3-22-2013

My Notes:

Today I am putting on the trend lines from the overnight pivots.  I haven't been doing this but it seems those are the correct trend lines.  Good day today.  I missed some trades but they didn't fit the rules I am following now which are to only take 2nd entries and/or 2 legged pullback to the channel trend lines or support and resistance areas.  I finally understood what Mack means by "dropping an order down there."  I discovered you can do this with great success in support/resistance areas in ranges that increase your odds of success and decrease your stop loss.  Some of Mack's teachings are starting to stick a little better in my head.  Don't get cocky b/c if all of Mack's information was the size of a basketball then the amount of my knowledge would be a small dot of a black Sharpie marker on it.  I am getting better about recognizing when the trend switches to a range and how to trade those properly.  I am seeing a little growth which is encouraging.

The one horrible trade I almost took was due to me incorrectly drawing the trend lines again.  This would have been at 9:25 off of the purple lines.  Luckily I held off b/c of the horrible looking overlapping bars.  At least the fear of missing out on a winning trade is not as strong but it is definitely still there and tugs at me which is why I've taken so many losing trades due to bad setups.

(After watching his video I still didn't draw the major trend line correctly.....all I can do is laugh about it at this point.  The black dots are the correct trend line.  Haha, now after watching the video further he specifically states that my blue trend lines were incorrect.  I have a lot of work to do in this area.  If I had drawn the black dotted correct trend line then some of my trades and reasoning would have been different below)

Mack's Notes:

Keep studying and practicing and you will get better with this.
Experience makes this look easy.
It takes dedication to make money doing this.
You have to compare this profession to any professional profession.  Think of all the hours that lawyers, doctors and pro athletes put in to become successful in their field.  You have to take the same level of dedication, time and commitment to be a profitable trader.
Until you can prove you can make money consistently on the simulator then you are no where near ready to go live.
Being a successful trader is a two step process.  The 1st step is correctly reading price action, the 2nd step is the mental aspect.  Anyone can learn the 1st step but it is the mental side that stops people from being successful.
If you don't know what prices are doing and why they are doing it then do not take the trade.
This is not something you will learn to do quickly, it takes time, dedication and experience.
Most people give up before they become profitable because they do not want to put in the time and dedication.
There will be an emotional learning curve when you switch from sim to live.  If you have proven that you are profitable in sim then you at least can read the price action correctly.

My Trades:

1.  2nd entry long after price broke out of the trend line for the 1st time.  The rule is when price breaks the trend line for the first time it will usually go to retest the high or make a new high before reversing into a trend or a down trend.  This trade was easy for me.  I can honestly say this trade did not excite me at all when the scalp hit.  I still wonder if I should just put my 2nd contract one tick below the high to lock in the 1.75 or so profit rather than trying for a 2+ point runner.  But I waited for this trade and took it with no hesitation and didn't get excited when I was in the trade or when the scalp worked.  That is new for me and the path Mack says you need to be on if you want to be a successful trader.  I've seen this setup enough times the past month that it was pretty much automatic.

2.  2nd entry long off of resistance turned support.  There are a couple of things I like about this trade and one thing to think about.  I love the fact that I identified that price would snap back to this level after the prior breakout.  This was where resistance turned into support and I entered on a 2nd entry long.  I think what I should do so I can get in at a .50 - 1.25 point entry is after the 2nd entry signals is to drop my order back down a tick or two above the support level.  This way I get in at a much better fill and if price goes in my direction I get my scalp and a better opportunity on my 2nd contract.  If price happens to go against me then I've cut down my stop loss that much more.  Great job identifying that price would probably snap back to this area from the breakout.  I remembered this from the video the day before.  (After watching Mack's video I think the true 2nd entry was around 10:00 b/c price had made a lower low so the count can start over)

3.  2nd entry short and failed 2nd entry long off the EMA.  I did this trade exactly as I should have done trade #2.  After the failed breakout to the upside at around 10:25 I have usually seen price retrace back and make a new low below the low of the range it just failed to breakout from.  The yellow square is the 2nd entry short and I should have put my entry at 1548.50 which would have been on the EMA and 2 ticks below the high of that little pivot.  Once I saw the 2nd entry failed long form I wanted in on this trade so I put my entry at 1548.50 and luckily I got filled.  This is in Sim so who knows if I would have gotten filled if this was live but I did and my scalp got filled even before the entry bar was finished.  I though about moving my 2nd contract down to a tick below the lowest bar in the range b/c when price fails to breakout one direction it seems to make a new high/low at the other end of the range.  Instead I played it safe and put it 2 ticks higher than my perceived support line which made it a 2 point profit.  I really love trading ranges this way.  Sometimes I may not get filled but I think this way is worth it for ranges.


Missed Trades:

1.  2nd entry long after the first break of the trend line.  This wasn't correct b/c I did not have the correct trend line drawn.  Mack took this exact trade but he just took it off the support level it was on.  I didn't have the resistance level drawn yet.  I thought it as the first break of the purple trend line.

2.  2nd entry short off of resistance at 10:10.  I called this trade but I'm not upset at all with not getting filled b/c what I tried to do is what I should have done with my trade #2 from above.  After I saw the 2nd entry short form I didn't want to get in almost 1.5 points from the resistance level so I dropped my entry back up to 1 tick below the high from that pivot at 1548.75.  I didn't get filled so maybe I'll try 2 ticks next time.  If I had gotten filled even at 1548.50 then that would have been .75 ticks better than the 2nd entry short at 1547.75. I really like trading the support and resistance levels this way if the 2nd entry forms too far away from the support/resistance area because it gives your scalp a much easier chance to succeed, increases the ticks on your 2nd contract and decreases your stop loss.  What's not to like about that?  Sometimes price may not come back and fill you before taking off but I think in the long run it is much more worth it doing it the way I described.