Emini Day Trading Currency Trading Method

euro1: consider the blue centerline-yellow dots - would you regard any of these as base setups - which dot would you view as the 'best' trade setup?

yellow dot1 - green dot1 [yellow dot2]: IF you were trading the euro you would be aware of the left side down swing AND you would be aware of the left side price/dark blue line at 12957.

this combination wouldn't let me buy the yellow dot as an initial reverse at the blue centerline - regardless that i would be trading into/through the double channel hold as a triple break - the trade would be right into 12957 which hasn't been setup to break. NOTE - IF this had been a resumption sell AND the directional trade - i would have done a similar short setup.

after the reject of 12957 then the centerline hit/higher low - i did the green dot buy again into/through the double channel AND the dark blue line which has been tested-hit.

red dot [yellow dot3]: the purpose of including this chart is to point out the yellow diagonal line synched with the blue centerline AND that IF you take this trade as an initial reverse - you are taking the trade as the resumption of the left side direction WHICH is through the diagonal. similar to making the note above regarding the yellow dot through the double channel/triple break IF it was a resumption sell - i tried this initial-resumption sell because of the diagonal break which is also a continuation indication.

chart1: consider the chart to the right of the yellow circle - is this a base buy setup - IF no where is a base buy setup? now consider the rectangle which starts at the initial reverse - is this a base sell setup - IF no where is a base sell setup?

chart2: consider the chart to the right of the yellow circle - is this a base buy setup - IF no where is a base buy setup?

these charts weren't included to discuss the trade setups - they were included to discuss a very difficult trading situation today AND also point out how this same situation was making it hard to figure out how to get into a trade in time to partial. this was a situation that i struggled with a number of times today AND consequently my trade quantity was below average - there were a number of potential trades that just weren't tried AND there were a number of trades that were thus held longer.

i tried to point this situation out at the beginning of the day in the chatroom AND compare it to a very similar situation as 2-1 AND that was with regards to a key price point/floor number location - on these charts the issue was the 2-2 low 809.60 AND s1 810.30 - which was only 7 ticks apart.

yellow circle-yellow dots - green dot: what i kept finding as my problem was the 'need' to trade more aggressively than i wanted to OR not being able to get into a trade 'in time' to partial. i don't want to go long here on a congestion ledge counter pivot trade buy through 809.60 AND i also don't want to buy either of the blue line-yellow dot trades right into s1 as resistance - yellow dot1 i don't have a setup to consider anyway.

yellow dot2 is a trade that i would often try as a resumption trade to the yellow circle BUT instead because of s1 - the trade that was done was the green dot as a s1 reject - that trade didn't partial BUT yellow dot2 would have.

red dot: this wasn't as big of an issue regarding the entry - the trade was done as a break-reject of s1 as resistance in a down market BUT it was an issue getting a partial - as 809.60 hit and immediately rejected-retraced back to the s1.

yellow line wedge - blue dot: i held my short on the retrace for a s1/yellow line reject. IF flat i would not sell the reject from yellow square1 - i have no setup there - BUT i would have shorted the blue dot after the double hold/wedge break. i also mentioned that if i had gone flat the red dot sell because it move a couple ticks higher and got whipsawed - i would have re-entered that sell at the blue dot.

yellow circle- yellow dot: i am still short from the chart1 red dot = -810.00 +809.00/+809.10/trail. i don't want an initial buy at the yellow circle AND i also don't want the yellow dot buy at 809.60 regardless of it being right side base - i want to be short still AND regardless i don't want this entry AND the 'straddle' issues of a price point like this.

blue dot - green dot: i went flat 809.80 on the retest-reject of 809.60 - BUT even though i am flat i didn't want to buy the blue line-blue dot right into s1/this is essentially the same trade-decision as the blue line-yellow dot2 on chart1. AND again the same problem regarding the amount of room that has gone buy from the initial entry not done - having to trade more aggressively than i wanted to OR needing enough continuation to partial on a s1 reject -vs- trading into s1.

remember that the issue is not taking a counter trade - it is taking this trade right into a 'known' resistance point and/or having room to take the trade into s1 and partial there. AND also like chart1 - the blue dot buy which would have been done without s1 wasn't AND then the green dot s1 reject buy didn't go far enough to partial = +810.40-.50f 1220ct -810.20-.10f reverse on the s1/ledge break WITH flow.

chart1: consider your open price specifics AND the nature of the open which was essentially 2 way range search between the floor pivot AND the overnight high - where were the base setups AND where was the 'best' setup?

open price specifics: a centerline related to the 812.10-812.20 pmd from yesterday's last hour reverse - the blue centerline on this chart at 812.40 was a focus line used from today's trading. the top blue line 813.20 was next resistance from yesterday/above the 812.80 overnight high AND in this location the floor pivot was support.

