Final Post of 2009

Many are taking time this week to reflect on the past year and to set goals for the upcoming year.

I have never done well with listing out goals or even physically writing down my trading plan.

It is not that I do not have a plan or set goals for myself to achieve.

The fact is that I am in a constant state of reflection and goal setting. Every single day.

It is all in my head and it never shuts off. This makes it difficult for me to live what most consider a "normal" lifestyle.

My life is my fight to be a better trader and accomplish what I set out to accomplish.

This will not change until I get where I am going.

As for reflecting on 2009, it was a year that challenged me more than I could have ever imagined.

I have had several crushing defeats over the past year as well as some major victories.

It is hard to measure success this early in a trading career because gains can be lost and ability can be turned into unlimited wealth.

I have either given up or lost almost everything while pursuing my passion of trading. Friends, family, relationships, assets, stability, and so on.

My trading journey has led me to move half way across the country and start over in new area for the second time in my life.

I have ended old relationships as well as began new ones.

This may seem like a dark post (trading can put you in a dark place sometimes), however, this is what it takes to make it in this business.

Anything less will not cut it. I hope everybody understands that. It was not made clear to me until I met a real trader face to face.

I am going to leave this year feeling stronger than ever and confident that I will do great things in the upcoming months.

As ambitious as I am, probably more than I could have imagined just one year ago.

The one thing that is common amongst all successful traders I have met, which is not many, is that they have all overcome great adversity.

Specifically, they have all had at least one devastating blow (most have had several) in their career that was a defining moment and they were able to work through it and move on.

I have had some moments this year, while onscreen or at the end of the day, that were indescribably awful.

I wish I could explain but those who have not had these moments will not understand and those of you reading who have know exactly what I am talking about.

It is through this process that one becomes a real trader. You will not be a trader without it.

I feel that through all the hard work and sacrifices that I have made this year I have forged a great skill that can never be taken from me.

I have something that is extremely rare and powerful that has grown along with me over the past number of months. It can either allow me to earn everything I have ever wanted or ruin me.

I have had it for some time but am just now starting to apply it properly. My success in the upcoming year will be determined by how I apply my skill and how much perseverance I have. Period.

I am going to make it or fight until the end.

So I consider this year a great success because I will close out the year understanding exactly what I am doing and where I am going.

I still have a long way to go. Further than where I have come from.

December 30 2009 Prep Overlay and Commentary

No trades today. I was willing to execute had I seen a good opportunity.

I am working on some commentary. I want to discuss strategy a bit.

Check for posts over the next few days.

December 30 2009 ES Prep Posted

Good morning. Prep posted. Mid range today. A little better chance of a move but be cautious if tempo is complete grind after open.

December 29 2009 Overlay and Commentary

Another day of low volume grind as anticipated today. The volume of visits here has been very high in the past week. I wish there was more to comment on.

One thing that is notable to me is how accurate the visualization has been. I am going to work on focusing more on executing my visualization and trading my convictions when the market wakes up next week.

I think it is time. I believe my idea of trading was too restricted and mechanized from early on because I originally started out as a scalper using indicators.

I thought that was all that trading was. This made me think a good setup had to "qualify" and questionable trades had to be "filtered."

While consistency is important, it is not all about the prefect looking pattern. Trades come in all different shapes and sizes and the best trades usually do not look like anything at all.

If the market is showing too much of itself, it will quickly be put back in line by the participants.

I guess I am trying to say that conviction and premise are far more important than mechanical rules and thresholds if you understand how the structure works.

I think one of my biggest failures this year was not betting on my convictions often enough and allowing myself to get stopped out of trades that I knew where good (or not re-entering after a stop out).

This is a because I tend to focus on numbers and not concepts. A trade is a bet and it does not care if you only want to loose 2.5 points instead of 3.

While I have moved to a much tighter risk management style this year, I must also be willing to bet on my convictions often even after being stopped out once or twice.

I will discuss this topic more later this week.

December 29 2009 ES Prep Posted

Good morning. See comments on prep.

December 23 2009 Prep Overlay and Commentary

I had a good feel for what the market would do today and made a very accurate visualization on the prep.

I did not have any trades. There was nothing for me to do even though I had the premise correct.

We may see this type of action for the remainder of the year. I have a feeling there will be one surprise move but it will likely be costly to catch via many attempts in this ugly grind.

I suspect what is happening is that big market participants want to close out their books on a high so there is little chance of significant selling.

It is interesting because the blog is getting a very high level of traffic this week. More than on a busy trading week. I suspect everybody is bored do to slow price action and surfing the web more.

