[swansjr]

Day 23
June 17, 2009

One trade. One winner.

Today my main computer died. I think it's the motherboard or a memory card. It often won't boot up or if it does it will lockup after about 10 minutes of use. I ran some diagnostics on it and can't locate a problem. It's an older machine from 2004 but has served me well. Tonight after work, it's off to the Apple Store.

My dedicated trading platform is another computer, so at least I can still trade. With all the fuss with my other computer I managed to get one trade in this morning. Probably best because it was chop suey today. On thing I'm beginning to notice on these choppy days is looking at my higher time frame (445t) is a big help. Historically, I would use the higher time frame as confirmation while my focus is on my lowest timeframe. This works in a trending market but most of the time the market is not in a strong trend - or so it seems. Yet, if I change my focus to the higher time frame and actually look for setup on this timeframe, this seems to work out much better.

A trader named "brutusdog" sugjested this is the way he trades the EC and that lead me to take a look. Thanks Brutusdog.

More on this later...

P&L: $100

[swansjr]

This is a brief 5-minute video on my chart-setup. I thought some of you may be curious. In the future I would like to put more of these together to explain my setups, entry and exit rules. Everything on the chart is inspired by Watts Trading.

[jimbob42]

Thanks for the video. Looks interesting.
How is his trading room after you get his program?

[swansjr]

Originally Posted by jimbob42 »

Thanks for the video. Looks interesting.
How is his trading room after you get his program?

I have to say I only used the room a few times simply because I don't trade during the day and that's when the room is active. Right now, they are trading YM during the regular session. I trade early morning (:5:00am - 8:00am Central) on EC. However, the few times I've been there the people have been friendly and helpful. Watts is not in the room everyday day. But he does post which days he will be available.

[swansjr]

Day 24
June 18, 2009

No trades today as it was chop suey again. I did sit and watch the action from the 445 tick chart and made notes on how to handle this type of market. The 445 tick appears to give decent indication to turning points and with the help of divergences I may develop some rules to trade this chop. My initial mistakes with the system has been to always trade the same way - trend following. This works great some of the time, but then there is the other times (maybe most of the time) when there is more chop than trend. Scalping 7-10 ticks of profit appears very realistic.

I would like to formalize my ideas a bit more and during the next choppy session, trade it in simulation mode.

[brownsfan019]

I agree - that 6E just didn't want to move till later in the session. And of course I flattened my short position WAY to early...

If you are going to focus on the trend trading part and can avoid days like today, that's a winner in my book! Days like today are exactly what a trend trader needs to avoid or take minimal losses. So job well done there!

The next question or step would be - do you want to remain a trend trader only or can you identify days like today w/ consistency and then make some money there too? If you can identify range bound days like today, then it's a fairly easy trade - buy lows, sell highs. Easy enough IF you can decipher days like today vs. the big trending days that you know the 6E can deliver.

[swansjr]

Day 25
June 19, 2009

One trade. One winner.

Quick update on Friday's trading. Today I took a trade based off my mid-term chart and entered on the 89 tick. It was not a smooth ride but my target was hit. I continued to watch the price action on both timeframes.

It's been a busy weekend as I still need to review my setups and how they interact between my 89 tick and 445 tick charts.

P&L: $100

[swansjr]

Originally Posted by brownsfan019 »

I agree - that 6E just didn't want to move till later in the session. And of course I flattened my short position WAY to early...

If you are going to focus on the trend trading part and can avoid days like today, that's a winner in my book! Days like today are exactly what a trend trader needs to avoid or take minimal losses. So job well done there!

The next question or step would be - do you want to remain a trend trader only or can you identify days like today w/ consistency and then make some money there too? If you can identify range bound days like today, then it's a fairly easy trade - buy lows, sell highs. Easy enough IF you can decipher days like today vs. the big trending days that you know the 6E can deliver.

It's a good question. As described in the PDF from Watts, the system has two primary setups. First is a trend continuation setup where you buy/selling re-tracements within the major trend. The second is a counter trend setup when you try to enter when the trend is changing.

I've been focusing on the trend following aspect while observing the possible trend reversals as a curiosity. The thing is, a trending market is not always present and at first I would treat all price action as a trending setup. During a trending market the money came easy. But during not-so-trending markets, I would struggle. It's now dawning on me that the so-called counter trend setup can be adapted (with some modification) during these non-trending days to scalp reversals. I'm still reviewing this but it sure looks it has potential.

To answer your question directly if I can tell when the market is in a non-trendy mood, yes. At least, I think I have a basic handle on it. It's rather obvious at times based on how flat my moving averages are. The way the price moves is also different. Trending price action is a lot smoother and price moves away for the averages. In non-trending the price hugs the moving averages more and has a "choppy" look. Lots of false breakouts and tails. At times price is contained between my two moving averages as well.

By skipping non-trending markets I can keep my trend trades in the black. Yet, it appears that the choppy markets are just as tradable but you must change the way you approach it - something I've not been doing.

I hope to detail both concepts soon and perhaps get some feedback from viewers. I might be happy with simply ignoring trending days and using the trend setup. However at this time, I'm interested in become proficient at both.