Monday, March 16, 2009

Monday 03/16/09 - Real-time Journal

7:53 Am - Resistance was expected in the 765 area, and that proved to be the case in over-night trading. Shorted 763 in pre-market earlier this morning, but was stopped out at break-even. It's my first day watching the S&P pre-market movement, so I'm not in-sync with the timing of entries/exits. From the looks of it, one could extract 3-5 points in pre-market, trading off the faster tickbar charts (233-tickbar). Volume indicators seem to work fine even in the thinly traded over-night session. I wanted to re-enter short at 763 but I'm thinking it's probably best that I just watch from the side-lines today.

7:59 AM - ES now at 761.25 sitting on continuous volume trend. Looks like it could definitely head lower, but a bounce is typical at the continuous volume trend, so I'd prefer to wait for a pop to 763-764 and see if I can enter short. If it breaks 761, next level is 757 (market mid-point).

8:02 AM - Getting that bounce as expected; ES trading at 762.50. A nice gap-fill trade could setup here shortly. As long as I stick with the 6-tick stops, can't do too much damage.

8:05 AM - ES hit 763 forming a bullish engulfing on the 610-tick chart. Staying out of shorts for now. Also looks like we're forming a H&S setup on the 610-tick.

8:12 AM - Triangle on the 233-tick chart. Technically I should short a break of 761, or buy a break of 763 but with a 70% chance of a gap-fill, I don't think I could buy up in this area.

8:17 AM - This is looking weak. Short at 762.50. 3 tick stop-loss.

8:19 AM - ES trading at 761.50. Moving stop to break-even. Initial target 759.50

8:22 AM - ES at 761 now. Leaving stop at break-even. Have a little more confidence in this trade now but 761 has to break just broke, and hit 760.50. Hoping I don't get stop-gunned here at the open.

8:27 AM - I'm tempted to cover here at 760.50 and just lock in the 2 points. DISCIPLINE! Must hold out a little longer...

8:28 AM - Screw it, moving stop to 761.50 to lock in +1 pt. I'll probably get stopped-out and then ES will drop 10 points without me :-/

8:29 AM - stopped out for +1

8:32 AM - $TICK is at +630 pointing to higher price levels, but price is trading down towards gap-fill. I haven't watched the open in years, so thi price action is new to me. Feel like shorting this, but will stay out and wait for opening range to setup.

8:33 AM - ES at 759...should've held that short! Can't let that frustrate me though. Tightening stops to lock in gains is part of my trade management plan.

8:36 AM - Energy sector is down, but financials are up.

8:40 AM - The open is a little too fast for me. I'm thinking this is where liquidity providers like Don Miller are raking it in covering for 2-3 ticks on larger size. This sporadic price movement probably works to their favor.

8:45 AM - Scalped it short for a tick or so (I think). TradeStation doesn't show me my trade entry point on the DOM; maybe I need to re-configure it or something.

8:51 AM - $TICK has finally dipped to negative territory. Would love a bounce on price here to enter short at 761.50. Need to get that 3rd screen up and running today; having an eye on the sectors would definitely help.

8:54 AM - Short 760.50; stopped out at -1 pt before I could even finish typing this sentence :D
8:55 AM - ES at 762.75 now. Just goes to show, if you're gonna use a stop, might as well use a tight one and keep the losses small. You can always re-enter at better price levels. XLE and XLF are both re-bounding to the up-side so probablt best to stay out of shorts for now. But NQ is way down, and I'm thinking the other indices should follow! Confusion!

8:59 AM - I'm sure it's due to a lack of skill on my part, but trading the open looks like a crap shoot. Last week I wasn't around for the open and was able to make modest gains; at this point, I'm down $25 because market can't make up its mind on where it wants to go. Maybe sitting out the 1st hour is not such a bad idea.

9:04 AM - Sectors keep climbing up. Staying out of shorts for now.

9:06 - What the hell is up with these moves? I'm short at 759.75

9:09 AM - Out at 760.00 for -1 tick. Weird price action here with the NQ down and ES and Dow holding their own. I'm thinking some tech company came out with shit earnings?

9:12 AM - Short at 59.75 again
9:13 AM - Out for +3 ticks. Ofcourse now that I'm out, price drops :D

9:16 AM - Not gonna bother trading the first 30 minutes tomorrow. But I think there may be some opportunity in trading pre-market. I don't know...need more screen time.

9:20 AM - Trying a Long here at 58.25. $TICK went positive. XLE turned up.
9:24 AM - Out at 59.50. Early exit as always. 760.50 = mid-point. Expecting resistance there. Might short that area.

9:28 AM - Price hit a high of 760.50 on that last swing up; hit resistance and is now at 757.75. Should've entered short there.

9:31 AM - Matt just went Long at 760.50. Boy's got balls...I'm not touching this thing! My short bias won't let me.
9:33 AM - ES @ 762.50. Insane up move and awesome timing by Matt on that Long trade.
9:35 AM - Matt just exited at 764.25...nicely done! 764 = first hour high. Good area to cover profits.

9:37 AM - Energy sector is rallying pushing this market higher! Staying out of shorts at the moment but I also can't get myself to buy up here.

9:39 AM - Gap fill to down-side is still a possibility. Several times in the past, price has hit 1st hour high, and then reversed to fill the gap. But this bullish engulfing on the 5-min chart is keeping me out of shorts. I'd like to see price break the mid-point at 761.25; head lower, then come back up the mid-point, at which point I would hit it short and hold for gap fill.

