1D M1 VWAP, 1D M2 VWAP, H12 Bearish LIS, H6 Bearish Trend, Lower DOL, M1 Entry, M2 Entry Loss, Mo Bearish Trend Shift, VWAP Short,

Key Takeaways from Today's Trade of the Day Setup

1. Trend and LIS Analysis:

   • Entered a long trade during a setup that should have been taken in the opposite direction.
   • Misalignment due to the H6 trend not flipping, which is crucial for counter-trend trades into the H12 LIS.
   • The trade would not have been executed if the H6 trend flip was awaited, avoiding the incorrect long entry.

2. Timeframe and Execution:

   • The trade of the day setup played out on the 1D 1M VWAP middle band, suitable for 1-minute and 2-minute chart execution.
   • Chose the 5D 5M WEEK VWAP for the trade based on a prior successful trade at the upper band extremity.
   • Misjudged the lower band extremity as a high possibility for a swing low hold and bounce.

3. Volatility and Price Action:

   • Experienced tricky price action with significant volatility.
   • The draw on liquidity was lower following the monthly trend shift, which should have been factored into the analysis.

Adjustments and Rule Implementations

1. Counter-Trend Trade Rule:

   • New Trading Rule: To execute a counter-trend move into the H12 LIS, the H6 trend must be counter-trend to the H12 directional bias/trend.
   • This rule ensures alignment and avoids premature counter-trend entries.

2. Trend Confirmation:

   • Always wait for trend confirmation on the H6 chart before executing trades against the prevailing H12 trend.
   • This confirmation helps in avoiding trades that go against the overall market direction.

3. Timeframe Consistency:

   • Execute trades on appropriate timeframes that align with the identified setup (e.g., 1D 1M VWAP middle band for 1-minute and 2-minute charts).
   • Avoid using custom or less relevant timeframes that could lead to misalignment and increased risk.

4. Price Action and Volatility Consideration:

   • Factor in recent trend shifts and the potential impact on price action and liquidity draws.
   • Stay cautious of tricky price action and avoid making trades based on assumptions without confirmation.

Summary of Adjustments and New Rules

1. New Trading Rule:

   • For counter-trend trades into the H12 LIS, the H6 trend must be counter-trend to the H12 directional bias/trend.

2. Trend Confirmation:

   • Wait for H6 trend confirmation before taking trades against the prevailing H12 trend.

3. Timeframe Consistency:

   • Use the appropriate timeframes for trade execution based on the identified setup.
   • Avoid relying on custom or less relevant timeframes.

4. Price Action Awareness:

   • Be aware of recent trend shifts and their impact on liquidity and price action.
   • Exercise caution in volatile markets and avoid trades based on unconfirmed assumptions.

By implementing these adjustments and rules, you can improve your trading accuracy, avoid misaligned trades, and enhance your overall trading performance.

 

 

 

 

Today we took a long at the exact moment this 'Trade Of The Day' Setup played out. So i got in the wrong direction at the exact moment I should of went the other way.

The reasons I think I got this trade wrong, was mainly because, the H6 trend never flipped, which seems to me now, to be a major factor with my H12 LIS thesis.

***NEW TRADING RULE***

In order to play a counter trend move into the H12 LIS, going against the prevailing directional bias as we state in our 'Line In The Sand', the H6 trend must be counter trend to the H12 directional bias/trend.

__________________________________________________________________________________________________________

I believe if I had waited for the H6 trend to flip, it would have kept me out of the long side trade, because the long order would have never got filled, and I could have located the counter direction move and looked for levels and opportunites according to it. 

The trade panned out on the 1D 1M VWAP middleband. And the trade could have been executed on both a 1 minute & 2 minute chart.

I executed the trade on a 5D 5M WEEK VWAP, because the prior day, I had an amazing trade that came from the upperband extremity, and today we were trading the lowerband extremity, and I thought there was a high possibility that the swing low would hold, and that we would bounce. It was very tricky price action. 

And the draw on liquidity was lower after the monthly trend shifted. 

