02202019 Wednesday — understanding real-time analysis

20 Feb 02202019 Wednesday — understanding real-time analysis

02202019 Wednes­day Trade Plan

Ter­mi­nol­o­gy (par­tial­ly made up by yours truly)

• PA = Price Action
• BO = Break Out
• BD = Break Down
• CAR = Con­firm As Resistance
• CAS = Con­firm As Support
• UKC = Upper Kelt­ner Channel
• LKC = Low­er Kelt­ner Channel
• TV = Tick Volume
• WPP = Week­ly Piv­ot Point
• DPP = Dai­ly Piv­ot Point
• DR = Dai­ly Resis­tance (piv­ot)
• DS = Dai­ly Sup­port (piv­ot)
• WR = Week­ly Resis­tance (piv­ot)
• WS = Week­ly Sup­port (piv­ot)
• HL = High­er Low
• HH = High­er High
• LH = Low­er High
• LL = Low­er Low
• SD = Stan­dard Deviation
• VWAP = Vol­ume Weight­ed Aver­age Price
• AS = Asian Session
• LS = Lon­don Ses­sion (EU)
• NY = New York Ses­sion (US)
• R/R = Risk to Reward
• M2M = Move to Move
• T2H = Trade to Hold
• DT = DownTrend
• UT = UpTrend
• LTF = Low­er Time Frame
• TTF = Trad­ing Time Frame
• HTF = High­er Time Frame
• Hypo = HYPOthetical

Per­son­al Checklist

5 pos­i­tive 1 negative	Sun	Mon	Tue	Wednes­day
-	2/17	2/18	2/19	2/20
Beers night before	4	0	0	0
Time bed yesterday	-	1:07	22:30	23:25
woke up	-	8:25	7:30	7:39
Hours sleep	-	7:18	9:00	8:14
Awake	-	1:11	-	1:40
REM	-	0:35	-	0:20
Light	-	4:33	-	4:57
Deep	-	0:59	-	1:17
Sleep well?	3	3	4	1
Mela­tonin	1x	1x	0	0
Neg­a­tive thoughts?	1	1	1	2
Exer­cise yester(to)day	4	4	4	4
Grat­i­tude	5	5	5	5
Joy	5	5	5	5
Anger	1	1	1	1
Fear	1	1	1	1
Focus	3	3	4	2
Cof­fees today	1TC	1TC	1TC morn­ing, 1 espres­so afternoon	1TC morn­ing, 1 espres­so afternoon
Inter­mit­tent fasting	no	yes	yes	yes
Water L	3	3	3	3
Vit­a­mins	no	no	yes	yes
Cig­a­rettes	0	4	4	0

Health review (for the past week)

• Week­ly goal
  • Do morn­ing workout
  • Inter­mit­tent fast­ing the whole week with one extra meal on the weekend
  • Rule of 4
• How do you feel?
  • For some rea­son I didn’t sleep well. Very light and not much REM sleep. I don’t feel as sharp and pow­er­ful I felt yes­ter­day although not my worst either. It could be that the cul­prit was drink­ing 1 TC and 1 espres­so after hav­ing slept enough. I feel after get­ting enough sleep I can han­dle less caf­feine and would need to lim­it intake more. Anoth­er clue to this is that yes­ter­day my thoughts were rac­ing a bit and talk­ing fast is anoth­er red flag. This is some­thing I recent­ly noticed so I will keep an eye on this in the future.
• How would you rate it (1–5)?
  • 2
    • Be care­ful today

The Big Pic­ture (dai­ly)

• What hap­pened yes­ter­day? Where are the tech­ni­cal levels?
  • Dur­ing the AS we dropped from LIS to Prev Low and then slow­ly made our way up to the excess are around 56.45 till LS opened and brought us back down to LIS area around 56.30
  • We then spend the rest of the ses­sion trad­ing in a range of .20 to .60. An ear­ly clue to this was the widen­ing KC. PA kept revers­ing at the LKC/UKC
    • Could rang­ing and KC attrib­ut­es be relat­ed to val­ue, excess and LIS areas being so close to each oth­er? I’ll keep an eye on this.
  • Dur­ing NY we dropped hard to 55.70 lev­el which I indi­cat­ed as a pos­si­ble HTF PB lev­el before. We then chopped back up to pre­vi­ous excess area lev­el to set­tle around LIS area again

Intra­day Fundamentals

• API report
  • Com­ing out today
• EIA report
  • Com­ing out tomor­row. Fore­cast is a build of 3.100M.

