bakedbeans' learning journal

[bb01100100]

I thought it would be useful to log some thoughts here while I trade (on tiny size, but live) support/resistance, perhaps zero-lines.

My basic premise is that I need to keep it simple, avoid complexity (either with indicators, over analysing or trying to predict the market) and learn through engaging with the market. I've read many posts and some of the very long threads here and enjoy the relative simplicity of the methods and approaches presented. I'm aiming to improve my skills by documenting what I'm doing.

I live in Australia, so choose 8H timeframe (based on midnight local time daily alignment), since that roughly gets me 1x bar for the Asian session, 1x bar for Europe and 1x bar for the US. I trade via Oanda so size in units and by necessity need to set up trades to play out over night.

While I'm interested in about half a dozen pairs (like EUR/JPY, EUR/USD, GBP/USD and GBP/JPY) I will likely focus on AUD/USD charts here in the spirit of keeping it simple.

I haven't created a journal or log anywhere before, so I'm new at this as well. Lastly, I doubt I'll post frequently due to family, career (and trading!) commitments, but I do aim to progress over time.

My next post will include an AUD/USD chart and some thoughts based on what I've read and learned from other threads on Kreslik.

[BambinoFlex]

Looking forward to it. I think its helpful. Many times have I re-understood certain concepts when replying or posting some trade ideas.

[bb01100100]

My basic view of AUD/USD:



We have three pushes downward from 0.7300; I've marked the last 'lower high' at 0.7180.
Interesting that the third-to-last 8h wick touched that.

I have a rough line-in-the-sand of sorts (blue horizontal line) at 0.7136.. there have been two closes slightly above that line but I'm just seeing a rejection of the area between 0.7135 and 0.7180 so far.

So, I'm interesting in shorting this, but it's Friday here and I see we have non farm payrolls later tonight my time, so I don't expect much in terms of movement today until that happens.

Assuming my normal entry risk is 1% of account, I will short 0.5% at 0.7150, with stop at 0.7185.

If I get filled I will assess where next to add.. I might add another 0.5% within the 0.7150 - 0.7175 range to build up my 1% position.

If I don't get filled, I will look for a close below my line in the sand and most likely decide what to do next week.

In terms of targets, I'm not sure.. price has bounced at circa 0.7100 twice, so a scale out there might be OK with a view to adding again back at 0.7120.. that seems all quite close and probably not something I'll either be awake or on-hand to manage.

Next area of interest would be circa 0.7070 - 0.7060, since it was a bounce on the way down (short lived support / profit taking?) and a bounce on the way up.

[bb01100100]

Chart update:



Price subsequently came off starting from 4pm my time, with no retest of the 0.7135 to 0.7180 area. That was a large 8H candle, most "momentum" candles are about 30-40 pips.

I didn't get a price-action opportunity (e.g. smaller candle closing below my line in the sand) to enter and didn't set a short stop entry below the general price action area. That is something to consider for next time, and although the stop distance might have been quite large it would have meant participating in the move albeit at smaller size.

I thought we might see a bounce down at the 0.7070 - 0.7060 area, and price did bounce at circa 0.7050. I will have a look at the effect of round numbers on support/resistance areas.

Thoughts for next week: look for price action around 0.7100 to set up for another short.

Homework for me:
1) Practice looking at old charts, moving the chart bar by bar and calling what I see and what will cause me to enter and exit.
2) While doing that, make some notes on what happens at round numbers.

[prochargedmopar]

Did you watch this?

https://youtube.com/playlist?list=PLVgH ... PGePL3r69s

[bb01100100]

Did you watch this?

https://youtube.com/playlist?list=PLVgH ... PGePL3r69s

Hello, thanks for the link. That was very interesting.. I watched videos 2 and 3 so far.

I’m not in a position to watch low timeframe charts, but now wonder what I might see on my 8h charts if I think in terms of market structure shifts.

[prochargedmopar]

Did you watch this?

https://youtube.com/playlist?list=PLVgH ... PGePL3r69s

Hello, thanks for the link. That was very interesting.. I watched videos 2 and 3 so far.

I’m not in a position to watch low timeframe charts, but now wonder what I might see on my 8h charts if I think in terms of market structure shifts.

Lower and Higher time frames are the exact SAME.
Adjust position size according to the range you are trading.
Accuracy is still just as precise on HTF.

Keep watching.

[cheunt3]

Chart update:



Price subsequently came off starting from 4pm my time, with no retest of the 0.7135 to 0.7180 area. That was a large 8H candle, most "momentum" candles are about 30-40 pips.

I didn't get a price-action opportunity (e.g. smaller candle closing below my line in the sand) to enter and didn't set a short stop entry below the general price action area. That is something to consider for next time, and although the stop distance might have been quite large it would have meant participating in the move albeit at smaller size.

I thought we might see a bounce down at the 0.7070 - 0.7060 area, and price did bounce at circa 0.7050. I will have a look at the effect of round numbers on support/resistance areas.

