bakedbeans' learning journal

[Don_xyZ]

Thanks Don. I've been mulling your statement over during the weekend..

At this point I'm resetting my approach to trading and using dead horse as a way of rewiring my brain to trade "better". I'm interested in high R trades, but at the moment there are fundamental issues with my trading that I need to resolve. Practicing a single method, single market, single session is helping me find my way and also to recover when I have a "failure of perception", or worse - revert to my bad habits.

Everything at this early stage of my progression is about adaptation. I'll never find high-R trades if I can't work 1-2R trades, or if I average losers, use too much leverage, hold for "too long", etc.

When I think "high R" i imagine a chart where someone held through the ups and downs of a market - we get to the see the finished product, but I wonder what decisions kept someone in a trade with, say, 50-80% retraces, etc. Hopefully there are some cold hard stats being leaned on there.

Alternatively I've read that some people use very-very small stops, maybe that's the thrust of the approach. I know my stops at the moment are quite generous, so it's on my to-do list..

While I'm working on my foundational skill, can you point me in the right direction for where high-R trades are discussed? I haven't finished Alias's dead horse thread yet, so maybe it's there, lol.

Alias' thread is good. Lots of info there. Pro's thread is also good, lots of practice there. IgazI's thread is good, lots of gems there. dojirock's, dchappy's, MightyOne's, es/pip's, kreslik.com is a treasure chest.

I have 2 threads, as you can see in my signature, I won't say anything about them other than I have a content list on the 1st posts to make it easier for you to navigate and find the info you need. I discussed many things including the ones you mentioned so I hope you'll find what you're looking for.

[bb01100100]

Today was difficult - I flip flopped between 0.5 - 1.0% profit, but didn't adapt my point of view and was long when the market pushed down strongly.


First trade was reasonable - Entered on a zline test and netted 2R / 0.75%.

2023-06-27-a-MES.jpg (103.21 KiB) Viewed 2849 times

Next trade I was imagining that price would not close above the prior momentum candle; I entered short as price retraced from that pinbar high - perhaps too aggressive.

2023-06-27-b-MES.jpg (88.51 KiB) Viewed 2849 times

Next trade is me doing that again higher and failing. I am clearly not believing the bias with the SMA which is a shame.

2023-06-27-c-MES.jpg (92.52 KiB) Viewed 2849 times

At this point I'm flat - my downside has been looked after - no big negatives.

I noticed during the session that a fair value gap existed (lower rectangle) and while I was busy scalping a point here and there in the chop up top, I was ready to get involved in price pushed down to that level.

2023-06-27-d-MES.jpg (77.54 KiB) Viewed 2849 times

At this point I was thinking price would push higher to test the prior 3H candle high.. it didn't seem to want to go down with no closes below the upper rectangle. So I held and exercised some patience.

Price then pushed hard down to the FVG and I was net $0 for the day again. I got long as price exited the gap - I assumed this was a liquidity grab and that the highs would be tested again. They weren't and again I didn't pay attention to the SMA bias.
Price retraced and stopped me out at breakeven.

Price subsequently pushed to and past the lows of the day, but again I was thinking the wrong way and again ignoring the SMA bias - buying lows.

End of day results:

• Net PnL $4.20, 0.11%
• Max DD $74.40 / 1.88% (this is equity high / trailing drawdown.. I wonder where I can get opening balance drawdown stat from Sierra Chart)
• Pct Protfitable 59.26%

Pros:
- Entered on zline retests
- Found and executed a FVG trade

Cons:
- Did not pay attention to SMA bias
- Did not update point of view as market moved

[bb01100100]

Thanks Don. I've been mulling your statement over during the weekend..

At this point I'm resetting my approach to trading and using dead horse as a way of rewiring my brain to trade "better". I'm interested in high R trades, but at the moment there are fundamental issues with my trading that I need to resolve. Practicing a single method, single market, single session is helping me find my way and also to recover when I have a "failure of perception", or worse - revert to my bad habits.

Everything at this early stage of my progression is about adaptation. I'll never find high-R trades if I can't work 1-2R trades, or if I average losers, use too much leverage, hold for "too long", etc.

When I think "high R" i imagine a chart where someone held through the ups and downs of a market - we get to the see the finished product, but I wonder what decisions kept someone in a trade with, say, 50-80% retraces, etc. Hopefully there are some cold hard stats being leaned on there.

