1st April – Bund Daily Trade Plan

1st April – Bund Daily Trade Plan

News

0815 Span Man PMI 0845-0900 EZ Vars PMI 0930 UK Man PMI
1000 Ez Unemploy 1330 US NFP 1445 US Man PMI
1500 US ISM Man PMI

Stats

DATR 79-

WATR 1.78-

WK.50% –

M.50% 60.92

Weekly Summary – Up week with neutral bull close

Previous Day – Normal down inside day with bof of prev id at 63.13 and a weak bear close. Exp test of id.hi at 63.84. if not am session then poss at NFP

Hourly Bias – Short Bias SC 1

Big Picture

60min – Short Bias, LH and rej of sz and rot down to test 05 60.s and bof inside low and buying at month end back up to 40 and low volume ext back to 60.sz

15 min – Long Bias, at 15.60sz, exp a reaction, 15min bias to hold 15bz and consume 15.60sz for cont

Hypo 1 – Range – if price holds 57-64 then shorts t 50 t2 40 t3 33-25; if price holds 33-25 then longs t 50

Hypo 2 – Up – if price bac 64 then longs t 75 t2 84; bac 84 t 90-98

Hypo 3 – Down – if price bac 28 t 14-03; bac 03 t 88-82

Red flag levels – For short trades bac 63.64 For long trades bac 63.03

31st March 2016 – Bund Daily Trade Plan

31st March 2016 – Bund Daily Trade Plan

News

0700 Ger Retail sales 0745 Fr CPI 0800 UK Carney
0800 Sp CPI 0855 Ger Unemploy 0930 UK GDP
1000 EZ CPI 1330 US Initial Jobs 1445 US Chic PMI

Stats

DATR 79-

WATR 1.78-

WK.50% –

M.50% 60.92

Weekly Summary – Up week with neutral bull close

Previous Day – Normal Inside Day with weak bear close ID.Hi 63.84 ID.Lo 63.13

Hourly Bias – Neutral Bias SC 2/ Last trading day of month. 62% cash will close higher than open Cash HLR 38 ticks mode/ 72 ticks 1 SD

Big Picture

60min – Neutral Bias, minor bof of y.hi and rot down thru bz but failed to test nvpoc and rot back to test failed bz at 60-68

15 min – Long Bias, at previous failed bz, for long bias to continue, hold of bz and bac of sz

Hypo 1 – Range – If price hold 60-68 or 75-84 then shorts t 60 t2 50 t3 40-35; bac 35 t 25-13

Hypo 2 – Up – if prices bac 84 then longs t 90-98 bac 98 t 64.20/datr

Hypo 3 – Down – if price bac 13 then shorts t 05 bac 05 t87-80

Red flag levels – For short trades bac 63.98 For long trades bac 63.13

30th March 2016 – Bund Daily Trade Plan

30th March 2016 – Bund Daily Trade Plan

News

0920 It Auc 1200 Ger CPI
1215 ADP Non Farm 1430 US crude

Stats

DATR 82-

WATR 1.78-

WK.50% –

M.50% 60.92

Weekly Summary – Up week with neutral bull close

Previous Day – Normal up day with very strong bull close.

Hourly Bias – Long Bias sc 3/ 2nd to last trading day of month. 66% cash will close higher than open Cash HLR 34 ticks mode/ 84 ticks 1 SD

Big Picture

60min – Long Bias, into weak 60/daily sz exp to hold 60.bz on pullback and test of 98

15 min – Long Bias, into weak 60/daily sz exp for 15min pb and either 15 s at 59 or 15/60 bz to hold for continued upside

Hypo 1 – Up – if price holds 59 or 50-45 then longs t 80 t2 90-98 bac 98 then t 64.20 t2 64.35/datr

Hypo 2 – Range – if price holds / bof 90-98 then shorts t 50-45 if price holds / bof 45-36 then longs t 70-80

Hypo 3 – Down – if price bac 36 then shorts t 20 t2 10-05

Red flag levels – For short trades bac 63.98 For long trades bac 63.36

29th March 2016 – Bund Daily Trade Plan

29th March 2016 – Bund Daily Trade Plan

News

1400 US Cons Conf 1530 US Yellen
1345 US Services PMI

Stats

DATR 82-

WATR 1.78-

WK.50% –

M.50% 60.92

Weekly Summary – Up week with neutral bull close

 

