12272018 Trade Plan — Pullback after huge rally

27 Dec 12272018 Trade Plan — Pullback after huge rally

12272018 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)

Per­son­al Checklist

5 pos­i­tive 1 negative	Sat	Sun	Mon	Tue	Wed	Thu
	12/22	12/23	12/24	12/25	12/26	12/27
Beers night before	10	2	10	0	3 glass­es of wine	4
Hours sleep	5	8	6	9	8	8
Sleep well?	1	2	1	3	1	2
Mela­tonin	0	0	0	0	0.5 x	0
Neg­a­tive thoughts?	1	1	2	1	3	1
Exer­cise yester(to)day	1	1	1	1	1	1
Grat­i­tude	5	5	4	5	4	5
Joy	5	5	4	5	4	5
Anger	1	1	1	1	1	1
Fear	1	1	1	1	1	1
Focus	2	3	1	2	2	2
Cof­fees today	2 espres­so real quick	1 espres­so spread over 1.5 hours	0	1 espres­so spread over 2 hours	1 espres­so spread over 2 hours	1 espres­so spread over 2 hours
Inter­mit­tent fasting	no	no	no	no	yes	yes
Water 2.2L bottles	1	2	1	2	2	2
Vit­a­mins	no	no	yes	yes	yes	yes
Time bed yesterday	03:00	02:00	02:30	10:30	11:00	11:00

Health review (for the past week)

• How would you describe your over­all health?
  • I think it’s prob­a­bly relat­ed to not drink­ing enough water recent­ly and eat­ing too much stuff that I usu­al­ly don’t eat that is mak­ing me feel so slug­gish. Can’t wait for next week and I can start the new year all fresh. 2019 is going to be my year. The year I become a CPT.
• How do you feel?
  • I feel hap­py because the weath­er is so nice today. I feel hap­py because of the peo­ple around me. The peo­ple that sup­port me and stick with me through it all.
• How would you rate it (1–5)?
  • 2.5

The Big Pic­ture (dai­ly)

• What hap­pened yesterday?
  • Yes­ter­day we made a huge move up. Let’s have a look.
  • So we start­ed the day with a gap down below the Dai­ly VWAP 2.0 SD and then basi­cal­ly trad­ed the whole day up and reached the 1.0 SD
  • We had a low of 42.603 and a high of 47.064 which means the mar­ket moved 446 ticks
  • When we had the gap down, the 30M chart shows a lot of long wicked can­dles. And since they were at a bot­tom they looked like they were accu­mu­la­tion can­dles. PA was slow as well. I took note of this yes­ter­day and today I see that we shot up huge­ly. So I am going to note of this for my playbook.
• What is the mar­ket sentiment?
  • What does the crowd think?
    • Accord­ing to investing.com yesterday
      • All sen­ti­ments is 60% bullish
      • Last week 54% bullish
      • Last 3 days 54% bullish
      • Bull­ish­ness has def­i­nite­ly dropped but since this is the sen­ti­ment on the retail lev­el we could per­haps assume the oppo­site of this
    • Accord­ing to investing.com today
      • All sen­ti­ments is 59% bullish
      • Last week 54% bullish
      • Last 3 days 54% bullish
      • Not much has changed
• EURUSD
  • High 1.14196
  • Low 1.13443
  • EURUSD: Retail trad­er data shows 47.4% of traders are net-long with the ratio of traders short to long at 1.11 to 1. The num­ber of traders net-long is 7.7% low­er than yes­ter­day and 22.5% low­er from last week, while the num­ber of traders net-short is 3.5% high­er than yes­ter­day and 35.5% high­er from last week.
  • We typ­i­cal­ly take a con­trar­i­an view to crowd sen­ti­ment, and the fact traders are net-short sug­gests EURUSD prices may con­tin­ue to rise. Traders are fur­ther net-short than yes­ter­day and last week, and the com­bi­na­tion of cur­rent sen­ti­ment and recent changes gives us a stronger EURUSD-bull­ish con­trar­i­an trad­ing bias.
  • BULLISH BIAS
• Gold
  • High 1279.30
  • Low 1265
  • Spot Gold: Retail trad­er data shows 80.9% of traders are net-long with the ratio of traders long to short at 4.25 to 1. The num­ber of traders net-long is 0.1% high­er than yes­ter­day and 3.1% low­er from last week, while the num­ber of traders net-short is 27.5% low­er than yes­ter­day and 20.5% 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.
  • STRONG BEARISH BIAS

