• From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Topic: SmilingSynic's ES journal--observations and trades

Apparently the masses want a futures journal, and in light of the fact that this is an election year, and it is therefore prudent to give the masses what they want, here it goes:

A few guidelines:

1. Although the marquee says that it is "SmilingSynic's" journal, anyone can post here.  Feel free to post trades (please do so live, not after the fact) and/or observations.

2. As for me, I will post trades and observations.  I invite everyone to question what I write.  I teach Socratically, and would like the same question-intensive approach to be applied here.

3. No #$#holes.  If I wanted that, gee, I'd go to ET.
Please treat fellow posters with respect.  We are gentlemen (and women) here.

I do like intense debate, and I welcome any rigorous questioning about my own thinking.

4.  I also will post some material that I have written over the years.  I welcome others to share links and illustrations.  No problem with pictures.  :-)

5. Please note that I do have a full-time job, and that I both swing trade (place orders overnight) and, when I can, do intraday trading between 1-4 PM.  Some days I cannot daytrade at all, and on those days I stay up to trade the Hang Seng (trends well, but too thin).

Last edited by SmilingSynic (2008-10-01 08:16:45)

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

September 2008 was by far the best month I have ever had trading the ES (and the NQ), both in points and in total profits.

But today, I do not know what to do.  I see no immediate high-odds play, so I have no position in my two accounts, other than a token position in UYG that I got when the VIX hit 45 on Monday. 

One of the rules I follow is that even though it is called day trading, one does not necessarily have to trade everyday.

Here is what I see: big range day on Monday, inside day Tuesday, and, so far, inside day on Wednesday.  Inside days take place around 1 out of every 8 days, and it is not often that there are two.

Meanwhile, the VIX remains high.  High VIX plus a series of inside days = high-odds probability of an imminent strong move.

Which direction it will go, I do not know (frankly, no one does).

Not only that, but there are gaps everywhere: 1214.5 above, 1168 right above, and 1113.50 below.
I expect in the next week that there will be a 100 point range in the ES that will take out every one of those close gaps (not the one up in the low 1300's, for now).

Here is how I am playing this on a swing trading basis:I have gtc limit orders at 1495-1498 NQ and 1093-1095 ES areas.  I expect those to be taken out on a whiplash move that will rival anything we survivals who made it through 1997, 1998, and September 2001 saw.

As for intraday trading, I am not making any promises.  I do not trade intraday on Fed days before the announcment, and the market is acting as if this were a Fed day (I learned my lesson trading Fed days when I experienced 13/32 "slippage" on the 10-year).  I now wait an hour before trading on Fed days.

Please note that these are small orders.  I do not believe in using high leverage.   When it comes to using leverage, some might accuse me of being too conservative, but I am more interested in protecting what I have gained over the past 11 3/4 years more than I am in adding to it.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

1168 gap filled.

Assuming that there is not an immediate sell-off now that 1168 has been touched, I expect a run at yesterday's high of 1175.

No positions.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

One of my tried-and-true principles about intraday trading is this: 

"If the test of the previous day's low/high fails, the previous day's high/low is in play, and if the test of S1/RI fails, then R1/S1 is in play."

Those who are trading intraday should note that there was a strong effort to knock the ES down to S1 (1141.50) and yesterday's low (1132), but those failed.  R1 is 1185 (rather high), but yesterday's high was 1175.75.

Last edited by SmilingSynic (2008-10-01 08:48:21)

  • Registered: 2006-12-26
  • Posts: 1,215

Re: SmilingSynic's ES journal--observations and trades

SmilingSynic wrote:

3. No #$#holes.  If I wanted that, gee, I'd go to ET.

You just precluded half of FT from participating lol.

Good luck and my personal input is fade all rallies for now as the larger overall picture is still lower, bailout planned be dammed.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

15 point whipsaw on the 1-minute chart. 

No, I do not regret sitting out this intraday session.

This is like Fed day stretched over two days, and no one knows when there is going to be announcement.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

Until Congress decides what it wants to do, I am stepping gingerly.  I do not have to trade everyday; I pick my spots, and wait for my pitch.

As for swing trading, I have a gtc limit order at 1133.  Reason: price action suggests that they want to take it to Tuesday's low of 1132.  1133 is close enough.

For swing trading, I put on small positions, one ES per 50 in account balance (my two trading accounts are funded at 178M and 72M.  Intraday, it is more like 1 per 20.

I moved up the limit orders from 1093 and 1095 to 1133 and 1114. Since I am scaling IN, I have 2 at 1133 and 2 at 1114.

Please note that I do not intraday trade how I swing trade.  Swing trades cover 2-5 days and seek multiple handles (20, 50, or more).   I have no problem if a position goes against me at first, since the position is put on on such small size.