 

 

 

 

 

 

 

 

 

 

 

Previous Day – Neutral Up day with weak bull close

Hourly Bias – Long Bias sc 2

Big Picture

60min – Long Bias, rot up though r.hi at 05 and HH and pullback into range value area, and retest of r.hi for MC. To remain Bullish, exp is for to hold low at 81 and bac 04 then 33

15 min – Short Bias, pb off IBL and retest of r.hi at 04, needs to hold or bac this for s/t direction

Hypo 1 – Range – if price holds / bof 15-33 then shorts t 10-00 t2 93-82; if price holds / bof 93-83 then longs t 10

Hypo 2 – Up – if price bac 33 then longs t 40 t2 55 t3 68-81

Hypo 3 – Down – if price bac 82 then shorts t 62-56 t2 44 t3 33-26

Red flag levels – For short trades bac 62.82 For long trades bac 63.33

How I am trying to stop being so easily manipulated by my own trading statistics

How I am trying to stop being so easily manipulated by my own trading statistics

 

What we are communicating are simple statistical issues, such as underlying risk, standard errors, and variability. But they are extremely difficult to communicate clearly, even to people with some training in statistics. So we spend a lot of time with patient groups, changing wording after wording, such that we end up with something that is understandable without being technical or misleading.

 

There are. We know, for example, that “relative risks” can be used to look impressive. Twice a small number is still a small number. We know that talking in whole numbers—so many people out of 100—is clearer than talking in percentages or decimals. We know if done right, visual representation can often do a better job of explaining numbers, especially to those with low numeracy. “As a statistician, the perception of numbers is new to me. I thought people would know that 3 out of 100 = 3% = 0.03.”

 

We’ve used this knowledge, worked with psychologists around the world, to build guidelines for how people can best communicate risk. But there are still things that we haven’t got a good answer to. For instance, we know that people think 30 out of 1,000 is bigger than 3 out of 100. We know that we make numbers look bigger by manipulating the denominator.

 

The bottom line is that humans are very bad at understanding probability. Everyone finds it difficult, even I do. We just have to get better at it. We need to learn to spot when we are being manipulated. Changing axes on a chart is one way, but there are many other subtle ways to do it.

 

Read the full article here…

As someone that is not that natural with numbers, I find this article very interesting.  I am constantly looking to improve my use and understanding of trading statistics, but I have also noticed that I suffer at times at not completely accepting what my own statistics are telling me.

To aid me in my understanding, I have over time been adding more graphical representation to trading statistics in my own journal.

The Edgewonk trading journal does an excellent job of doing this.

But what I am also doing, is changing the way the trading statistics are displayed. Typically my percentages were displayed in decimals i.e 0.72 is 72%. I have changed my journal so all these trading statistics are displayed in full percentages so that it is easy for me to digest these figures.

As I have mentioned before, that one of the areas I working is self belief in myself and my system. For example, if I take 3 losers in a row, the default state in the past has been to doubt my own ability or that my system is losing its edge.

To help combat that, in the trade entry part of my journal, I have a system health mini dashboard, which displays my win rate and exp for all my trades and also for the last 30 trades and looks at various factors as time between trades, errors, trade quality, average win and average loss over the last few trades.  This is to give me a heads up when I about to go on tilt and when I am not on tilt, it is there as added mental re enforcement that when I have a string of trades not working out, the the bigger picture is still healthy and these losing streaks are within my standard distribution of my system.

I have added recently an indicator to the Health dashboard which displays my minimum required win percentage to be profitable, taking in account my historical average win compared to my historical average loss (BM%), and then does the same on a rolling 30 trade average(BM.30%). This is then plotted on a simple bar chart against my current historical win rate and 30 trade rolling win rate.

12

 

 

2016-03-28_1459

 

These minimum win rates are not a target, but a mental crutch.  When the inevitable losing streak comes along, I find it natural for me to start doubting my process and system. But a check of my System Health Dashboard will remind me that this is within the normal distribution. Which allows me to re focus on context and process rather than worrying about the mechanics of my system.

