MES
Channel Continuation
1. TA
- 30m here is in a downtrend but we broke above the anchored vwap (to the peak)
- 2m is in a slight uptrend because my channels updated with intraday price action but at the beginning of the day they were clearly downtrending still
- VOLD opened red but immediately started to trend back to the upside, ADD started red then ate up the HOD quite fast before grinding up in a slow consolidation breakout style, TICK mostly above 0
- Weight was also in a big downtrend but yesterday we brokeout nicely and had a big selloff overnight and we pushed off the mid range of the descending chanel and started to move higher, this made the descending channel on the ES much less likely to hold.
- Sectors were risk on with weight being bought up steadily throughout the session.
2. Review
1. Channel Continuation
- I took this short here and added into it for a nice 4 point scalp with 2 contracts. I took this because ADD was ripping lower and we were still in a descending channel on the ES so I was willing to trust that but not for long. I scalped it specifically right above 4400 because I thought it would hold as support which it did. This was exaggerated as a scalp from the Weight being bought up at the open as well as VOLD decreasing nearly immediately after putting in a HOD at the open print. This was a good scalp, right idea, right execution. Everything worked perfectly
2. Channel Reversal
- The 2nd trade was a long where I had 1 contract but lost 4 points. I shouldve known better than to get in right at this level before it properly broke out above that level and pulled back. I also was getting in so high when had I planned to put my stop at LOD, I wouldve been more aware of getting in as close to that low as possible had I been more focused on the playbook of this trade. Reversals must be taken at HOD or LOD depending on long or short. I executed this trade like a continuation trade which is totally wrong. Had I executed this properly as a continuation trade then I wouldve done this...
- If instead of the second trade I took this one for a continuation style, it wouldve been much nicer. I shouldve waited for the breakout then gotten back in on the break of prior resistance turned support (green line) and then added once we confirmed it, and even possibly added again on the breakout then sell around 10 points in profit. Wouldve been about a $150 trade if I did it correctly. If I wouldve wanted to actually trade it like a reversal then I wouldve had to do this...
- This is the playbook for a reversal trade. Get in as close to the LOD as possible then add on the breakout of previous lower high and then sell into the strength for the breakout through HOD. This is about 10 points on 2 contracts so another $100. If I nail this trade and then nail the continuation trade I just previously discussed, thats $250 already on the day and I still have another trade to discuss.
/M2K
Channel Breakout/Channel Reversal (not sure what to call this just yet)
1. TA
- This is a beautiful setup in creation here. I think this is something where my approach today was fine but in the future my approach could be exponentially better. On the left we have a clean holding near the top end of the descending channel on the 10d:30m chart. If you go into a 4h chart its still in a huge uptrend so this 30m downtrend is still within a much larger 4h uptrend so the breakout of the 30m downtrend should theoretically be very strong and violent. This was not very strong but it did happen. On the right we have the 2d:5m chart and we are ascending already because yesterday was a big green day, then you can see on the circle that we are at the bottom of the ascending channel which means we should at least revert back to the mid channel so long as the 2d:5m and 4h trends hold to the upside. In terms of TA this was pretty much all I had other than the NQ being in a good uptrend and ES breaking out of its descending channel.
- This is the first time I ever traded the russel but it seemed extremely choppy and it was not really able to be a leader in the market, it seemed like it was waiting for the NQ at least for it to make a clean frontside but even then it was not clean at all. I didnt really know how to approach it but I did decently but I think it may be from partial beginners luck which usually happens the first time I trade a new ticker hahaha. Im going to be very careful trading it but I think so long as I watch it daily maybe ill be able to see who the leaders and laggards are within the DOW RTY ES NQ. I think if I learn all of these then its possible I will eventually be able to find the one that has the cleanest setup on the day because if I have 4 tickers to look at instead of just the ES, that gives me a 4x higher chance of finding a clean setup within one of them everyday.
2. Review
- I got in at a clear level that was resistance that turned into support, I added nicely and then I was the idiot who sold when we did the fake breakout basically for breakeven. I realized that was stupid so I got back in and then added at the breakout level with an OCO set and I made about 7 points with 2 contracts. It was a good trade but I really couldve done a lot better on this one. We had a really clean breakout on the 30m downtrending channel and a clean breakdown through premarket low, use PM low as new support, breakout to new HOD. I should have probably added into this trade where I stopped out the first one and then had like 4 contracts for the 7 point breakout which wouldve been around $140. I still think $70 is a good trade for a ticker I never traded before but I am not going to be eager all of the sudden to start trading the russel everyday. I want to see how it moves and play it with small size before I start going balls deep.
Something I need to work on.
1. Identify the setup BEFORE you take it.
- Continuation
1. Breakout of a key resistance and use it as support or breakdown through a huge support and use it as resistance. this example above is perfect because it had strong thrust through the previous resistance and then use it directly as support for a breakout to HOD.
a. Strong thrust through level
b. consolidation above that level
c. strong breakout to new HOD quickly after
- Reversal (intraday)
1. Stop is at HOD or LOD.
2. Target is a break to new HH or a key resistance/support level
3. WAIT for good entry as close to LOD or HOD as possible..if you dont wait for the perfect entry your already slim chances of winning just got even slimmer
4. Must be in the direction of the overall trend on 30m/4h. If we are all in confluence, followthrough is much more likely
2. Dont stop looking for opportunities
- Sometimes I win on my trades and then I immediately stop looking for good trades. I could have been stalking the MES today and probably nailed the reversal had I remembered the rules of a reversal trade. I must get in at the LOD or as close to it as possible so that my stop is not too far from the entry. When you stop on reversals its like a double fuck you because you get to watch the trend occur for the rest of the day and you probably either keep shorting or completely avoid it PLUS when you enter on the trade you are so terrified to stop out because you think you are going to stop at the top/bottom thus giving you bigger losers. Its a very very very very difficult strategy to be good at and in the current market its still always smarter to just take the 10 points with some adds and get the fuck out. Someday that wont be the case but for now 10 points with 4 contracts is a good day but that might mean you make a 10 pointer with 2 and a 7 pointer with 4. If all depends on the +EV of the setup and nothing else. I need to view the market fully objectively and never give a single fuck about what my narrative is or if I win or lose. I am a trader who uses my playbook strategies to identify and execute high +EV plays. When I see the structure align with the internals, its time to go all in. I am learning how to do this properly and someday soon I will figure it out and the rest will be history but until then I will still be here.....patient as ever