I wish I had more to comment on but absolutely nothing happened today. I will be onscreen tomorrow but will likely have no trades.

I could see the grind today after observing the tempo for 10 seconds after the open. If tomorrow goes the same way I will pack up by 11:00 AM EST.

December 23 2009 ES Prep Posted

Good morning. Premium setups only for me today. See comments on prep.

December 22 2009 Overlay, Trades. and Commentary

I posted overlays from the past two days above along with today's trades. Visualization from yesterday did not play out as the market did not test inside support prior to moving up but the zones were excellent as they often are.

My trading in the past 2 weeks has been a little random due to the slow action and randomness always leads to a draw down for me.

I have been asking a lot of this end of year market by playing for breakouts of tight ranges. Maybe too much. However, I can not ignore the fact that all of my attempts have been at key areas with very large risk/reward.

There was an excellent long right at the open yesterday. Very tight micro congestion sitting on a major resistance zone. I was distracted and not onscreen due my schedule Monday morning.

This was a mistake because it was the probably the best setup we will see this week. There was an opportunity to hit it with a 1.5 point stop.

It would have been hard to exit with less than 7 points according to my plan. This is were randomness can do damage.

I was ready to execute today and the setup did not work out. It was a good short attempt. Had the trade worked, it would have been good for 4 points with a kicker for a potential major selloff.

I lost 3.5 points on the bet. It was a good trade.

The only thing for me to contemplate about my trading right now is should I be trading in this grinding mess of a market.

There is less liquidity and tight ranges which makes entries much more prone to get stopped out. There is absolutely no flow of things.

However, I want to engage. I do not care how difficult it is. I need to hit my setups. Period. I am not going to get in the habit of standing aside because I think trading will be tough.

This will lead to further questioning of setups when the market goes back to normal in a couple weeks.

So I am going to press on and yuck it up if I have to. I am in the midst of one of the worst 20 trade samples I have in a while. The the impact is much lower because my average loss is less than half what it used to be.

I am not surprised by this in this type of price action.

It is not phasing me one bit this time around because I know what I am capable of now. If I do indeed have a losing streak I will come back and make a new equity high as long as I keep pressing.

I will be trading my AM setup tomorrow and Thursday as well as Mon-Wed of next week. My only goal for these days is to hit the setup win or lose.

December 22 2009 ES Prep Posted

Good morning. See comments on prep.

December 21 2009 ES Prep Posted

Good morning. See comments on prep.

December 18 2009 Overlay and Commentary

I had a good read on the market this morning. The visualization arrows were spot on.

The price action has been very slow and grinding for the past 2 weeks which has made conditions for trading tougher than usual.

I have noticed this week that often after getting a setup, the price will oscillate between the recent highs and lows of the past 30 minutes and often extend both ends prior to making it's move.

This seems like probing for stops in a less liquid market than usual.

It has led to 3 extreme tick stop outs for me this week. Many of my usual winning trades have been getting 3-5 point excursions and coming back for a break even.

I have not made the proper adjustments to the tighter trading of the past couple weeks. As a result I have been hitting my usual losers and not taking the profits on many of my winners.

Conditions like this require wider stops and quicker profit targets and that is the opposite of how I like to trade.

I have entered a modest draw in equity this week but am still up for the month of December.

I am not sure that I want to make any adjustments in times like this. I believe my plan is solid and that the edge will prevail over a large sample.

I am going to continue to post preps and overlays from now until the end the year but the commentary may be lighter than usual due to the slower market conditions.

I will supplement with some trade videos and maybe some technical analysis in attempt to keep things interesting.

December 18 2009 ES Prep Posted

Good morning. See comments on prep.

December 17 2009 ES Prep Posted

Good morning. The significant moves continue to happen in the Globex session. See comments on prep.

December 16 Prep Overlay and Commentary

I was off screen for most of the day and did not have any trades.

The market has been extremely tight for the past couple weeks. It is unusual to see such a lack of movement around a major high.

I am anticipating a major washout above the current price prior to the market selling off.

It will be interesting to see if the price hangs around this area until January.

I suspect that there are many market participants such as large funds trying to prop up the price so they can close out the year strong. I find this ridiculous.

There is probably a lot of liquidity above the market in the form of stop orders from those who are short. I would expect the price to be drawn towards these orders in attempt to wash them out.

In the mean time I will just trade what I see intra day.

December 16 2009 ES Prep Posted

Good morning. See comments.

December 15 2009 Overlay, Trades, and Commentary

CLICK HERE FOR HD VIDEO COMMENTARY AND TRADE REVIEW 7.5 MINUTES

I had an excellent read this morning and traded in the right direction but did not get the outcome I was looking for.

