Thought I'd drop a few small updates in between some of the bigger posts just to let followers of what I'm thinking or doing while trading. Had a fantastic day yesterday, but today hit my loss limit for the day early and my risk management plan says stop. Just got whipsawed early, out of sync a bit. Doesn't happen that often but it does happen. Of course being a trader I couldn't look away and sat on my hands and let the next 3 trades go by (winners) but, still followed my plan. Stings, but it happens. Got a little Miffed? Yep. That being said, is it better to change my plan because I had a couple of losers in a row? Absolutely not. Past trade results should not change how you trade the next trade. They all stand on their own. Can I adapt and make my plan better based on this information? Maybe. Look for the positive and apply what I can for the next day and move on. That's trading... Just talking with a trading colleague saying that that's one of the hardest things in trading is taking losses but its all part of trading if you're following your plan. I'm a reactive person by nature (remember my background is engineering) who likes to solve things immediately, so in the past losing trades would make me trade MORE in an effort to make back anything I lost. There's an excepted term for this: Revenge Trading, and boy was I going to show that market. Ha! Sometimes it would work, most of the time the hole dug was deeper... and I vowed at the time not to do that again. A while ago I reached the point where I can actually do this. Not an easy task. My advice is if you find yourself in this place, work to solve it sooner rather than later, you'll be MUCH better off. Even though the losses sting you'll live to trade another day. -Trader Joe
Good Day Traders!
Hope you all had a great week of trading! Quick video reviewing what I’m seeing in the longer term charts with the recent volatility and shorter term day trading setups over the last couple of days. I’m not a big fan of posting trades setups but followers always ask for these so here ya go…
Volatility is screamin'... Be really careful as it is easy to get chopped up by putting stops close, or even normal position. If you're building on a smaller account, may want to sit aside or paper-trade for a while and keep your account intact. With this volatility It's nice when the action goes in your direction as is really moves, but when it doesn't you not only can get whacked, you can also be the victim of huge slippage. Had a couple of stops this week that were slipped a few of ticks, but I've had in the past where I got slipped 3 or 4 points, yes, points, not ticks. To say the least it sucks, just trying to save you some pain. Tradestation increased the daytrading margins way up in the last few days so be sure to watch your margin as well. Don't want to get your account locked because you missed a margin change.
Heck of a week, expecting more of the same to come…
Been squawking on any media I could to anyone who would listen this last week that we have an interesting, if not historical phenomena showing up on the EminiEdge HeatMap Indicator, and by implication, the ES market. Professional interest is showing up on the daily chart on the retrace to the all time highs recently posted. A lot of traders I talk to will argue this point and question my interpretation of what I see, and that's okay with me. I don't normally make long term "calls" but simply try to let others know one more piece of information that may be available to them. That being said, "Kaboom" comes to mind. If this means what it looks like then we can expect another run to new highs soon. This of course ignores the "Trump factor" where some wild-ass news drives the market wild...
The most common question (or arguement) I receive is "how do you know these are professionals? This is just volume..." or something to that effect. Well, first I'd mention that the HeatMap indicator does not measure simply volume but trades size. Professional traders trade in size where the retail or small trader trades smaller,, maybe one or two lots. This isn't a criticism but an observation. If you want a more detailed explanation take a look at the HeatMap Indicator section on EminiEdge.com. Second most popular "question" is "...how do you know they're buying and not selling it down?" Well, professionals are always looking for value and buying lower and selling higher. This area isn't exactly at the low or high, they have too many contracts to liquidate overall so it's done over a range, on falling prices on the WAY to the low or rising prices on the WAY to the high. Not even the professionals know where the exact low or high is. However they don't typically buy high and sell higher (like a breakout, but of course there are some exceptions to this based on the timeframe being traded). One exception to this worth talking about briefly is when the professionals capitulate. This happens when the professionals are wrong (say what?), and yes, professionals are wrong time to time, and when this occurs they may start liquidating a t lower prices and accelerating price lower. This is not a pretty sight and fortunately not that common of an occurrence, but it does happen. Going with the odds however lets us make the assumption that the professional presence on falling prices is most likely accumulation not distribution. THIS is what the HeatMap is identifying.
So I leave you with this observation to ponder and add to your trading toolbox. In my world, trading with the professionals and not against them is a better bet. Keep in mind this happens across all timeframes and we can use this to make decisions real time. This daily chart is something I'm betting on for some of my longer term investments, but I'll be watching my day-trading tick charts for my intraday trades.
Hope this is helpful to you and as always, if it is, please feel free to share this on any site or post you like. A few suggestions are down the side of the site but hey, go crazy and surprise me with posting somewhere else. Who doesn't like surprises?
