Review July

This Month was a very bullish, by the using elliot wave method the trades always reached their final targets and there was no confusion how long trades would last.

The buy signal on the 10th of july was one day too early and got stopped out for breakeven, however by using 10 and 2 min charts it was possible to catch most of the uptrend.

On the 60 Min Chart the risk was never bigger than 55 points. On the 7 trades we had in average a Risk Reward Ratio bigger than 3 and in fact no loosers.

04th Week of July Sideways Trading

Monday

• Monday morning gap up, gap fill trade
  
• Then a short setup that got triggered to early, I learned to wait for double top or a trendline break to enter short
  
• A long signal that got triggered to early V-bottoms simply dont work I have to wait before entering a trend trade.
  
• Another long that also avoided trading short

On Tuesday

• Then a couple of long signals that got avoided
• 2 Short setups that did not work out, so i learned to once again wait for the trendline break
  
• The last setup overnight did work
  

Wednesday

• Counter trend signal long was the best trade of the week on the 10 min chart
  
• Another long signal that retraced 100% before reaching its target on the next morning
  

Thursday

• We had targets from the the 2nd Wednesday setup left but also the stop would have been hit, therefore no long trades on the 10 min chart.
  
• Also no short trades as there has to be before the Setup a Bar with a Higher Low than the Low from 2 Bars ago so its clearly a fractal sell.
  

Friday

• Short setup after news was good for some quick profits
  

31th July Up, Down, Down, Side

High of the Day: Camarilla H3
Morning Reversal: Prior Day Close
Low of the Day: Prior Day Open Or 200 EMA (10 Min)

Profit 2,3 R optimized or
Loss -3 R trading all signals

Exit Rules:

• Breakeven after the short trade broke below the support channel on 5:26 am
• Discretionary: Watch every news event and exit trade manually in cause the strategy order does not get filled at the target price.
• For the last trade same rule we had yesterday simply trail the stop on 15.30
  

Entry Rules same as in the morning 29th of july:

• Don't short when there is a strong uptrend (Elliot Osciallator > 10)
  

30th July Down, Up, Up, Down

High of the Day: Camarilla H4
Morning Reversal: 200 EMA (10 Min)
Low of the Day: 200 EMA (10 Min)

Profit 2,32 R optimized or
Profit 3,36 R trading all signals

Today was a very trending day, the sell off in the morning was immediately faded so that it was very obvious that we would have also a bullish US session.

What was interesting when comparing 10 min and 2 min long signals first the 10 min got stopped out in the morning but there where still some targets left, then the price went down to the 200 ema line and then traded up again. The same thing happend for the 2 min signal at 6 am it got stopped out and then the price traded down to 200 and then priced continued up to reach the targets.

I will use this experience as an opportunity to keep in the future the targets in mind and use other entry methods to get all of them even though the original trade got already stopped out.

Anyway these where the setup rules:

• Remember we where saying don't short on strong trends (elliot osciallator > 10) or don't short if the 50 ema is not below the 200 ema, well all of this obviously is not needed on counter trend DP signals, so almost all of them will be traded
• There was a signal on 9:30 but this one was not traded because the low as not below the 34 SMA, so it was overbought and like many times in the past would have generated a loosing trade.

Exit Rules:

• On 15:30 the market usually decides if there we will be a really or a sell off before the close, as there was no clear sign that today will be a rally before the close the strategy automatically closes trails stops to the swing low point.
  

29th July Up, Side, Up, Side

High of the Day: Camarilla H4
Morning Reversal: Camarilla L4
Low of the Day: Camarilla L4

Profit 1 R optimized or
Loss -1,20 R trading all signals

Like yesterday there was a rally in the morning, but then unlike yesterday the up trend continued till the news at 8.30 am came out.

The 3 wrong short setups in the morning where not traded by the strategy, unfortunately there was no long setup on the 2 min chart just on the 10 min chart, so no trades where done on the 2 min chart in the morning

The setup rules for today had one specific thing to strong sell off days:

• I don't allow the strategy to take short trades on strong trends (elliot oscillator > 10) during trending times like before 4:30 am and between 9:30 am and 10 am
  
• Same as every day don't trade signals during 7.10 am and 8.04 am as these well be just scalp trades before the news event.

Exit rules like we had yesterday:

• Trail Short Stop On New Short Setups

28th July

High of the Day: Camarilla H3
Morning Reversal: Prior Day Low
Low of the Day: S2

Profit 4,20 R optimized or
Profit 3,10 R trading all signals

Like yesterday and the day before yesterday we had today the same market behaviour: In the morning a rally (which the strategy traded perfectly), then a sell off before and after the news.
Today was in particular a heavy sell off with almost no regular retracements therefore only one valid short setup got traded by the strategy.

