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Dom's notes


Despite having been hammered for posting my sincere feedback re. ATW in the appropriate thread (or may-be, because of ...) I am starting this thread for the benefit of all waanabee traders.

I have no intent of sharing my exact trade setups, however I will share as much as I can - the good, the bad & the ugly, and if someone learn something from this then it won't have been a waste of my time.

I have been a student of the market for over 4 years now. I actually started my education with Investools PhD program (which was a lot of money for not much outcome in my case), trading stocks then options, then started to focus on the SPX (directional Calls/Puts then credit spreads), at some point I discovered the futures / ES in particular and that was a "revelation" ... 1/4pt spread vs 2pt spread for the SPX options, I was sold in no-time.

I purchased Todd Mitchell's system (TradingConcepts), which was a lot less money than Investools but no more outcome in my case, at least it triggered my interest in Fibs (back then, retracements only) and I did a lot of research / backtesting using Fibs - but at the end of the day, the real challenge resides in figuring out which fib level will "hold", and to this day I have to admit I have not solved it.

Anyway, I then spent a lot of time in a couple of "free" trading rooms
learning pure price action, the person that was offering his time teaching PA free for several months later offered a paying program, which I took, but I still couldn't make money live. I took another mentor, recommended on a free forum, and despite he being a nice guy (and why wouldn't he be when students are paying), this also was a failure.

I was about to throw the towel when I found ATW, started with the 101A education, added 3 weeks later the mentorship education, and have been studying / backtesting a lot for now a full year. I reached a point where I can "consistently" make fake-money on sim, however the transition to live trading is a real challenge for me, because of fear I pass on many trade setups and I deviate from my trade management rules.

So, that's the background. I trade CL (Crude Oil "big" contract) which is very liquid, has 1 tick spread throughout the European & US session, and is nicely volatile (day range is on average 250-350 ticks, some days even more - like today : 450 ticks). I find CL to have a lot of momentum, it shows very repetitive "patterns" (at least, for the fib user that I am).

I don't use any indicator, I trade price action using a lot of price projection techniques (best book IMO on this topic is Robert C. Miner "Dynamic Trading").

If I have one advice for new traders, it is look for another way of making a living ... but if you are truly in love with the markets, then I believe it is a must to 1) find an excellent education (this is way more than just reading books, and frankly, there is probably no one-stop education shop) and 2) find a mentor to accelerate your learning curve.

Now that this is out of the way, a brief summary of my week :

Tuesday - tried 1 trade early morning, entry hit no fill, that made me mentally sick for the rest of the day, I passed on 2 setups (both wins), the last setup I tried but my entry wasn't even close to be hit.

Wednesday - 2 setups no-fill, then 1 small winner (got out at 1/2 of my target for pseudo-good reasons - really, lack of discipline), and I passed on the last one (another wouldabe winner :( )

Thursday - passed on 5 setups (4 wins / 1 loss), took 1 small winner (1/2 target again, same lack of discipline), and missed the best setup of the day by being away for 5min

Friday - passed on 1 setup (win), no fill on next 2 setups, then I couldn't focus & called it a day.


Bottom-line - only 2 trades this week, I made ~10% of what I should have made if I had the discipline to follow my plan.
Day's summary

CL live : 3 no-fill / 1 entry-error

FRUSTRATED ... I passed on the only one setup that would have given me a fill (& a win). What a wimp !


SPY live : 2 wins

I was watching since this morning a 5 wave structure which 5th wave was subdividing into another 5 wave ... but that was making a number of possible completion targets for the move, and being shy I looked for other CFs ... I ended-up using the TF100 (not shown on the chart, which was captured before that), got 2 potential areas (1067 & 1061), of which the 1st one was well aligned with the 5th-of-5th DF51x (pink projection at 1067.23). So I missed the early LoD right on the main DF51 (1069.50, to the tick), got more than annoyed with it all day long, and finally got this CT long at the TF100 & DF51x target late in the day (and actually twice, on the initial move and on the retest just before the close). I took these 2 trades on SPY as I was very uncomfortable, despite the amount and quality of CFs, so they are pocket change wins but huge for my psychological capital.

Click image for original size
24 06 2010 es 5th of 5th
Day's summary

No trades today. I missed the LoD in ES by 1.5pt (I will have to analyze this one quite a bit, since I was shooting for a swing-trade may be I should have been a bit less demanding on the entry). I missed (by a large amount) a couple long entries in CL after the huge breakout. Rest of the day was too much chop for me in CL.
Day's summary

I did not get one setup today ... CL day session range was 68-ticks only (I bet the lowest range regular trading day in last couple of years), chopping around with no volume (66% of last week's Monday volume ... is that summer already started ?).
Day's summary

CL live : 1 win (+5-t ... trade management error, again !) / 1 entry-error

I woke-up too late to catch the system short entry of my 5th-wave trading system ; at that point (~6:25 EST) price was bouncing of what appeared to be a strong S/R level (~76.60-76.70), and ES being also "solid" support (78% ret. of the last up-swing), I thought CL would end up doing an ABC wave 4, so I decided to wait for C ... too bad, CL finally retested W3 without any attempt to make that ABC :(

I passed on the 1st little push down (8:30 EST), which was only a 10-t penetration of the 78.6% ret. of last up-swing, finally at the day-session open CL made a decent LL, which pullback I traded aggressively - but again bailed out way before my regular target (trade management error).

