Trading Forex While Asleep…

Trading Forex While Asleep…

 

Just a bad thing to do. Last night I was trading the Yen in the Asian overnight. We had a rounded top formation so I went short into the US afternoon, Japanese early morning once we had broken the 118 level in the Yen.

The trade went well, and after an hour , I was in profit. Volume was falling and the market was getting quiet as it usually does this time of day, and I was waiting to take my profit.

I literally just fell asleep watching the screen. I had my original stop which as back up at the 118.20 level. I woke up and immediately closed the trade. I was now well off my trading plan, and when you are off your plan, the best plan is to get flat and regroup.

The reason I wrote this post is the moral of the story.

When you are off your trading plan for any reason, close out your trade and get back to disciplined trading.

Disciplined trading is really the only way.

FTSE Rollover, Worst Trading Day of the Year so far

ES Rollover

TRADING THE FTSE ROLL

Thursday was by far the worst trading day of the year for me. This post should be titled “How not to lose your shirt on rollover day”.

I did trade the US indexes before, and they have a pretty specific rollover. I believe it came from the pits haveing a specific rollover day.

The US indexes roll the Thursday before the end of the contract. I was trading the FTSE (Z) and it was weird, and the contract wasn’t really rolling.

THE ES & FTSE ROLL DIFFERENTLY

I made two studies on the roll of the futures contracts between the S&P E-mini (ES) and the FTSE (Z).  The x-axis is days remaining until the end of the contract. I also added a chart of the difference between the front month contract and the upcoming contract as well as the change from day to day.

What really stands out is the ES rolls 6 days before the end of the contract, which is the Thursday before the end of the contract. What surprised me was the FTSE roll.

The FTSE split the trading volume between the two contracts and them BAM! All the volume switches.

FSTE Rollover

REALLY, IT WAS MY FAULT

I should have noticed. It was just that I had put rollover out of my mind, and I was going to trade until the end of the contract.

I REALLY should have noticed something when the fat-fingered error happened, but I was happily trading away. Wednesday I did fine, and I was just complacent.

BOTTOM LINE

The FTSE roll is not nearly as dramatic as the E-mini S&P, and next roll, either take the day off on Thursday before expiration or trade really carefully.

Probably going to just take the day off.

Was There A Fat Finger Error In The FTSE Yesterday?

Z 09-15 (Second)  2015_6_16

 

I was trading the FTSE and I was in a trade, nothing unusual. I keep an eye on the prices while I am in a trade and I am never far from my computer. I had been in this particular trade for about 45min. I heard my stop loss hit and I glanced over at the price and the price was nowhere near my stop. So how was I stopped out?

Looking at the chart, there was a strange spike. I say strange, because I was watching the price ( not the chart ) and I never saw the price move to those levels. Going down to a 1 second chart, I indeed saw that the price traded through my stop and my profit target all within 15 seconds !!! Of course the price hit my stop before hitting my profit target of course.

If you enlarge the image above ( by clicking on it ) you will see what I think is a fat fingered error by a trader. The price is going along, then a 500+ lot buy order comes and the market makes a moon shot, sweeping the book. Eleven seconds later a similar sell order comes in sweeping the book the other direction.

I think a trader entered the wrong size. maybe wanted to do 50 and market and sent 500,  Saw what had happened and tried to reverse the trade eleven seconds later. Maybe he/she meant to place the order in the June contract and not the Sep contract.

What do you think ?

My Trading Did Not Take Off Until I Visited the CME Floor…and now it is going away.

1418246837_e89cf3a100_bTHE CME FLOOR

My trading really did not take off until I visited the CME in the summer of 2014. I have a friend with a Gold badge on the CME floor, and he took me to the floor. He went down to the floor once or twice a week just to get out of trading from home. That was the time my trading really changed.

As I write this at the end of May, the pits are due to close by July. I

WHAT I LEARNED

I have always been a screen trader. I have beent o the floor, but I have never traded on the floor. I always thought that those guys had some sort of super human abiliy to trade down in the pits. When I went, I saw guys sleeping in pits, pits that were compltely empty and the stalls around the floor mainly empty. The option pits were full, but the outrights pits were just dead. I walked acoss a completly empty ZS ( Soybeans ) pit with just a monitor showwing the Globex price, where I traded.

What I had imagined was traders shouting constantly trading back and forth between each other. What I saw was traders just doing nothing until orders came into the pits. These guys ( and girls ) were not being active, but they were reacting to the market. Letting the market come to them and that was the piece that really sunk in.

I changed my trading. I moved from a tick chart to a 15 min chart. I think the tick chart is more accurate, but that is not the poitn. I needed to be patient like the traders I saw and I could do that with a 15 min chart. Not staring at the market all day, just when something is going on.

