Poking the ER2

[jessop]

Came home from work a bit later than normal today and a little bit more brain dead.
I got the charts up just after 7:30pm and saw what I had missed. The longer TF charts said that S5 was a very strong short signal, but I decided to ignore that and jump straight into a long!!

S1 (S) – signal not taken - at work
S2 (S) – signal not taken – at work
S3 (S) – signal not taken – at work
S4 (S) – signal not taken – at work
S5 (S) – signal not taken – at work

S6 (L) – it was a valid signal but given that S5 was such a strong short it was high risk. Entry at 637.5 it went up 0.8 pts and then dropped through the floor – stopped out for 636.4.

S1- n/a
S2- n/a
S3- n/a
S4- n/a
S5- n/a
S6-2/2
Rules Hit Rate = 2/2 = 100% (I took the entry and exit was automatic – but 100% doesn’t quite seem right here !!)
Points today -1.1pts (not including comms) ….

Onwards and upwards……….

 

[jessop]

Commander,

I did say in my journal entry that I exited too early (panic exit) and that the exit signal was much later.

I don't use MACD so couldn't comment on it as an exit signal.

Thanks for the feedback

 

[commanderco]

Commander,

I did say in my journal entry that I exited too early (panic exit) and that the exit signal was much later.

I don't use MACD so couldn't comment on it as an exit signal.

Thanks for the feedback

Hope you dont mind me commenting, but if you are going to trade "hot" you need to come down through your times frames, daily, 60 ,15, 5 and then enter on a thrust.
ie sell into an upthrust and buy into a down thrust.
Then unwind your trade back the way you came in. Try using a MACD over time frames.´
Remember your profit comes from your exit ... your entry is a paper figure until you exit.

There are only 2 things that will enable you to succeed.
% A ( % of total trades profitable) and W/L ( average winning points to average losing points per trade)
Of the two, % A is paramount in the begining because it creates confidence and relates to the world that you are most familiar with.
Once you have % A settled down, them concentrate on W/L to maximise your trades.
Remember the real money is going to come from the number of lots traded and this will increase naturally as you become comfortable with a high % A
Good luck

 

[jessop]

Great post commander - thanks.

I've certainly got a bit to learn on using higher timeframes with my 5min charts.

On the risk reward analysis point. I read some material on ET several months ago about "Acceptable risk reward ratio". When I plugged in my trade results from the first few months I realised I had to change something quickly....it was a definite oh my god moment ......because I was on a path to certain statistical failure.

This is a critical part of my trade plan now, and as you say maximising reward once you reach a stable W/L ratio is key. Cheers again.

 

[jessop]

Well 3 longs on a day like today sounds like madness but it was after 6:30pm and a bounce was in order on the higher TFs. I was ahead on all trades but got stopped out twice and left a bundle of points on the table. I guess that is the difficulty trading one contract, because I would scale out with multiple contracts.

S1 (S) – signal not taken - at work
S2 (L) – signal not taken – at work
S3 (S) – signal not taken – at work

S4 (L) – a little bit late on the entry at 623.6, it went up 1.2 pts and then dropped back down to my now b/e stop to close at 623.6

S5 (L) – entered early on signal before the 5min candle had printed got in at 620.5 - it jumped up 3.2 pts – no exit signal in sight - and then came back down to +1pt stop (it goes to +1.0 when 2pts in profit) at 621.5.

S6 (L) – still bullish action for me and I get S6 signal which I enter correctly in 20:20 bar for 622.70, thought I was going to get stopped out again at 20:30 but it missed my b/e stop and rose into the close to be up over 3pts. I was almost tempted to hold overnight because an oversold mini-bounce looks possible – but that’s not in the TP - so I closed for 624.10 at 9pm, without any exit signal. A wise move in hindsight !!

S1- n/a
S2- n/a
S3- n/a
S4- 2/2
S5- 1/2 (nil points for the early entry)
S6- 1.5/2 (didn’t have an exit signal to close on so only half point for exit)
Rules Hit Rate = 4.5/6 = 75%

Points today +2.4pts (not including comms) ….

Onwards and upwards……….

 

[jessop]

My trick of having a sugar free Red Bull when I leave work so I am wired for the afternoon session has worked for the last two days. Maybe I should start a sponsorship deal with Red Bull !!

