Hey Gang,

For those of you who wish to read this, here’s what’s been going on with me. I had already announced that I planned to retire in April, the volatility mess in Feb hurt, and it sucked big time, but it did not change the calculus on retirement plans. I have never mentioned this, on purpose, but worked for Rockwell Collins ($COL now part of $UTX) for 32 years. I had worked my way into a very unique position where I was the only person in the company doing what I did. I was involved in projects with very senior leaders where I wasn’t even allowed to tell my boss what I was doing. So, my retirement caused them some grief trying to figure out what to do since I could not be directly replaced by anyone in the organization. I spent Feb, Mar and April training a number of different people to take over the things I was working. That took all of my time and effort, so had to just walk away from the market altogether.

Even before the Feb mess occurred, I had been wanting to move away from what I was doing and head for futures day trading. I liked the idea of being able to be flat at the end of every day and not have to worry about after hour shenanigans, or what was happening in China, etc…. Had spent quite a bit of time picking @Fibwizard‘s brain and working on a strategy that would work for me. Once I retired, I dove pretty deep into it and figured out a good approach, but eventually had to look elsewhere. I had figured out a strategy that I could implement, and if I had still been working and at my computer all day, would have gone that way. But, with retirement, I didn’t want to spend all day staring at my screen waiting for the right setups. Lots of other things I wanted to do with my time.

Around that time @smasty160 told me about a guy named Tony Rago @ TheoTrade who was trading /NQ futures with other traders, calling out what they were doing real time in a live chat room. I spent some time studying his approach and watching. I then started paper trading it on TOS. The worst possible thing that could have happened, happened, for the next 3 weeks it worked beautifully and I killed it. So I decided to go live. First day, first trade ended up a very small loss, no biggie. Next trade, got long, and seconds later a Washington headline crushed the market and I had to hit eject as it just kept heading south, no rebound at all to give me a better exit. After what happened in Feb, the last thing I wanted was to be starting something new and losing money at it. So had to be back to paper trading. 3 weeks later when I had some confidence back and was consistently making money, first day back trading real money and you guessed it, bang, another headline hit while I was long and got crushed again.

Not much you can do about the headline risk, but the better I get at trading, the fewer trades I have to take to make my goal for the day and thus the less amount of time actually being exposed to the market.

His overall approach makes sense and Tony put a lot of time and effort into developing it, but I wasn’t really happy with it as is:
1) Sometimes it worked right away
2) Sometimes it worked but you had to deal with some heat first (never feels good as you don’t know if it will continue to go against you or not), which is OK with Tony, he accepts it as part of his thesis. Since it is his, and he put the time into developing it, he has that level of confidence in it. Me, not so much.
3) Sometimes it just plain didn’t work

I before I spent any more capital, I wanted try to figure out how to put the odds on my side

I needed a better set of rules to use.

I spent months fine tuning the approach, trading for a few weeks, analyzing failures. Lather, rinse, repeat. I’ve had times I went 3 weeks trading without a single loosing trade only to have it start to fail so spent more time tweaking. I have definitely put my time into it. I now have time frames, EMA’s and patterns identified that put the edge dramatically in my favor when entering a trade. Still working on my execution, having the patience to wait for the high probability setups and identifying them real time as they are developing, they are always obvious later looking at the chart :). I trade for about the first hour of trading, 1.5 hrs max.

On the flip side, retirement definitely doesn’t suck. I’ve been loving it.

I am not the directional…

I am not the directional guy but while eating lunch /NQ just pushed to new 20 day lows on a 5 minute chart and bounced fairly quickly. Not saying this is a bottom but on market profile there is a lot less volume here so any reversal is likely to snap back to 6865 fairly quickly.

What is @fibwizard showing?

Next big levels above that are 6977 and 7104. Big volume at the 6977 level.

Channeling @fibwizard With the volatility…

Channeling @fibwizard

With the volatility trying a few futures scalps. Full disclosure, I have done this before, just my job does not allow me to do it on work days. Off today, daughter home sick so figured I can make some money back. Entered at the green arrow but set stop to tight and triggered out 3 bars later while I was making breakfast for a $205 loss. But re-entered close to the lows as the signal is still valid. Will hold until I get an exit signal on the 15 minute chart.

Back to the drawing board.

Officially went flat on the year with todays drop on paper. Gave back all the profits since Feb. Obviously income investing cannot keep up with extended moves.

I am comfortable with my directional trading now but do not have the time to watch the markets all day.

Have to come up with a hybrid trading model. Core based on income investing but really need to take some directional plays to boost returns and keep up with the extended directional moves. As I generate cash with rolls will figure out how to do that better.

Hope everyone else is preserving some gains.

SPX chart….

My SPX Chart for this current sell off…as is usually the case, on oct 4th, teh indicators I use called for a reversal at the top..see the white Line, as it intersected teh ADO and DPO moves to the downside..after a double top retested the 2940, the dam broke down…and as usual, I took advantage of the sell off based on my chart indications….


Reversal signal on /ES on…

Reversal signal on /ES on the new indicator, can’t post it, on a different computer. What is @fibwizard showing.

New tool. Not advertising here…

New tool. Not advertising here but works well in chop. Not going full directional like @fibwizard but I think this will help with my #pietrades by pointing out the actual pivots in real time. I just can’t make it work for me because of schedule, wish I could I know there is money to be made there. So I need something that does it for me. Alphashark calls it the tide trader or something like that. Uses a combination of volume, momentum, oscillator (can’t figure out which one but I think RSI looking at the math) and ATR so it is a Frankenstein indicator. However, it already helped me to hedge my SPX hedge as I saw the reversal. Takes some adjusting to each name. You have to figure out which ATR works best for what you are trading or you get too many or not enough signals. On /es and most stocks a setting of 2 is god but NFLX/AMZN take 10s. Default is 0.5 and just too many signals.

Special is $259 but I don’t know how long. An upper indicator, the big arrows and a lower. Increasing green wave go long. Purple dot possible reversal point. Increasing red wave short. Can change it for any time frame. Easy enough even I cannot miss the signal. Only traded with it 2 times so far but is helping recover MU and WDC positions by letting me sell options closer to the money.

Will update as I use it.