Intra­day Tech­ni­cal Analysis

• HTF
  • Define con­text
    • Where were the overnight highs and lows?
      • High 56.643
      • Low 55.695
    • Where is the LIS?
      • 56.45 area
    • What didn’t hap­pen? Where do you think it should go?
      • We didn’t BD from HTF UKC but rather bounced off this lev­el as a PB con­tin­u­ing the HTF UT
      • Since the HTF UT is still in play I’ll be look­ing for signs of more buy­ing pres­sure com­ing in
    • Where’s the best R/R? Opportunities?
      • Bounce off LIS to new highs would be a good long opportunity
      • Overex­tend into 57 lev­el to roll over could be a good short­ing opportunity.
• TTF
  • Dialling in on opportunities
    • Where are the areas of estab­lished “val­ue” and “excess”?
      • Excess 56.50 area 
      • Val­ue 56.20 area 
    • Is there a shift in value/excess migra­tion? What is the cur­rent mar­ket con­di­tion? Are we trend­ing, balancing/range bound? Where are we in the trend range axis?
      • The lev­els have most­ly remained around the same areas how­ev­er the LIS shift­ed a lit­tle high­er. Could this be the pre­lude to a (failed) BO on the HTF?
    • What trade loca­tions among this struc­ture would l like to get involved in that will offer me the best R/R opportunities?
      • Hold LIS as sup­port into new highs 
      • BD from LIS to overex­tend into Excess area per­haps even prev low to reverse and catch a long back up. TTF range bound trading.
• LTF
  • What has the Asian Ses­sion printed?
    • We dropped to val­ue area and held as sup­port and slow­ly moved to LIS and BO in and over the Excess area and Prev High to then reverse into LIS. Let’s see if we can hold this level. 

Trade Idea

• Hypo 1 Short
  • BD from LIS overex­tend into val­ue area (pos­si­ble rever­sal long around val­ue area)
    • Entry around 56.40
    • PT around 56.25
    • Stretched PT 56 area
• Hypo 2 Long
  • Hold LIS as sup­port into (pos­si­bly failed) BO from Prev High
    • Entry around 56.60
    • PT 56.75
    • Stretched PT around 57.30
• Hypo 3 Short
  • Overex­tend over prev high into roll over back down to LIS area
    • Entry around 56.75 area
    • PT 56.50
    • Stretched PT around .40, .30

My goals for the day (Dai­ly Report Card)

• Define win­ning
  • Per­form well by EXECUTING only 4 play­book setups and be hap­py by doing what I love and under­stand­ing that I give myself over to the ran­dom­ness of the market

Read­ing the Tape

• What is printing? 
  • 16:05
    • Just before the open I saw that we made a bear­ish can­dle just below prev high on the TTF so stalked a pos­si­ble quick short entry on the LTF and wait­ed for PA to hit close to prev high, which it did, but I missed the entry and I stayed out because of not good R/R. I’m gonna be a lit­tle bit more care­ful today since my prep work showed that I don’t have much clar­i­ty on the mar­ket today. 
  • 16:35
    • Still not much clar­i­ty in the mar­ket. LTF is show­ing long can­dles with­out real­ly mak­ing a move. Going to wait for a poten­tial drop to LIS (HYPO2) and stalk a long. Which could be the start of range­bound trad­ing because KC is look­ing to widen, VWAP look­ing to tight­en and HYPO2 would be a range­bound trad­ing set­up which I will try to trade. LTF KC/200MA TTF 50MA in LIS area which could con­firm sup­port around that area.
  • 17:05
    • PA dropped to LTF LKC and I went long accord­ing to my range bound the­sis but that dropped fur­ther than I had thought and I got stopped out. It looked to fol­low through on the BD and I went short (accord­ing to HYPO1) after a small PB which still looks to be valid. 
  • 17:35
    • 2nd trade short accord­ing to HYPO1 I closed in prof­it. Per­haps too soon. Gonna stall a PB and get in short again although I don’t like this much inde­ci­sion here but should push myself to take some risk and believe in the con­text I set up.
  • 18:05
    • I feel that PA is very slug­gish and moves aren’t hap­pen­ing as fast as I’m ‘used to’ so I feel a lit­tle bit anx­ious to cov­er quick­ly. We haven’t real­ly cleared the LIS are yet and BD isn’t con­firmed yet. Although I am look­ing for that extend­ed drop into val­ue area where I can stalk for a long opportunity. 
    • Added 3rd trade but cov­ered quick­ly again due to no real fol­low-through on moves. Not much con­vic­tion in the mar­ket today.
    • We seem to be breach­ing LTF LKC to the upside now so I’d be look­ing for LIS to per­haps hold as resis­tance. If it holds as resis­tance I might stalk that short into Val­ue area again but there seems to be very lit­tle con­vic­tion here. Per­haps this gets bet­ter when we retrace up to LTF VWAP/LIS/TTF50MA area 
  • 18:35
    • We just had what wasn’t a con­vinc­ing rejec­tion of LTF VWAP and when we dropped to poten­tial­ly breach LKC I thought I had missed my oppor­tu­ni­ty to go short. Only to then see PA cross back over again and it’s look­ing to BO from LTF VWAP into LIS and poten­tial­ly beyond. If LIS holds as sup­port I’ll con­sid­er going Long into excess area poten­tial­ly prev high. If we fail and confirm/hold as resis­tance I’ll be look­ing to see how PA reacts to the val­ue area.
      • I was also think­ing that we’d go high­er here but if it would be me I would not get in at that lev­el as you men­tioned because of bad R/R.
  • 19:05
    • We failed to show fol­low-through on the BO from LTF VWAP and con­se­quent­ly dropped to val­ue area accord­ing to HYPO1. Accord­ing to HYPO1 I’ll be look­ing for signs that PA is overex­tend­ed to stalk a poten­tial long for the rever­sal back into LIS. How­ev­er, the bears might not be done yet and we might see a con­tin­u­a­tion to this move so I will stay flex­i­ble and be on the look­out for a poten­tial PB con­tin­u­a­tion trade. 
    • Although, since I will be dis­cussing my mar­ket analy­sis with a fel­low trad­er I might not actu­al­ly take a trade.