blue dot1 - red dot1: double hold at the yellow squares 812.90 is a hold of the 812.80 overnight high - blue focus line break2 after the spike bar BUT i have no way to react to this real time on the up bar-reversal bar back through the line -with no mex flow to be 'looking' for this entry. the trade done was the pause-reject of the line. i regard this as a base-open trade with the double top 'start point'.

green dot: there is nothing that i can do at the yellow circle besides an indicator reverse right into the channel/price resistance - i went flat on the break. the green dot was a pause-break of the focus line - mex is still flowing up so the issue of trading into a pmd isn't there at the time. this is a first continuation trade AND in that context has base components of mex and the focus price - i find that this is typically a difficult trade for people to see - i think it's because of more directed right side focus where this line really isn't apparent.

blue dot2 - red dot2: of all the setups on this chart - i actually like the blue dot2 the best AND that is because of the dark blue squares - the start point of the blue line resistance AND the lower high double top retest - THEN the lower high WITH mex flow [ttm has already flipped] - sell the blue focus line break. i also realize that this tends to be a more difficult trade for people to think - again i think it's a right side focus -vs- seeing the structure of how this setup comes together. the trade was entered at the red dot was simply where the trade filled - as i missed my entry at the blue dot.

chart2: what are the key prices on this chart AND what-where were the base setups related to these prices?

red dot: combination floor pivot break-blue focus line WITH mex flow down - this is a floor pivot reject-failure sell - this is base. i mentioned this in the chatroom AND want to mention it again - those bars 2 ticks above the floor pivot instead of exactly at the floor pivot does not mean this isn't a reject of the floor pivot - NOT with mex flowing down while the line is testing.

green dot: pmd low AND no pmd swing-swing reverse - we have gone into consolidation AND there is no related setup on the break of the blue centerline after the double bottom. there is no mex flow for a pivot entry AND there is no triple range break setup - no trade setup to try. the green dot was done as a shift of the blue line area to support WITH the timing of this trade being into the 2 yellow squares as a triple range break setup. again note - this is a consolidation break setup AND not a pmd related setup - as the pmd was a transition into consolidation.

chart3: this trading period is one of s1 'straddling' AND thus any trade tried should be a s1 break-failure setup - did such a trade setup occur on this chart - IF yes where?

red dot: this is a s1 break-failure setup - the setup is after a double top-lower high WITH mex flow down AND into the 2 yellow square triple break.

green dot: this is also a s1 break-failure setup - in this case a break2-mex flow setup.

i do know that this is not our basic break2 line drawing entry pattern - this is more similar to the trade journal from the weekend and the pmd-break2 BUT there is no way to bring the yellow line above the pmd into this particular trade - we can't because it would be a trade into s1 -vs- a break-failure of s1.

dark blue dot: this being said - the green dot is break2 of the line WITH mex flow AND it's not right into next/left resistance. i realize this is not as easy to see as the red dot because of the triple break AND that trade was with direction. IF flat i would try the dark blue dot as a first continuation trade - a shift of the dark blue line through the 2 dark blue squares as an across the chart triple top break - right side ledge break. AND IF the trade was done in the chatroom you know you would hear me whining about having to do a breakout entry instead of a trade into the breakout - nonetheless this would be a time that i tried - particularly with room into the dark blue rectangle as resistance.

open: where were your open price specifics - what-where were your open trade[s] AND how was price related?

price specifics: 814.10-813.90 which was shifted to the 814.20 blue line for the open trade. also the dark blue line overnight higher low to the 812.90-813.00 shiftline discussed on the update.

red dot: double channel reject focus line break WITH mex flow. the first continuation setup is the dark blue line matched price - enter at the dark blue dot as a break2 instead of break1 of the line - this is where the line fails as support AND with the mex extreme i have the issues that the first break is a trade into a pmd at this support point. i didn't do this as an addon AND really should have given it a try because of the mpf setup - IF this was a combination swing direction-market direction setup i wouldn't have hesitated.

yellow dot: pmd low AND retrace to the 812.90-813.00 shift line and a 'ledge stall' - to go long here would be a ledge breakout. regardless of mex flowing up here the break still has to be considered as an initial reverse AND the mex flow is a function of the stall AND not from a momentum build like you get on the retrace in a break2 setup. i had no setup on a sup:res ledge break AND also held the trailing short.

chart1: price moved down from the open AND then transitioned into consolidation as it tested the floor pivot. besides the floor pivot where were the key prices during this period - what-where were your trades AND how was price related-how was the setup related to the market condition?

key price: from the open update the prices that you 'know' in this area are the dark blue lines at 812.60-812.10.