Anyway, Thanks and Good Trades!
Guten tag traders!
Well, well, well. All time highs hit today and what a fun day to trade it. Nice couple of long setups and quick profits. Love it when a plan comes together! Sometimes even a blind squirrel finds a nut now and then...
For those that gave me a hard time and even ridiculed my comments (you know who you are)... it's not about right and wrong. It's about reading a chart and making the best assumptions you can based on your trading strategy.
Thought I'd do a quick video to talk about a new update to the configuration of the MTF-EEdgeTrend indicators (the "base" indicators are unaffected), giving a proverbial "heads-up" when a trend line S/R is about to print from higher or lower time frames (the "Home" time frame already does this). This is another edge we can take advantage of and remove a little stress while waiting for an entry... always a good thing. Every little edge helps! Other than that, a bit of a choppy week, fewer trades than normal but that's okay if our strategy keeps us out of the chop. Used to be one of my biggest issues, over trading and getting whipsawed in small range days which the EEdge indicators have all but eliminated for me, and I hope you too.
Anyway, looking forward to a great, volatile week!
Nice little entry and exit today . Breaking out on the larger time frame but catching it on the MTF. Apologies for the video quality. had some troubles. A cinematographer I'm not, but you'll get the point. I said filled at 79.25, meant to say 79.50. Gets away from you sometimes. Anyway, included a video of the trade this morning for your info...
Ni Hau Traders!
Hope your trading is going well. Awesome break of resistance into an initial uptrend as we forecast. I love it when a plan comes together! Review of a few different charts in this video including the ES, Bonds and Gold along with some multiple time frame setups. It was rollover week so had a little less interest on some of the days later in the week and decided to step aside on Friday, as apparently many did. Wednesday and Thursday had some interesting setups that showcase the EEdge indicators all too well. As the title of this post suggests I discuss selling low and buying high, or vice versa depending on who is trading where. Both are happening, buying and selling at the high and buying and selling at the low and I had a couple of rants about this very subject. I guess the moral of the story is to keep your emotions in check while trading, and if you can’t don’t call me, I’ll call you… Didn't your mother ever tell you "If you don't have anything nice to say, don't say anything at all"? Always listen to your mother.
An updated look at the equities and bonds/gold seems to still support continued, maybe even explosive strength. Anything can happen however, the ES consolidation at resistance, new resistance for treasuries and an apparent lack of interest in safe haven gold seem to be lining up for a move. The professionals continue to be showing up on the down pulses so continue to trade what you see, not what you think... No video today, just my two cents on the continued consolidation...
A follow-up to the last video talking about long term patterns biasing your short term trades... Be mindful that you explore all possibilities and be prepared to trade it, REGARDLESS of the direction or action! React to what you see, not what you predict!
Yes Siree Bob. That's what I like to see, professional on cue. Now we get to see the enthusiasm if it's true selling, buying or an amateur flush out...
*** Update 6/3/2018 (below)
An updated look at the equities and bonds/gold ...
Quick video to start the week talking about some short term trading scenarios using some long term patterns. Nice when things line up. Important not to get married to a bias, be flexible and willing to switch if the action warrants. My trading is a formal set of "if-then" statements, probably a hold-over from my programming days, but I always know what the trades setup is with the information at hand. if it changes, it changes, don't predict just react.
Anyway, looking for a bit of volatility this week, let's hope.
Had a couple of timely questions regarding "draw downs". Could be something to do with the crappy action of late but as we all know we can't simply blame the market. There are things we can do to deal with and hopefully reverse this unpleasant situation and since I recently had a draw down of my own thought I'd do a post on how I dealt with it. Might make this a continuing educational series if there is enough interest, takes sooo much time to prepare, certainly don't to waste my time. Maybe all this stuff is well known to everyone else and I'm just stating the obvious, if so, apologies for that. Just look away then I'm hideous...
I'll attach a few screen shots here to give the gist of it...
In summary, trading drawdowns suck. : )
Well, the volatility dropped a little bit today ahead of rollover. Not sure if I'm happy or sad, kind of get used to the 50 point swings and taking 10 point/contract stabs along the way. February was one of my best months ever and I couldn't have done it without the wild market. That being said, even the exhilaration of a wild party gets old after too long and you just feel like sitting quietly over a boring bowl of corn flakes. My nerves can only take so much before I go crazy. Staring at every tick of the market is exhausting, especially when there is a crazy bid-ask spread and your trying to enter or exit. Today was a great range, keep it right about there please...
