The purpose of this DRC and all DRCs moving forward is to find out how many points my system offered and how many I got. The goal is to be within 60% of whatever number that is.
1. Review system
2. Review internals to find times of bullishness and bearishness + weak or strong
3. Find every possible entry technique within those phases of the market
4. Compare it to my actual results
System: If internals trend together, trade in the same direction
Before we identify strength we must identify which internals will matter the most on a weekly basis. Are we in Macro (lot of macro news) or ER (earnings) this week? if Macro then ADD matters a lot if ER ADD matter not as much as Weight.
- This week is a combo of ER and Macro, making it difficult to know what to follow the most
When is system considered strong?
1. 3/3 trending together (sometimes ADD can lag or Weight can lag given the type of week (ER or Macro)
2. VOLD ADD making new LOD/HOD back to back
3. Weight also making new LOD/HOD but not required, can lag slightly on Macro weeks
4. Rate of trend is strong
- VOLD > 0.25pts/2m candle
- ADD New LOD/HOD consistently
- Weight: outside of OR = very strong, inside of OR = neutral
5. OP is respected immediately
System is Strong? How do we trade it?
Strength Entry Requirements: (During V Shape)
Strength Stopout Requirements: (During V Shape)
1. 1 points above/below HOD/LOD
***Get 3 chances to take this trade, if 3 losses must stop.
Strength Target Requirements: (During V Shape)
1. Passive= first ChoCh
2. Aggressive= Full reversal (OP, PDC) whichever comes first. (very hard to get this trade on formation of V as this is when the most fakeouts will occur on the first ChoCh. I think in general better to take it at first ChoCh then trade continuation rather than trying to hold initial V the whole way into a full reversal.
Strength Entry Requirements: (After V Shape)
1. 5m new countertrending H/L
Strength Stopout requirements (After V Shape)
1. (Testing but not sure) 2 pt stop on 5m candle entries
2. (FVG) H or L of candle BEFORE FVG formation
3. (IR) Prior bar H/L
Strength Target Requirements: (After V Shape)
- new LOD/HOD
- OP/PDC whichever comes first
RARE A++++ Strength:
If system is very strong: 3/3 together, VOLD ADD + Weight making new LOD/HOD together, outside of PDR, Rate of trend is very strong, etc. We look for AGGRESSIVE targets and add into position on FVG or IR or 5m scenarios.
When is system considered weak?
1. 2/3 internal trending together
2. Rate of VOLD trend is weak <0.25pts/2m candle
3. Interals constantly flipped above and below OP
4. ADD flat or consolidating
5. Weight inside of OR
WHEN SYSTEM IS WEAK WE USE 5MES (half size)
Weak Entry Requirements (During V Shape)
*** only 2 chances to take this trade. if 2 b2b losses must stop
Weak Stopout Requirements (During V Shape)
Weak Target Requirements (During V Shape)
1. first Choch (Do not hold for full reversal ever as it is unlikely in most circumstances)
Wean Entry Requirements (After V Shape)
***There is no 5m new countertrend H/L entry when the system is weak. These entries tend to be more of fakeouts and very difficult with weak followthrough.
Weak Stopout Requirements (After V Shape)
1. Candle H/L before FVG
2. Prior bar H/L
Weak Target Requirements (After V Shape)
1. First ChoCh
2. New LOD/HO
****Never target full reversal when system is weak
When is system considered Neutral?
1. 1/3 internals dictating movement
2. Many retests of OP if 2/3 internals moving together
3. Weight Stuck inside OR
4. Anytime VOLD ADD conflict eachother usually not a good sign for clean price action.
IF THE SYSTEM IS NEUTRAL WE DO NOT TRADE.....EVER. If we do its 1MES for fun and even then you get 2 trades if you lose back to back you are done.
November 3, 2023 Strategy Review
Green= Strong bullish
Red= Strong bearish
Light green= weak bullish
Light red= weak bearish
Strong Bullish: 9:38-9:56
Strong Bearish: 10:08-10:50 (could consider 5 consecutive LH on VOLD as bearish once HOD is hit, if done that way rather than break of OP, this time slot would rather be 10:04-10:50
Neutral: 10:50 and on
Potential Entries on Bullishness from 9:30-9:56 (white box outlines timeframe)
- During this bullish continuation from 9:38-9:56 there was no possible entries. Entry possibilities within system of Strong Bullishness include, FVG, IR, or 5m countertrending new H/L. We had not 1 of those 3 options within this move higher
Potential Entries on Bearishness from 10:08-10:50 (White box outlines timeframe)
1. 5m countertrending NH within downtrend
Result: Loss (~2 points)
This is a loss because exit criterium for 5m countertrend entry is 2 point stop out.
2. No criterium for this entry but I will create one right now
I am going to call this entry a Wick. Reason being, there are 4 wicks created above this level (illustrated with white line being the area where all wicks are formed) When I saw this on 5m it clearly shows that many sellers are up in that zone and anytime we went into the area we were sold into thus creating a wick. I took the entry as we failed in that exact spot. Target was same as 5m countertrending entry, 1 point above new LOD.
Result: (~8 points)
3. 5m Countertrend entry
This is easy and simple 5m new high countertrend trade where we finally made a new 5m high so that is entry (2pt stop) then target is 1 point above LOD. If we were only weak bearish I would say this target should be 1 point above previous higher low rather than 1 point above LOD.
Result: (~7 points)
Total trades within system: 2
Total points in profit within system: ~5 (First trade would have been 2 point loser, second trade was 7 point winner)
If you include the "wick entry" which will be a new entry criterium within the system, the total point potential would be ~13 points.
ES: 6 points
MES: 6 points
Total: 12 points.
This is 5 points more than what my system accounted for which is not a good thing. If I am taking entries outside of my system I can easily get in trouble. Today was a unique example of a huge rally week where I knew that the shorts would be very difficult as everyone is waiting for them. I was more willing to take aggressive outside of system entries because I knew big spiked would occur then get faded heavily just from the fact of Everyone is trying to short this big move. The Wick entry is now part of the system and If I added that into the system today and considered my results based on that trade as well then I would have had about 13 points of total potential trading opportunities.
12 (total amount of points I received) / 13 (total amount of points system offered) = I traded my system at a 93% efficiency score today. Very very good,
Takeaways: I have been avoiding the inevitable for so long as I was in such a good green streak and didnt want to break it. I was taking profits way too fast within system and not really focusing on my exact entry and exit requirements. As a result I was trading very scalpy in moments where I should hold which made me do the "tiny green day everyday then 1 red day wipes out a week of gains" type trading. Its very difficult to make money being a trader like that. Moving forward I will only judge myself based on the amount of points I captured WITHIN MY SYSTEM. If I read the system correctly and I hit max loss then so be it. If I read the system correctly and get 20 points intraday, great. If I read the system incorrectly and make 3 points on a day where I couldve made 25, that is a huge red flag. I need to make sure every decision I make moving foward is fully outlined and perfectly described in every way possible. There should be zero confusion as to when I enter, when I exit, when I push, when I sit, and when I walk away. Discretionary decision making is over, until I have enough experience that I know when to break the rules but even then that should only happen max 10% of the time I am trading.