I had a rare back-to-back extreme low tick stop out sequence on my two long attempts this morning.

There is not too much I could havc done about it. I knew the action would be tough as it has been the past couple weeks but am not going to start avoiding setups.

My plan has evolved to a point that when I lose it is going to be due to a contraction, channel, or deep washout occuring after I enter.

Managing my trades tighter is going to lead to occasional misses like today. It is a fair trade off.

I did a video to review today's trades.

Tomorrow is Fed day so there should be a good AM move then a grind until the announcement.

December 15 2009 ES Prep Posted

Good morning. See comments.

December 14 Overlay, Trades, and Commentary

This post will go in the key posts section.

Very tight contraction at the highs today. We had the 1105.00 inside support identified in the prep today.

I also had a caution in the prep comments for a contraction and sideways market 1105.00 - 1110.25.

Even though I was prepping for a potential contraction, my play in this type of scenario is to initiate mid range positions and hold for a breakout.

I have found that I can get high probability very low risk entries mid range if the price has just reversed off a zone.

I have developed a couple specific entries that work very well for this. Up until a couple months ago, I completely avoided the mid-range action.

I have discovered that there is an efficient way to play the middle 50% of the range. The top and bottom zones each have 25% and there is a middle 50%.

When you get stopped out buying support or selling resistance, it is because a level does not hold.

When you get stopped out in the middle 50%, provided you know how to execute the area, it is because the market contracts or forms a channel. There is no area to hold or fail.

Therefore, if I enter correctly, the only thing that will clip me out of the trade is a contraction or channel forming.

With my knowledge of structure, I can quantify when there will or will not be a channel or contraction most of the time.

This provides me with an edge mid-range that I did not have before.

I call these trades mid-range inside breakout trades and I have taken quite a few of them lately.

They could probably be efficiently scalped but I hold for the range breakout which is a lower probability event. It is lower probability but high payoff.

I prefer the higher payoffs over larger samples because it allows me to make fewer decisions thus less room for error.

I had two break evens today. Both had decent excursions but not what I was looking for.

I did everything I could. My goal is to put my self in position to be in the trade when the market opens up. That was what I accomplished today.

Overnight Moves:

I just wanted to mention that for the past week or so that the major moves have happened in the European session.

We have been seeing intra-day contractions followed by overnight breakouts.

This evening is another example of this. There was a contraction today with inside support so I will be looking for another overnight extension to the upside.

Being able to recognize this type of structure can save you multiple intra-day stop outs in a contraction.

December 14 2009 ES Prep posted

Goog morning. See comments.

December 11 2009 Weekly Commentary

CHECK OUT THE 3 VIDEOS POSTED EARLIER IN THE WEEK IF YOU HAVE NOT ALREADY

There is no overlay today because I did not fully complete my prep work this morning due to Ninja Trader data issues.

I was going to write about how ridiculous it is but it is just simply not worth the energy. I have talking about this problem for 2.5 years and still no resolution.

I did not have any trades today. I was ready to execute had there been some action but could not get excited about the tight range that formed.

It was a fairly slow trading week for me. I believe that I did everything I could. My goal is to put myself in position to hit the big moves that I am able to project and I did that.

Also, I stayed away when there would be no significant move. My strategy has been very precise ans well executed.

I am higher in equity than when I started this week.

I only took very premium entries that had the opportunity to open up to be big winners. Sure there were smaller opportunities but I am of the mindset recently that it makes no sense to risk 2 or 3 points to make 2-4 when I can wait for a premium setup and risk the same amount to make 10-15.

I am leaning towards making bigger bets on premium trades rather than many smaller bets on trades with various winning percentages.

If want to take more trades I can and I will.

Some need to trade for the sake of being active and that is OK. If I add up all my trades that are questionable or "not premium" based on my current standards I think the PNL would be break even at best.

I am up over 36 points in the past 6 weeks on my one-entry and one-exit trades tracked on this blog with a max draw down of 5 points and less the 2 points in the past 3 weeks.

I will take those stats. It is ok if I am only seeing one premium entry most days and none at all some days.

I think I am naturally filtering out all the noise in the market and hitting what I feel is right. It is working and that is a milestone.

This is the level of trading that I have been working towards and now the hard part will be maintaining and improving on it.

December 11 2009 ES Prep Delayed

Good morning. I am having the usual quarterly data issues with Ninja Trader due to the contract rollover.

I will not be able to post the prep in time for the open.

Please contact Ninja Trader and Zen Fire and tell them to wise up and get a continuous contract. It seems like a very simple concept and a basic necessity of a trading platform and data feed.