Intra­day Fundamentals

• API report
  • The API report­ed a build of 3.450M
• EIA report
  • This report will come out on Fri­day but the fore­cast is a draw of ‑2.667M
• Geopol­i­tics and the head­lines of today?
  • U.S. Oil Prices Rebound After Christ­mas Eve Meltdown
    • Investing.com — Oil prices pushed high­er on Wednes­day, with the U.S. bench­mark bounc­ing back after reach­ing its low­est lev­el since June 2017 in a bruis­ing pre-Christ­mas ses­sion on Monday.
  • Ener­gy Min­is­ter: OPEC+ Deal Has Brought Rus­sia $120 Billion 
    • Russia’s bud­get has received an addi­tion­al US$120 bil­lion since Moscow’s coop­er­a­tion deal with OPEC start­ed two years ago, Russ­ian Ener­gy Min­is­ter Alexan­der Novak told local busi­ness dai­ly Kom­m­er­sant in a wide-rang­ing inter­view pub­lished on Tuesday.
  • In a first, Trump makes sur­prise vis­it to U.S. troops in Iraq
    • AL ASAD AIR BASE, Iraq (Reuters) — Pres­i­dent Don­ald Trump made a sur­prise Christ­mas vis­it to U.S. troops in Iraq on Wednes­day, his first trip to a con­flict zone near­ly two years into his pres­i­den­cy and days after announc­ing a pull­out of Amer­i­can troops from neigh­bor­ing Syria.
  • Chi­na’s indus­tri­al prof­its suf­fer first annu­al drop in three years
    • BEIJING (Reuters) — Earn­ings growth at Chi­na’s indus­tri­al firms in Novem­ber fell for the first time in near­ly three years in the face of slack­en­ing domes­tic and exter­nal demand, high­light­ing ris­ing risks to the world’s sec­ond-largest economy.
  • UN Part­ner­ship to Roll Out Blockchain-Based Telemed­i­cine, Telepsy­chol­o­gy in East Africa
    • The Unit­ed Nations Office on Drugs and Crime (UNODC) will report­ed­ly part­ner with blockchain-based telemed­i­cine and telepsy­chol­o­gy firm doc.com to expand free basic health­care ser­vices across East­ern Africa. News of the part­ner­ship was shared with Coin­tele­graph in an email on Dec. 26.
  • Falling Oil Prices May Spark New Debt Crisis
    • U.S. oil prices at below $50 and now even below $45 a bar­rel could cause con­cerns about the debt lev­els of some ener­gy com­pa­nies, Nas­daq ener­gy ana­lyst Tamar Ess­ner told CNBC on Wednesday.
    • “Cred­it mar­kets have held up a lot bet­ter than the ener­gy equi­ty mar­kets right now, so that tells you that cred­it investors out there believe in the oil sto­ry much more so than ener­gy equi­ty investors do right now,” Ess­ner said. 
  • Asian Stocks Rise, Nikkei Jumps More Than 3.5% After Wall Street Rally
    • Investing.com — Asian stocks rose in morn­ing trade on Thurs­day, with Japan’s Nikkei 225 jump­ing more than 3.5% after Wall Street recov­ered from the steep loss­es suf­fered in the pre­vi­ous ses­sion and record­ed the biggest ral­ly since 2009.
  • 2019 Will See Entry of More Insti­tu­tion­al Play­ers in Cryp­to, Says Asia Fin­tech PwC Leader
  • India May Legal­ize Cryp­tos But Under ‘Strong’ Rules: Report
  • Dow notch­es record point surge in dra­mat­ic rebound
  • (Reuters) — The Dow Jones Indus­tri­al Aver­age surged more than 1,000 points for the first time on Wednes­day, lead­ing a broad Wall Street rebound after a report that hol­i­day sales were the strongest in years helped mol­li­fy con­cerns about the health of the economy.
  • Exxon con­tin­ues drilling off­shore Guyana as Venezuela lodges complaint
    • CARACAS (Reuters) — Exxon Mobil Corp (N:XOM) said on Wednes­day its oil drilling and devel­op­ment activ­i­ties off­shore Guyana were unaf­fect­ed by a week­end inci­dent in which Venezue­la’s navy stopped two explo­ration ves­sels the com­pa­ny had hired.
  • Gold Prices Mark Fresh 6‑Month High on Safe Haven Demand
    • Investing.com — Gold prices marked a fresh six-month high on Wednes­day as recent risk-off sen­ti­ment drove investors towards the safe haven pre­cious met­al while U.S. Pres­i­dent Don­ald Trump held fast in his insis­tence for bor­der fund­ing in order to reopen the government.
• Addi­tion­al OPEC news
  • None at this moment