9:43 AM - I believe 9:40-9:45 AM is a time of day when price typically reverses. Looks like that's what it's doing right now. Price action has certainly calmed down now. Easier to manage risk on slower moves since market allows you to bail for a tiny loss and get back in, unlike the price action during the open.

9:47 AM - Looks like a bull-flag on the 1 min chart here.

9:56 AM - Have an limit sell order in at 763.00. Price hit 762.75 on that prior swing up and missed me by a tick. But I don't see the point in chasing price here. Nice $TICK divergence setup is forming on the 1-min chart but I'd like to short a pop to take full advantage of the divergence.

10:00 AM - My execution has been pretty terrible this morning.

10:21 AM - Churned some more by taking some short scalps that exited for par. Sitting at -$25 on the day.

10:32 AM - Short 766.50; looking for a reversion to mean. $TICK is still positive but not making any new highs as prior swing up. Using a 6-tick stop at 768 (High of Day). 764.25 = Upper value area. Looking for price to retrace down to that level.

10:36 AM - Doesn't look like this thing is out of steam just yet. Might bail for a small loss here.
10:38 AM - Out for -1 tick loss. Sitting on -$75.00 on the day.

10:39 AM - Re-short at 766.50 yet again. What can I say, it really looked like it was about to drop!

10:40 AM - Stop to 767.50
10:44 AM - Stop to break-even (766.50)
10:45 AM - Out at 765 for +1.5 pts. Back to $0.00 on the day. Gonna step away for a break here. Lets hope my performance in the afternoon session is better.

10:53 AM - Scalped it short for +3 ticks. Stepping away now.

11:34 AM - Just got back to my PC. Short at 767.25. Double-top with $TICK Divergence.

11:37 AM - Well, that didn't work out. Stopped out for -6 ticks. -$25.00 on the day so far.
11:39 AM - Re-short at 769 with 1 pt stop. Initial target is 766 on this one (upper value area & resettable volume trend)
11:50 AM - Was stopped.

11:51 AM - Re-entering short. This isn't being stubborn; the chatrts look like this thing is about to DROP. I accidentally shorted 2 contracts so will be covering 1 fast to get back to 1 contract.

11:57 AM - Stopped out on that one. P/L at -$262.50. Might be best to call it a day.

11:58 AM - Giving it one last shot. If this doesn't work, I'm done for the day. Short at 770.75 with a 5 tick stop.

12:09 PM - Exited at 668.50 for +2.25 pts. -$150 on the day now.

12:14 PM - Short again at 669
12:15 PM - Exit for +2 tick.

12:26 PM - Tried getting short at 770; no fill. Tried again at 769.25; no fill! Finally, ended up chasing the trade and hit it short at 768! Bad call...should've been patient!
12:30 PM - Out for -2 ticks.

12:32 PM - Re-short 768.50.
12:36 PM - My short bias is killing me today. Stopped out for -1 pt. -$200 on the day now + commissions :(

12:45 PM - Shorted 770. Neither volume, nor $TICK supporting this up-move.
12:47 PM - Stopped out. Today is not my day.

12:49 PM - Double-top on Price + $TICK divergence. This could very well be my last trade of the day but I'm yet again short at 770.75

12:52 PM - Looking at the DOM; barely anyone's buying the 770+ area. I'm surprised this market is holding.

12:55 PM - Stop to 770
12:56 PM - Out at 767.75 for +3 pts

1:08 PM - Tried to short a bounce...but the bounce never came and now ES is tanking without me. I am starving though, so stepping away to get some food now. Maybe I'll operate better after I eat something.

1:35 PM - Just got back. Need to adjust my lunch schedule to Eastern time :D
1:37 PM - Just scalped it short for +1 pt. -$75.00 on the day now.

1:53 PM - Scalped it short once more. -$50.00 now.

2:12 PM - Scalped it Long and am now at $0.00 on the day.

So I screwed up pretty bad today. I'll post the Trade Station trade chart and performance summary below. My win rate today was 38.89% and the only positive point I can take from today it is that with my tight risk management, I can have a poor hit rate and still come out flat on the day ($-70 or so if you count commissions). I had 6 losing sequences in a row, which is quite rare but it happens. I'm just glad I didn't do too much damage. First full day of trading definitely did not go as planned, but it did provide me with some insights. My short bias got in the way and I'm going to actively work on resolving that issue. I also relied too heavily on the gap-fill play (70%+ probability of same-day gap fill). The gap did eventually fill but my belief that the gap would fill caused a lot of losing trades early on, and because of those losers, I wasn't mentally where I should have been in the afternoon, and exited some trades too quickly. I also don't know if it's worth trading the first 30 minutes (for me due to my skill level). This week is going to prove to be very educational :-)

Trade Station Performance Summary

ES 610-Tickbar Chart (Morning Trades)

ES 610-Tickbar Chart (Afternoon Trades)

Gap Filled by 2:30 PM

ES/$TICK Chart (3-Min)


  1. Thanks Rick. Today was my first day watching/trading the open and the pace was simply too quick for me. I'm more accustomed to the mid-day/afternoon trade setups when then opening range support/resistance has already been set. It'll take some time to internalize the opening price patterns and adjust to the pace. It's probably best that I stay out of the market for the first 30 minutes (8:30 AM - 9:00 central). I will try to monitor/trade the pre-market session. The only recommendation I have for the pre-market or overnight session is to use tickbar charts (233-tick and 610-tick).

  2. Geez that was a hectic day, seems like everyone (but Stan) had a challenging day today. Let's hope things calm down a little tomorrow.

  3. The reality is you did trade well today. You got back to par and that was quite a feat at various times during the day.

    If you can eliminate some of the bias you have at times I think you'll be hitting them out of the park everyday!


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