Monday, August 18, 2008

Monday Notes - Trend Day

1:36pm Interesting rhythm today as it's been a "spike/consoildation/teeny pullback/repeat" day, which can make it difficult for both extreme spike and deep pullback wholesale entries. Doing OK so far as traded the DAX to the long side on the Europe mid-A.M. climb, and have traded ES both long and short on the drop south, covering on the retracements back toward the mean. First trade was a 9:37am long on the early drop, which I quickly scratched for a small loss upon seeing further weakness, and then began focusing on the short side given both the early weakness and the 15-min VIX which has been uptrending all day.

I've only traded three or four ES sequences, booking modest profits on most, and have not looked at my P&L since the U.S. open, but sense I'm reading and trading in fairly good rhythm so far. I'm not too interested in going into gain preservation mode yet given the nice market movement and potential future opportunities in the afternoon ... I don't expect traders to be leaving early today as was the case Friday! Market seems in no-man's land here, but might be interested in fading the next hard move up or down.

2:58pm A bit tricky down here as 3LB went long, then shaked and baked and hasn't been much help in the chop indicating no sustained buyers and thus no likely short squeeze in the afternoon cards (yet). Focus now turning toward the "morning after trend" setups and being cautious heading into the last hour.

3:33pm Disappointing pace/rhythm in terms of clean entries ... either that or I'm just not in sync. No trades since 3:03pm. Looks like the prime entries will be in the A.M. Pretty typical performance for me on a trend day ... up minimally on the day ($4K, half of which was from the DAX) which is pretty irrelevant in the larger scheme of things. Call it close to a scratch day as I look toward the morning. Strong resistance in the mid-to-high 1280s for the moment and looking for day after trend day rhythm in the morning if we close down hard.

3:55pm Watched the swimmers fight it out to the finish line and wasn't interested in participating as the goggles were a bit foggy. Pretty wild price swings toward close and am hoping they save some of those for the morning. Should be one or two solid entry points tomorrow, and will have to be on my toes.


Unknown said...

"3:33pm Disappointing pace/rhythm in terms of clean entries..."

Phew! What a relief reading you say that. I was banging my head against the computer thinking it was me alone. If not profit, at least you gave me some hope.

To cleaner entries!

Don Miller said...

Hi Roger -

I imagine some did OK, but the charts indicate some may have gotten whipsawed late in the day trying to look for the reversal & stopping, and then a further breakdown & stopping. When the 3LB reversal failed to hold late in the day (I'll post a pic tonight), that was a yellow light for me which quickly turned red at which point I turned off the engine.

Hats off to anyone trading that last hour rhythm well ... I wasn't in that group.


cleon said...

Don't know about you guys, but I find trend days the hardest type of day for me to trade. Maybe it's just because I prefer countertrend trades. The thing with trend days is that early on, I never know if they really are going to be a trend, but you also don't want to fade a monster move. Alas...they are always clearest after the fact!

The one thing though that always excites me about trend the day after! My favorite day to trade right after a nice move :)

Happy Trading!

Don Miller said...

Ditto here cleon. Of course we could have done without the late nine point pop off the 3:47pm low ... that was supposed to be saved for tomorrow :-).

GS751 said...

Don, There are a lot of similarties between trading and poker. I wrote a blog post called tilt about an XLF bet that I closed out too early. Link is.

Great blog I am adding it to my blog Roll if that is cool with you. When I play poker I try to have consistent betting patterns, eg I bet enough pre flop to not let somebody lag in but still protect my table image.

Don Miller said...

Hi GS.

No problem adding it to your blog list. I'm always interested in mutually sharing relevant info.

Still working on my poker image. It's interesting that Dan Harrington recommends doing what you "should" do about 75% of the time to keep everyone else guessing. At least in trading, we don't have to worry about that and can simply work toward doing what we "should" do 100% of the time. Easier said than done of course.

Cool blog at your end ... thanks for sharing.