Intra­day Tech­ni­cal Analysis

	Wed	Thu	Fri	Week	Mon	Tue	Wed
	12/19	12/20	12/21	12/17 — 12/21	12/24	12/25	12/26
High	48.369	47.543	46.816	52.145	46.287	0	47.064
Low	46.338	45.718	45.179	45.179	44.169	0	42.603
Close	47.423	46.243	45.439	45.439	44.363	0	46.675
Pip move	203.1	182.5	163.7	696.6	211.8	0	446.1
PP	47.377	46.501	45.811	47.588	44.94	0	45.447
dis­tance	103.9	78.3	63.2	240.9	77.1	0	284.4
R1	48.416	47.284	46.443	49.997	45.711	0	48.291
dis­tance	203.1	182.5	163.7	696.6	211.8	0	446.1
R2	49.408	48.326	47.448	54.554	47.058	0	49.908
dis­tance	-99.2	-104.2	-100.5	-455.7	-134.7	0	-161.7
S1	46.385	45.459	44.806	43.031	43.593	0	43.83
dis­tance	-203.1	-182.5	-163.7	-696.6	-211.8	0	-446.1
S2	45.346	44.676	44.174	40.622	42.822	0	40.986
TV	72,350	80,893	72,030	351,797	42,179	79,278
50MA	58.766	58.273	57.775	57.212	56.705
200MA	65.932	65.859	65.78	65.69	65.613

• What can we tell from the PP levels?
  • We widened our PP lev­els more so than the whole of last week’s levels
  • DPP is at 45.447 lev­el now which is still low­er than last week’s
  • We had a good amount of TV which could be traders cel­e­brat­ing Christ­mas com­ing back to the mar­ket and tak­ing positions. 
• Where are the high­er time frame S/R levels?
  • We shot through the Dai­ly lev­el of 45.10 that is a pos­si­ble sup­port level
  • With a week­ly chart resis­tance lev­el of 47.50
• What does the 4H and 30M chart show?
  • On the 4H chart we can see that we blast­ed through the VWAP mean and halt­ed at the 1.0 SD 
    • The 45.10 lev­el is also around the same lev­el as the VWAP mean so let’s see if this lev­el can hold up
    • The 2.0 SD is the same lev­el as the 50MA and the week­ly 47.50 so at this point we wouldn’t be able to have the momen­tum to BO here I think
      • We could see the mar­ket pulling down the price a bit and enter a squeeze before we have the ener­gy to BO and cross the 4H 50MA
  • The 30M chart shows that we fol­lowed the 2.0 SD all the way up and then slow­ly rolled over and are now at the VWAP mean and might break this and enter the squeeze again before we make a big­ger move
    • I’d be inter­est­ed if we could hold up the DPP 45.477 lev­el which coin­cides with the 4H chart VWAP mean and week­ly 45.10 lev­el as well
• How far away are we from tech­ni­cal levels?

