The purpose of this blog is to provide a comprehensive compilation of articles and posts which have been of great help to me in the past, or that I find very insightful, wise or containing a great deal of useful knowledge.
The original author of the text will be mentioned, so that those who are interested in the subject can explore it deeper.
The blog will consist out of several categories, some more theoretical, other containing charts and analysis.
Finally, this blog is, in a way, a continuation of the journal
I started in the public section on another site.
The original author of the text will be mentioned, so that those who are interested in the subject can explore it deeper.
The blog will consist out of several categories, some more theoretical, other containing charts and analysis.
Finally, this blog is, in a way, a continuation of the journal
I started in the public section on another site.
Part 2
Posted 06-09-2008 at 07:54 AM by firewalker
Review of June 2 - June 6
I have noticed over the course of the last weeks that when I enter a trade, I usually have some sort of target in the back of my head. Often this target gets reached, but not before I exited my position. This has caused some frustration on my part. In the end I have to focus myself on trading the plan and remind myself that instead of being right, being profitable is more important!
I have been right on several occasions in the last two weeks, where price did exactly as I anticipated, but somehow I wasn't able to profit from it. Therefore, I'll need to make some little tweaks on the approach, some of which I've been dwelling over for some time.
Instead of scaling out in two parts (halves), I'll divide my trade into thirds. This will help me stay in a trade longer, and it will ultimately help me catch the big fish. The downside is that I might get stopped out at breakeven after my first third has reaching it's destination (and price returns to my entry point), but the days where I hold on till EOD should make up plenty for that.
Lessons learned
(1) Take your entry, but don't try to outsmart your plan by moving your stop to breakeven to soon. I missed one potentially very profitable trade because I moved my stop to breakeven +1 point on the NQ this week. There is a reason I move my stop to breakeven and I must remind myself to adhere to my own rules.
(2) My 'bigger targets' are usually the next important S/R level and I should stick to them. In trending days price often hovers during lunchtime. On Friday June 6 price hovered for two to three hours around 1378 on the ES. I had set 1370 as my next target, which before the end of the day got reached, and even broke lower. However, price went sideways for such a long time that when it finally began to move lower (1375), I moved my stop to 1378, only to see it taken out, before we dipped significantly lower.
(3) You can't catch the big waves, unless you are prepared to give back some profits on those occasions where price returns towards your entry point.
Positive elements
I've had a very good feel of the market, although in most cases it took price a little detour to reach it's destination. It is like some forces are in control, thus creating an environment ('the market') where the forces of supply and demand work in such a way that they will follow a path that hurts the greatest number of traders. I was very surprised when on Thursday (June 5) the NQ broke higher above 2050, it looked very much like a 'trap' before the NFP to get as many people as possible on the wrong side of the market. It turned out to be the case as Friday saw one of the biggest down days in a year.
Adjustments
First target: break of demand/supply-line / move stop to BE
Second target: next S/R level / move stop to first target
Third target: wait for clear trend reversal signal (and exit at the break of last swing)
Interesting post to keep in mind:
http://www.traderslaboratory.com/for...580-post4.html
I have noticed over the course of the last weeks that when I enter a trade, I usually have some sort of target in the back of my head. Often this target gets reached, but not before I exited my position. This has caused some frustration on my part. In the end I have to focus myself on trading the plan and remind myself that instead of being right, being profitable is more important!
I have been right on several occasions in the last two weeks, where price did exactly as I anticipated, but somehow I wasn't able to profit from it. Therefore, I'll need to make some little tweaks on the approach, some of which I've been dwelling over for some time.
Instead of scaling out in two parts (halves), I'll divide my trade into thirds. This will help me stay in a trade longer, and it will ultimately help me catch the big fish. The downside is that I might get stopped out at breakeven after my first third has reaching it's destination (and price returns to my entry point), but the days where I hold on till EOD should make up plenty for that.
Lessons learned
(1) Take your entry, but don't try to outsmart your plan by moving your stop to breakeven to soon. I missed one potentially very profitable trade because I moved my stop to breakeven +1 point on the NQ this week. There is a reason I move my stop to breakeven and I must remind myself to adhere to my own rules.
(2) My 'bigger targets' are usually the next important S/R level and I should stick to them. In trending days price often hovers during lunchtime. On Friday June 6 price hovered for two to three hours around 1378 on the ES. I had set 1370 as my next target, which before the end of the day got reached, and even broke lower. However, price went sideways for such a long time that when it finally began to move lower (1375), I moved my stop to 1378, only to see it taken out, before we dipped significantly lower.
(3) You can't catch the big waves, unless you are prepared to give back some profits on those occasions where price returns towards your entry point.
Positive elements
I've had a very good feel of the market, although in most cases it took price a little detour to reach it's destination. It is like some forces are in control, thus creating an environment ('the market') where the forces of supply and demand work in such a way that they will follow a path that hurts the greatest number of traders. I was very surprised when on Thursday (June 5) the NQ broke higher above 2050, it looked very much like a 'trap' before the NFP to get as many people as possible on the wrong side of the market. It turned out to be the case as Friday saw one of the biggest down days in a year.
Adjustments
First target: break of demand/supply-line / move stop to BE
Second target: next S/R level / move stop to first target
Third target: wait for clear trend reversal signal (and exit at the break of last swing)
Interesting post to keep in mind:
http://www.traderslaboratory.com/for...580-post4.html
Total Comments 1
Comments
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Great analysis of your trading Firewalker. I think changing to the thirds is a great idea as it will give you more flexibility and encourage you to hold on for your profit targets. That post you referenced from Db is great.
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