Happy New Year

New Year just round the corner. Wish everyone a prosperous Year ahead and may everyone do well in the market.
It'll be a year of sharing for me ahead, to share my journey in trading, with this journal.
The past few weeks is too good to be true. Did I discovered the winning formula? The accuracy of trade is way too good to believe at 100%. The risk/reward averaged about 3.5R.
This is the first time that I trade with an perceivable target in mind, its a good feeling when you do have a predetermined Stop and Target in sight, you feel that you're in control. This is a total change from my earlier endeavor in the market, where I was thought to take fixed 1 point target and fixed 1 point stop or logical stop at last support/resistance. Market is dynamic, Fixed target/stop is not realistic, market don't swing with fixed magnitude, the swing could ranges from 0.5 ticks to 2 points. With fixed stop/target, I often got stop out before market move in flavor of my trade when the swing is big. A side effect is also leaving lots of money on the table, seeing price move many more points in my flavor and not riding it.
With help of Fibonacci, I'm now able to set realistic stop/target, often hitting 2-3 points target with 0.5-1 point stop. I'm happy so far.
Having traded long enough, I know that market changes in behavior over time. What works now may not work 2 months down the road. Well, I'll need to keep my fingers crossed and try this out for some more time.

Risky Trade

@12:05 Short 780.9, Stop 781.7, Target 777.8, RR 0.8/3.1, R 3.875
This trade was nearly taken out as I queue early. should observe price in future and enter when price is moving in the direction of trade.
Move stop to 2 ticks profit once price move below last support. There were some retracement before hitting the target.

Early Gap Trade

@9:50 Short 786.3, Stop 787.3, Target 782.7, RR 1/3.6, R 3.6
Market Gap up during market open. As trend was down, it is typical for price to cover Gap. Which it worked out exactly as expected.

Testing Time

Price has pushed through 800 Resistance and is consolidating along the uptrend channel.
Reasonable assumption is for price to bounce off this channel.
Will still look for Long trade for today. Hope to see price touching 806

9:50 Market didn't play out like what I expected. It went below the channel line and now the support becomes resistance. Short 799.4, Stop 801.4, Target 792.6, RR 2/6.8, R3.4

Riding the uptrend

Riding the Christmas Rally. Couple of trades possible.
@10:16 : Long 794.7, Stop 794.2, Target 795.9, RR 0.5/1.2, R 2.4
@12:23 : Long 794.3, Stop 793.9, Target 795.5, RR 0.5/1.2, R 2.4
The second trade has eventually gave 10pts (20R) return.














@15:14 : Short 803.0, Stop 803.8, Target 800.9, RR 0.8/2.1, R 2.625

Holiday rally

Didn't trade on holiday eve. Looking back, a good trade at 12 noon.
Enter 796.8, stop 796.0, target 799.0
RR 0.8/2.2

Further uptrend

More uptrend, from ER2 daily chart. price is going to test 786. The cross point between upper and lower trendlines.














9:50 - Short @ 986.1, stop 986.4, target 984.7, RR 0.3/1.4














10:09 - Long @ 784.0, stop 783.4, target 785.7, RR 0.6/1.7

Trending Up

After some heavy fall with subprime woo. market is showing much effort in regaining upswing momentum.

emini2000 ER2. Daily chart shows consolidation into a closing wedge.

basing on fibo. it is trying to hit 769 (.5 retracement)

3min chart show similar potential at 768 too (1.272)

Afternote - price did hit 768.4 before turning.

Expectancy

1Come upon this nice concept in money management

Simply said, it is the measurement of gain vs lost in trades.

Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss)

Natural enough, traders focus on making a "winning" entry. We hate losing trade, so much so that we're happy as long the trade closed positive even if it is a very small win. Many small wins doesn't really make one money in the long run.

Lets look at the equation, we can have 70% winning trade of 1% average gain. But if the average of 30% losing trade is 3%, we're going to lose money at the end of the day.

Expectancy = 0.70X1 - 0.30X3 = 70 - 90 = -0.20

On the other hand, we could have a low percentage of winning trade and still make money in long run. ie. 30% winning trades of 3% average gain, couple with 70% losing trades of 1% average lost.

Expectancy = 0.30X3 - 0.70X1 = 70 - 90 = +0.20

Knowing this formular help us better focus our attention - on making money - rather then winning the trade.

More links on Expectancy
Postive Expectancy in Trading

CONTROL YOUR STOP LOST

Remember those days that you beat yourself up when you moved your stop when you SHOULD HAVE NOT?
Moving STOP is a big NO NO in trading and yet many of us do that constantly. All successful trader DON'T move their stop. But for ordinary trader like many of us, doing this is hard, I often let my LOST RUN and CUT my PROFIT. what a discipline. ;-)

Ok. what we need now is some help to control this. If you happen to use Braket Trader http://www.bracket-trader.com/. This is one trick you can use.

Go under Preferences, uncheck "Widen Stop Button"

There you go. you've just disabled your ability to widen your stop. Cool isn't it.

Awaken

Am I awake. I hope so. Have been trying to trade futures for 2 years with no progress. Trading for living is my vision.