My way of seeing the market

Hello,

I have been "trading" for 5 years now. I have recently come to realize my way of approaching the market is not consistent and I focus on the wrong details. I need to free my mind of all the garbage I accumulated over the years and have a fresh start.

That is why :

1. I cleaned up my charts from all the indicators I had put there.
2. I am taking a break from entries for one month. For one month I'll be watching only.

-My instrument of choice is NQ cfd.

-I am trading the M1 and S10 charts; Depending on action, I trade either one or both charts at the same time...

My method is not consistent, yet. This journal is an attempt to untangle all the knots in my head and finally come to profitability stage.... Ultimately I hope it will help someone really serious about all of this, like some threads helped me here on FF.

At first I was skeptical of doing a journal. But I think it's time I drop the "conspiracy" theories mindset (part of becoming a trader).

Trolls & off-topics will be ignored.

So... stay tuned.

Chart with "random" action included. Some obvious levels highlighted.. for giving the tone to the journal.

This is the rough setup I plan on using for this thread.

The open in the equity market is always a shock to the "system" in place. The flow is being altered and a new equilibrium has to be found.

Something I am now very well aware of is that it is impossible to learn let alone apply what we have learned when we are operating from a distressed emotional state. As Brett Steenbarger, a psychologist, puts it :


I have unfortunately been operating under this state for a very long time. This is one of the reason I am undertaking a mental reset. I accumulated so much wrong habits!

I am watching (not trading) the charts in intermittence throughout the day. I watch for 30 mins then I take a 10 mins break. I do this 6 times (3h total screen time). I do this to work on my attention spawn which is almost non-existant these days. In the past I would have 20 tabs open, trading, watching a video, etc. Now when I'm watching a video, I'm watching a video. When I'm watchign the charts, I'm watchign the charts. When I'm writing a post, I'm writing a post. When I'm relaxing, I'm relaxing.

It also allows me to reset my relationship to the charts. After 6 days doing that, I already don't have the impulse to load everywhere anymore. I am simply watching with zero stress and zero expectation, letting my brain getting used to this state.

Price is attracted by liquidity; it might seem like it's moving heaven and earth to get it, but in fact it's just the way market works. A very common scenario is the infamous "stop hunt". Price returning is happening everywhere on the charts and I am starting to think to build my approach around it.

I think that I get mesmerized too much with big moves on the chart and trying to catch them.

This is a great thread so far Don't forget bounces and support/resistance levels aren't perfect on the minute chart..I spent alot of time trying to trade perfect setups but those dont exist, they will be around those areas you expect but will form and bounce in a 'dirty way'.


Small pullback trades several times a day is the key.. It doesn't matter if you lose a few..there's usually plenty of chances in the day.

I wish you a good way.

Perfect setups... i tend to get caught in that mindset, thanks for mentioning that.



Thank you Michael

I'll keep revisiting both your threads because i think they cover the few important aspects. Market are simple. Focussing on the few important aspects is already a huge step forward for me...

Today is one of those days on NQ...... "power that be" simply dropped the load. It happens every now and then, when price is messing at all time high.

Today I have realized that NDX is one of the worst instrument for scalping with tight stop, at least the first 2 hours of the NY session (9:30 EST to approx 11). The spread is so unpredictable that it makes no sense to try to enter the market with a tiny stop. Spread is almost always taking out everything in its vicinity because it's "breathing".

For this reason alone, I want to focus more on the major currencies pairs from now on. Forex is more "calm" and therefore better suited for M1 scalping and more stable during "normal" market time.

Other indices could also be potentially better suited. Both the dow and s&p have a more stable market than the nq.

As funny as it might sound, I had never really noticed that. I always thought NQ spread was "normal". But it is very unstable (at least on my broker's mt4).
I think that now that I really take the time to watch I can evaluate various options, and trading NQ alone is a little bit too wild for my liking. I probably take trades I should not simply because I don't watch other stuff.

I don't know what exactly drew me to trade the NQ in the first place.

I guess it was the big moves and the fast market, and now it's for the same reason that I question that initial choice. I'm certainly not saying it is impossible to trade NQ, because I'm sure some traders do it successfully. What I'm thinking is it might not be the best suiting instrument to "start" scalping naked for me.

Also, like Veni pointed out to me earlier, s/r levels are far from perfect. And on this index, I think it is twice as true! Price will always over-extend and do crazy things (simply moving to liquiditiy when I think about it... It's like it's driven almost exclusively by trader's stops!) thus making the chart harder to read. After watching closely (often in hindsight...) we can see price interaction at levels though...