green dot: initial reverse then retrace to 812.10 which rejected to 812.60 - i decided to do this as an 812.60 break - i wouldn't have tried this trade yet if not for the way the 812.60 price lines matched up.

blue dot: this is really a better setup than the one that i did - IF i had just exited at the green dot instead of trying the reverse - this would have been my next trade as there was no sell to have considered doing. the green dot move went back to the 813.00 price AND rejected back down to 812.10 again THEN gave a break2-mex flow at the blue dot WHICH was also into the 'across the chart' triple top break.

there is no way to see this setup inside of fast chart consolidation UNLESS you were focused on price specifics AND how this is also a price action setup besides being right side base. inside consolidation and/or a counter swing trade - i want more than right side only setups.

chart2: price has moved to the highs BUT any attempt to break r2 AND shift it to support is rejected - thus causing the market to remain in consolidation. consider the blue line-yellow dots - do you regard either of these as consolidation break setups - also considering that the trade IF done is counter? IF yes - which dot AND what is the setup - IF no did you do a sell after yellow dot2 and what was the setup?

120t yellow circle - red dot: the purpose of chart2 and the questions is to point out chart2b AND the setup clarity that would never be evident using the fast chart in consolidation. neither of the yellow dots is a consolidation setup - neither is a line break2-mex flow AND into a triple range break.

however there is a very good setup that triggers during the time at the 120t red dot - a setup components that i can't see IF only using the 52t: (1) blue line break2 after the ttm flip (2) trendline break2 (3) r2 shift-reject (4) with mex flow AND a ttmf hook (5) with diagonal break continuation potential.

red dot2: dark blue line-red dot is a base pmd-failure addon. now go 'look' for this setup with a fast chart only focus - can you find it? the setup on the 52t only is a 817.00 focus line break as ttm resumes - it looks like a line break inside congestion AND without mex flow as part of the setup - realtime i would not have considered the addon without seeing what this looked like with the 120t.

open: we spent the overnight breaking open update setups AND instead of these being available for trading - we found ourselves dealing with an open in the area of support ahead of yesterday's closing breakout. what-where was your open trade AND what was the setup? what-where the trades done during this period - are you short on the last bar of this chart - IF no where was your next trade?

yellow dot - red dot1: i couldn't sell the floor pivot break at the yellow dot - i have no setup. unfortunately a floor pivot break2 setup didn't occur AND i had to try the red dot first continuation as a floor pivot reject which filled 817.20 - so i couldn't get a partial at the 816.50 low which held.

dark blue circle - dark blue dot: i didn't consider buying the dark blue circle on the initial reverse AND then didn't do the dark blue line-dark blue dot as a reverse which was a directional decision - the setup is right side base with 'enough room' to the floor pivot that i could manage a reject there.

red dot2: i never did a buy on the swing - after the dark blue dot i went flat AND then didn't want to do a floor pivot break buy. there was an initial reverse which was a combination blue line retest/diagonal line hit - no setup on the initial BUT THEN with the lower high - i re-entered the sell on break2 of this area. with the setup directional AND into the diagonal - this setup had breakout potential AND gave a move through 816.50 AND a 2x partial at 815.70.

why this chart: (1) open trade entry problems and losing trade (2) directional decision not to do a trade that would have been a winning trade after the losing trade - always a 'bad' feeling (3) re-enter trade that had breakout potential AND regardless of the 2 previous issues and 'the want' of a partial - the partial was allowed to expand and it turned into an 18 tick p1 - which was bigger than the 15 ticks [5t * 3 contracts] on the losing trade.

chart1: where are the key prices for trading AND what is the market condition during this period? what-where are the setups base to the market condition - what-where were your trades?

key prices: yellow line 816.50 initial low as shift line resistance - dark blue focus line which synchs with 815.80 from the open update chart - s1 814.50.

red dot: nothing was done on this initial indicator reverse - still short AND then with the resumption back through the focus line - i did the red dot as an addon. this trade was done into/through the yellow square double bottom with room on a break-test of the s1 to partial - with out the setup component i would not have tried the setup.

dark blue circle - yellow dot: -815.50 +814.70/+814.70/trail - this was the addon AND the trailer was exited at 815.50 on the initial reverse - still short the trailer. after the yellow square hold AND focus line break - i have a right side base setup through the channel and the blue line-yellow line resistance - nothing done.

green dot: blue line break into/through the 2 hits of the yellow line as a triple break as first continuation to the yellow dot AND an immediate loser. is this a base first continuation setup that was a loser OR a 'bad' trade? it was a bad trade - i blew it - i reacted to the yellow dot not being done AND missed that this was a trade into a pmd at resistance as a counter trade.