December 10 2009 Overlay and Commentary

The market made its move in the European session and there was not much to do in the day session.

I did not have any trades today.

We got the extension of 1097.25 the was projected in last night's video.

After observing the structure just after the open today, it was too late for me to initiate longs. I like to execute near the origination point of the move.

I will take later sequence setups but need more room to work with. The price was only 4 points away from overhead resistance.

I will be looking for a test of 1010.50 or the high of 1115.25 overnight and tomorrow. This will be a premium area to fade the market with minimal confirmation.

The risk reward will be very significant. There must be an appropriate setup because many others will have the same idea.

I have said before when everybody is thinking the same thing the market will do the opposite.

December 10 2009 ES Prep Posted

Good morning. See comments on prep.

December 9 2009 Overlay, Trades, and VIDEO Commentary

CLICK HERE FOR 17 MIN VIDEO COMMENTARY ON PREP AND TODAY'S TRADE IN HD

I had another single trade day today. This is acceptable to me as long as I am taking the most premium setups.

I have basically been in scalping mode the past couple days. I like to hold my trades but need to get in optimal position to do that and have not had the premium entries this week.

It is good to put points on the board however.

We had an awesome trade on Friday which is a good example of executing in optimal position.

Stats are fairly ridiculous in the past week and a half and I am up 16 points Friday through today on just 4 trades.

I did another video post today. There was a comment posted about the prep and I also received a few e-mails.

I would like to encourage everybody to leave comments whether they are positive or negative. There are thousands of visits here but few comments.

The first part of the video explains my thought process during the prep and has some good insight into how I read the structure.

Video is 17 minutes tonight.

December 9 2009 ES Prep Posted

Good morning. Complex prep this morning.

December 8 2009 Overlay, Trades, and VIDEO Commentary

CLICK HERE FOR 6 MIN HD VIDEO OF TODAY'S SHORT TRADE WITH COMMENTARY

Slow day for me. I caught the short just after the open that looked very promising but it hit a brick wall and I exited with a 2 point scalp.

The market then set up for some sideways oscillation. I like to trade in sideways markets but prefer it to be between a support and resistance zone.

Today's action was grinding in an extension area which is difficult to trade. I recognized that early and stood aside.

I am really focusing on just hitting the areas where my edge is very significant.

I did another video today for the rest of the post. Check out yesterdays video if you have not yet. It is well done.

Decemebr 8 2009 ES Prep Posted

Good morning. Detailed comments on prep.

December 7 2009 Overlay, Trades, Commentary, and 12 Min VIDEO

CLICK HERE FOR 12 MIN COMMENTARY AND LIVE TRADE VIDEO

**You can click the screen icon on the lower right hand corner of the Screencast screen to expand the video to FULLSCREEN mode

I had a good read on the contraction this morning and took a micro breakout long just after the open.

I knew there would only be one good shot at the long this morning so I acted decisively. My plan is to act fast while I am in position instead of reacting to what I see while out of position.

This is analogous to poker in many ways.

The trade resulted in a break even which is a good outcome for me in this type of price action.

There have been multiple requests for more videos so I did a 12 minute video explaining what I was thinking.

CLICK HERE FOR 12 MIN COMMENTARY AND LIVE TRADE VIDEO

December 7 2009 ES Prep Posted

Good morning. Detailed comments on prep.

December 4 Overlay, Trades, and Commentary

CLICK HERE FOR TODAY'S 12 POINT SHORT TRADE IN HD 2 MIN 38 SEC VIDEO

Very interesting day today.

I did the prep at 7:30 AM EST USA prior to the big move up. I was not anticipating an extension of 1115.25. I visualized the price exhausting inside of 1115.25 if it moved up.

The zones were precise however. I give the visualization a B- today. There was no way to project what we got.

I did make an adjustment to my visualization quickly. I was pleased to see the weak extension and move back inside 1115.25 and knew what to do.

I actually detailed this exact setup in the post on December 2nd and mentioned it was one of my favorites.

I did not sell it blind. Instead I took what I call a micro inside breakout entry. The breakout had not occurred at the major low pivot in the local area but inside the pivot.

The reason for this is simply to have very limited risk in the trade. The premise is if the inside micro pivot breaks there is a high likelihood that the main pivot everybody else sees will as well.

It was not an easy entry because the price congested for 40 minutes after I entered. The setup was clear and the attempt was worth multiple losses if needed.

Had I been stopped out I could have re-entered on the more major breakout. This has proven to be a very efficient way to manage risk for me.

I acheived 6 to 1 on my bet.

