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12192018 Trade Plan — Range Bound Trading

Daily Report Card

12192018 Trade Plan — Range Bound Trading

12192018 Trade Plan — Range Bound Trading

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)

Per­son­al Checklist

5 pos­i­tive 1 negativeSat­ur­daySun­dayMon­dayTues­dayWednes­day
Beers night before83352
Hours sleep777.56+18.5
Sleep well?33222
Neg­a­tive thoughts?21121
Exer­cise yester(to)day11111
Cof­fees today1 cof­feehalf a cup of coffee1 espres­so spread over 2 hours01 espres­so real quick
Inter­mit­tent fastingnonoyesnono
Water 2.2L bottles11222
Time bed yesterday03:0000:3000:3003:00

Health review (for the past week)

  • How would you describe your over­all health?
    • My arm is hurt­ing a bit again and I have still not made a doctor’s appoint­ment. I’ll do that today. 
    • I have also not made an appoint­ment for a gen­er­al checkup. 
  • How do you feel?
    • I feel good but feel not as sharp. Feel a bit grog­gy is the term I believe. Just not sharp for when you’ve slept too much. Actu­al­ly, I didn’t sleep that much but took a sleep­ing pill last night to be able to sleep so that could be it. 
  • How would you rate it (1–5)?
    • 3

The Big Pic­ture (dai­ly)

  • What hap­pened yesterday?
    • After a peri­od of VWAP expan­sion on the dai­ly we tight­ened last week and last Mon­day we made a move to the 2.0 SD
    • Yes­ter­day we dropped even fur­ther out­side of the 2.0SD and crossed the 47.50 lev­el and the VWAP start­ed expand­ing again
      • Which could mean that we are in for a new down trend
    • It seems that the mar­ket doesn’t agree with oil pro­duc­tion cuts made by OPEC+ and the mar­ket is still in state of a sur­plus in supply
  • What is the mar­ket sentiment?
    • What does the crowd think?
      • Accord­ing to yesterday
        • All sen­ti­ments is 61% bullish
        • Last week 68% bullish
        • Last 3 days 68% bullish
        • Although sen­ti­ment has increased in bull­ish­ness I believe the bears will have their day in the sun first before the bulls can take over
      • Accord­ing to today
        • All sen­ti­ments is 60% bullish
        • Last week 63% bullish
        • Last 3 days 61% bullish
        • The sen­ti­ment shows a decrease in bull­ish­ness and com­pared to yes­ter­day we see a drop of 1 point over­all, drop 5 points on last week and 7 points in the last 3 days. That’s seems like a big shift in sen­ti­ment and the price reflects this
    • Yesterday’s range
      • High 1.14016
      • Low 1.13380
    • Accord­ing to IG
      • EURUSD: Retail trad­er data shows 58.1% of traders are net-long with the ratio of traders long to short at 1.39 to 1. In fact, traders have remained net-long since Nov 23 when EURUSD trad­ed near 1.1388; price has moved 0.2% low­er since then. The num­ber of traders net-long is 4.5% high­er than yes­ter­day and 10.1% low­er from last week, while the num­ber of traders net-short is 12.7% low­er than yes­ter­day and 8.7% low­er from last week.
      • We typ­i­cal­ly take a con­trar­i­an view to crowd sen­ti­ment, and the fact traders are net-long sug­gests EURUSD prices may con­tin­ue to fall. Posi­tion­ing is more net-long than yes­ter­day but less net-long from last week. The com­bi­na­tion of cur­rent sen­ti­ment and recent changes gives us a fur­ther mixed EURUSD trad­ing bias.
      • MIXED BIAS
  • Gold
    • Yesterday’s range
      • High 1250.42
      • Low 1245.24
    • Accord­ing to IG
      • Spot Gold: Retail trad­er data shows 77.7% of traders are net-long with the ratio of traders long to short at 3.49 to 1. The num­ber of traders net-long is 0.7% high­er than yes­ter­day and 5.5% high­er from last week, while the num­ber of traders net-short is 5.2% low­er than yes­ter­day and 3.1% low­er from last week.
      • We typ­i­cal­ly take a con­trar­i­an view to crowd sen­ti­ment, and the fact traders are net-long sug­gests Spot Gold prices may con­tin­ue to fall. Traders are fur­ther net-long than yes­ter­day and last week, and the com­bi­na­tion of cur­rent sen­ti­ment and recent changes gives us a stronger Spot Gold-bear­ish con­trar­i­an trad­ing bias.