S/R	kind	lev­el	Dis­tance
R6	WR1	49.997	379.7
R5	Dai­ly	49.8	360
R4	DR2	49.908	370.8
R3	DR1	48.291	209.1
R2	WPP	47.588	138.8
R1	Week­ly	47.5	130
CURRENT	46.2
S1	DPP	45.447	-75.3
S2	Dai­ly	45.1	-110
S3	DS1	43.83	-237
S4	WS1	43.031	-316.9
S5	Week­ly	42.9	-330
S6	DS2	40.986	-521.4

• What has the Asian Ses­sion printed?
  • We can see that dur­ing the AS we moved low­er in a pull­back move back to the 30M VWAP mean
    • And we entered the tight­en­ing part of the VWAP bands
• ATR
  • What is the ATR on the daily?
    • Is it increasing/decreasing?
    • 2.4905
      • We’ve kind been trad­ing around this lev­el for the last 2 weeks

Trade Plan

• I’d be look­ing for signs of weak­ness dur­ing the AS that could bring us down from the huge ral­ly we had yesterday.
  • And see where we can hold sup­port. At this point I’d be look­ing to go long with a swing rever­sal trend ter­mi­na­tion set­up which would be a high­er time frame trend con­tin­u­a­tion move

My goals for the day (Dai­ly Report Card)

• Only take 4 trades
• Only take PB setups

Read­ing the Tape

• What is print­ing? Look for PA with high­er TV and S/R levels.
  • On Lon­don open we were under the LKC and we had a few long wicked can­dles out of the 2.0 SD and then on the open we had a ham­mer can­dle form­ing on the 30M 200MA lev­el just below the UKC and 10 ticks above the DPP 45.447 so I thought a swing rever­sal set­up was form­ing and took my first trade
  • T1
    • Win 7 ticks conservative
    • I cov­ered when we kin­da halt­ed just below the LKC and i just want­ed to pock­et some gains from the get-go and I’m hap­py I did since price reversed and we are hav­ing some more long wicked can­dles at this point. 
    • Could this be anoth­er accu­mu­la­tion phase going on on the small­er time frame? Let’s wait and look for more clues. It could also be more distribution.
  • So what do I see form­ing on the charts. What stars are aligning?
    • I see that we ran inter­fer­ence by the 30M 200MA and we are in the tight­en­ing part of the VWAP on the 30M
    • The 30M KC is in an uptrend
    • PA is above the 200MA
    • On the 5M we can see that we formed a cup of some sorts with long wicked can­dles right under the LKC
    • VWAP is trend­ing down and looks to be tight­en­ing where the KC looks to be expand­ing so a diver­gence is on the horizon
  • We just re-entered the KC and hit the 1.0 SD
  • The spread is 34/35
  • It looks like PA is not fol­low­ing rules as much so be extra cautious
  • VWAP is tight­en­ing on the 5M while the KC is widen­ing how­ev­er PA is still on the low­er side of the KC just above the LKC
  • I’ll be wait­ing for PA to go flat and then wait for a pos­si­ble BO but let’s wait and see what will happen
    • It looks like we might be going flat since PA could be trad­ing in a range on the low­er time frame
  • We just dropped to the DPP 45.447 lev­el let’s see if we can hold this level
  • PA is below the 50MA and 200MA on the 5M and the 50 just BD from the 200MA
  • We look like we are try­ing to break the DPP and are now at the 30M KC 50MA point so let’s see if this holds and we reverse
    • This is also the 4H VWAP & LKC CAS level
    • I’ll be look­ing for a long oppor­tu­ni­ty here but the 5M has to con­firm this in the form of a bull­ish can­dle pat­tern but we look like we might have a con­tin­u­a­tion still
  • The 5M shows a down­trend since PA is still far under the LKC so I should be look­ing for a short oppor­tu­ni­ty (unless I’m fad­ing which I do like to do)
    • But if I was look­ing for a short where would that be?
      • Bear­ish can­dle at the 5M VWAP mean
  • If there would be a rever­sal at this lev­el how would that look like?
    • A move away from the 2.0 SD and then a bull­ish candle
  • We dropped to the Dai­ly 45.10 lev­el which means we already moved 110 ticks
  • At this point I am more inclined to look for a trend con­tin­u­a­tion setup
  • T2
    • Win 12 ticks conservative
  • T3
    • Loss 27 ticks conservative
  • T4
    • Win 7 ticks moderate
  • I am going to stop trad­ing now but keep watch­ing PA.