There were a few textbook long entries today that I talk about in the video, one nice one later that I didn't take. As I mentioned before, I like to trade around 8:00 to 11:00 or so. I find that before or after that is questionable for my setups so it works for me. This week might be a little slower due to rollover so don't forget that. Here's the video showing how I trade rollover in case you have forgotten.
Lastly, so a follower asked me recently: “How did you trade today? Were you profitable?”
My gut reaction was to respond with a yes or no answer, but after a moment I realized how quick traders are to fall into a trap. Let me explain:
The initial part of the question asks how I traded today. A good trading day is one in which I follow my well thought out and researched trade plan. This includes all setups, entries, and specific exit strategies. This plan is 100% formulated before the trade is placed each and every time. There is not a situation in which I do not know how the trade will go, it is a finite series of “if – then” statements. I may not know which path of “if – then” statements will be executed, but do know the probabilities of each one. The plan is researched to the degree that I know, statistically, what percentage of these trades will be profitable, IF AND ONLY IF the trade plan researched and documented is followed to the letter. Any deviation throws all the research and likely the entire plan out the window. We should never be figuring out a trade plan while trading. I repeat, NEVER! This is too late! So the question of how I traded is really answered by how well I followed my plan, not if I was profitable or not. So if the researched and documented trade plan is deemed to be profitable over some period of time then the question of profitability after one or two trades or one or two days is moot because I know if I follow my plan that there is a high likelihood that profits will be the inevitable outcome.
So to answer the follower’s questions: “I traded excellent today, thank you!” ;)
Hope the video is useful to you. If so, as always, I'd appreciate a like or share somewhere of your choosing. Down the right side of this page there are a few of the "hot links" but don't feel limited by that... Go nuts! Thanks in advance!
Holy Hell, what a week! If you wanted to know what it felt like when the coyote strapped an ACME rocket to his back in his relentless pursuit of the roadrunner, this week of trading would be it. Ranges the biggest in history, every news outlet has their own reason for it but really not having a clue. Regardless, we as traders don't care, just trade the crap out of it! Be careful if you're not confident or trying to fine-tune your trading strategy, this isn't the week to do it. Standing aside is a completely valid strategy, see rule #8.
Have to say this week gave me a bit more anxiety than normal but exhilaration came with it. Had some great stretch targets but also had some stop hits... and in a hurry... Whew.
I walk through a few setups, entries and exits in the video and overall reflect on the week in review. The first minute of the video is how it felt while trading this week... WooooOOOOooooo.... Ahhhhhh... Whew... repeat. If you don't want that excitement, start at index 1:00 min. But, if you can put yourself in their mental state, you'll get what I mean. If you don't hurl it makes you a little stronger for the next time.
Hope you had a great week of trading as well...
Guten Tag Traders,
Been optimizing the setup criteria for the strong trend following setup, both long and short over the last couple of months. Today happened to get both the uptrend entry and downtrend entry in the same day which is unusual but nice opportunity to explain what these setups look like.
Interesting that the volatility has been increasing lately, usually don’t get this at the tops so seems like more new highs are on the horizon. Long term investing is certainly paying off, just received a statement on one of my accounts and it showed +37%. Haven’t seen that in a while but I’ll take it!
Attached a real time trade recording as a video is worth a thousand pictures, right?
Bonne année Traders,
Caught a nice little long trade to start out the first full week of the new year. Likely would be more in it to the long side but sooooo slow, not worth the risk of staying longer into the afternoon. Don't record the actual trades that often as I find it a distraction, one of the reasons I've been resisting a trade room. If there would be enough interest maybe I'd reconsider, not sure...
Well, with out further ado...
Hauʻoli makahiki hou Traders!
Hope Santa found your chimney and didn't give you any dense fossil fuel in your stocking! Found a few decent setups in the last few weeks and in the beginning stages of validating an additional trade setup. So far so good. Always struggled hitting those runaway trends and this little dandy is picking some of them off. For some reason the image of being stalked by something higher up the food chain keeps coming to mind while trading. Hmmm... Not sure why...
New computer is finally stabilized and now that the holidays are nearly behind us looking forward to a raging 2018 for trading. The increased resolution is nice in some ways but reduces the fonts in certain displays so I curse at it once in a while, which surprisingly doesn't make it much better. Huh. I'm going to keep trying anyway...
Anyway, last blog of the year for me, going to find some warmer climate for a bit rather than the current deep freeze. -25 Degrees F, -40 with windchill, are you kidding me? Just... not... right.
Good Trades all!
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"Trader Joe" trades the Emini S&P exclusively and is the main influence behind EminEdge.com.
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