Week before US Election

 It is going to be interesting week before USA election.

NQ

 Notice , on Friday close, the NQ rally back to 0% line, we expect the downturn on Monday

back to $10955.5 level.

ES

Overall is downtrend, it hovers around monthly 50% level, may swing btw 3291 to 3260 level.  We expect it will go up till 3290 level, then goes down to 3260 level

GC, will see mild rally up 1899 level, Long term bullish for Gold

How to think like Professional Trader

 Over the weekend, I watched 4 video serials by Mark Douglas "How to think like Professional trader? "

That is exact what I need at this stage of my trading career.

In my short trading experience for future and option, I have learnt many new analytical tools and strategies, I did trade in paper money and I had some success and failure in one way or another, but overall, I did not make real money.   

I found myself have "scary mentality".  Though I know the mechanicals of certain trading strategy, I found myself often experience as following:-

• I always hesitate and look for more confirmation before I put up the entry; 
• At the same time, when the trade turns out to be winning, I am anxious to take off too early; 
• When  trade turns against me, I delay the exit and even, move the stop loss and hoping the market turns around.

After watching Mack Douglas video, in which, he advices to have Pro Mindset of  Overall all Series of trades" not "trade by trade". 

There are three steps to achieve that:

1. To define the edge of trading strategy by back test of paper trading by series of sample of trades;
2. To follow the edge of statistically define 
3. To develop the skill set of professional traders that trading without fear

From today, I will set up a serial of trades, strictly following my trade plan,

- I will always put defined risk for every trade

- I will change my mentality from "trade by trade" to "overall serials trade and seek statically probability"

- I will accept the risk and willing to scale back or let go the edge

- I will act on edge without reservation and hesitation

- I will keep trading journal to monitor my mental growth and errors

- I will never violate the principles of success.

I am a consistent winner!

Market Update: Days before USA Election

 Market has totally lost sense of direction.

It has been a directionless week for market, despite of earning season.  NQ, ES both have been seeing range with bearish skew.  The tapes are filled with some sudden move driven by news of mixed reaction of hope and reality check..  It is seems like a storm is brewing days before election.

1. ES

2. NQ

3. GC

Even at this moment, the average daily range for NQ is up to 100 points, there are still lot of opportunity for two ways trading during US trading session, 

Good lesson

 We received both good and bad things from God.  So give thanks to GOD always.  God sends sunshine and rain, all things from GOD are gifts.  

Yesterday, I trade NQ in Globex session, locked in +49 handles with $100+ gain, and got Day done in by lunch time, feeling pretty happy.  Only to have terrible shock when US market opened, I found I left two limited order behind and it was filled against me with negative $350 +.  Very panic!!!  I scalped most of trades in RTH, and recouped back $200, but still end up with nett $100 loss. 

It is good lesson for me.  It was not first time I left order behind, last time was surprised gain of over $100+, but this time was double negatives.  There are few lessons to be learned from this mistakes.

1.  When facing loss, let it go and cut the loss asap.

Yesterday market was 100% U turn, at the beginning of discovering this mistake, I did have moment of thinking  to hold the position till the price returns, but later decided to let it go.  Market can do anything, Rather to hold the position and hope the loss to be recovered, it is better to put it back and start with next trade.

2. Have a business plan and Professional process

Trading is business, not hobby to me.  If I treat trading as business, I ought to have professional business manner and process that I will do in any other business.  This mistake can be prevented should I have set up mapping process.  Like SOP .

From now onwards, I will develop business plan and mapping process for order entry/ exit.

3. Develop strong mindset

To win and to loss is part of trading business.  To make mistake and to  learn is part of growth.  I do think it is required to develop strong mindset to begin with.

Mindset, is pivot to this business in the long term.  

I have decided to trade in real account with micro.  With SIM, though the strategy can be tested out, it does not help to develop mindset.  I have found I have good performance on SIM, but with real account,  I am still experiencing anxiety when enter and exit trade,  lack of confidence to enter, or to hold positions.  With real account, through trail and error, with risk management and small trade size, all small details will be helpful to form stronger mindset.

NQ Day Projection

 NQ H: 11739; L: 11553

On Yesterday trading session, NQ rallied up higher to 11739.  but it has big bearish skew in day monkey bar chart.

After adjusting skew, the next daily projection is as following:-

NQ is at near projected fare price at both monthly and daily projection.  Next Monday session will be critical to see whether the bullish trend will be continuous.

One candle reversal Technique review.

Using yesterday tap as example.  

1) if the candle bar cross key level, and breakout previous candles' HH or LL.  It can be used as one candle reversal technique.  This technique can be used even when the price action are within range.

Fig 1

 Fig 2

Notice above there were two Red candles cross key level 80%, there is immediate another green candle indicate reversal trend. 

For confirmation, the reversal trend should break the previous Red candles' HH . Notice that the first Fig 1, the reversal green candle did not break the previous candle's HH, therefore it did not qualify for the entry.  Notice that the sequence price action will fail this set up.  In Fig 2 The second reversal green candle had large body and broke the previous red candle's HH.  Therefore the Long set up as follwoing

Entry:                                 L11575.74

Stop Loss:                         11554.4 The previous candles' LL

1st Profit target:                 11592.16

2nd Profit target:              11609

3rd Profit target:                11641.41

Risk/Award Ratio:              2.4 for 2nd Profit target

                                            16.7 for 3nd Profit target

Notice that the potential profit can be higher , if applier the breakout range technique, as the price rallied higher to above11700.