After I got back from work, I was very disappointed to have missed the nice S4 signal by ten minutes. There was then a nice continuation entry for S5, but a premature exit. But a nice result for one trade.


S1 (S) – signal not taken - at work
S2 (L) – signal not taken – at work
S3 (S) – signal not taken – at work
S4 (L) – signal not taken – at work

S5 (L) – entered a little late on continuation signal at 621.70 - but it broke 622.80 convincingly and I exited midway through a 5 min candle print at 624.80 - and of course it didn’t confirm the exit signal 3 mins later at the end of the candle. I also had a continuation signal at the start of the 19:45 candle which threw me a bit too. So not a clever exit.

S6 (L) – still in S5


S1- n/a
S2- n/a
S3- n/a
S4- n/a
S5- 1/2 (nil points for the exit)
S6- n/a
Rules Hit Rate = 1/2 = 50%

Points today +3.1pts (not including comms) ….

Onwards and upwards……….

 

[jessop]

What a strange day … I had the HOD & LOD nailed as entries….but was saved in the end by one trade (S7) …. but rule following poor.

The fatal flaw in the trading plan bit me in the **** twice (the b/e stop after 1pt in profit). Plus I’m losing a bit of faith in my timing & reading of the 5min charts. What should have been a stonking ER2 day turned into a damp squib morning session….and then saved by one trade.

Had a bit of a crisis of confidence generally in the first 2 hours……found S1, S3 and S5 hard to read on the 5min chart and missed the entries …then looked at the same entries on the 3min chart and decided that they were clearer. So after getting 3 short signals on the way down and 3 on the way up I was 1pt down !!

S1 (S) – signal not taken

S2 (S) – entry at 626.60 – but stopped out for b/e in the very next 5min bar

S3 (S) – signal not taken – messy action and signal not totally clear

S4 (L) – well this signal had it all – bounce off support level, nice candle, & main signal type highlighted and I got in at 624 – yes 624 was mine – then my friggin b/e stop got caught and I was a spectator. I also had a continuation long signal brewing on the 30 min chart to really rub a bucket of salt into the wound….

S5 (L) – the signal formed but I just didn’t read it in time

Non-signal – getting a bit silly now to be honest – jumped in early at 630.5 on the 16:40 5min candle (after 1 min !!) but SHORT – the end of the 16:40 candle was a continuation long signal – but I wasn’t thinking straight and did nothing and got stopped out at 631.5.

S6 (L) – continuation long signal – not taken still in non-signal

S7 (S) – actually taken from 3min charts (in hindsight it just wasn’t a clear signal on the 5min) & higher TFs looking short term o/b – entered at 633.4 held through the first PB – then the selling kicks in. Its tough with 1 contract because you are so tempted to exit when 3pts up – obvious scale out territory. But higher TF charts keep me in trade, until I couldn’t bare it anymore and exited without a signal at 630.4 – exit signal was 10 minutes later.

S8 (L) – another 3min signal – not taken at lunch

S9 (S) – taken from 3&5min charts – entry at 631.8 held through the first test – then it dropped but I exited at 631 without a signal – because it seemed to be struggling to breakdown as expected - exit signal was very shortly after exit. In hindsight not sure how I managed to get 0.8pts out of that thin CT move.

Finished early for the day – the ER2 rollercoaster has me whacked. Looks like S8 has more life left in it. Off to redesign my b/e stops…and work out if its 5 or 3mins.

S1- 0/2
S2- 2/2
S3- 0/2
S4- 2/2
S5- 0/2
S6- 0/2
S7- 0/2 (3min signal not 5min and exit on non-signal)
S8- n/a
S9- 1/2
Rules Hit Rate = 5/16 = 31% - the good news is I can still make points with such a poor hit rate – the bad news is that trading size consistently will not work with 31% of rules followed

Points today +2.8pts (not including comms) ….

Onwards and upwards……….

 

[badtrader]

It is uncanny how you can pick the exact tops and bottoms.and seem to exit on the lows and highs.Trades in question

S4,S5 S7,S8 S9.On the S9 trade you also got out on the low.Wow what a trader You have got the holy grail :cheesy:

And you only trading 1 lot,I be trading 100 lots if could pick the highs and lows like you self

 

[jessop]

BT,

I'll leave your moon cycles alone if I can continue my ego trip in peace please.