On the other hand, intraday trades are ALWAYS done in conjunction with the trend, and I NEVER, EVER scale down.  I am a much better intraday trader than I am a swing trader, in terms of profit factor, but I just cannot intraday trade all day.   

Believe me, I have considered quitting my full-time job to just stay at home in front of the screens.  But I spent several years earning a Ph.D. (including work at Cambridge (UK)), publishing enough to get tenure and promotion to full professor, and now department chair.  I am reticent about giving all of that up at this point.   Then again, I have done all I ever wanted to do, and at 40 there is still time to do something else.

EDIT=
M= thousand
MM= million

Last edited by SmilingSynic (2008-10-02 06:28:15)

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

Intraday, it pays to watch the previous day's highs and lows, and also the RTH close.

Traders are taught to buy dips in strong uptrends and to sell rallies in strong downtrends.  It is at the previous day's key levels--close, high, low, average price (daily pivot)--where such a strategy tends to work.

Note, for instance, the resistance at yesterday's low.  Price went down to 1136 and then a weak rally was stopped in the 1142 area, right by yesterday's low of 1143.75.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

Long 2 ES at 1133; long 400 SSO at 46.37.

Target of 1165 for ES; 1200 for SSO.

Do I use hard stops for swing trades?

Yes, but not right away.  Positions need time.  I prefer time stops: if the market action does not confirm my hypothesis within a reasonable amount of time, I am out.

I will check back at lunch.

I have two contracts for trading accounts that equal a quarter of a million.  I am not overleveraged.

My thesis right now is that the market is groping for a bottom in a stair-step fashion, hitting all the stops that protect long positions.  When the stops are cleared out, the market will bounce to at least the 1150's.

If the rally is weak, then I know I am wrong, and I will exit, with the expectation that I will get back in later, at a better price.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

Looks like they're pushing for 1113.

I will add one, not two, at 1114.

That will make 3 contracts total for a total account size of 249M (179 January 1 08).

Last edited by SmilingSynic (2008-10-02 11:51:09)

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

Waiting for a student who is late for a 3:50 meeting, so I'll post this from my files:

"How not to blow up trading stock index futures":

Don't trade countertrend with high leverage on a trend day.

No $hit, sherlock. How does one know it is going to be a trend day?

Consider the following as generalizations based on my own experience. And if it helps you avoid losing half your trading nut (or more) in one day, good :

1. Strongly trending markets tend to move in tight channels, and there is little movement away from the trend, and little movement back to the open. The stronger the trend, the smaller the pullback.

2. When the market gaps down, and then trades up to a point that there is a swing high below the gap, there is generally at least another strong move down for the day. Gap (or strong move) plus mid-day consolidation equals late afternoon continuation.

Likewise, when the market gaps up, and then trades down to a point that there is a swing low above the gap, there generally is at least another strong move up for the day

In other words, there is usually a chance to get out a mid-day. If you have been fading all morning, you might want to take advantage.

3. On a trend day, the trend tends to become stronger as the trading day becomes longer. Therefore, on a trend day, the stubborn countertrend trader risks suffering significant losses.

4. If the market consolidates at support and does not bounce off, that support will probably not hold. The longer the market consolidates at support, the more likely it will successfully be breached. Likewise, if the market consolidates at resistance and does not back off, that resistance will probably not hold. The longer the market consolidates at resistance, the more likely it will successfully be breached.

5. If the market breezes through S2 or R2 levels early in the day, as if they didn't exist, they probably didn't.

These rules apply to INTRADAY trading of the ES.  For positions held for 2-5 days, on average, for those who cannot watch the screen all day, trading countertrend IN SMALL SIZE can be a workable strategy, assuming that one can handle the higher drawdown holding overnight.

  • Registered: 2006-12-31
  • Posts: 149

Re: SmilingSynic's ES journal--observations and trades

SmilingSynic wrote:

5. Please note that I do have a full-time job, and that I both swing trade (place orders overnight) and, when I can, do intraday trading between 1-4 PM.  Some days I cannot daytrade at all, and on those days I stay up to trade the Hang Seng (trends well, but too thin).

SS, do you want to start a HSI journal too?

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

yip1997 wrote:
SmilingSynic wrote:

5. Please note that I do have a full-time job, and that I both swing trade (place orders overnight) and, when I can, do intraday trading between 1-4 PM.  Some days I cannot daytrade at all, and on those days I stay up to trade the Hang Seng (trends well, but too thin).

SS, do you want to start a HSI journal too?

