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Looking for shorts..

down to 1465 and 1456 this week...perhaps monday.....
Exited All short ES 1467.25 +8
It’s probably more important to analyze how a trading method losses money. I’ve been waiting since I started posting my trades in real time for a day like yesterday. A losing day for me. A trend day. You may recall the key number “ window” that I mentioned in a prior post. These are centered around key numbers like the 00, 50 number. Do they have significance with the 25 and 75 numbers? Yes, but it is not as accurate.

Ok Yesterday we had the 1450 number and the plus and minus 2.5 and 5 point numbers on both sides of that. The theory being that they will use the window as resistance until we go 5 points above the key number with some volume. Then the market should rally further to the upside.

I think anyone who tells you they can consistently pick tops or bottoms is a liar. I average into trades and with sound money management this is ok to do. My first trade campaign started in the overnight with a short in the 1442 area.( 3 contracts..overnight initiation ).then I added at 1447.50 with 6 contracts( Hint : Key number), and then the last add-on went at 1452.50..( key number) with 6 contracts. I covered all of those at 1447.75….I never have more then 24 contracts “working” as I am just a small player in a big pool. I aim for consistency and don’t get greedy…I never add in a 4th time and I always trade SMALLER after a losing trade. I don’t trade to “get even” and feel that if I am “off” for the day there is no sense trading with bigger size. I look at this as entering in to the market in waves. Three times if needed.

Sometimes it’s only wave 1 and no add-ons. Sometimes it’s two waves ( one to initiate and one add-on) then the wave two add-ons usually have wave one entry price as a target etc…

So my second campaign of yesterday lost money. I was in on a wave one and then added. I never added a third time as I knew I was “off” for the day and odds would favor me screwing up…lol. I shorted 57.75 and 59.25..I thought the market would test down and it never did. When I saw the market not even able to retrace to the 1455 ( key number of 1450 plus 5) after it was broken to upside I pulled up stop and was taken out at 1461.25.

Obviously position sizing can and is very important. I seem to favor a 1,2,2 relation so if I put 4contracts on in wave one then I will add 8 in wave two and 8 in wave three. Wave three is sometimes the most uncomfortable place to be in but also the most profitable. I do not have a fixed amount of points the market will move against me between each wave.

Here is a chart with part of the “window”. Notice how once we broke the 1455, the market kept going. It couldn’t even come back down to test the 1455. So ends my “real time” postings. From here on they will be after the fact but I was really more concerned with the educational value most of the time anyway.

These trend days are cool but I can’t trade for them. Some amateurs will look at a day like that and say “from now on I’m holding my trades for a long time”. To me that’s the wrong way to day trade but I guess there are some that make the majority of their money on the 2-3 days that we really trend. It just doesn’t work for me. I hope these posts gave some insight into what I look at as someone who tends to "fade" market moves.


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Excellent trading pt and thanks for that great explanation Bruce!