Thanks

 

[badtrader]

BT,

I'll leave your moon cycles alone if I can continue my ego trip in peace please.

Thanks

Most of us have been taught to believe that being a cyclical creature is a primitive or inferior We believe that we will be less productive, less useful or just plain stupid if we allow ourselves to follow the rhythm of our cycles the rhythm of the moon cycle was one of my studies. I studied Gann.I would agree to a newbie it does sound stupid and to the young. But one cant knock it. it has not lost in the last 10 years. Although I dont trade it myself. It is no different from trading off a moving avr,But I my self would prefer to trade of cycles. Like the 3 and a half week cycle or the 3 and a half day cycle. Dont knock it, until you back test it.

 

[jessop]

I’ve been looking at the trading plan over the weekend and made a few enhancements:

The first is around the significance of certain signals and where they occur in the bigger picture timeframes. Since I’ve been watching the 120min & 30min charts alongside the 5min chart over the last two weeks, I’ve realised that I’ve been treating all my signals the same way, regardless of whether they also represent a higher TF reversal or continuation moves.

For example, in the last week there were four signals I took on the 5 min chart that were also strong signals on the 30min and sometimes 120m charts:

Day/5m Signal

10/10 S4 5-10pter
11/10 S5 20pter
13/10 S4 10pter
14/10 S4 10pter

So to cut to the chase I will have a new category of Swing signal that I will trade on the 30min & 120 min charts – but using the same signals I have been using as entries.

I will Sim these trades in the interim until I can demonstrate this method has a good expectancy. I will need to setup a separate IB account for these Swing trades. Ninja doesn’t allow sim trades to run over more than one session so I will just keep records of the Swing entries in the interim until live.

The swing trades will have a 1pt initial stop and will only move to b/e when 2pts in profit. The exit signal will be based on 30min/120min chart indicators.

The second enhancement is the ‘bread and butter’ signals coming from the 5 minute chart. On occasions I am holding these trades too long looking for the home run trades. I will move to the 3min TF charts and trade the reversal / continuation signals to the exit signals and not try and “hold through the first pullback” all the time. The aim is to pick up the 1-3 pts on offer several times a day on these mini-swings.

The 3min chart just gives me a little bit more clarity that is missing in the 5minute chart. I accept that I will get more noise as a result but I’m just looking for quick wins now for the mini-swings, so I need to be more agile.

The mini-swing trades will have a 0.8pt initial stop, the stop will move to b/e once 1pt in profit. When I am trading multiple contracts I will take 1 contract out when 1pt in profit.

 

[commanderco]

Jessop,

Come down through the TF´s, enter and then track back up through the TF´s
( same path as you entered)

 

[jessop]

Hi Commander

Just so I have it clear - Is this the right order :

Entry -> 120 then 30 and finally 5 signal confirms entry

Exit -> 5 then 30 and then 120 signal finally confirms exit

Is that right ?

Thanks for the feedback.

 

[jessop]

What should have been an excellent reversal day was a case of loads of missed opportunities. Generally very passive today, concentration **** and exits very poor….apart from all that a good day!!

S1 (S) – watched but signal not taken

S2 (L) – could see that S1 was struggling but the move was too quick for me

S3 (S) – signal watched – but for some reason I decided that the ER2 should bounce from the 15:15 bar and I would short that. It ignored my advice and dropped 4pts without a bounce. Looking for the market to give me perfection!!

S4 (L) – after ignoring all the signs with S3 – I jump straight into a ‘falling knife’ long. There was a signal there but given the weakness it was a real CT gamble play. Entered at 634.3 and stopped out 5 mins later for 633.5.

S5 (S) – very clear signal – watched and did nothing

S6 (L) – even more p***ed off after missing S3 & S5 – not taken

S7 (S) – Great entry at 632.8 at the start of the 17:03 bar – thought the move might have got away from me. A panicky exit without a signal though when it hit the LOD – closed at 631.4. The exit signals was at 17:18 when price was around 630.7 level.

S8 (S) – not taken at lunch
S9 (L) – not taken at lunch

S10 (L) – nice continuation long signal – watched and waited for perfection again – not taken!!