The second change was to just look at price and an economic calendar. I reducend the number of setups I use to about 6 somple of them. The guys in the pit were trading .

MORE ABOUT PIT TRADING

Open outcry trading, depicted in such movies as “Trading Places” and “Ferris Bueller’s Day Off,” is a thing going away. There are some websites that are trying to preserve the history of the pit. There is a movie Pit Trading 101, at http://www.pittrading101.com/ . A really interesting blog & website at Trading Pit History https://tradingpithistory.com/ and http://www.tradingpitblog.com/

My Trading Setups

SITE STATS

The most popular page on this site besides the index is the setups page, followed by the indicators page. Looking at those pages as the most popular topics was slightly suprising. I was actually hoping the psychology posts would have been the most popular, but alas, it is what it is.

As for indicators, I only use a few. I will go over the few I use in another post. In this post, I will give and introduction to my setups.

MY SETUPS

Over time, I have developed five different setups that I like for my trading and my timeframe. These may not work on different products or time frames. I do not know, I just trade on my timeframes. Since there are price action setups, they SHOULD translate to any timeframe or instrument. That said, your mileage may vary.

Second Entry

Trend Bar

The Anti

Breakout Pullback

Triangle Breakout

EDIT: I started this post with the intention of putting all six setups on one page. That became unwieldy so I a giving each post a separate post. Check back as I will update the links above as I add posts for each specific setup.

SETUPS ARE PERSONAL

The one thing to remember is that the best setup in the world does not mean anything if you can not use that setup. By use, I mean that the setup fits your personality. Every trader is different and trades differently. Whatever you do with my setups, the most important thing is to make them YOUR setups.

Review of Al Brook’s Video Trading Course

Al Brooks

I have been a fan of Al Brooks, for a long time. I bought his first book back in 2009. My initial impression of that book was, I wish it had been written in English Even Al ays the editing on the first book was not great.

Fast forward 6 years and he has a video course at Brooks Trading Course. I finally got a chance to review the course and I wanted to do a review for anyone else who is thinking about taking the course.

The original single volume “Trading Bar by Bar” book, is now three volumes. The list price on the three is ~$225, but you can get them on Amazon for about $150. So the video course is a little bit more than the dead tree editions.

THE REVIEW

The course is a LOT of material. Lots of setups and really useful information. But as I said, it is a LOT of information and it will take quite a while to finish. I gave myself 30 days to see if I could do the entire course and I was not able to watch everything. I took two trans oceanic trips in that month, so there was a lot of binge watching videos. According to the website, it is about 36 hours of video. You cannot binge watch his course like ‘Breaking Bad’ so you will have to spend a decent amount of time watching the courses.

I would say, there is enough in the course to help someone become a profitable trader from the price action side. You would still need to work on the psychological side ( which is not what this course is about ). In becoming a price action trader, learning how to trade takes up 90% of the time, learning how to deal with the psychology of trading takes up the other 90%.

FINALLY

If you are a visual learner, and you are thinking about buying the books, I would get the videos instead. The course is worth the money, just from the sheer volume of content.  It is a real price action course that any student of price action should pick up if they can.

The course ( and the books ) are a set of tools to help you understand and trade price action. That is the best you can realistically ask from any trading course. As with any course that you buy or study, you will have to apply that course to your method, trading instrument, time frame and psychology.

TL;DR

Awesome course for price action trades, it is a lot of materiel and will take a long time to absorb. Good value, get the videos over the books.  Also, check out the Al Brooks Trading blog.

The Evolution of My Trading

The Evolution of My Trading

Ok, it has been awhile since I posted, I have been trading, just not posting. I wanted to fill anyone in on how my trading has evolved.

As you know, I did have a problem waiting for the market. I wrote about it here The One Piece of Advice That Really Helped With My Day Trading Futures Psychology.

I went up to a 15 min chart and switched to the FTSE 100.

15 MIN CHART

The 15 minute chart I fell is almost out side of the range of what I would all scalping. I know a few people who consider anything under a daily chart scalping, so to each his own.

I do not think time based charts represent the market as well as tick based charts. They do however have one big advantage. I know when a bar will form.

Instead of sitting in from on the monitor all session, I can look at the market for a few minutes every 15 minute and go on to occupy my mind with something else. I usually, calm my mind before I look at the chart. I make fewer impulse traders and I have more time for analysis.

The only downside, is that I will see fewer setups in a day, rarely more than three in a day.

FTSE 100

I like trading the Bund, Bobl, and the FTSE. I traded all three and over time I have settled on the FTSE. The FTSe fits my personality best and I trade it well.

I believe there are a lot of day traders trading the FTSE which is probably why I feel at home trading that instrument. Support and resistance levels are respected, and we have a lot of trading vacuums that move to those levels like magnets.

Photo by Allan Ajifo