Total 2.17R before commissions

Today was a lot easier to trade for me. Took my time stop perfectly and made only a slight hesitation on the $TICK divergence exit signal.

I missed a trade possibility. I say possibility because it would have been a discretionary call. Not yet in the groove completely with the market so probably best to just take the obvious set-ups for now.

One lesson. If it’s getting close to news and price is just meandering around then I may as well market out for a tick or two profit than wait for a time stop.

Total -3.13R before commissions

A catalogue of mistakes today.

Trade One: In the August wrap-up I mentioned that I would pay more attention to the overnight support and resistance areas. There was support at 79 and I scaled in early (above 79) and 1 tick below the previous 5 minute candle low. A perfect place to get trapped… and I was. Stopped on a Time Stop. Which was perfectly executed, with positive slip too! When heading into a congestion zone if price is not acting with conviction I need to market out and wait.

Trade Two: Perfect entry from divergence at overnight high and high $TICK readings galore. Perfect stop and reverse into…

Trade Three: This had the makings of a test of resistance that is now support. It wasn’t. Again perfect entry on close above high of low bar. The high tick… This whole trade needed more market feel. I didn’t have it. In-fact I have not ‘felt’ the market the past two days, and I’ve been doing my meditation. Here we go again… Did not respect the time stop. Saw divergence after divergence set-up and felt that if I stopped out I’d be entering straight way in the same direction. NO I WOULDN’T because I would have been waiting for a close above the high of low bar at ’84. It didn’t happen…

Trade Four: I saw the divergence and took my eye off the $TICKs and did not notice the divergence neutralise and entered a false trade. Marketed out as soon as I noticed. Pat on the back for not keeping a ‘non-trade’ just in case it was profitable. Do not want that bad habit…

Trade Five: Perfect trade that stopped.

Trade Six: I didn’t take this trade. This was the correct thing action, even though it would have been a profitable trade, because I would have been taking a $TICK extreme exit signal just as entered the trade.

I thought to myself pre-market that the 5 mins chart looked a mess with price not respecting the 20MA at all and a lot of whip. A thought worth remembering…

Total – 1.88R before commissions

This was a lovely welcome from the markets after a month away. Large gap up and news that sent the markets without me…

Made one mistake. I did not market out at the end of the $TICK extreme plus divergence signal. Cost .75pt per contract or -0.43R

The chart shows all the signals and thoughts…

Here’s August’s hypothetical trading results. The spreadsheet is posted in a link at the end of the post.

Thoughts:

SQN raised from 3.26 in July to 5.35 in August. Could this have anything to do with these results being hypothetical…? A great benchmark to aim for with real money on the line.

My main take from these results, plus the aggregated results with July, is profitable trades do not go against the entry price of either 1st or 2nd entry by more than .38R on average. At present my rules for stop placement are to keep two ticks below or above the last swing low/high. As price is not even moving half the risk value on average I think I can afford to bring this in to one tick above or below the swing high/low.

I have been keeping the 2nd entry risk at the first entry level stop and using time stops to reduce this risk on failed trades. I will now reduce risk to half initial risk with 2nd entry being filled. These risk management levels could probably be narrowed further. Let’s see how September pans out.

Only slightly more profit made on longs than shorts. Average loss is just over half initial risk. I’m capturing 56% the target value and leaving about 45% of what is actually available to make on successful trades. Quite a lot left on the table. Not sure how to wring a few extra ticks out of profitable exits right now. Maybe something will come to me through September.

The down days could have been mitigated with more emphasis on pre-market support and resistance zone identification. I will now look for areas of consolidation in the overnight action and be sure to market out of trades that show signs of failing at these zones. I will also be very wary of Weekly/Monthly pivots lining up on 3/4 indices. They don’t happen often but my initial observation is these are vague reversal areas that may not show a divergence. Not sure yet. As I have only had weekly and monthly pivots on my charts for the past week I’ll leave any conclusions for another monthly wrap-up.

Here’s the July-August summary:

Here’e August’s spreadsheet.

Total 0.38R before commissions

With so many trades today any profit was handed to the broker…

In my monthly review I will outline the subtle adjustments to the rules and how I will mark up charts pre-market to help. The stats for Maximum Adverse Excursion are very enlightening and will help reduce the average loss and bump up the win:loss ratio.

Total 6.17R before commissions

Total 8.88R before commissions

Total 4.41R before commissions

Total 0.0R before commissions

Dylan was in again today so we turned the SIM mode on and let him trade the session. His post session reaction was “does it get less hectic with time?”. Yes it does. To gain a calm repose requires about three months of practice trading, a clear psychology and some pre-market meditation.

Total -2.38R before commissions