Today's Trading Hell

[AbeSmith]

Hello. Today was a bad trading day for me. So I was thinking I would show my chart and describe the trades I made and perhaps some of you more experienced traders might be able to fill me in on what I’m doing wrong. So here it goes:

I’m using the 2 day chart, 15 minute candles, and pivot points. I’m not using stop loss. Here is an image of my executions today.



Notice the lables B(X) and S(X), B for buys and S for sells, and X representing the order of the execution. The orange B(X) or S(X)’s are longs and the purples are shorts. As you can see I made a total of 12 trades = 6 roundtrips. 2 roundtrips were shorts and 4 roundtrips were long.

And here is the chart:



The first trade B1, at 9:15 central time occurred on the candle where the B1 arrow is pointing to. Notice the arrow only shows the time frame, not the price. The price for B1 was 13688. I bought it right after seeing the previous candle print a green overlapping the previous red. It was a bullish signal which I remembered from my readings. So I bought 2 contracts quickly at 13688. But I should have paid more attention to the brown pivot point right above, at 13690. It was a resistance point only 2 point above my entry point. A bearish signal, which should have alerted me to not buy or buy with a tight trail. And sure enough, the price dropped around that point and I ended up selling at S1, 13676, a 12 point loss.

The next trade, B2, at 10.01 C.T., and 13696 price occurred after I saw a lot of buying volume pushing the price through the pivot at 13690 and I quickly jumped on that trade, thinking back to things I heard about going with the trend and buying high and selling higher. But after just 2 minutes I got the jitters and sold at a loss, from 13696 to 13688. But I was wrong because the price fluctuation was short term and the price rose higher and higher breaking 13700. So at B3 I bought at 13700 at 10:24 C.T., but sold by 10:38 for 13701, a 1 point gain. Some reasons I sold this time was because: 1. The volume trend of that price move was downward. I read in a book that a price move up that has down moving volume trend is a weak move. 2. The price was reaching the red pivot point which I figured would be a resistance point. I don’t know exactly how pivot points are calculated, but I know they are strong support and resistance signals.

Then I got an idea that it would be a good time to short. I had never shorted before but I decided that because of the lowering volume trend, potential resistance pivot point at 13710, and peak of lunch time which I hear is not a good trading time, that these factors were a high probability setup for a short. So I decided to short around 13710. So I shorted at S4, 13707, 11:04 C.T. But I got really nervous. One reason is that my IB workstation was acting up. I had to press the transmit button several times until the transmit window popped up and I remembered that shorting carries infinite loss potential, probably irrelevant but that thought coupled with what if my connection goes out or what if TWS F's up made me anxious. And also, because it broke through the pivot point I got scared of the potential of a breakout. So I sold quickly at B4 for a 2 point profit. Then shorted again at S5 and sold at B5 for a 1 point profit. But I wish I had more patience because the price dropped all the way down to 13680. At 13680 I noticed the green pivot which was a strong support signal and the price bounced off of that. So I thought it was going up again so this time I bought at B6 for 13689, but the price was not going up so I sold at S6. Fed up with the stock market and having a total loss of $200 I called it a day and was planning on going to see transformers but decided to write this log. The lessons I learned are:

1. Not having confidence in your hardware and software can make you jittery. My unreliable internet connection, unreliable TWS software which has acted up more than once, and lack of general experience in stocks were making me very anxious. Also, lack of very specific trading plan made me anxious and unprepared. Some greed was also probably getting in the way, becuase he greed made me jump into a trade without thinking of a plan but instead thinking about not losing potential profit.
2. Pivot points are powerful support and resistance indicators.

And I have a question I was hoping someone could help me: How does short selling affect the price?

Any help, as always, would be very appreciated.

[Dogpile]

other than having;

poorly thought-out trade set-ups
bad execution system
and clear impulsive trading behavior

all looks good.

seriously, bro. you have a lot of work to do. not sure where to start. you need to have a well thought-out gameplan and strong discipline or you are going to blow your account out fast.

I would suggest you first learn to read multiple timeframes -- a higher timeframe for the set-up and a lower timeframe for the execution. trading off candlesticks in a single timeframe with some pivot points is not going to work for 95% of us. some small fraction of traders with incredible innate ability can do what you are attempting but I would go short this concept as a rule.

[AbeSmith]

	Quote:	Dogpile
	other than having; poorly thought-out trade set-ups bad execution system and clear impulsive trading behavior all looks good. seriously, bro. you have a lot of work to do. not sure where to start. you need to have a well thought-out gameplan and strong discipline or you are going to blow your account out fast. I would suggest you first learn to read multiple timeframes -- a higher timeframe for the set-up and a lower timeframe for the execution. trading off candlesticks in a single timeframe with some pivot points is not going to work for 95% of us. some small fraction of traders with incredible innate ability can do what you are attempting but I would go short this concept as a rule.