 

Weekend Viewing – Order flow 26-27 March

As I have mention on this blog, I working to improve my understand of order flow and the price action on the DOM.

This is a collection of videos I have read watched over the weekend to help me improve my order flow reading.

Miltos’ Price Ladder Analysis 15/03/16

Via youtube.com

Miltos’ Price Ladder Analysis 08/03/16

Via youtube.com

Price Ladder Analysis with Brannigan Barrett

Via youtu.be

Next week I will be watching

Occasionaly FT71 holds public AMA and webinars. I highly recommend anyone interested in improving their trading to watch these webinars when they are available.

 

Weekend Reading – Macro 26-37 March

Weekend Reading – Macro 26-37 March

This is a collection of articles I have read over the weekend to get a feel for the overall macro conditions / themes for the next week.

Marc to Market: Greenback Finds Better Traction

The US dollar rose against all the major and most emerging market currencies last week. After selling off following the ECB and FOMC meetings, the dollar found better traction. It was helped by widening interest rate differentials. Regional F
ed manufacturing surveys for March suggest the quarter is ending on a firm note. With new orders rising, it is reasonable to expect the momentum to carry into Q2.

Read more…

Marc to Market: Is that Buzzing Sound Helicopter Money?

Helicopter money is the rage. Central banks are talking about it. Economists are debating it. The media is rife with coverage. While it sounds important, it is not precisely clear what helicopter money means

Read more at marctomarket.com

Marc to Market: ECB, Corporate Bonds, and Credibility

The euro’s rallied shortly after the ECB announced numerous monetary measures that in their totality were more than expected. Many saw this as proof that monetary policy had lost its effectiveness, and central banks have lost credibility.

Read more at marctomarket.com

Marc to Market: When Doves Cry: Imprudently Cautious

Yellen acknowledged that the Fed’s assessment of the US economy had not changed much from December. There is little reason it should. However, it is difficult to reconcile that with the substantial change in the forward guidance, and the halving of the rates hikes that are deemed appropriate this year.

Read more at marctomarket.com

Was that it? ~ Macro Man

Over the last 5-6 weeks risk assets, commodities, and non-dollar currencies have bathed in the warm glow of an accommodative Fed that’s been more than willing to play it cool.

Was that it? While calling tops may not go as spectacularly wrong as trying to pick bottoms, kevlar glove-style, it can on occasion be no less painful. Call it death by a thousand cuts rather than a decapitation- either way there is sufficient danger that it is difficult to call a definitive extreme with anything more than temerity. (The exception, of course, is if you’re in the business of being notable rather than profitable, in which case 100% confidence is a prerequisite and accuracy is of secondary if not tertiary importance.)

Read more at macro-man.blogspot.co.uk

Notes From Underground: Bored of the Fed | Notes From Underground

Currently, the financial markets are in rally mode as repressed savings seek some measure of return while PENSIONS, SAVERS and INSURANCE COMPANIES have to seek shelter from the game of negative interest rates. This experiment is commented on all day long and I am bored, terribly bored as the continued praise heaped on the promoters of the ever-present counter factual rubbish. Today, San Francisco Fed President John Williams was paraded out to reignite the possibility of a Fed rate hiked in April or June as it seems the headwinds that prompted Yellen’s  dovish press conference last week have abated. Williams is not even a voter so why should we care what he has to say? It’s just more nonsense. The rumors continue to swirl that the G-20 crafted some type of agreement to prevent the dollar from rallying, and stopped other nations from attempting to manufacture the depreciation of their currencies in a contrived manipulation to gain a competitive trade advantage. Again, I don’t believe this story and will wait to see how it plays out during the coming month.

Read more at yragharris.com

 

 

 

My Week and a Progress Report on Price Ladder Training – Part 2

My Week and a Progress Report on Price Ladder Training – Part 2

20-24 March

As I mentioned a couple of weeks ago review that I am focusing on 2 areas to improve my trading.

1) Participating in the Futex Price Ladder Training Course, to improve my Dom reading skills and to work on my no fills on the Bund.

2) Working on my confidence and self-belief with visualisation.

Price Ladder Training – Week 3 Progress Report

This week consisted of 2 days of Modules, learning about Fading and Breakout plays, and a couple of full days drills.