Intra­day Fundamentals

  • API report
    • API report shows a build of 3.450M which would be bear­ish on the mar­ket so now the mar­ket will look at the EIA report to come out and con­firm or reject this number
  • EIA report
    • EIA report hasn’t come out yet. It will come out lat­er today.
  • Geopol­i­tics and the head­lines of today?
    • Libyan Oil In Jeop­ardy As Peace Talks Fail
      • Libya’s NOC has shocked the oil mar­ket by offi­cial­ly declar­ing force majeure on its oper­a­tions at the El Sharara oil­field, the largest oil­field in the country
      • Months of opti­mism on a peace deal between the two com­pet­ing gov­ern­ments that would increase oil pro­duc­tion, which could mit­i­gate the falling Iran­ian and Venezue­lan pro­duc­tion seems unlike­ly to happen
      • The 315.000bpd field is blocked by pro­tes­tors and mili­tias in the area
    • North Kore­an Oil Smug­glers Elude U.S. Military
    • Sur­prise Inven­to­ry Build Sends Oil Prices Even Lower
      • The Amer­i­can Petro­le­um Insti­tute (API) report­ed a sur­prise crude oil inven­to­ry build of 3.45 mil­lion bar­rels for the week end­ing Decem­ber 14, com­pared to ana­lyst expec­ta­tions that we would see a draw in crude oil inven­to­ries of 2.475 mil­lion barrels.
    • Iran Claims It Holds The Most Oil, Gas Reserves In The World
      • Accord­ing to the CIA World Fact­book with data as at Jan­u­ary 2017, Iran ranks fourth in the terms of biggest proved crude oil reserves in the world, behind Venezuela, Sau­di Ara­bia, and Cana­da. In the nat­ur­al gas proved reserves rank­ing, Iran is sec­ond behind Rus­sia and ahead of Qatar and the Unit­ed States.
    • Off­shore Drillers Bull­ish On 2019 Despite Falling Prices
      • Upstream oper­a­tors are set to sanc­tion up to 50 new large oil and gas projects next year, up from 40 in 2018, with deep­wa­ter oil devel­op­ments in Guyana and Brazil and liq­ue­fied nat­ur­al gas (LNG) projects lead­ing the way, ener­gy con­sul­tan­cy Wood Macken­zie said this week.
    • It’s Fed day
      • The expec­ta­tion is still for the Fed­er­al Open Mar­ket Com­mit­tee to raise the fed­er­al funds rate by a quar­ter point to a range of 2.25% to 2.50%.
    • Gold Ends a Touch High­er Ahead of Fed
      • — Every Fed­er­al Reserve meet­ing is impor­tant, but the cur­rent ses­sion will prob­a­bly be the most telling since the March meet­ing that decid­ed this year’s first rate hike. Con­se­quent­ly, gold traders hedged them­selves on Tues­day with a slight­ly high­er price move, await­ing the outcome.
  • Addi­tion­al OPEC news
    • None at the moment

Intra­day Tech­ni­cal Analysis

12/11/201812/12/201812/13/201812/14/20812/10 — 12/1412/17/201812/18/2018
Pip move172191.7292.2208.7291.9280.9
  • What can we tell from the PP levels?
    • We can see that we had a big­ger drop of 378 ticks than we’ve had in recent times
    • Also the PP lev­els have widened so there is room for big­ger swings to happen
    • Also, as opposed to last week we can see that PP lev­els have dropped sig­nif­i­cant­ly where the Dai­ly resis­tance lev­els are at the same lev­els of the week­ly sup­port levels
  • Where are the high­er time frame S/R levels?
    • We have a high­er time frame sup­port lev­el at 42.90 which we are still ways away from but it’s pos­si­ble that we might drop to that level
    • A resis­tance could be the 47.50 we just crossed yes­ter­day. It would be inter­est­ing to see if we con­firm that as resistance
  • What does the 4H and 30M chart show?
    • We can see that yes­ter­day we broke the 49.80 level
  • How far away are we from tech­ni­cal levels?
S6Depths of hell0-4695.2
  • What has the Asian Ses­sion printed?
    • After we dropped to the 46.20 lev­el yes­ter­day we inched high­er and dur­ing today’s AS we found resis­tance at the 47 level
    • Then we reject­ed it for a 2nd time and I took a short posi­tion that I quick­ly cov­ered at a 8 tick profit
  • ATR
    • What is the ATR on the daily?
      • Is it increasing/decreasing?
        • 2.4452
          • And it’s still decreas­ing indi­cat­ing a pos­si­ble agree­ment on direc­tion of the market

Trade Plan

  • I’ll be look­ing for PA to test the 46.62 lev­el and pos­si­bly break that
    • The next tar­get would be the 46.25 level
    • If we hit this lev­el I’ll be look­ing to see if a swing rever­sal is a valid set­up to take
      • If not, I’ll be look­ing for a con­tin­u­a­tion on the BD
    • If we find sup­port at the 46.62 lev­el and move back up I’ll be look­ing for a swing swing rever­sal set­up at the DPP 47.22 level
    • How­ev­er, a con­tin­u­a­tion move might be pos­si­ble as well. Although the DPP 47.22 lev­el is a fair­ly crit­i­cal resis­tance lev­el since that is also the lev­el we bounced off of yes­ter­day before we broke it. So we might see a CAR play today

