System: If 3/3 Internals are trending, then trade in that same direction.
- Today was not a very clear day for my system. There was only about 5-10 minutes of clean downtrending movement and that was directly at the open. After that initial downtrend which was still weak, the internals went pretty neutral. All white boxed areas are neutral trading zones. When Internals are neutral I have a tendency to get stopped out often, targets not hit before reversals, tricky entries, etc. During these times I do not want to be trading because of that exact reason. When the market is neutral I am much more likely to lose.
Trade: This was a quick short that I took directly at the open but shortly after this trade the ADD continued to break higher and VOLD had started to move higher as well. At the time I was very weary of clean price action so I didnt want to stay in this trade long, not to mention that the open is very volatile and taking small scalp wins is much better than holding for an outsized move that will retrace on you. This trade look so small within this move but it was 3.75 points which is a decent amount. The smallest scalp I am willing to take is 2 points and anything above that is fair game especailly at the open. In terms of my system, I probably should have held this trade to first change of character which is the low at 4192, not 4196. If I was following my system properly then that would have been about an 8 point trade which is very very good. At the open, these trades seemed sketchy because internals were very neutral quite quickly.
Trade: Got short again because Weight was really moving lower and ADD broke its OP, VOLD was also below OP and holding so technically if I was going to have a bias it should be short. I waited for a pullup into the previous lower low and got about 9 points on this trade. This was another nice scalp but with very small size as again I did not trust the internals much as they went neutral quite fast.
Did I trade my system properly?
- Realizing that the market was neutral was the right move as I avoided a lot of tricky trading where the market was quite volatile and risk had to be widened.
- This trade above is one trade that I wish I would have taken with ES. This is a clean lower high where your risk is about 1.5 points for a possibly over 10 point reward if you take it at the most passive target possible. This is a trade I need to take in the future when I am more accurate within the system. If the internals seem neutral to me then its still important to trust the trend but expect larger swings in price and less accurate entries. If you can notice neutrality then expect the price action to act accordingly aka more volatility, trickier trends, violent swings in price, etc, then possibly I could be prepared to take that trade above. If I take that trade above it is the difference between an ok day and an incredible day.
- I need to be making sure I am playing the meta-game at all times.
1. how are other traders positioned?
2. are trends or ranges are most likely (internals)?
3. where are the stops of most traders?
- I think I identified the market as neutral a little bit too early. This above shows the moment in each internal where there was a change of character and the earliest internal to change character was VOLD and that was at 10:26 which was also the moment that the ES did its first small breakout in the backside. When ES is right on time with VOLD then its time for my system to be turned off. I was done trading the backside with ES at 9:40 which was wayyyy too early to deem the market as neutral. I probably should have been trading the whole backside down with ES but in terms of strength I still dont consider this a strong downtrend amongst internals. Yea I definitely shouldve been trading that with size to the downside,fuck