The week has been very interesting and the modules coupled with the drills means that once again I am spending a lot of time just watching order flow, and my understanding and more importantly how I would handle the order flow is constantly improving.

What have I learnt about myself as trader this week

Focus

I am still implementing the Pomodoro Technique, and I have it invaluable in managing my mental energy during the day.

To the extent that some times during the week, I have found that I have a setup at the time I am required a break. I took the trade but then went straight back into focus mode after the I exited the trade. I found this counterproductive over the day as I started to lose focus earlier. Thus I have to careful of managing my mental energy when the markets are busy, if I cannot stick to the 25/5 mins routine then I must take a short 5-15 mins break when the opportunities allow.

Spoilt for choice – what market.

One of the problems I ha, during the first 30 minutes of live trading this week, was that I had not decided what market was my main market and if I had an opportunity on the 2 markets, which one would I take. I actually missed out on 2 trades due to this indecision about and took one loss due to trading one market whilst focusing on the order flow on other market. I know, that a fucking stupid thing to do.

Afternoons

I still find afternoons hard to read and harder to maintain focus and I am still more likely to do stupid shit. Partly this focus management but a large part of this is struggling to read the market. I have come to this conclusion, as I had a breakout in thinking in the later part of one afternoon and then traded the rest of the session better. I will cover this more in the ebb and flow section.

VPOC

Still find the choppiness around the VPOC and the algos that operating here hard to deal with profitably. I am starting to develop strategies for how to deal with that, which I will implement on the following drills to come.

Ebb and Flow

One of the points of the all-day Position Drills, is to learn to read the ebb and flow of the market without a chart. If the market is trending, this is reasonable easy to read as we have an overall direction to work with until we reach an opposing area of interest.

The more difficult situation is where the market has no overall direction with lots of decent rotations in various directions but no overall direction. This seems to be a lot more common in the afternoons at the moment. As I mentioned earlier, I had a break though in thinking, it along the lines of the following.

Not every absorption is a point of reversal, that gives a decent RR. The markets are generally fractal in nature, so on direction less periods in the market that each rot is a micro trend in order flow. The market will go in one direction with minor areas in absorption with a few tick pull back to a previous failed absorption point and then make a new extreme, and continue this way until this counter rotation breaks the previous failed absorption and makes a new opposing extreme and this is an indication that a possible micro trend change could be in the offering.

I already knew this to a point, but following it on a Dom, I found pretty hard without an over bias or context provided by a LTF chart. The key for me to following this on the Dom, is careful note taking of the size of the micro rots (to get an idea of strength) and points of absorption that fail / hold.

I do not intend to be holding positions all day in my real trading, as we do in these drills, but the cross over benefit will be on the trade management on the scalp trades as to when to hold or fold the runner part of the position.

Bund and Market orders

The Bund market, when it decides it wants to go, still can be a complete fecking fecker trying to get a fill. The strategies for me seem to be two fold, anticipation which is fine if I have a strong area of interest and have a bias of a level, I can position myself one way and work the best entry I can before it goes.

But some areas of interest are not so strong, or can be front run. After the fun and games, when it wants to go, it can just take off on a micro scale and joining the bid or offer just leaves me Billy no mates and no fill.

This course and drills has taught me that at these moments in time, I have to be better prepared. I need to decide if I am joining the bid/offer or going to market before the absorption is complete, and then do my hoovering over the appropriate bid/offer to join or be ready to go to market. As any hesitation is a killer in a scalp.

Price Action Journal

One of the suggestions from the course is starting a Price Action Journal, I already keep one of these but have changed its focus to deal with the Dom order flow. I have written about this here, and I am already finding this immensely beneficial, just from the few examples that I have.

I would highly recommend that anyone interested in improving their understanding of order flow, is not to focus on screenshots only but a mixture of screenshots and video.

There is a good reason Futex examples are all recordings of order flow and not screenshots, because the ability to watch and re watch at various difference speeds is a real benefit to understand how these set ups work in real life.

This is an example of one of the recordings, where price did not trade my level and was absorbed in front of the level. I did not take the trade as I am still working on how I am going to incorporate the order flow in my current system.

2016-03-23_1126

 

Implementing this into my real trading

On the couple of days of live trading I have done I have started to incorporate order flow into my trading. The first AM session was not great, too gung ho and trying to take every setup without consideration of my system or context.

