System: When 3/3 internals trend together, then trade in the same direction.
In this review I will try to identify 1 thing per day that worked very well and 1 thing that did not work. The purpose of this document is for me to be able to identify my system as quickly and efficiently as possible. The identifcation of the system has multiple parts.
1. Identify exact moment in time where 3/3 trend together
2. Identify strength of that trend (Strong, Neutral, Weak)
a. If strong, anywhere from 1-3ES
b. If weak, anywhere from 2MES-1ES
c. If neutral, 1-5MES
3. Identify Entry Technique
a. 5m countertrend new H/L
b. 2m FVG or IR
c. As close to bottom or top of V as possible using HOD/LOD as stop
4. Idenfiy Exit Technique
a. New LOD/HOD (aggressive)
b. Change of Character (break of previous HL if we are now in a downtrend, vice versa if in uptrend) (passive)
DRC: DRC October 23, 2023 (tradejournal.co)
Right: Took the right aggressive entry after noticing exact moment that Internals went bullish. Also took profits at the first change of character.
Wrong: Could have held the trade a bit longer. Also could have added.
Takeaways: Not sure if its really smart for me to think about trying to make more money on an already very good trade or if its better to just let it be. I have gotten into trouble in the past trying to maximize everything when in reality its just impossible to trade perfectly. All in all this was a great trade and a great start to the week. I didnt panic exit the second I got back to green on the day and I didnt take profits at any arbitrary level, it was the first change of character. If everyday of trading was like this I would never complain again.
DRC: DRC October 24, 2023 (tradejournal.co)
Right: Identified exact moment of 3/3 trend perfectly and traded it aggressively. I also stopped once I lost 3 MES trades.
Wrong: I dont really like the short on the 9:45 news candle but it was a great trade nonetheless. I entered at about 9:44 then held only a few seconds into the 9:45 candle before selling. Had I held though wouldve been a huge trade but could have also been a huge loss.
Takeaways: Again not much I can complain about on a day like this. I got clean aggressive shorts at open when I identified trend. I think sometimes its okay to short a news candle but it should never be with full size. I knew the risk and I held into that candle though before it occurred so I was preparing for a quick sell into it if we were going to break lower. Still probably just never a good idea to trade a news candle with full size.
DRC: DRC October 25, 2023 (tradejournal.co)
Right: Sized down as trend was unclear because of ADD.
Wrong: Failed to understand that during earnings ADD will be more than often a fakeout machine as focus on smaller names is very minimal.
Takeaways: Always realize what type of market we are in as the internals will change depending on the type. In non ER times, ADD will usually trail Weight and can absolutely lead a move. In ER times, ADD will always be inverse of Weight and can very often fakeout the VOLD in which case moving forward in ER season I need to make sure I give VOLD Weight a much higher level of importance over the ADD. With all that being said, ADD still much truly turn and trend with Weight and VOLD if we want a legit strong trend to occur. I wont give ADD zero importance until I see months of information telling me to do so.
DRC: DRC October 26, 2023 (tradejournal.co)
Right: Identified Trend perfectly
Wrong: Did not trade it aggressively enough. Missed at least 2 very clean entries, 1. HOD stop V shape 2. 5m higher high within downtrend.
Takeaways: There is no reason or purpose of having a system if you do not trade it when it tells you to. I need to trust that when the trend is there, its THERE. Dont conflict it dont overthink it dont expect something insane to occur, just trade it. If you are terrified of a sketchy entry just size down and take it anyway. If you dont trade the system properly then theres a high chance that you eventually start to drift away from it and conflict it. In that scenario you can easily give away a ton of profits very quickly as you "dont trust" the system anymore.
DRC: DRC October 27, 2023 (tradejournal.co)
Right: Eh, didnt do much of anything right on this day. I did take a more aggressive entry later on but that was me really just being annoyed that I didnt take the first 2 trades within my system.
Wrong: Failed to act swiftly at open on a clean short opportunity, then failed to act again on the first 5m candle new high within downtrend. These 2 trades were scary because Weight was not moving lower at all but again if 2/3 internals are moving very strongly lower but 1 is holding up and that 1 is Weight and its ER season then its safe to assume that the 2/3 internals trending very strongly lower will pull weight down with them. It just may be an uglier trend. In an uglier trend I need to give more patience to 5m entries and I need to be aggressive with taking profits as anything sketchy can happen.
Takeaways: Kinda wrote it already above. If 2/3 internals are trending very strong then its safe to assume trading in that direction is more than okay. If something seems scary or sketchy just size down, very simple.
1. Trade the system when it tells you to. Take all the possible entries as you dont know which ones will work and which ones wont but if you take all of them then you are bound to still make more than enough money as on avg they will work.
2. Once trend is identified immediately switch to "entry mode". When in entry mode we look for 3 things, 2m IR entries, 2m FVG entries, 5m countertrending new H/L entries. As you take the trades monitor the internals to look for potential flips in trend. Always have the potential target limit orders ready to go while monitoring internals.