DOL higher reversal, H12 Bearish LIS, M1 Entry Loss, M15 Entry Loss, M2 Entry Loss, M30 Entry Loss, M5 Entry Loss, Prior Day Untapped LowerBand Failure, Volume Increasing On Open, VWAP failure, VWAP Lowerband Failure,

Key Points from Notes (Refined)

Trading Session Reflection (11:39 AM)

• Massive Loss: Significant red day with a large blow to the account.
• False Signals: Every buy signal received was a false signal.
• Market Behavior: Market dropped unexpectedly with expanding volume on the open.
• Liquidity Draw: The draw on liquidity higher was the next H12 candle high.
• VWAP: Prior day untapped Lowerband on the daily VWAP did not provide a bounce; even premarket movement was manipulated.
• Rule-Breaking:
  • Did not follow the sizing plan (only 1 micro).
  • Did not adhere to the M5 chart trading timeframe plan.
  • Ignored the rule of moving to the next higher timeframe when incorrect on a trade.
  • Resulted in a loss bigger than it should have been.
• Psychological Impact: Felt market was excessively extended to the downside, leading to larger positions.
• Future Considerations:
  • May switch to trading the S&P500 due to NASDAQ volatility.
  • Need to decrease risk on trailing drawdown until recovery.
  • Wider stop losses required when moving to the next higher timeframe.

Loss Analysis and Future Strategy (3:10 PM)

• Persistent Failures: 30M and H1 long signals also failed; unprecedented failure of long signals throughout the day.
• OTD Analysis: Need to analyze how to anticipate such trades in the future.
• Key Observations:
  • H12 bearish LIS (Line in the Sand) to start the trading session was the only indication of a sell-off.
  • Typically expect a run on the LIS to the upside first, followed by a sell-off, which did not happen today.
• Signal Grouping: To prevent future false signals:
  • Short Term Timeframes: 2 Minute, 5 Minute, 15 Minute.
  • Medium Term Timeframes: 30 Minute, 1 Hour, 2 Hour.
  • Long Term Timeframes: 4 Hour, 6 Hour, 12 Hour.
  • Rule: If 3 losses are taken in a row on the same trade idea within any timeframe grouping, stop trading for the day or change the trading thesis.

Additional Reflection (12:52 PM)

• Market Movement: Reached the lower weekly DOL and continued towards the lower prior monthly DOL.

Refined Entry Criteria for Using the Middle VWAP Band

1. Market Context:

   • Range-Bound Market: Use the middle VWAP band for potential mean reversion trades.
   • Trending Market: Avoid using the middle VWAP band as a primary entry point in strong trends.

2. Volume Confirmation:

   • Look for significant volume around the middle VWAP band to confirm the strength of support or resistance.

3. Time Frame Alignment:

   • Ensure the middle VWAP band aligns with support/resistance levels on higher time frames.

4. Price Action Signals:

   • Use candlestick patterns like pin bars, engulfing patterns, or inside bars at the middle VWAP band to confirm potential reversals or continuations.

5. Additional Indicators:

   • Combine the middle VWAP band with indicators such as RSI, Moving Averages, or Bollinger Bands to filter out false signals.

Entry Signals

1. Volume and Price Action:

   • Volume Spike: Look for a spike in volume coinciding with the price reaching the middle VWAP band.
   • Candlestick Patterns: Monitor for bullish or bearish reversal patterns at the middle VWAP band.

2. Multi-Time Frame Analysis:

   • Ensure the middle VWAP band aligns with support/resistance levels or trendlines on higher time frames.

3. Indicator Confirmation:

   • RSI Divergence: Look for RSI divergence at the middle VWAP band.
   • MACD Crossover: A MACD crossover near the middle VWAP band can signal a potential entry point.

4. VWAP Band Interaction:

   • First Test: Give more weight to the first test of the middle VWAP band after a significant move.
   • Multiple Time Frames: Confirm that the middle VWAP band is respected on multiple time frames.

Example Trade Setup

1. Price Approaches Middle VWAP Band:

   • Volume increases, indicating potential support/resistance.
   • A bullish pin bar forms at the middle VWAP band on the 5-minute chart.

2. Confirmation from Higher Time Frames:

   • The 15-minute chart shows the middle VWAP band aligns with a previous support level.
   • RSI on the 5-minute chart shows bullish divergence.

3. Additional Indicator Confirmation:

   • MACD crossover on the 5-minute chart supports the bullish reversal.

4. Entry:

   • Enter a long position as the next candle confirms the bullish pin bar.
   • Set a stop loss just below the middle VWAP band and the recent swing low.
   • Set a profit target based on risk/reward ratio or at the next VWAP band level (top band).

By refining your criteria and combining multiple signals, you can enhance the reliability of using the middle VWAP band in your trading strategy. This approach helps filter out false signals and increases the probability of successful trades.

 

 

 

 

11:39AM. Massive fucking red day, massive blow to the account, every single buy signal I got was a false signal. Market dropped in the center of nowhere, volume was expanding on the open, the draw on liquidity higher was the next H12 candle high. Complete fucking joke of a day, and honestly. I dont even know what I would do differently. 

Prior day untapped Lowerband on the daily VWAP didnt provide a bounce at all, it did slightly in the premarket but even that move was manipulated. 