S11 (L) – continuation long signal – entered 631 on start of 19:12 bar and exited at 631.5 – no exit signal again – just got out when there was no follow through

S12 (L) – not paying full attention – not taken – an expensive distraction

S13 (L) – continuation long signal – get another chance but not paying full attention – not taken again!!

S14 (L) – ditto S13

S1- 0/2
S2- 0/2
S3- 0/2
S4- 2/2 (this feels generous)
S5- 0/2
S6- 0/2
S7- 1/2 (exit on non-signal)
S8- n/a
S9- n/a
S10- 0/2
S11-1/2
S12-0/2
S13-0/2
S14-0/2

Rules Hit Rate = 4/24 = 17%

Points today +1.1pts (not including comms) ….

Onwards and upwards……….

 

[commanderco]

Hi Commander

Just so I have it clear - Is this the right order :

Entry -> 120 then 30 and finally 5 signal confirms entry

Exit -> 5 then 30 and then 120 signal finally confirms exit

Is that right ?

Thanks for the feedback.

If you go in 120/30/5 then you need to reverse your way out, but I would suggest you throw
15 into the pot.
ie make your trade at 5M then watch it expand on the 15 & 30 TF
Once you have wiggled into the trade, do not let it back up into a loss.
% accuracy is your primary goal followed by better exits to increase points per trade.
Do not subscribe to the belief that a few big winners more than cover a bunch of small losers
thanks to your stop system.
To make money you need to trade plenty of lots.
To trade plenty of lots you need confidence.
Confidence comes from regular consistency, which comes from a healthy %A

 

[jessop]

Many thanks Commander

Makes perfect sense to me, especialy the confidence and lots comment.......its the consistent execution thats the challenge at the moment.

Cheers

 

[badtrader]

I said that in one of my post, You can be the best trader in the world at reading charts, but if one cant do Size you are not going to make money worth talking about. The sad fact is, 95% have got a glass ceiling,above they head, they cant break out of it. an example of this is Sheldon Knight. once he run his account up to $500.000 he quit.

 

[commanderco]

Many thanks Commander

Makes perfect sense to me, especialy the confidence and lots comment.......its the consistent execution thats the challenge at the moment.

Cheers

Well if it is not one challenge it will be another.
Next thing you know you will be doing 100 lot trades and your Broker goes tits up.

Give all these challenges some thought and make sure you are not using 100%
of your thought power on just enter / exit

 

[jessop]

Well a lesson today in taking all your signals (S10 to S13)….if you get selective the market will kick your butt.

S1 (L) – not taken at work
S2 (S) – not taken at work
S3 (L) – not taken at work
S4 (S) – not taken at work
S5 (L) – not taken at work
S6 (S) – not taken at work
S7 (S) – not taken at work
S8 (S) – not taken at work
S9 (L) – talking to builder - not taken

S10 (L) – I was happy with the continuation entry at 629.9 – but it just failed - stopped out for -0.8pts.
S11 (L) – Again I was happy with the entry at 629.7 – but there was no buying and the bar quickly reversed and I was stopped out for -0.8pts again.

S12 (L) – the pain of two failed longs kept me from committing to third – not taken
S13 (S) – ditto S12

S1- n/a
S2- n/a
S3- n/a
S4- n/a
S5- n/a
S6- n/a
S7- n/a
S8- n/a
S9- 0/2
S10-2/2
S11-2/2
S12-0/2
S13-0/2

Rules Hit Rate = 4/10 = 40%

Points today -1.6pts (not including comms) ….

Onwards and upwards……….

 

[jessop]

Well this would have been a good day to pull a sickie !!

If I miss the morning session working I always hope that its been a whipsawing tight range.

Soooooo painful to turn on the charts today….for my trading plan this is pretty close to the perfect day. S5 and S8 with nice continuation signals (S6 and S9) in case I exited early. The higher TF charts were screaming oversold bounce on way too. Plus there is usually a strong probability once it starts to bounce from S5 (in the way it did) its going to attempt, at least, to make 627/628.

I’m going to be very unprofessional and stop now because I know I’m not in a positive frame of mind. There is no point fighting it because my performance correlates almost perfectly with confidence/general mood.

I’m on hols for the next two days so the next entry is Monday.

Happy trading all

Onwards and upwards……….next week