Trade Man­age­ment

Explain what trade you put on (include price, SL, TP) and what your thoughts are dur­ing the trade

• T1
  • Why? What do I see?
    • TTF
      • Where are we as opposed to the val­ue, excess and LIS areas? What tech­ni­cal lev­el are we at?
        • TTF 50MA and LIS area
    • LTF
      • Is LTF confirming?
        • LTF KC showed widen­ing and thought we might have a range­bound trad­ing ses­sion again. So when PA dropped to LTF LKC I imme­di­ate­ly went long. 
      • What risk am I going to put on?
        • 15% of intra­day loss
      • Entry: 56.491
  • SL
    • 56.40
  • TP
    • 56.665
  • Trade Man­age­ment
    • Cov­ered at a loss at 56.371 on signs of con­tin­u­a­tion to the move. What I did wrong here was over­look the fact that VWAP was in a squeeze and KC was widen­ing when the momen­tum move to LKC hap­pened. This is what I call a KC/VBWAP diver­gence and could sig­nal a new trend in the direc­tion of the momen­tum move. This is some­thing I will need to back­test more to get a bet­ter feel­ing for it. How­ev­er, I do feel good about tak­ing a risk and tak­ing the oppor­tu­ni­ty to prac­tice being a lit­tle bit more bold. Not care­less, but bold. 
      • Loss 12 ticks

• T2
  • Why? What do I see?
    • TTF
      • Where are we as opposed to the val­ue, excess and LIS areas? What tech­ni­cal lev­el are we at?
        • Just below TTF 50MA/LIS
    • LTF
      • Is LTF confirming?
        • PA made PB to LKC and failed to show any real push back so went short on the PB
      • What risk am I going to put on?
        • 15%
      • Entry: 56.436
  • SL
    • 56.522
  • TP
    • 56.180
  • Trade Man­age­ment
    • I want­ed to cov­er around .25 but I cov­ered at .33 after it took way longer for the mar­ket to make its move. I was think­ing to scratch and just go flat and wait for a bet­ter oppor­tu­ni­ty so when we dropped to this lev­el I took it.
      • Win 10.8 ticks

• T3
  • Why? What do I see?
    • TTF
      • Where are we as opposed to the val­ue, excess and LIS areas? What tech­ni­cal lev­el are we at?
        • PB to TTF 50MA/LIS
    • LTF
      • Is LTF confirming?
        • PB to LKC and PA didn’t breach it so thought short term DT is still valid and I went short
      • What risk am I going to put on?
        • 10% of intra­day loss a bit tighter than usual.
      • Entry: 56.361
  • SL
    • 56.44
  • TP
    • 56.20
  • Trade Man­age­ment
    • Cov­ered at 56.315 because PA was being so slug­gish and was again look­ing to just scratch the posi­tion but then when it dropped to pre­vi­ous can­dle low I took it. 
      • Win 4.6 ticks

Trade Review

• P/L for the day

-	Open Time	Type	Size	Item	Price	S / L	T / P	Close Time	Price	P/L ticks	Dura­tion
T3	2019.02.20 11:38:53	sell	2	wti	56.361	56.529	56.199	2019.02.20 11:54:10	56.315	4.60	00:15:17
T2	2019.02.20 10:57:29	sell	2	wti	56.436	56.522	56.18	2019.02.20 11:24:16	56.328	10.80	00:26:47
T1	2019.02.20 10:51:15	buy	2	wti	56.491	56.323	56.665	2019.02.20 10:55:18	56.371	-12.00	00:04:03
-	-	-	-	-	-	-	-	-	-	3.40	-