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?
    • Swing Rever­sal
      • On Lon­don open we were under the LKC and we had a few long wicked can­dles out of the 2.0 SD and then on the open we had a ham­mer can­dle form­ing on the 30M 200MA lev­el just below the UKC and 10 ticks above the DPP 45.447
      • I took a con­ser­v­a­tive position
  • SL
    • Just below the wick of the ham­mer can­dle at 45.55
  • TP
    • 46.001
      • I set it at the swing low where it touched the LKC before it ducked under­neath it
  • Trade Man­age­ment
    • I cov­ered when we kin­da halt­ed just below the LKC and i just want­ed to pock­et some gains from the get-go and I’m hap­py I did since price reversed and we are hav­ing some more long wicked can­dles at this point. 
    • Win 7 ticks

• T2
  • Why? What do I see?
    • Swing Rever­sal
      • PA crossed the 5MA after we slight­ly moved away from the 2.0 SD
      • Also we were at the 30M MA level
      • Entry
        • 45.292
  • SL
    • 45.040
  • TP
    • 46.269
  • Trade Man­age­ment
    • I cov­ered at 45.412 because we got near the LKC and VWAP mean
    • Win 12 ticks

• T3
  • Why? What do I see?
    • Trend con­tin­u­a­tion
      • We got back to the 8MA and thought I’d take a con­tin­u­a­tion position
      • Entry
        • 45.232
  • SL
    • 45.896
  • TP
    • 44.528
  • Trade Man­age­ment
    • Cov­ered at a loss at 45.504
      • Loss 27 ticks

• T4
  • Why? What do I see?
    • Swing Rever­sal with continuation
      • We dropped to Dai­ly 45.10 lev­el so thought we might have a rever­sal at this level
      • 5M PA took a sharp turn up and crossed MAs and then crossed LKC and VWAP mean
      • Entry
        • 45.548
  • SL
    • 45.003
  • TP
    • 46.330
  • Trade Man­age­ment
    • Above any­thing else I am try­ing to learn to con­trol my emo­tions while in a trade.
    • PA seems to slow­ly creep up even though we are hav­ing doji can­dles at the top of the swing
    • I cov­ered when PA hit the 5M 50MA 30M 200MA level
      • Cov­ered at 45.613
    • Win 7 ticks with mod­er­ate position

Trade Review

• Did you let your trade play out or did you cov­er or stop out soon­er? If so, why?
  • Still focussing on tak­ing good trades
  • T3 wasn’t a good trade though. I let it ride too long and should have cut my loss­es quick.

Dai­ly Report Card

• Only take 4 trades
  • I took exact­ly 4 trades and lost 1 tick but am up in money
• Only take PB setups
  • This one I feel I didn’t do too well. I had tak­en a short and then returned and took a long when the short was still open. I should have cut the short there and then before going long.
  • Because I broke my rule I am forc­ing myself down from Opti­mistic to Con­ser­v­a­tive in terms of my trad­ing sizes for tomor­row. Let’s see if I can still close the week in prof­it. Right now I am down a lit­tle bit in mon­ey and I am down 6 ticks for the week.

Feed­back?

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