ES H: 3480; L3445.25

Likewise, ES also rallied to 3480.

Similarly  ES also has bearish skew.

There are three possible set up for one candle reversal :

1st Set up: (for the time sake, we only show the 1st set up)

 Long Entry:             L3452

Stop Loss:                 3345.38

1st Profit target:        3456.94

2nd Profit target:        3461.58

3rd Profit target:         3470.85

Risk/Award Ratio:     2.5

GC H:1936.8; L: 1898

Unlike NQ and ES, GC has bullish skew, 

GC shows the bullish trend yesterday.  The trend following set up would be great success.  four possible set ups are shown as following:

For the time sake, here only shows the first one:

Long set up Entry:           1901.0

Stop Loss:                        1899.1

1st Profit Target;             1905.5

2nd Profit Target:            1908  

3rd Profit Target:             1912.9

Risk/Award Ratio:            12.

Using Monkey bar to project next day market movement and one candle reversal technique is great tool for trading.

Wish you all great success!

Trader's Mindset

I start to learn day-trade in August.  It has been exciting and challenging experience.  I decided to keep some of personal learning as form of blog, it is more for myself to reflect and grow.

The process is not easy, so far, I am yet to break even or make any profit.  From what I have learnt, I think the most important in trading is to develop Trader's Mindset.

Like in any competition, the mindset plays pivot role in player's performance.  There are perhaps three types of mindset:

To play for win

To play for not lose

To play for fun, not care of result.

Of of three which one can deliver the best performance?  I don't know, but from my personal experience is the last.  If I really don't care the result, I don't have pressure and stress to perform, somehow I can perform better.  Others may be different, for some, play for win, gives them purpose and motivation to perform better, but I dare to say, "To play for not to lose" is the worse type of mindset.  The fear of losing also shows that one cares the results too much. The fear of losing can freeze your subconsciousness, and deprive your ability to lash out your true potential.  

In the trading practice, I found myself doing well in simulation platform, but in real account, often has the fear of losing, the worse mindset to have.  Therefore, to develop right mindset is the first step to be a successful trader.  

How to develop the right mindset, as for me , I think:-

To trade only what you are willing to lose.

If you are truly committed , not care of results, you will be able to free from fear and pressure, to better perform in real trading environment.

Therefore,  I would suggest anyone who is willing to learn trading, not only to learn all technical perspectives, but also to mindfully develop right mindset for trading.

NQ Tape Reading

 Bear Flag and Failed Bear Flag

There are times failed pattern play, shown as above, the second was mistaken as Bear flag.

In the news driven tape, this type of failed pattern are often presented, therefore, be cautious.  

Impulsive Drop and Double Top

Market Updates

 7 Oct, 2020

1. NQ 

H: 11524.6; L: 11197.5

2. ES

H: 3421.75; L: 33330.5

3. GC

H: 1927; L: 1878.2

All above shows the twitter effect of President of Donald Trump.

Light recovery are expected for all indices.

NQ Tape Reading Lesson

 Oct 2, 2020 NQ tape is classic textbook learning materials.

1.  Bear Flag Patten (67.1% success rate)

2. Ascending Triangle Patten (72.7% success rate)

3. Head and Shoulder Patten (83.4% success rate)

4. Bull Flag Patten (67.7 % success rate)

5. Double Bottom Patten (78.5% success rate)

6. Double Top Patten (75% success rate) / Triple Bottom Patten (79.3%)

 AD vs ES divergence

 

in the above left charts show AD and ES divergence, that gives good indication for next reversal of trends.

Core Set Up Back test

1. S26, S06 with key resistance level

2. L06, L18 with lowest of tape of day and Exhaustion of trend

3. S46 with key level of resistance

4. L66, L77 with key level of support

5. L56 with key level of support

6. S18 with key level of resistance

Market Daily Review

Based on trading day finished on Oct 2, 2020

 /ES High: 3375.5; L 3300.25

At monthly level, ES was located at overbought range, at intraday level ES is looking to enter oversold range, looking for long position in next trading day.

/NQ High:11604.75, L 11204.5

On last Friday, the new of President Donald Trump tested positive of Covid 19 sent market freefall , NQ dropped almost 300 points within 10 minutes,  it ended at oversold range in intraday chart, at monthly level however, NQ is located at overbought range. Looking for slight recovery on next trading session, if there is no negative news .

/GC High 1923.6, L 1895.2

GC had bit recovery over last week of trading session, but retract back to oversold range.  At monthly level, GC is also at oversold range.  It may take some time for GC price to reach the highest point, it may consolidate at current level.

/RTY High 1542.2, L: 1490.7

Unlike above, RTY has bullish skew, despite NQ and ES bearish skew on intraday base. RTY shows strong bullish trend at last week trading, will be interested to see how the trend goes next week.