You are right. I just want to clarify that I looked at the monthly and weekly chart, then the 2 day chart. Are you saying I should do 5 minute candles instead of 15minutes. I tried that but on the 2 day chart the 5minute looked too smooshed. And I prefered the 2 day chart because I could compare yesterday's moves and because it added an extra pivot which was significant today but did not show on the 1 day chart.

[MrPaul]

Oh boy they saw you commin'!:p

Before I go too deeply into anything, what books are you referring to?

And also, have you looked into any low cost chart services like Sierracharts? Those IB charts are just tough on the eyes.

I have some advice for you, but I am really interested in what trading literature you have been getting into first...

[Dogpile]

personally, I use the 2-3 daily set-up for kind of a high level structural bias... then use the 15-min chart as my core 'higher timeframe' and 2-5 min charts for my execution timeframe.

[dalby]

generally speaking, a 5 minute chart or a tick chart is better for playing pivots... i use a 15 min (and market profile) for frame of reference

also...

if you actually said "i'm not using stop loss" you CLEARLY should not be trading futures.

are you kidding me?

today was a phenomenal trading day for me, fwiw. the market tells for a big sell were everywhere, support and resistance were clearly defined and well respected, etc.

as much as i like narrow range fade days like yesterday, days like today are a gift!

[brownsfan019]

Welcome to the futures biz abe.

I'm not going to comment on the trades as you will find over time if your trading plan can work for you. No one else can decide that.

A few observations:
1) Why no firm stop loss?

2) What is your commission round turn for 1 contract? I wasn't exactly sure looking at the snapshot.

3) Have you done backtesting on this trading plan and is a day like today to be statistically expected? If so, no worries. If not, I would worry.

One last question - this was done on a simulator, correct? Today should have been a good learning lesson for you since NO real money was on the line. You should be on a simulator for MONTHS before ANY real money is at stake or you will quickly be out of this game.

[AbeSmith]

	Quote:	MrPaul
	Oh boy they saw you commin'!:p Before I go too deeply into anything, what books are you referring to? And also, have you looked into any low cost chart services like Sierracharts? Those IB charts are just tough on the eyes. I have some advice for you, but I am really interested in what trading literature you have been getting into first...

Hey Paul. The first book I started was Toni Turner's beginner's guide to day trading online. I read about 100 pages of it but it wasn't going smoothly, so I dropped that book and picked up The Complete Idiot's Guide to Daytrading Like a Pro. At first I shunned that book because I have a bias against these Idiot's books as "fake books" and also didn't like them calling me idiot. But I bought it and after finishing it I have to say it was an excellent beginner's book that made sense to me. Very straightforward and lacking the motivational green tea mumbo jumbo of Toni's book.

Then I read this neat little book which I don't remember the name of it, I think it was called sticky charts or something. I read that at barne's and nobles without purchasing it. It was very good beginner's book about trendlines, chart patterns, and reading volume. I also read at barne's and nobles this 50$ book, I don't remember the name, I think it was Tricks of Daytrading or something. It was ok. Then I bought The Market Maker's Edge by Josh Lukeman. I'm still reading that but it seems like a good book. After I finish that I will go back to Toni's book.

I'm also reading the beginner's forum from the beginning to the present. I got 2 more pages to go on that. I have to say it is very excellent.

To answer your question about Sierra Charts, I did look at them for a moment and did install their software but I was not very impressed. It seemed a bit crude, but I will look at them again because I did not spend much time looking at it.

[AbeSmith]

	Quote:	dalby
	generally speaking, a 5 minute chart or a tick chart is better for playing pivots... i use a 15 min (and market profile) for frame of reference also... if you actually said "i'm not using stop loss" you CLEARLY should not be trading futures. are you kidding me? today was a phenomenal trading day for me, fwiw. the market tells for a big sell were everywhere, support and resistance were clearly defined and well respected, etc. as much as i like narrow range fade days like yesterday, days like today are a gift!

You are right. If you see my charts you can see that even I was correct most of the time with the overall trends, and that is not too bad considering that I had 12 overall trades. The problem was that I was too jittery...well one of the problems...LOL.

I probably would have jumped back in the market during the Fed meeting for a short but I was feeling beat and also my internet connection was acting up.

[brownsfan019]

ABE - HERE'S THE BEST ADVICE YOU WILL RECEIVE TODAY AND I'M SURE COOTER AND OTHERS WOULD AGREE:

STOP TRADING
REAL MONEY OR NOT.

I can tell by reading your posts here that you are literally winging it thinking you can outsmart the pro's from a quick read of a couple books at B&N that you didn't even buy!?!?!?

Remember Abe, futures are zero-sum. That means while you are losing, another person/bot is taking your money from you and vice versa. There are many good traders, some even here, that will take your money all day long as you wing it. I don't know how much you have to play with, but if you lose $200+/day, it's not going to take long to eat away your account.

You need a foundation to build your trading 'house' and right now you have money to burn with no regard for starting w/ the basics.