I also broke many many rules, almost didnt follow anything. Didnt follow my sizing plan. of only 1 micro. Didnt follow my timeframe plan, of only trading the M5 chart. didnt follow my rule of going to the next timeframe higher when Im incorrect on a trade. Loss is way bigger than it should have been. It just felt like the market is so overexaggeratedly extended to the downside that it was baiting me into bigger size. 

But because of this massive false signal, and the loss of almost half my drawdown. I may switch to trading the S&P500 tomorrow because its less volatile. I simply cannot afford to trade NASDAQ if its going to move this much. Its moved -360 points to the downside somehow. And with the timeframe stoplosses that I require, I have to decrease my risk on my trailing drawdown until I get out of this hole. 

The issue is that if I follow the rule of going to the next higher timeframe, then I have a way wider stop with the bigger candles. I would have taken a massive hit on the M15 short long extry signal because the next candle was completely engulfed. 

as it stands right now, we are going to need at least 30M confirmation to take any longs on nasdaq in the future. This loss on the day was completely unacceptable, and we have to do everything we can to make sure this doesnt happen again.

3:10PM Just came back to my trading journal to write under this statement ^^^^^^. The 30M long signal also failed. As well as the H1 long signal. This is unprecedented, virtually every long signal on the day for me failed. So the most important thing I will need to do OTD is go back to figure out how I could have anticipated this trade

The only tell that this trade would sell off OTD for me currently is the H12 bearish LIS to start the trading session. The only issue with this, is that in the past, we have usually seen a run on the LIS to the upside first. and then come down. Thats the type of move I was anticipating today, a move higher from open, until 1PM sell side was offered. I was not anticipating this heavy of a drop from open. And it basically was like trying to buy the next floor and taking an elevator down everytime. 

In order to prevent this many false signals again in the future, we will group the trade signals

(Short Term Timeframes)

- 2 Minute

- 5 Minute

- 15 Minute

(Medium Term Timeframes)

- 30 Minute

- 1 Hour

- 2 Hour

(Long Term Timeframes)

- 4 Hour

- 6 Hour

- 12 Hour

If 3 losses are taken in a row on the same trade idea within this timeframe grouping. I must stop trading on the day, or change the trading thesis.

12:52PM. It just reached the lower weekly DOL and is still continuing to head for the lower prior monthly DOL. 

1D VWAP UpperBand to Lowerband, 2D 5M VWAP (Month), H12 Bullish Trend, LIS Hold, M2 Entry Loss, M5 Entry Win, VWAP (MONTH), VWAP Upperband short, VWAP Upperband To Lowerband,

Trade Analysis for July 29, 2024

Trade Details

• Published: July 29, 2024, 7:41 p.m.
• Status: CLOSED
• Portfolio(s): APEX PA ACCOUNT 50K
• Broker: Tradovate
• Asset: Future
• Future Date: July 29, 2024
• Future Name: /MNQN24
• Symbol: /MNQ
• Type: Short
• Patterns:
  • 1D VWAP UpperBand to Lowerband
  • 2D 5M VWAP (Month)
  • H12 Bullish Trend
  • LIS Hold
  • M2 Entry Loss
  • M5 Entry Win
  • VWAP Upperband short
  • VWAP Upperband To Lowerband

Notes

10:08 AM:

• Initial Trades:
  • Took two small losses off the opening.
  • M2 chart failed on the first sell signal.
  • First trade: A bit of a chase after closing below 19260 (prior day sell range from the 1D VWAP Upperband). Should have considered the 1D Lowerband on the session and the M2 long signal from the variation at the 1D VWAP.
  • No red bar closed below the 1D VWAP on the M2 chart, hence no full confirmation of a continuation selloff.
  • Second trade: 1D VWAP Upperband short from the M2 chart; correct theory but did not work out.
  • Decision: Focus on the M5 timeframe that worked today.

11:06 AM:

• Current Trade:
  • Trading the M5 sell signal from the top of the 2 Day 5 Minute Monthly VWAP.
  • Unsure about holding duration but targeting 19030 (an aggressive target).
  • Following the rule of using a lower timeframe entry, then moving to the next higher timeframe if needed.
  • M5 chart was the successful timeframe for the day.

2:58 PM:

• End of Day Analysis:
  • Mentally taxing day, watched position return to breakeven and waited for hours for a drop.
  • Should have covered at the first test of the 2D Month VWAP upperband.
  • Trading with 1 contract made it harder to respect covers.
  • Need to take quick profits at VWAP for mean reversion trades with 1 contract.
  • Could have avoided the loss and been up $200 by waiting for the M5 chart instead of M2.
  • Sign trade was going against me: reclaim of the 1D VWAP Lowerband trend shift and squeeze of the H12 LIS at 19168.
  • Battle between shorts holding the HOD and longs holding the LOD, with M5 entries from both HOD and LOD holding.