Thoughts for next week: look for price action around 0.7100 to set up for another short.

Homework for me:
1) Practice looking at old charts, moving the chart bar by bar and calling what I see and what will cause me to enter and exit.
2) While doing that, make some notes on what happens at round numbers.

To me, weekly says a short. Daily also. H12 was a clear turn for me and I would have risked lines on this period. H8 wasn't so clear to me. Target at 706 because of H4 and H6 on the left.

[bb01100100]

Gosh it's been nearly a year and a half...

A lot of things have happened in that time:

• I wrote an event-driven algo in python from scratch to trade fractals and "opposite extremes first" concepts on the weekly; risking about 0.83% per trade.. it did very well with an equity high of ~90% with about +/- 10% swings on a weekly basis. It lost its edge and quietly lost money until I pulled the plug at about 30% equity growth (on a tiny account). I couldn't really get to the bottom of why, but I suspect a regime shift (higher interest rates) changed market behaviour slightly and my algo was very sensitive to that behaviour. Very interesting.
• That was a good learning experiment, but I realised that all I was really doing was coding, coding, coding, not trading - I saw that as an avoidance technique so I opted to get involved directly again.
• I opened an account with a futures broker and started trading ES micro contracts (MES)

From that point on it has been a confronting, frustrating and emotionally fraught experience.

My ego, need to be right, stubbornness and fear have all been exposed repeatedly. Wow. I came to realise that I am 100% typical of the typical trader: loser.

However, I'm here and have started reading the Aliassmith beats a dead horse thread from page 1, currently at about page 120 or so and have found it very insightful.

Due to some recent failure "to see what is in front of me", I have committed to following the somewhat mechanical Dead Horse strategy and taking 100 trades with it using a small number of micro contracts in order to help reset my brain and learn how to execute.

I had a DOM up, various volume charts, a TPO/MP chart, etc but I found over and over again that I "lost the plot"; I would start aiming for a particular outcome (usually reversion, agghh) and fail, then reverse my point of view then get crushed. The loss of "perspective" during trade execution is fascinating after the session ends, but debilitating at the time.

Anyway, I'm writing this here because this is the only safe space I have to share my thoughts. What follows will be my end of day results, good bad and ugly.

So, in writing: my objective is to take 100 trades and learn to execute, learn what works/doesn't, learn to take losses and move on, learn to take profits and move on, learn to let trades work out/fail without interfering and to practice not becoming confused. It's a tall order, but if I can't do this then I'm sunk.

For Dead Horse I'm looking at 2 MES lots initially targeting 1:1 RR, with the option of adding a 3rd lot if price action seems right and targeting 1-2x on that 1 lot. I'm not shooting for the moon, but practicing trade management. I'm not trying to stack (don't have the experience yet). I'm keeping it simple.

If I were to make 2.5% net at the end of the week that would far more impressive than anything else I have achieved.

Onwards!

[bb01100100]

My available trading hours are 2pm - 4:30pm NY time, which is early AM for me in Australia. The time on my charts is UTC+10, so I'm starting at 4am my time.

I arrived at my screen and thought I had just missed a momentum bar starting from 4417, which was rejected at circa 4409.
As price started to retrace past 4413 I remembered often times price retraces back to zero out profit before continuing, so I placed a sell limit at 4413.75 price and was filled.

I sat through the next three bars, price getting close to my stop (red line at 4416.50), which in hindsight wasn't the most sensible placement.

As price turned and moved out of the red/green rectangle i added another 1 lot short, for 3 lots short in total.

2x lots exited at 1R
1x lot exited at 2R

2023-06-14-MES.jpg (102.91 KiB) Viewed 18352 times

I was happy with the above outcome, but made myself take the next trade to practice trading what I see.
There was what looked like a momentum candle long that closed on 4407.25, which is where I entered a 1-lot long, stop at 4402.25
I was very nervous about this trade - attached to my profit, even though a failure would keep me up for the day.
I saw 4409 - 4411 as a "resistance zone" and was worried I would get stopped out, so I moved my stop to b/e at 4409 and exited the trade at 4410.50.
This is something I need to work on - I had a "free" trade but couldn't accept that it might get stopped out, so I took about 0.75R instead.
Price subsequently hit 1R, retraced which was rejected then hit 1.5R.

I stopped there, but marked up another momentum bar, which was a little late in the day (20 mins to end of session) to feel confident in taking.

What did I learn?

• Align with the MA for direction
• Remember to look for "zones" where support becomes resistance; be patient to see what happens at those zones
• Pay attention to momo bars.. sometimes I'm not noticing that "yes, that bar is a now a momentum bar"
• Remember that retraces to zlines are an opportunity (entry) and a threat (stops) so position accordingly
• Trust the system: if I'm entered, let it work out, or fail.
• Practice "non-attachment" to my profit/balance.

So that's a reasonable start, $66.98, 1.81%.

Now I commit to providing an update tomorrow - good, bad or ugly.