Alternatively I've read that some people use very-very small stops, maybe that's the thrust of the approach. I know my stops at the moment are quite generous, so it's on my to-do list..

While I'm working on my foundational skill, can you point me in the right direction for where high-R trades are discussed? I haven't finished Alias's dead horse thread yet, so maybe it's there, lol.

Alias' thread is good. Lots of info there. Pro's thread is also good, lots of practice there. IgazI's thread is good, lots of gems there. dojirock's, dchappy's, MightyOne's, es/pip's, kreslik.com is a treasure chest.

I have 2 threads, as you can see in my signature, I won't say anything about them other than I have a content list on the 1st posts to make it easier for you to navigate and find the info you need. I discussed many things including the ones you mentioned so I hope you'll find what you're looking for.

Thanks, Don.

I have now finished reading the whole of Alias’s thread and have learned a great deal and have a lot to practice and put into action. Of all the variations shown I think I’m using v1 plus FVG and some general support/resistance or supply/demand. I guess I’m making it my own without trying to improve it.
Fundamental to everything is being able to consistently make good/reasonable trade decisions and preserve my capital.

I’ve just started looking at your observations thread and am glad that I did.

The anchor trades idea reminds me a little of some analysis I did with my 7 years of 1 min data from Oanda (for about six pairs). It validated that on a weekly basis price will open, eventually move in one direction by a non trivial number of ticks, turn cross the open and close in the opposite direction circa 89% of the time. I’m on a tablet so don’t have the stats to hand or I’d be more specific. The other times it was either dead or a one way market.

I believe this was an old concept on Kreslik from maybe 12-13 years ago, which Lem and Bredin looked at if I’m not mistaken - Opposite Extremes First. Anyway, that felt like a similar context for an anchor trade.

I look forward to working through your thread.

[bb01100100]

Another grueling session.. I started at 2pm NY (sorry chart has cut off time on bottom - left hand side price at about 4419.50) and saw the grind higher and knowing that you need to be uber patient I set my limit orders and got in with 2x 2 lots due to lower volatility.

I was all about being patient for the grind higher due to past experience, but that was pretty much the top, and I got stopped out as price moved lower. I got back in once that little lower zone was formed, getting mostly flat. After that I ground about trading the range that ensued, with an eye on the lower zone being breached.

At 4pm I had netted $49.59, 1.25% with 61.11% profitable trades and max drawdown of 2.35% - that related to me getting stopped out as price pushed up above the high and then stalled. I got back in and was patient enough to get slightly green again.

What peeves me about today is that I was trading for a break to the downside - a trade that I was sitting in for 90 minutes, but I eventually got worn out and wanted to "protect" my pnl for the day and not end it in the red, so I exited as we hit 3:55pm NY at about 4419.
5 minutes later and that lovely support zone was breached and 4414 my "big" target for the session was touched (50% of prior 3H candle).

2023-06-28-c-MES.jpg (149.57 KiB) Viewed 2780 times

Upside:
- Didn't lose 3-30% of my account by being stupid or frustrated or "catching up", etc.
- Was patient - sat through some discomfort.
- Got stressed but took some uncomfortable trades - I guess this is disassociating my pnl position from the opportunity that presents itself.
- Saw the just-before-4PM price action respecting the support zone and took a fast 1pt scalp.

Downside:
- What method was I actually trading today? Most of my session had a relatively flat SMA so I was taking range trades while waiting for a push lower.
- I need to consider my positioning prior to the 4pm close if price hasn't yet done something substantial and hang in there. If it has, stay out.

I felt a little frustrated at myself for not doing better, but then I remember:

• I finished the day positively!
• I didn't do stupid things
• My cumulative return is at a high: 8.94%
• 9 out of 10 trading days with positive pnl

Things could be spectacularly worse...

[bb01100100]

Wednesday update:

• Pnl: $11.31
• Max DD -$60.05
• Pct profitable 50%

I really struggled to see the opportunities on the chart today; I was out of sync I suppose.

I've marked up the chart after the fact (other than the two rectangles which I marked up during the session) and see some very good opportunities for a confident entry.