But I then calmed down for the subsequent sessions and now have a better idea of how to fold this knowledge into my current system. When I have finished my course with Futex, I will update my trading system process to know when and where I take the Futex setups that I have learnt, when do I stick to my current edge only and where I use this knowledge to improve my current edge (basically the no fills or Adeys).

Visualisation

I am continuing my visualisation before the markets open, and the cumulative effects of this are improving my confidence.

For example, when I was trading like a knob on the first session, in previous times it would have taken me probably a full session for this to sink in that I was trading without an edge. Then I would have been fucked off, then anger, and then would have felt less confident for the next couple of days.

This time, I recognised that I was being a complete knob head reasonably early, all trades were graded and were D and E quality trades, I then traded well and then took a couple of losses at the end of the day which did not help my bottom line. But all these trades, graded well A and B’s. And during the whole period I did not lose confidence in my trading nor in my self-belief that by trading well it would turn around.

This is a marked improvement for me.

Price Action Journal

Price Action Journal

One of the tips recommended by Miltos on the Price Ladder Training Course, is to keep an price action diary, recording how order flow reacts to structure.

Or a Market Structure Journal as Lance Beggs from YourTradingCoach.com calls it.

He is a quick description from Lance’s eBook “The Greatest Trading Book – Ever.”

Whilst I do keep a journal of market structure, and screenshots and videos of the trades I take for my Trading Journal. I have been wondering how the best way to journal the market structure and order flow.

One of the problems with journalling is that it can take up a lot of time. So I am constantly looking for efficient ways to do this that do not hours and hours to the day. I do not mind the hard work, but it has to be process that I can envision that I will continue over the years. If it takes hours per day on top of a full day’s trading followed by a journalling/review process and then a market structure of individuals setups then it could be something that fails by the wayside.

Over the past few days I have been experimenting to find the best way to efficiently journal market structure and order flow, which also includes set up that I am not in for whatever reason.

My current process is to use SnagIt, which is the big brother to the free Jing screenshot software. This allows me to take screenshots and edit them, and take video for longer than 5 minutes.

The other advantage is that the screenshot I can send straight to my journal in OneNote and the videos get sent straight to YouTube. Which allows me to embed the video later, but also keeps all the videos in the cloud rather than hogging memory.

Here is an example of one my Market Structure Entries.

Breakout Play – Stoxx 23rd March 2016

Daily – Bof of inside day low, exp for test and break of inside day high

Above 2980-82 is where potential stops have built.

Target 2989 is previous daily high and minor sz and above 3000-3013 is a major sell zone.

Price has bof low and my exp short term is for a test of the 2980-82. Therefore, looking for an order flow breakout scalp to 2989 and then possible reload for for test of 3000.

Did not take this trade as I was already stalking a Bund Trade.

From start up to about the 15min mark is pre breakout order flow, and after the 15min mark, there is a change where the buyers start to push for the break.

Stoxx – ID Breakout scalp

 

24th March 2016 – Bund Daily Trade Plan

24th March 2016 – Bund Daily Trade Plan

News

0700 Ger Cons Climat 0900 EZ ECB Econ 0930 UK Core Retail 1215 Us Bullard
1230 Us Core Durable 1345 US Services PMI

Stats

DATR 82-

WATR 2.00-

WK.50% –

M.50% 60.92

Weekly Summary – Inside week with bull close hi 62.81 / lo 61.02

Previous Day – Up day with very strong bull range close

Hourly Bias – Neutral Bias Sc 1

Big Picture

60min – Neutral Bias, held Range low at 19, into bal and rot up to test 60.sz and range hi at 96-05

15 min – Long Bias, exp to test bal high to find sellers, exp to hold/bof or bac 63.05

Hypo 1 – Range – if price holds / bof 96-05 then shorts t 81-75 t2 62-57; if pricer holds 62-57 (mid) then longs t 81 t2 96-03

Hypo 2 – Up – if price bac 05 then longs t 28 t3 38 (ecb hi and possible bof point) bac 38 then t 55 t2 68-81

Hypo 3 – Down – if price bac 58 t45 t2 34-24

Red flag levels – For short trades bac 63.04 For long trades bac 62.19