5D 5M Month VWAP , M5 Entry Win, VWAP Short,

Key Takeaways from Today's Trading Session

1. Adaptation to System:

   • Focused on taking positions based on market displacement and direction from the overnight session.
   • Anticipated a shift at the Month VWAP, which influenced the decision to short.

2. Trade Execution:

   • Shorted against the prevailing H6 and H12 trends, aligning with the strategy of trading based on displacement from key levels.
   • The trade did not hit the stop loss (set at the High of Day) and trended below the 9 & 21 EMAs on the 5-minute chart.

3. Drawdown Observations:

   • Experienced drawdown due to a variation shift entry on the 5-minute chart.
   • Despite a winning trade, drawdown occurred, highlighting the need for improved entry strategies.

Key Intention for Tomorrow's Trading Day

1. Backtesting Displacement Areas:

   • Conduct backtesting on displacement areas to identify common themes that lead to successful trades.
   • Focus on how displacement from key levels correlates with winning trades.

2. Refine Entry Strategies:

   • Analyze and fine-tune entry strategies to minimize drawdown.
   • Investigate ways to enhance accuracy in displacement entry points and reduce adverse effects from variation shifts.

3. Data Analysis:

   • Gather and analyze data on how displacement from key levels impacts trade outcomes.
   • Use this analysis to refine strategies and improve overall trading performance.

By focusing on these areas, you can work towards optimizing your trading approach and potentially increase the success rate of your trades.

 

 

 

 

I just followed the adaptation to the system. Which is taking positions based off of displacement and where the market is heading, from the overnight session, I figured that the move would shift at the Month VWAP, and present an opportunity for sellers to get involved. At the moment I shorted, it was against the prevailing H6 and H12 trend, but it appears that displacement from these key levels is a better appraoch thus far, unless the data changes. I took the trade, it never hit stop which was HOD, and it steadily trended below the 9 & 21 EMAS on the 5 minute chart.

My key intention next is to do some backtesting on all of the displacement areas, and try to gather data on common themes that lead to winning trades. Although today was a winning trade, I did experience some drawdown from the variation shift entry on the 5 minute chart, and if I can find ways to fine tune these entries, and avoid as much drawdown as possible, I think that would be a great next step. Finding common entries based on displacement areas off of key levels.

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)