why this chart: (1) to discuss a 'bad' trade that i did AND point out an issue of seeing that you aren't in a winning trade AND missing a critical component related to the 'next' trade - that instead of keeping you flat - became a losing trade. now what - which is no doubt something that separates different traders - do you take your loss AND go on without 'steaming' OR do you continue to dwell on what you did AND miss a winning trade-take another 'bad' trade?

chart2: what-where the trades done during this period - are you short on the last bar of this chart - IF no where was your next trade?

blue dot - yellow dots: the blue dot is a setup that i was fine with taking - an indicator reverse back through 816.50 price AND the blue line-yellow square triple diagonal AND nothing was done because this trade triggered with the 9:30ct eia natural gas release AND i don't 'chase' news.

yellow dot1 - ledge break as first continuation - nothing done. yellow dot2 - floor pivot break2 - nothing done. i am always going to have a problem with yellow dot2 as a counter trade AND without mex flow or rollback lag. this is a setup that i can view as a pmd-failure continuation AND no that the mex rollback is imminent on the break - BUT not at the floor pivot as pmd resistance.

red dot - blue dot: the red dot was done as the blue line break2 which was viewed as a floor pivot reject-failure. the blue dot is a matched price failure of the yellow line AND as a triple break of the 2 yellow squares. the squares placed where they are/viewed as a triple break - as these are the 2 hits-tests of the yellow line that synch with the retest-failure of the floor pivot resistance OF WHICH the floor pivot reject-failure is an important component of any trades being done here.

one of the additional keys to this setup is the continuation potential we see from matched price failures - this line 'should' be support AND when it fails left side longs are being exited AND an trader joe who has tried to buy the pullback to support at the line - is having their trade stopped out.

why this chart: (1) to discuss a situation where a trade that you would typical take can't be done because of news AND the subsequent issues trying to enter the trade when there is no pullback - it sucks when this happens and you keep seeing the move going without you BUT that's the way it goes sometimes. not all winning swings have an entry for you AND it sucks a lot more to take a trade that you aren't committed to that turns out to be a loser AND then further impacts the 'next' trading decision AND compounds the problem. (2) the sell setup-trigger was done without issue - that issue continuing to be mad about missing the winning buy because of the news AND turned out to be a very good trade = -817.60 +816.40/+815.80/+816.00 = 46 ticks of profit -vs- a 40 tick daily range at the time.

Trade Journal

2/9/2007

Instead of a chart-trade discussion for the journal today - I have 2 discussions on trading psychology AND it's relationship-interrelationship with trading method. These pages have been 'rebuilt' from prior training sessions AND include the text-audio from them.

Is it overstated when it is said that trading psychology as the reason for trading losses is 90% trading psychology, or any similar high overweighting of trading psychology over trading method? To say this also seems to be saying that regardless of method, a trader with control of all emotional issues would be a profitable trader, and I can't accept that as the case. If a trader was able to trade 'any' method profitably they would do so because of (1) their understanding of the method's inherent strengths and weaknesses (2) their ability to maximize these strengths and minimize the weaknesses. But regardless, how could a trader ever overcome any amount of trading psychology related issues without this complete understanding of method and how they intend to trade it, and thus the resulting confidence that they will be trading profitably.

Trading psychology has become so widely 'discussed' and 'promoted' in books, articles, consultants, etc - that it has become available as any necessary excuse for losing and not taking responsibility, as a trader keeps trying to trade against the market and against themselves. For instance, keep trying to buy the bottom of a strong downtrend, or keep trying to take indicator trades inside of a range that isn't wide enough to provide a partial profit; is this method, or is this psychology?

You have a great trading method and trading plan. You have profitably paper traded, and you now start trading real money AND everything falls apart, your method and plan no longer work. Everything you do is wrong, and you continually lose money - you come to the point where you can't even trade any more.

We continue to discuss the importance of trading AND planning; you can't trade without a plan that is both consistent with your personality and with a given trading methodology. The plan must then further define the components of the trading methodology in order to develop specific trading setups, as well as a way to manage the risk/reward of those setups.

The objective of the trading method plan is to develop a plan that includes your ‘core’ repetitive setups that you have established a positive expectancy, that you can recognize realtime AND that you have accepted the implications of in terms of related risk/reward. BUT this might not be enough - there still may be issues that are related to emotion AND fear that circumvent the implementation of the method plan.

Like a trading methodology plan being a key to making the transition from method to paper trading to realtime trading, making a trading psychology plan would be just as significant to making the transition from trader action/trader psychology to trading method/trader trading. The objective of the trading psychology plan is to develop a plan to deal with the emotion/fear issues that either circumvent the method implementation OR keeps a trader from trading at all. Take the trader's actions and give a honest assessment/understanding of a given action, and then define a 'setup' for replacing the action.