the Range is much smaller.

Oh btw, I am back to observing the market and am not going to follow my plan blindly anymore, I need to change it.

 

[DrSafari]

Did not prepare anything on paper for 26-10-2016 but was watching the charts and kept mental S&R levels. This trade is the result.

Short S&P500

Net P/L +8.14 points

Amount 1 Contracts

Opening Rate 2137.44
Close Rate 2129.3

Open Time 10/26/2016 5:28 PM
Close Time 10/26/2016 7:57 PM

Stop loss: around 2140.50

Entry and exit 5m chart:




Reason of closure: adjusted trailing stop loss got hit at ~ + 3 R

Comments
I noticed the big rally upwards and then I saw that price came to a halt around the 2139.00 level. I looked at higher timeframes to see if any previous S&R levels were defined around that price. There was one for the month of october (2140.70) and a few others around that level for daily and weekly. Since price did not push through that level I ought it to be likely that price would drop so I went short. When price started nearing the 2126.94 level I tightened my trailing SL and got stopped out with a nice profit.