Equity market is a thinner market than currencies. From previous statement, implication is: traders account for a larger part of volume (compared to currency market). Again from previous statement, another implication : stop hunts everywhere... Fractal stop hunt! lol. I'm half joking here...

A time where the chart "settles" is in the afternoon. As a rule of thumb, it settles somewhere between 11:00 and 13:00 EST.

Another thing is this market is so fast! It's the reason I was using a 10 sec chart. During NY there's not even gaps in this chart. It is always ticking. I often checked and even the 1 second chart has moments when it looks like other "normal" NQ charts (first 30-60 mins of the session).

I think I was attracted by this speed because it's instant feedback and instand gratification. I thought it might speed up the process of learning aswel. But now I think it might have done just the opposite!

My point is (and it could be an excuse, I dont know yet), I am tired of throwing darts in the dark : I need a bit more time to make decisions and I need to take less trades in a day. I need clean charts with less fat jump in liquidity every now and then for no reason.

So, for the next few days I am putting NQ on the back burner and I'll be watching a few major pairs from London/NY overlap until 11:00 EST, to see if I'm simply makig excuse again. I am not implying here that forex is easier, far from it. I simply think (right now) that it might be better suited to achieve what I intend to achieve... Let's see!
..

I said I would just watch, but I could not resist doing a little live analysis...

I couldn't help but notice a few things on NQ aswel... I still didn't fully made my mind about it (about last night's post)... I guess I'll always have an inclination towards watching it as it's the instrument I "understand" (feel) the most right now and also spent the most time watching. Becoming a master of NQ fastball pitches always appealed to me for some reason.

Keep on working that way. Only what you able to see, you can trade!

I will .... !



update...

Don’t scalp forex on the 1m.... I’m sure people still do it but it’s slow, miserable, painful, and unnecessary.

If you want to scalp the 1m, NQ is where you should be. A forex swing trade’s worth of profit in seconds. And all the liquidity you could ever need.

Also, don’t worry about risk:reward ratios alone - you are forgetting probability. Put the stop in the correct place based on the chart, not some amount of ticks, and don’t base your target on that stop distance - that is illogical and nonsensical.

Don’t change who you are; change what you think you need to do. if you can’t focus for more than 30 minutes, stop after 30 minutes - market open is the best time to trade anyway.

“it’s like it’s driven almost exclusively by traders stops” - so be a part of that. Provide the liquidity for those getting stopped out.

You can still trade these highly volatile pairs, just cut your trade size in half..it's that simple... Because you don't want to be losing 20 pips (normal lots) with every tiny spike or sudden move on the minute chart, that's a nightmare.

Sorry for late reply.

I think you guys hit the nail on the head. I can't change who I am. Well, I certainly could but in the end would it be worth it knowing I could simply take who I already am into account and work with that instead? I dont think so.

I think I am ready to let go of Risk Reward scenarios where I need at least 1:1 or more. The more I think about it the more I come to realize I need to take what's on offer. It makes way more sense to me (now) to place stop based on the chart and ride profits based on the chart also. It's why trading is discretionary anyway, because a fixed risk to reward ratio is kind of placing stop like a "deer in the headlights of a truck" and taking profit at random areas also (depending on what I base my entry on, the target, or the stop...).

The logic behind 1:1 R:R + is flawed because by doing so I introduce more randomness. My stop lays either in the middle of nowhere or 2-3 levels too far. That's without even considering profit "target". Price could move with a high % probability to next level missing my 1:1 tp a bit further from the level, then turn right there and hit my stop in the mid. Then I get frustrated and overwhelmed and I don't know what to do.


What I find difficult without a pre-determined R:R is manually calculating my risk in advance each time, as the bars oscillate. In a perfect world I'd be risking 1% on every trade. But easier said than done when scalping the M1... I guess it'd be easy to solve with a "loader" ea.

Try risking an amount you don't care about - this will solve most of your problems relative to 'doing the right thing' (ie putting the stop in the right place, etc), and help free you from thinking about calculating R:R. I don't remember the last time I calculated R:R or cared about it - I'm focused on PROBABILITY.

NQ scalp


The idea is to get back to a "clean" emotional state before re-entering the market.

Also, music can help put me into a flowing mindset where i dont think so much about the future or the past, simply the moment at hands. Something I struggle a lot with.

"strong rejection, pullback, load". Variant of "strong break, pull back, load".

I have decided to take one trade a day for the next 7 days (until friday next week). Keeping up with my pomodoros (30 mins watching-10 mins break x6).

I need to stop over trading! This is the main issue here. Being unconfident in my abilities and ending up messing it all up by all sorts of possible ways.

"It's all in the head".