7-17-2013

Pre Trading Notes:

1.  If price creates a 1st entry that forms a double top or double bottom by only going up or down by 1 tick then do not count it as a 1st entry.  It seems Mack's charts do not show these bars being first entries but only double tops or double bottoms.  If it goes 2 ticks or more to create a double top or double bottom then you can count it as a 1st entry.
2.  Continue to use failed 2nd entries to confirm 2nd entries and to trade them on their own against the trend lines and the EMA.
3.  If price is against a trend line and bumping against a S/R line then go with the trend line to trade off of and not the S/R line.  If price is in a trend within a range, has come off of a S/R area and is in the midpoint of the range but bouncing off of the trend line then do not use the trend line because price is probably going back to the opposite side of the range.

Post Trading Notes:

I learned a very important lesson today or rather it was nailed home in me.  For some reason I try to make everything a trend, even on range days I like to have trend lines within ranges.  For whatever reason I gravitate towards drawing trend lines and give those more weigh then S/R lines.  In reality they are the same thing except one is diagonal and the other is flat.  That is what happened to me today.  I was so hell bent on making price into a trend whether up or down that I took two bad trades b/c I was going to be damned if my trend line didn't work.  As soon as I realized this and traded off the S/R lines my win rate went to 100%.

For some reason I do not trust S/R lines as much as I do trend lines which is why I think I always try to fit ranges into trends.
Once I saw that the two legged big move was not going to happen I should have realized that it was going to be a range day.  That is what usually happens.  When the 2nd leg doesn't form then that means it is usually going to be a range day.

I went ahead a put back on the trend lines in pink so I can look back on this and see my mistake.

(Edit:  After watching Mack's video I had the pink line drawn correctly, I was just trading off of it incorrectly and not counting the 2nd entries correctly)

Mack's Notes:

Draw the short term trend lines b/c you need to expect a break of the trend line and then a new low if in a downtrend or a new high if in an uptrend before price reverses.
In an uptrend you only want to enter off of support and/or the EMA.  In a downtrend you only want to enter off of resistance and/or the EMA.

You want to buy the lows and sell the highs which is why you draw your trend lines and S/R lines b/c you trade off of those.  You are looking for a reason to go long at suppport and short at resistance.
You can't enter late and you can't hold on too long.  These trades are designed for scalps, not swing trading so I need to scalp out more on both contracts.

After the 1st major break of a trend line price will usually go back and retest the highs or create a new high if in an uptrend and will retest the lows or create a new low if in a downtrend before going into a range or reversing the other way.

A lot of the time when you get an overshoot of the trend channel on one side price will come back and overshoot it on the other side.

When you get a break of a trend line you will get 2 legs up to a new high or down to a new low a lot of the time so it is a setup to expect.

Trades:

1.  8:36 - 2nd entry long and failed 2nd entry short off of the EMA.  I put my entry 2 ticks below the entry price b/c there were some overlapping bars previously.

2.  9:08 - Failed 2nd entry short off of the EMA.  I could have gotten a better entry but I still had my 2 tick cushion on my 2 point stop loss so it fit my entry criteria.  There were 3 overlapping bars so in that aspect I probably should have dropped a limit order instead of using a stop order.  Was looking for price to follow the big green trend channel up or at least hit the resistance level which it did.

3.  9:35 - 2nd entry long off of the lower trend line and the EMA.

4.  10:18 - Thought it was a failed 2nd entry short and was looking for price to head to the other side of the trend line.

5.  10:43 - Thought it was a 2nd entry long off of the lower trend line and a double bottom.  Obviously I am reading the charts incorrectly.

6.  12:07 - 2nd entry short off of the resistance area.

7.  1:27 - 2nd entry short off of the resistance area.

8.  1:52 - 2nd entry long off of the support area.

Missed Trades:

1.  He said it was a failed 2nd entry short off of the trend line but price went 4 ticks so I'm not sure.

2.  Breakout pullback long off of the trend line.

3.  2nd entry long off of the lower trend line.