2023-06-29-MES.jpg (126.75 KiB) Viewed 2723 times

First circle on the left I watched and could see on the DOM that there was a lot of volume trading there.. was it a pause because a push up or "resistance".. I wasn't sure. When price broke down I thought it was a liquidity grab, so I went long at about 4410 but stopped out shortly afterwards as price retraced.

Second circle I just watched and didn't click until the third attempt failed that there was a short opportunity.. I didn't want to chase the price so I put limit short orders in which weren't hit.
I think that was an excellent trade if I had been able to join the dots sooner:

• High volume of trades above - no spikes upwards
• Push down and then retest of 4414 area - no breach of the originating short momentum candle
• Three taps upwards to 4412.5 -> get short
• Target 4407 (prior minor swing low)
• Target lower rectangle - prior swing low

The bounce of the lower rectangle I didn't trade; instead I got short about 4407 and got into a world of pain, looking for a continuation of the move lower. I ended up averaging my loser and got out -1% down.

At this point I was feeling pretty beat up and was further losing confidence.

I correctly entered long after seeing the tap of the 50% retrace and took partial profits 2 points higher, then held through the following retrace (red candle long lower wick) but on the second retrace I got out for a scratch of the trade overall.

When price pushed higher to 4415 I could see there was a lot of volume being pushed at that price and since it stalled before the upper rectangle I went short looking to exit back at the zline at 4410 - that worked out nicely and I was flat/small up for the day.

The final circle I didn't trade because I thought at 4pm NY / 6am my time that the market would "seek liquidity" and push lower; it didn't and I missed a very straightforward trade.

In retrospect:

• I waited too long to be proven wrong - closer stops and short "time out" might have been much more helpful
• I need to pause and take my hands off the mouse for a minute here and there and think more about what's happened and what's not happening and set entries and stops accordingly.
• I need to be a little more strategic - I consistently see slightly longer term opportunities by looking at areas of interest on the 3H chart (e.g. 50% retrace if it hasn't happened yet, move to prior bar low, etc), but get sucked in to small price action.

I think I need to do less in order to achieve more.

[chappy]

test

[chappy]

Hi Beans ..Ive been following your thread. 2-4 is especially hard due to the afternoon doldrums ..but I understand with job etc..it is what it is ..I also trade the ES and am considering trying a funded challenge account ..Maybe we can post trades together and help each other ? I appreciate that you are using a real $ account ..the only way to truly advance IMO ...

[chappy]

Hi Beans ..Ive been following your thread. 2-4 is especially hard due to the afternoon doldrums ..but I understand with job etc..it is what it is ..I also trade the ES and am considering trying a funded challenge account ..Maybe we can post trades together and help each other ? I appreciate that you are using a real $ account ..the only way to truly advance IMO ...

[bb01100100]

Hello Chappy,

Very happy to post and share thoughts on trades - perhaps you can learn from my many mistakes!



Thanks,
Baked

[bb01100100]

Today was a significant down day - I just wasn't trading correctly.

• Net -$119.52 / -2.96%
• Pct winners: 37.04%, Max DD -5.01%

Blue circles are longs, red circles are shorts. I was right 37% of the time and the losses added up.

2023-06-30-MES.jpg (160.32 KiB) Viewed 2623 times

I seem to get confused by the SMA.. if I'm a distance away from the SMA and it looks like consolidation, then i trade towards the SMA.. this morning that didn't work. Not a DH trade either.
Second long trade was good - zline break of pullback in direction of bias.
Third trade short was me ignoring bias but seeing resistance and looking for a scalp down to the SMA -- ok I see a theme here.
Forth trade long was me reversing because price didn't close lower - I though we were now going to push through and go higher. I think that might be a reasonable failed trade.
Fifth trade looked reasonable to me - long with SMA bias, push down under SMA, rejection. After being stopped out, I didn't want to try again and watched price grind up to new highs.
The lower blue horizontal line was the 50% mark of the prior 3H candle.


Let's see what I'm learning from this analysis:

• I need to stop trading to the SMA - let's just make that off limits, despite how tempting it is.
• I need to trade momentum bar continuations as well - not just zline tests. This is very uncomfortable for me and I've just realised that I've been ignoring those entries (possibly because of the lack of follow through in the last several sessions)
• Perhaps I need to ignore prior price action a little (or stop overthinking things)? I shy away from entering long into very recent stall/retrace areas (e.g. next pullback below SMA after the second blue circle)
• Others?
  

Thanks,
Baked.