Things Done Right

1. Adaptability: Adjusted to M5 chart after M2 chart trades failed.
2. Stoploss Management: Adhered to stoploss rules and moved up the timeframe for a more reliable signal.
3. Trade Management: Held position with a clear understanding of the trade's setup and signals.
4. Recognition of Patterns: Identified the importance of different VWAP bands and levels in trade decisions.

Things Done Wrong

1. Target Setting: Had an overly aggressive target for the day; should have considered closer profit-taking points.
2. Trade Size Management: Took on too much size with one contract, leading to difficulty in managing the trade.
3. Initial Trade Chasing: First trade was a bit of a chase and not fully confirmed by signals.
4. Timeframe Selection: Initial reliance on M2 chart led to losses; should have waited for M5 signals.

What to Continue Doing

1. Using Higher Timeframes: Continue using higher timeframes for confirmation when lower timeframe signals fail.
2. Adhering to Stoploss Rules: Keep following strict stoploss rules to manage risk.
3. Analyzing Signals: Maintain thorough analysis of entry and exit signals across different timeframes.
4. Journal Keeping: Continue detailed journaling to track performance and learn from each trade.

What to Avoid

1. Overly Aggressive Targets: Avoid setting targets that are too far away; consider more achievable profit-taking points.
2. Large Position Sizes: Avoid taking large positions that are difficult to manage, especially when only trading with one contract.
3. Trade Chasing: Avoid chasing trades without full confirmation of signals.
4. Ignoring Confirmations: Avoid ignoring important confirmations on higher timeframes that contradict lower timeframe signals.

By focusing on these aspects, you can improve your consistency and profitability while avoiding common pitfalls.

 

 

 

 

4o

 

 

 

 

10:08AM: Took 2 papercuts off the opening, M2 chart failed on the first sell signal, im am now taking a M5 sell signal. The first trade I took, was kind of a chase, because we closed below a key level I had at 19260, which was the prior day sell range from the 1D VWAP Upperband. I thought because we closed below that level, we would see a continuation selloff. But I should have payed more attention to the 1D Lowerband on the session, and the M2 long signal from the variation at the 1D VWAP. There was no red bar that closed below the 1D VWAP on the M2 chart. So there was no full confirmation of a continuation selloff. The second trade I took, was a 1D VWAP Upperband short from the M2 chart, which was the correct theory, just didnt work out. This is why I came to the conclution that tomorrow I will focus on the timeframe that worked today, which was M5

11:06AM: I am currently up on the trade. Trading the M5 sell signal from the top of the 2 Day 5 Minute Monthly VWAP. Im not exactly sure yet on how long I should be holding this, but sell side liquidity grabs seem to be in play. My ultimate target on the day I guess is 19030. But that is an extremely aggressive target.

It worked very well for me to follow the rule of a stoploss with a lower timeframe entry, when unwilling to give up the same trade idea, just gradually move to the next timeframe higher. It lowers trade frequency, expands the range/scope of the move, and requires more confirmation. But M5 chart was most certainly the winner for the day.

2:58PM: im officially done trading OTD. Very Very mentally taxing first trading day. Watched my entire position come back to breakeven, and wait literally hours for the same drop. Should have covered from the first test of the 2D Month VWAP from the upperband, being I was only trading with 1 contract. This is the difficult part of only utilizing 1 contract. I dont respect covers as much. Its must easier for me to exit a full position when I have at least 2 contracts. 

The main thing I did wrong today was being too far out on my target. The fact that I was playing the Month 2D VWAP, shouldve required me to take profit at the first VWAP test. Instead of going for the prior day band low at 19031.97 which was a 1D M1 Lower Band Target.

With that being said, I think trading 1 contract is going to require me to take quick profits at VWAP for mean reversion trades, Its going to be very difficult to catch full top to bottom band moves with only 1 contract. 

Also, I could have avoided todays loss, and been up around 200 OTD only trading 1 micro contract, if I just waited for the turn of the M5 chart instead od M2. I will go into tomorrows trading session with that in mind.

Another sign that the trade was going to go against me was the reclaim of the 1D VWAP Lowerband trend shift. It was holding below, but then squeezed the H12 LIS at 19168. 

It was a battle between shorts holding the HOD, and longs holding the LOD. And both M5 entries that came from the HOD and LOD have held this far (3:31PM)