Dear diary,

It was a slow and quiet Monday. Before I started the day, I was reading John Carter’s book. His point on opening volume of E-mini S&P(ES) caught my attention.

If the first six bars on a five-minutes ES chart have most of the volume at or well under 10,000 contracts, expect a choppy, tight range session.
If the first six bars on a five-minute ES chart have most of the volume at or well above 10,000 contracts, expect a more volatile session with better trends

I think this is a pretty good idea. I use it as part of market tone determination for day trading E-mini S&P(ES) and Dow mini(YM) during cash market opening hour. That was what happened today. Other than the very first candle, the following 5 candles of E-mini S&P were trading below 10,000 contracts. And in fact, the broad market was rather quiet (partly because there was no fresh lead, no economic report). I ignored any possibility of trading E-mini S&P and Dow mini for the day even though there were a couple of dummy set ups. (I was right in this case).

Instead, I was looking at E-mini Nasdaq. ( Until this point, I am thinking, if market opening volume analysis of S&P shows a choppy, tight range session, can Nasdaq escape from this market sentiment and dancing in its own pace?) I got a short position.

That were a little of discipline and psychological plays. E-mini Nasdaq was indeed, moving in my favour after short position was established. And it poised to reach my 1-R break even point. It did not. To be frank to myself, I was really tempted to close the position when it was moving back around my entry point. It was the temptation and that’s all. I left it alone and sticked to the rule, let the market stop me out (And I got stopped out, Darn)

First trading day of the week, I am down with 1-R. No big deal, at least, I stick to the rule. The challege here is market tone determination. More works need to be done.

Ok, I just talked too much.

I like to write the postmortem of my day trading after I catch some sleep. It makes my mind clearer.
Dear diary,

Ok, yesterday I made a good trade with 1-R loss. (Good trade with loss!??!, nut!) I said good trade, because the trade was executed and stopped out as planned. No rule was broken.

Of course, I can’t feel great with 1-R loss, but that’s part of trading. I have been reading about options expirations on Mike’s blog. After doing some quick research on the web and short discussion with Vincent, basically, options expirations implies high volatility and whipsaw trading. I am not sure if the implication is remarkable, though some traders choose to step away from market on these days. I need some experience before jumping into conclusion. I will take the trade if dummy set up appears. (Here it goes, my first experience ended up with 1-R loss, #!@#$*@#)

While discussing trading multiple positions concurrently, Vince mentioned this point

KEY to trading multiple positons : “Once you are in a trade your job is to just manage the stops and forget about the market action during the day – this will keep the emotional level low. Only use market levels to reset your stops or to take partial profits and the trading plan will take care of itself.”

I think he really got the point. After establishing positions, our job is basically managing the stops. No prediction, no gut feeling and no monkey acting. Manage the stops according to our plan.

Mike left some good comments on my blog which I think I gotta quote it here.

A couple of things may help. Create rules for when and how you can move your stops. I found that moving my stops before being in the trade for an hour was making me miss moves by stopping me out too quickly.

It may also help to define your maximum loss for any 1 day. THis is an idea I got from John Carter?s book. That?s part of his business plan. 3R is my ?cry uncle? point. If I lose that much I wind things down for the day and just wait for an ?easier day? to try to make my money back?

Good points!
It is a long journey of learning and refining my trading strategies. Along the way, I should feel lucky to know these good people who are willing to share their opinion and experience. After all, there is really no secret in trading. It is just a job that I need to set my own rules, and monitor my inner self and ‘behave myself’ within the boundary of my own ‘Law of trading’.