I'd like to but cannot because I still cannot get my home computer to accept the cookies needed to fattail at home.  I can only post on fattail here at the office, for some reason.  :-(

The HSI is wild but thin.  I call it the MMA of the e-minis: if you don't know what you're doing, you can really get hurt.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

High volume bar and a potential Wyckoff upthrust.  Stop now in place at 38.75.

EDIT: Out of 38.50.  Negative slippage on the ES--geesh.  Still holding SSO.

Admittedly, a pathetically small position.   Smallest chips I have played with in a while.  I see no reason to bet any higher, in this environment.

I expect the RTH open to be tested.  That often happens after Wyckoff springs and upthrusts intraday.

EDIT: Profit of 5.50 points for two.

Last edited by SmilingSynic (2008-10-03 06:07:45)

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

RTH is 34.25.  If I were trading intraday, and not working, I'd look for a strong move off of this level.  The RTH is one of those key levels that need to be watched.  A 1-2-3 off of the open is money in the bank.

RTH was touched.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

Yesterday's high of 55.75 was touched.  Was on the phone the entire 20 point move off of the open.

Moves like that make a month, for the average trader.  Meanwhile I am the phone.

Hope someone out there cashed in.  Back at 1, if I have time.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

Looking to get out of the bulk of the SSO on a retest of yesterday's high/today's high.   Sell on a touch of 1154 on ESZ8 (the December ES).  Planning to leave the rest for 1198, which could be touched on a pop.

Odds are that a retest of the mid-50's is coming, since the NQ is hanging around R1 and the day's highs.  It might have to wait until after lunch.

Account total stands at 252.3 M.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

Out 100 SSO at 47.67 on a surge; looking to bail out of 200 at ES 1154, leaving 150 for later.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

"Surges" can be seen on 1-minute charts, but ESPECIALLY 15 second charts.  Otherwise, I have little/no use for 15 second charts.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

1-4 Intraday is not going to work today.

I have an out of work builder who wants to come see me about completing his degree so he can teach for a living, and I have to deal with an otherwise outstanding professor who used some racial language in her class.  I have students coming into my office crying.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

Out 200 SSO at 47.87 at 12:55:39.

252,000 + in account size,and all I have is 150 SSO, not even half an ES equivalent. 

Yes, that is what I call "sitting on the sidelines".    So be it.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

If I were playing this intraday this afternoon, I'd watch 1155 area like a hawk, as this area should hold as either support (if it breaks above) or resistance (if it backs off and heads back down).

I have limit orders at 1114 ES and conditional orders to buy 1 ES if VIX hits 49.5, and 1 more if it hits 53.5.  Again, this is small potatoes for an account my size.

Have a nice weekend, everyone.

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

Holy S$$#, Washington got it done.  Just checked in after my meeting.

Long 1 ES at 1114, and 100 SSO at 44.91.  Pu#$y position.

1132 is in reach by 4:00.  Bounce off of yesterday's low is not exactly convincing--looks like a bear flag, so stop is set at breakeven.

If it fails here and heads down, gee, that would be some long weekend for bulls.

Iow, I will be out at 1132 or at 1114, whichever comes first.

EDIT: Will be back here at 4:00--see what happens.

Last edited by SmilingSynic (2008-10-03 10:43:51)

  • From: Outer Banks, NC
  • Registered: 2007-01-03
  • Posts: 3,454

Re: SmilingSynic's ES journal--observations and trades

Stop hit at 1114, filled at 1113.25 (!), for a 3/4 loss, all on slippage.  Traded 10 lots with no slippage before, and get hit with 3/4 point on a one-lot.   Figures.

Market then went to 1131.75 without me (I had said 32).  Close, but there are no moral victories in trading.

Afternoons like this accentuate the difficulties of having a full-time job and a trading business.    I have tried to do both for years, and although I am consistently profitable, it is harder and harder to do both.  As I get better, I leave more and more money on the table.

Money does not make me happy as much as it provides what my family needs.  It will provide life-long care for my disabled son, and will allow me to retire when I want where I want.

But being right and not being at the screen to take advantage does nothing for the bottom line.

Considering the portfolios of the rest of those with a full-time job outside of trading, I should be grateful for actually having capital gains this year.  Then again, this volatility does not come around that often.

I remember trading through a sub-11 VIX and through 6-8 point daily ranges on the ES.  Now with VIX in the 40's, six or eight points is a five-minute bar.

There was volatility over the summer, the only time I can trade without interruptions; but nothing like it is now.

  • From: New York City
  • Registered: 2008-07-18
  • Posts: 371

Re: SmilingSynic's ES journal--observations and trades

SmilingSynic, your comments are invaluable. Thank you for taking time to post.

fortune favors the brave