My goals for the day (Dai­ly Report Card)

  • Only take 4 trades (dur­ing London)
  • Only take Play­Book trades

Read­ing the Tape

  • What is print­ing? Look for PA with high­er TV and S/R levels.
    • Just before the Lon­don open we dropped to the 46.62 lev­el which I indi­cat­ed as a 30M S/R lev­el and for now it looks like it might hold as sup­port on the 5M
      • Although the 30M looks quite bearish
    • Spread has increased to range between 34 and 42
    • 10:00
      • Lon­don open and we’re mov­ing up in a pos­si­ble rejec­tion of the 30M 46.62 level
        • TV isn’t that much though with 245
    • We had a long-wicked can­dle at the open that looks bear­ish but I don’t have the con­fi­dence yet that we will actu­al­ly BD the 46.62 level
    • NEWS
      • Forex — U.S. Dol­lar Slips as Traders Wait for Fed’s 2019 Rate Outlook
      • Gold Prices Lit­tle Changed as Traders Await Fed Outlook
    • It looks like we might be hav­ing a KC / VWAP diver­gence set­ting up
      • If that is the case I will wait for the BO/BD and look for an entry in either a pull­back MA or KC
    • On the 30M chart we can see that we moved back into the KC while rang­ing between the 46.25 and 47 levels
    • Spread is increas­ing and is rang­ing from 34 to 51
    • 10:55
      • We dropped to the 46.62 level
    • 11:00
      • We broke it with a can­dle going low as 46.36 but has been pushed back a lot and close at 46.53
    • I’m going to wait for a con­fir­ma­tion of a rever­sal at this lev­el and go long
    • Since we moved back into the KC very quick­ly I hes­i­tat­ed to take a long posi­tion and might have missed the best R/R so will have to reassess where to get in IF I do get in still
      • I think I am show­ing good restraint in not tak­ing a posi­tion here
        • Good thing since we dropped in a 50% retrace­ment but then quick­ly shot back up again but that would have hit me emotionally
    • Spread is still 34
    • Some inter­fer­ence at 46.85 level
    • TV gone down after we spiked at the drop to 46.36 lev­el. Then it was at 705
      • We are now at a frac­tion of that
    • 11:45
      • We just spiked up an are test­ing the 47 level
      • This could pos­si­bly be a BO from UKC
      • With tar­gets at 47.50 since that is the Dai­ly resis­tance lev­el after that we have DR1 48.724
    • We didn’t break out and we start­ed rang­ing between the 47 and 46.50 level
      • Exact­ly with­in the widen­ing KCs
    • We start­ed test­ing the 46.62 and bounced back up. PA seems a bit errat­ic and this might be where the algos are kick­ing in. So I’m gonna stay out of the mar­ket. KC has widened and so has the VWAP and we don’t seem to be get­ting in overbought/oversold posi­tions for my set­up sig­nal to arise. I have not­ed that when VWAP fol­lows the KC we might hav­ing rang­ing oppor­tu­ni­ties where u sell the highs and buy the lows.
    • We returned with a swing high to the 47 level
    • The 30M chart shows a lot of inde­ci­sion at these lev­els which the 5M chart have shown as well. 

Trade Man­age­ment

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

  • T1 (dur­ing the AS)
    • Why? What do I see?
      • Swing Rever­sal
        • I saw a dou­ble rejec­tion of the 46.95 lev­el fair­ly quick after each oth­er. And we had already reject­ed this lev­el ear­li­er in the AS
        • Also the 30M touched the upper 2.0 SD after the cross from expand­ed VWAP to tightened.
        • Entry 46.904
    • SL
      • 47.019
      • Few ticks above the high­est wick
    • TP
      • 46.674
    • Trade Man­age­ment
      • Cov­ered at 5M VWAP 1.0 SD at 46.823
      • Win 8 ticks
  • T2
  • T3
  • T4

Trade Review

  • Did you let your trade play out or did you cov­er or stop out soon­er? If so, why?
    • I only took one trade and am hap­py with that. I cov­ered at the next crit­i­cal lev­el and didn’t let the trade play out as much as it could. 
    • I learned a good les­son today and I’m going to take that into my back­test­ing. The set­up I am going to look at is when the VWAP and KC expand togeth­er. This might be the mar­ket con­di­tions for range bound trad­ing. All in all a good day. 

Dai­ly Report Card

  • Only take 4 trades (dur­ing London)
    • I only took one trade dur­ing the AS
  • Only take Play­Book trades
    • Since none of my setups arose dur­ing the LS I didn’t take any trades and I am hap­py with being consistent


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


Day trader. Tech geek. Sim Racing Enthusiast.

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