2023-01-24

Ambiguity of trading

This is typical for the ambiguity of trading. On one timeframe the market looks ultra bullish and is a strong buy. But on the smaller timeframe the market has already moved a good amount in a short period of time on poor structure (single prints)
As a pro active person i have more fear of missing out as of a loosing trade. In the past i often was too agressive in these situations and bought too high in relation to tf1.

Combining two timeframes

You have to combine two time frames. I call the timeframe that i trade tf0. You can also call it daytype. In the hierarchy of timeframes i am a „daytrader“. Below me are the „scalpers“. Above me are the „short term traders“. I call the timeframe above me tf1.
The most important thing is what is happening live at the moment
But this you have to embed in what the timeframes above are doing

Skipping a timeframe

On tf1 we have a strong emotional move which happened in the last two days. Of course, anything can happen, but it would be normal if this at one time starts to balance out and create a covering-p-profile, This is exactly what i have to keep in mind to protect me from buying too agressive in the region of yesterdays high, even if the trade fits perfect in the actual day type tf0.
This doesn´t mean that i am not allowed to buy there. But i have to carry this point forward and take it into account when deciding in the live-moment.
It is easy to make the mistake of skipping a timeframe. If i say the market is trying to breakout from the balance area of the last 10 days i miss that it already moved strong for two days

Do not skip a timeframe

tf0: Lets see what happens today
tf1: Emotional buying for two days
tf2: Trying to break out of 10 day balance

2022-12-13

Pre market narrative

Post Market summary

We had a ultra huge gap of nearly 3% after inflation data
We closed that gap to 100%
Many trader who trade for decades told that they cannot remember such a huge gap close on the first day in the ES

2022-12-12

Pre market narrative

This market can do whatever it wants especially with the coming news
If it goes up we normally would expect some kind of excess on the downside before that
Tomorrow CPI, wednesday FED
Often we have balance or non-trend behaviour on these days before big news

Post market summary

Again sellers get no traction
We get covering
We close above the 4 day balance with a price probe in K,L,M

Always remember, especially when it seems to be a clear context:

The worst thing a trader can have is only one idea

Trade what is, not what should be

2022-11-29

Not much to say
Not my market
Breakeven is fine on these day
If you control your downside, the winners take care of themselves

In dating and in trading:

When you need nothing you get everything

2022-11-28

Big Picture

We have a large downtrend which is intact
We are close to the trendline and have to see if we are able to break the downtrend
Are the lows of the year in?
Makes zero sense to think about this. Do not listen to the media. Let MGI guide you.

Middle picture

We see an uptrend which is not very dynamic. Balance areas overlap.
Nice balance area from the last 8 days
The destination trade worked perfectly from excess at the bottom to the top
I ignore the two holidays. I see todays open as a test of wednesday low

We opened below wednesday low
The first minutes looked like we reject lower prices
But we quickly ran out of steem and fell the rest of the day
You can formally call it a trend day. But for a gamechanging trendday down this is not enough range and not enough volume
We have two days left for this month. I try to stay neutral

A thought that came to my mind tonight:

Good entries show you fast and clear when you are wrong

2022-11-15

Whipsaw massacre

Gap up after inflation numbers in a already piled on situation
The market is of course vulnerable for at least a fade
It is an open-auction out of balance which goes up and down through the open several times
If you expect imbalance, like i did, this is the recipe for a whipsaw massacre
You get in several times, you reverse positions but you do not get paid
I was in for the fade or the liquidation several times but always got chopped out
When the liquidation came (triggered by ukraine news) i was already out

Thougths on the Market

We took out a daily high and are offiicially in balance on the daily now
Interesting to see how the market came back in the afternoon
Liquidations strenghten a market because they take out longs. These longs have now sold. This means a) This sell already happened and b) they can become new buyers (normally again at bad location)
I would not be surprised if we open higher tomorrow

2022-11-14

Liquidation break

We open in y balance
Try a little down, try a little up
You can feel that the market is a little bit too long, that buyers run out of bullets
Consequently, after 2pm we get a nice liquidation break
These breaks are hard to trade. When you have enough confirmation (speed) price has already moved a long distance
I do not sit in a trade waiting for a liquidation break. The most important thing is to recognize that it can happen and as a consequence not sit in a long trade

2022-11-08

Small gap up
A period checks back in upper distribution from yesterday and fails
We start one time framing higher
It looks very stable. Contextually we should have more covering potential
I hit a 20P Target.
I decide to let a runner run
For me a runner is a trade that i let free of narrow trade management because i think contextually we have room for more (narrative completion, destination trade)
On Friday i had a similar trade on the short side

Intention of runners

The intention is to trade the structure of the day as a whole with a small remaining position
I do this with minimal path dependancy. I do not want to get shaken out by normal contra rotations
If it works you make big profit and you feel good, because you saw the structure of the market as a whole instead of having to scalp around small in fight with the algos
In volatile times i sometimes need 2-3 trials before i am in a running trade. In that case i feel that i need to profit accordingly. If this goes too far and you trade your p&l instead of the market this is of course a big problem.

Problem with runners

Volatility of p&L increases which has much effects: 1) Calmness of mind decreases 2) Ability to increase size decreases
To balance these large disadvantages runners should have a large positive financial outcome. This is not the case

Believes to influence my behaviour with runners

The market is full of intraday speculators (too long, too short, need to liquidate/cover)
Money comes from size and size comes from stability

2022-11-04

This market is in maximum indecision
We gap up and fail clearly
Unexpected we fail to go down and rise sharply
Again unexpected we sell off hard
Only to again unexpected get no follow through and cover

How to handle next week

Many times it is a question of timeframe
If the environment is readable it is good to catch the larger intraday moves
If like now the market is in big indecision it should be better to trade a shorter timeframe
At the moment short term traders and algos get shaken around. Ohhh, it´s going down, let´s short it, f* no follow through we have to cover, ….
I expect this behaviour to continue the following week. We have midterm elections on tuesday and cpi on thursday
Look at the daily chart. You can see the indecision in the overlapping value areas
On the weekly chart on the left we see that sellers had the chance to get an outside week down but they were not able to get it
Until we get more clearity try to trade a little bit smaller timeframe !!!

2022-10-18

Trading day

Open with huge gap up at top of overnight session with 100% long overnight inventory
This is an invitation to go for the fade which worked out fine
For me unepected they filled the gap completely

Middle picture and how to act

We produced a red candle but nevertheless this was a positive day for the bulls as we accepted higher prices compared to the days before
We now have a choppy 3-week-balance area which is not my favorite
We also have Q3 earnings at the moment
I think at the moment the map is unclear
For daytrading: Be extremely objective. Do not develop biases. When in doubt get out. Cash in instead of making larger destination trades
Be a collector – not a hunter
Go for base hits – not homeruns