Trading the ES today in RTH was a usual type of day. Tomorrow at the webinar (you can still register - see link in KEY POSTS in the right hand column of this blog), we will go through the process in more detail.
We bought the market just before the RTH open at yesterday's VAL support as the order flow was positive. The trade didn't last long as we reversed at 1141.00 as the market turned sellers and the VAL didn't hold.
First scale was at + 2 handles at 1139.00. Second scale at 1137.00 AFTER the price hesitated at the Keltner lower channel. Now we have just 1/3 left and have made 6 points for every 3 contracts of our position. The stop loss is now break even so we have a completely free trade. I'm writing this blog "live" as we are trading. Its quite different but it shows how relaxed trading is today.
I must say that one of the outputs of teaching Kiki and of writing this blog has been greater discipline and ............Just covered the last at 1136.75....more relaxed trading. I think it is because I am more accountable. The end result seems to be a better win rate.
Well, I out of bullets now and need to look at a re-entry or wait for a new trade. Let's wait and see how it goes. Short again now at 1136.25. Price has just touched 1134.50, This is a critical point in the trade. OK, I have now scaled 1/3 at 1134.25. Price has now hit 1130.00 with a hanging man candle and my stop is moved to break even (plus a tick). Second hanging man forming and I am out of the whole position at 1134.50. I don't care what happens now as this trade, part of which was a re-entry is over. On the first set, I made 9.25 per 3 contracts and on the second set 5.50 per 3 contracts, a total of 14.75 per 3 contracts. Hope my maths is right.
OK, now let's look at the money management. Did scaling make more or less money, did being prepared to re-enter make more money. Should it have been an all in, all out trade. Should I have scaled in? Market is moving lower as we speak with a possible re-entry at 1132.75 but not for me. Unless its an obvious trend day, I only re-enter the same swing once. The context of the trade was yesterday's higher value. I want to see what happens today after the first trade to see where the order flow is likely to take us. My initial thought was overlapping higher value but so far, I am wrong. I am wrong but made 14.75 points per 3 contracts.
This type of flexibility of thought is a basic requirement of day trading. That is why I use the methodology I do. I follow the flow and let the market make me money. I neither predict nor try to second guess as I would be handed my head (which happened in the past more times than many of you have had hot dinners). Writing this blog "live" has been great as it allowed me to try and pass on what was happening as it was happening. No changes have been made to what I wrote for publishing except the usually checking for grammar and spelling by my long suffering darling wife.
Click chart to enlarge
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