I passed on the next push-down, as ES was still stuck on the same overnight low (not to mention, that last leg was pretty weak), then it was too close to the 10 EST news release ... which triggered ES next round of selling, but CL hit and bounced on its 1st wave-5 completion target (DF51 : 75.31, CL morning low : 75.29), so no short here, but no CT long either (not enough CF at that level).

The rest of the day was pretty much consolidation for CL, I lost my focus and plain missed the ABC around 11:10 EST
Day's summary :

CL live : 1 loser / 1 BE

Missed a short (5th wave) around 8:25am, wasn't at my desk :( Then a couple no-fill (I wasn't aggressive on entry levels and very quick to cancel at the 1st sign of retest). Finally, CL made a major BkD at 12:45 EST, giving a 5th wave short setup which turned out to be a plain loser (took it on QM, that's only 1/2 the pain of a regular CL stop). Finished the day with an aggressive long at 2:05 EST that did BE after +10-t :(

Not the best way to finish June, but I lost a lot more this month through trade management errors than plain losing trades.
Day's summary

CL live : 1 small win (+8-t, trade management error) / 2 entry errors

I aggressively traded the very 1st pullback after the breakdown at 9:52 EST, then I froze and passed on the next 2 pullbacks (10:05 / 10:40).
Rest of the day was a 1pt consolidation / trading range, no setup for my trading plan.
Day's summary

CL live : 1 no-fill

I wasn't expecting much of the day, prior to the long week-end, but I wanted to watch the reaction to the employment report ... was quite surprised to see CL break-down hard at 8:06 EST, tried an aggressive entry on the 1st pullback (8:15 EST) which was missed by several ticks :( The next push down was too close to the news release, so I waited.

I got almost faked-out on the 1st push up following the news (and frankly, I have no idea as to why precisely I didn't like going long in the 1st pullback at 8:31), but then I didn't like going short after breaking yesterday's low as this really looked like clearing stops on both sides of the overnight trading range ...

That was it for trading, I had other plans for the rest of the day.
Day's summary

CL live : 1 win (+9-t, trade management error) / 2 no-fills

A few things kept me busy away from my desk this morning, so I missed the long in the 10:26 pullback. Finally sat at my desk around noon, just in time to monitor the breakdown ... missed the entry in 1st pullback (12:38 EST) despite using an aggressive entry (I guess, not aggressive enough here), missed again he entry in 2nd pullback (12:44 EST), this time using my 5th wave system "regular" entry, finally got filled on the 3rd pullback (12:48 EST) but yet another trade management error, bailed out with 9-t when my target on this setup is 21-t.

Almost got long in the 2:10 EST pullback, but ES was making LLoD, so I decided to pass ... that saved a loser.
Day's summary

CL live : 1 win (+10-t, trade management error) / 1 loss (-11-t)

I missed an early long (7:50 EST), was not at my desk :(
Because CL didn't show a lot of conviction in the up-move this morning, I took a CT short at the 78% ret. of yesterday down-move (I had a couple of other CFs right there) ... used a 10-t stop, and got 1-t slippage on the exit. In hindsight, it was probably not smart to take a CT trade when ES was impulsing up ... Anyway, I then traded that same breakout to the long side, taking an aggressive entry in the 1st pullback, which took so long to retest that I decided to bail w/ 10-t ... 1 more minute of patience would have yield my full target.

Missed a couple other trades later in the day (again not at my desk, it is summer here and I have to drive my kids around to their activities)
CL Live : 1 loser (-15-t) / 1 BE (+2-t) / 1 entry-error

I missed the 1st long in the 9am pullback (was driving my kids) ... the pullback after next leg up was a loser (I used my aggressive entry, but regular entry would also be a loser) ... I was "sensing" something was wrong, but decided to take it anyway. In hindsight, 2 things were wrong : I was expecting ES to go down on the day, and more importantly I didn't pay attention to a 5WM from the 7:53 low, so this pullback was supposed to be deep.

I passed on an aggressive entry after the news report (actually, I missed that entry twice, so I didn't try it on the 3rd LL), and later cancelled any short bias after a symmetrical triangle formed on the 1min chart, and broke to the upside (I was wrong !)

Missed again an aggressive entry on the next leg down, and finally entered short just as CL was reversing ... got +7 and moved stop to BE, then as I was just about to get stopped out tried to get 2 ticks (and got them).

I then passed on a long in the 1st pullback after the long leg up from LoD (entry-error), and that was it for my trading plan for today :(
Dom that equity curve looks too good to be true so I'd be scared but hope it trades like that in real time....what became of your trading contest...? how did Chuck Huges do ? He wants me to spend almost 4 k on options recomendations