Dai­ly Report Card

Date:	2/20/2019	Week­ly Goal	Exe­cute only 4 play­book trades
PNL (%)	0.06%
Com­bined Score	88
Process Report Card (10 each)	Per­for­mance Report Card (10 each)
10	Pre-mar­ket routines	8	Hypos
9	Ses­sion PECS	8	Real-time analy­sis
9	Trad­ing the process	8	Trade selec­tion
10	Dai­ly review	9	Trade Exe­cu­tion & Mgmt.
10	Progress toward Week­ly goal	7	Risk Adjust­ed Returns
48	Total	40

Trade Idea

• Hypo 1 Short
  • BD from LIS overex­tend into val­ue area (pos­si­ble rever­sal long around val­ue area)
    • Entry around 56.40
    • PT around 56.25
    • Stretched PT 56 area
• Hypo 2 Long
  • Hold LIS as sup­port into (pos­si­bly failed) BO from Prev High
    • Entry around 56.60
    • PT 56.75
    • Stretched PT around 57.30
• Hypo 3 Short
  • Overex­tend over prev high into roll over back down to LIS area
    • Entry around 56.75 area
    • PT 56.50
    • Stretched PT around .40, .30

• Week­ly Goal
  • Per­form well by EXECUTING only 4 play­book setups and be hap­py by doing what I love and under­stand­ing that I give myself over to the ran­dom­ness of the market
• Review
  • I feel I did very well today. After the open I was stalk­ing a short but because of less­er clar­i­ty in com­ing up with HYPOs dur­ing mar­ket prep I felt a bit hes­i­tant. This com­bined with long bars up and down in a clus­ter (ask me what I mean by that) I find that there’s some­thing going on in the mar­ket and usu­al­ly I like to stay out of it. So that’s what I did. 
  • I noticed KC widen­ing as it did yes­ter­day and thought we would be in for anoth­er range bound trad­ing ses­sion so I set my sights on tak­ing this set­up (that I didn’t do yes­ter­day because of lack of expe­ri­ence with it). I timed it right, but then got stopped out quick­ly after but I had put my stop very wide because of a poten­tial rota­tion back up that would have giv­en me a good R/R. I had failed to notice the KC VWAP diver­gence as part of this par­tic­u­lar set­up. This par­tic­u­lar set­up is more prob­a­ble to see con­tin­u­a­tion to the move and that’s what hap­pened. Right after my 1st get­ting stopped out I wait­ed for the PB and got in short. I did well to shift gears here based on real-time analysis.
  • 2nd and 3rd I cut quick­ly because PA was feel­ing very slug­gish and there was not much fol­low-through on the moves only to see lat­er my HYPO1 play­ing out to a tee which would have been a over­all oppor­tu­ni­ty and I could have been well in the mon­ey instead of just break­ing even. 
    • Addi­tion­al: I sched­uled a meet­ing to dis­cuss mar­ket notes with a fel­low trad­er so I quit ear­li­er than I usu­al­ly do
  • What did I do wrong?
    • Besides fail­ing to notice the diver­gence ear­ly on (I’m not skilled yet in this par­tic­u­lar set­up) I did well ear­ly on to trade what I saw in real-time. Then when we crossed LTF VWAP but there was a lack of buy­ers at this lev­el I failed to go short again here and missed a good drop.
      • How will I improve?
        • I will back­test this par­tic­u­lar set­up to grow more con­fi­dent in it
• How accu­rate was my assess­ment of mar­ket context?
  • HYPO1 90%
• How well did I man­age my phys­i­cal, emo­tion­al and cog­ni­tive states?
  • I did well here as well even though I was con­cerned because of lack of a good night’s rest. The mar­ket analy­sis exer­cise I’m doing with a fel­low trad­er is help­ful in this regard since I am at key time points focussing and assess­ing the mar­ket in what I think is less clut­tered (if that makes any sense)
• What’s one thing you learned today?
  • I learned that the trad­ing rules I was apply­ing before fall with­in the con­text of mar­ket pro­file and auc­tion the­o­ry but I was miss­ing a sense of syn­er­gy with the con­text (again… if that makes sense:) )
• What’s one thing I need to do more often?
  • Fol­low my HYPOs! I spend much time com­ing up with them so it’s ridicu­lous if I would dis­re­gard them think­ing I could trade in the moment by wing­ing it. 
• What’s one thing I need to do less often?
  • Hes­i­tate on read­ing price behav­iour. My job is to posi­tion myself in high­er prob­a­bil­i­ty areas, not to be right. This goes back to back­test­ing the setup.

Feed­back?

Any ques­tions or feed­back you might have please feel free to leave a com­ment or con­tact me directly.