[jonbig04]

Sorry for the lak of updates. I haven't been in any trades! Well I've entered a few stop limit orders, but none of them have filled.

Here's what I'm looking for now on ES, in foresight:



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We are nearing major R, or may have already gotten there. I have it marked at 1101.75-1103.75. Notice the two circles. Price found R at 1103.25 and 1103.75, but the next time price only made it to 1101.75. That's a 2 point range I'm comfortable playing, but I didn't want to take any shorts until we were at least at 1101.75, and price only made it to 1100 earlier.

That being said I'm looking for shorts just above there, ideally near 1103. Whether the uptrend resumes or not, I'm banking on a strong reaction to that area (again maybe 1100 is all the R we will see, but I doubt it). Notice the red line, that's what I would like to see price do.

Now assuming we do get to 1103, I would like to see climactic volume on a faster chart, follows by a LH and a LL.

That's what I'm waiting for, in foresight.

There is also the possibility of a breakout above 1103.75. If price takes that area with momentum I would try to jump on the bandwagon. Ideally though, we get a nice rejection before that happens. That way I can hopefully catch and profit from such a rejection and it will give us a better idea of where the BO may take place, if it happens.

[jonbig04]

Just something interesting I'm watching between trades. As you can see from this chart of the S&P and US Dollar index (blue), there's been something of an inverse correlation.


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Here's a chart of the 6E/ EUR/USD, which to me suggest the possibility of a breakout further down, eg a strengthening US dollar ( at least against the Euro). Namely I'm looking for the failure of the double bottom. If the correlation continues, that wouldn't bode well for the S&P right?


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Here's a current look at ES. As you can see, it's at major R.


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So I'm wondering if the inverse correlation will continue and we see a breakdown in the EUR/USD (6E) and rejection of ES at this major level.

I'm a PA only guy, but I think it's interesting to watch this kinda stuff for the heck of it. Can't hurt.

[jonbig04]

-.75ES today, thought maybe the upmove would continue, stupid Fed.

[forrestang]

Didn't that 6E pan out the way you wanted?

[jonbig04]

Originally Posted by forrestang »

Didn't that 6E pan out the way you wanted?

That sim trade? It got owned.

I got a short in ES today. I actually missed fill on the initial lower low, but I simply left the limit there hoping price would flip that area, which it did (getting my order in). It's funny because the reason I missed fill originally was because price was at my limit of 1009, but never traded through to 1009.25. I find that most of the time price does have to trade through my limit in order to fill, but not always. When I got fill, I actually got it when price was at 1109 exactly and hadn't yet traded to 1009.25. Kind of interesting I thought.


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Notice how price bounced up and tried to take me out BE! Which it would have, but instead of moving to BE I moved my stop to just a tick above that little swing. I think it left me with a 0.75 stop and it held. Ha! How do you like that ES? Stop hunters go home empty handed this time.

I'm not crazy enough to hold over the weekend, I closed just before 4:15EST. Now what the heck do I do? I guess I will wait and if the market opens at the same price Sunday night. I'll simply enter back in my short with my stop in the same place it was. So it will actually be a 3.25 point stop.

Onto CL and 6E. I'm still trading these sim. Trying to nail down the swings and stops and targets. They are so much different than ES, it's going to take some getting used to. But as you can see from these charts, the same rules apply (and no I didn't mark these hindsight):


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Awesome CL flip, just the kind of trade I take on ES. I'm thinking my stop's on CL will be around 15-20 ticks give or take. With targets around 100-150 ticks. Just a rough guess, that's why I'm trading it sim for now.


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6E had a nice flip too, but it would have been tough to catch on the smaller TF and it wouldn't have panned out anyway.

[jonbig04]

Opinions Needed!

So here's the deal. I'm going to start scaling. I know, I've talked so much smack about scaling here and elsewhere, BUT I have good reasons. Also, it's my opinion that scaling, all in/out, trailing etc are all just the fine tuning of a strategy. I don't think they make or break a good strategy, but that's my opinion.

First off, in my opinion and in my trading, all in/out has been more profitable. That's why I've done it for so long. Obviously, it's tough psychologically to see those big winners come back to BE and to have an equity curve that looks like the results of a polygraph test, but to me that was appealing. I wanted to prove to myself that I had the mental fortitude and discipline to follow a plan that I knew was more profitable, no matter how much it hurt. I feel like I have done that.

Now that I'm starting to increase size I realize that peace of mind is worth something, and if I have to sacrifice SOME profit for it, then that's ok. Let's face it, when your goal is 20ES a month and you see a +11 go to BE, it's no fun. But I am hoping that my scaling will be just as, if not more profitable than my all in/out. Here's how:

I'm not sure if I'm going to be scaling out in 1/3rds or 1/4ths or what yet, but just for explanations sake, let's call it thirds. What I do now is basically move my stop to BE after +5 or so (when ever price reaches an intraday s/r level that may cause it to come back on me) and hold on for a 9-12ES target.

What happens is that I move to BE, get taken out BE (where as if I kept my initial stop, the trade would have survived) before price proceeds to my target. Seems to happen all the damn time actually. So I've decided that if I'm going to move to BE, I'm going to have to take some profit off at the same time. There's just no way that BE will ever pay for itself when it's costing me a full target, especially a 1:7 R/R target, unless I book some profit when I move the stop.

I will take a 1/3rd or 1/4th or whatever off around +4 to +6 depending on the intraday S/R, and move my stop to BE (or close to BE) on the rest. That will give me around 1:3 R/R on that scale. The next scaling area will be my original target around 9-10ES, or around 1:6 R/R. Then I will have another new target around +15ES or so, a real runner. Depending on the trade (whether I'm with the anchor trend etc) this runner could be really far off, maybe even around 20ES. Once again, it will depend on the charts.

With that plan I'm really hoping to net more than all in/out. I could backtest, but I HATE backtesting and the results never seem to mean squat for me anyway.

Anyway, tell me what you think.

[nikke]

Hi,

Given the original stop is protected by PA, and possibly by some important level.
Wouldnt you be better off in the long run taking the profit on the 1/3 and leaving original stop and targets in place?

Regardless if the stop is moved or not, i guess with scaling win-% goes up and average RR down. Overall maybe a little reduced expectancy. But maybe give a smoother equity curve and allow for bigger bets and maybe calmer trading

[DugDug]

thoughts - I am having the same process I am running through myself. I have to differentiate between scalling in and scaling out.

Conclusion - same as you - there is no right or wrong answer but a series of trade offs between monetary PandL and mental ability not to deviate from the strategy - If you find that you make less money scaling in and out, but its mentally easier, then go with that.

The biggest issue I am personally finding mentally challenging is reentry after scaling out.
eg; sell 3, TakeProfit on 1, TP on 1, = net short 1, then sell 3 more as a new short, TP on 1, TP on 1 = net short 2.

I say this as I keep asking myself, why am I taking profits, when I am willing to short again? It might feel good, but also can cause me stuff up what I am trying to achieve. (again a trade off)
As someone pointed out to me - if you like the trade and its going your way, trade more, dont take the profits off. (this is tough to do, its possibly not really suitable to day trading in which you should take profits as you are looking for lots of small opportunities.)