I had a very light trading week to do to my schedule this week and managed to execute well. I was up more this week in 1/3 the screentime than I have been in the previous 2 weeks.

You can not really hang too much on one 1 week's performance or a few good trades other than it was a good showing.

Coming in on a Friday of a light trading week and hitting a 12 point one-entry and one-exit trade is much like a pinch hit home run.

I have been saying for months that I have been reading the market exceptionally well and the execution has caught up.

I must keep pressing.

Video Of Short Today

I caught the short off the highs and had a good run. There was a similar setup of the high yesterday.

I just caught the end of the trade but it is a good video. 2 Min 38 Seconds.

I left a little on the table at the end but still got 12 points.

CLICK HERE FOR VIDEO OF TODAY'S SHORT TRADE

December 4 2009 ES Prep Posted

Good morning. Detailed comments on prep.

December 3 2009 Overlay and Commentary

Read was good this morning. I have been doing the prep earlier than usual.

I thought this would be problematic because the market really shows it's hand between 8:00 AM EST - 9:00 AM EST.

The prep has actually been even more detailed because I am forced to speculate a bit based on the structure. This causes more thought and visualization and thus more accurate of a read.

The more I let the speculator in me operate the better I do it seems. When I started trading I thought is was about being right. That you could just learn the right technique and do it. This is not the case.

I do not think being right has anything to do with trading.

My struggle is with allowing myself to speculate when I am unsure but feel something is there. That is when the best trades happen.

There was a good weak extension top this morning and the price penetrated the 1105.00 area. Pretty much a vacuum down to 1083.00.

I would anticipate a significant downward correction from here but be careful because it's so obvious that there might be one more thrust up.

The prep is still in effect. Sometimes for days after it is posted.

I like my big moves to come out of nowhere and not be apparent. If the majority think something will happen it will not happen until they change their minds.

December 3 2009 ES Prep Posted

Good morning. See comments.

December 2 2009 Prep Overlay and Commentary

There was an interesting open this morning. The read on the prep was good and the shallow inside support identified held.

I was not onscreen for much of the day and had no trades today. This is going to be a very light week for me.

The price did not give a chance to buy on a pullback to inside support. It was exactly at the middle point between inside support and resistance above when the market opened.

I have seen this before and have made a couple structural observations that help guide me with exits.

The medium sized extension and failure was able to be projected after the mid range congestion that occurred from 9:30 EST - 10:00 EST.

Had the market pulled back to 1105.00 or even a bit deeper and washed out, then held and reversed, I would have expected a significant run to the upside. At least to 1120.00.

Conversely, had the market just blasted off just before the open or at the open (or opened sitting on 1112.00), I also would have expected a powerful move up.

Since the market contracted and went sideways, there was only about 6 points worth of steam built up and the price only extended to the 1115.00 area.

So there likely would have been a much more powerful run to the upside if the market had either pulled back further or not pulled back as much. The structure behaves in this manner 90% of the time.

The only premium setups I see were a long at the retest of 1112.00 at around 10:45 EST which would have been stopped out or a blind short once 1112.00 got retested and poked through to the downside after the failed extension.

One of my favorite setups is the blind short unconditionally after the break of 1112.00. It has taken me thousands of hours of live screen time to understand that I need to stick an unconfirmed order in that particular spot and let it run.

I will make a video of this next time it occurs.

There is quite a bit in the previous statements if you can follow.

There were two correct trades there but only one winning outcome. Some call it a coin flip but it is much more than that. I wish it was a coin flip. It's easier to be consistent with a coin flip.

When you introduce a stop and a target/break even mechanism into a setup, the probability is that you lose or go break even in either direction most of the time unless you make a discretionary decision.

Having discretion without randomness is the same type of skill that a professional athlete performing at the highest levels has.

You will not find this in somebody's chat room or indicator package.

It is grown from within you after lots of hardship.

December 2 2009 ES Prep Posted

Good morning. See comments on prep.

December 1 2009 Prep Overlay and Light Commentary

I posted the prep extra early this morning. The read was pretty good. Price did not come all the way back to my inside support zone but inside support did form.

I mentioned this scenario in the prep this morning and made a projection which played out correctly. Now looking for shallow inside support just off the 1112.00 area and a potential overnight extension of 1112.00.

I have marked this on the prep overlay.

I did not take any trades today. This week will be a light trading week for me so I will mostly be posting preps, overlays, and light commentary.

Postings and videos will resume on the normal schedule soon.

I am working on producing some more commentary videos.

I would like to start discussing nuances and observations more frequently. I think this exchange can be helpful.

December 1 2009 ES Prep Posted

Good morning. See comments on prep.