The setup rules for today had one specific thing to strong sell off days:

• First of all I don't allow the strategy to take any more short trades after 12 am
• Long Setups under Camarilla L4 are normally also forbidden but after 1 pm its fine to trade them as there is most of the time a correction up after a strong sell off
  

The exit rules today where pretty common:

• Set breakeven stop +2 points after 20 points profit, but at least 4 bars after entry
  
• Trail long stop on Camarilla L3 Pivot
• During the News Period 8:00 am to 9:30 place breakeven stop if the close is above the entry price (very aggressive trailing, due to the time of day where either rallies because of news or corrections before the open happen)
• Trail short stops on the High of new Short Setup Bars
  

Targets-based trading

Today was the first day where I traded besides using the already working system a new approach: Targets-based trading

The method is pretty simple but very effective:

• In the morning I look at where the price is in relation to yesterdays close
  
• then I make either a long or short trade
• at the first target I re-evaluate if I stay in the trade for the next target or exit and wait for a counter trend signal
• Having a bunch of targets (yesterdays high, close, camarilla pivots, fibonacci extensions, 200 ema, 50% of yesterdays range) its quite profitable to trade this way.

With just 5 different targets (yesterdays high, low or close and the Camarilla Pivots) that get hit almost every day its a very effective way of trading.

27th July Down, Up, Down, Side

High of the Day: Open or Camarilla H4
Morning Reversal: Prior Day High
Low of the Day: 200 EMA (10 Min)

Profit 8,3R optimized or
Loss -7,2R trading all signals

Today was a nice gap up that the strategy shorted and then went long to catch the double top.

Entry Rules:

• Don't take long trades till 4 am if the gap is not closed
• Don't take short trades below Camarilla L3 but do take them below Camarilla L4 Level
  

Exit Rules:

• Trail Stops on new short setups
• Place Stop below the bar that reached the High of yesterday.
• Exit Short Trades on new Long DP Setups
• Exit DP Long Trades if the Target has been reached and a strong up trend is in place
• Exit all Trades at the end of the session
  

03th Week of July Another Bullish Week

This week clearly showed the type of market that we are in: Trending market
Pretty bad in trending markets are counter-trend signals. Have a look at both screenshots and decide whats best either elliot wave based signals or simple breakouts with ATR trailing to exit trades.

To avoid even more loosing trades I added this setup rule:

• Don't take short signals between 7 am and 8.30 am
• Don't take long signals between 4.40 am and 7.30 am
• Enter long after 8.50 am for the signals that occurred after 7.30 am
  

This limitations are because of news events happening usually at 8.30 am. Knowing the fact that news events often create spike ups that will be faded before the US stock market opens, its wise to use this entry rule:

• enter a valid long setups only after 9.30 am to avoid getting stopped out or realizing profits too early (targets or breakeven stop have been triggered)
  

24th July Up, Down, Down, Up

High of the Day: Camarilla H3
Low of the Day: Camarilla L3

Profit 5,89 R optimized or
Profit 1,70 R with trading all signals

Whats pretty common after massive rally day is that there was a slight selloff during the night then a gap fill that trades above the high of yesterday getting all stops of the people that went already short.

Following exit rules where used to stay in the long lasting short trade:

• Don't use ATR trailing or trail on the high of new short setup bars after 8:30 till 13.00
• Trail Stops if the price breaks below Camarilla L3 Pivot

23th July

High of the Day: End of Session
Low of the Day: PP

Profit 17,5 R optimized or
Profit 13,5 R trading all signals

Typical for News days was today the consolidation in the morning, after the gap fill the strategy traded short at 5:12 am after the short signal.

Normally I would trail stops after new short setups but there is one exception to this rule:

• Exit Rule: Trail stops on new short setups but only it the price is below 50% of prior days range or time is after 7 am

Nevertheless the positive news created a massive rally luckily with long setups prior to the move up. On Spike up's usually happening on 8:30 am the strategy used this exit rule:

• Exit on Profit Target Last Bar's Close + 25 Points

On the last trade this exit rules were used:

• Trail Stop to the Low of the Bar that reached the Daily Fibonacci Target (Low of today +1.618 times prior days range)
• After the long profittarget 2500 EUR trail stop 12 ticks below the Low of last bar (but like all trailing methods dont do this after 13 am)
  
• ATR Trailing with 3.3 periods after 70 ticks profit
  

To avoid choppy markets after a big rally in general this setup rules are used:

• Stop trading for today if a profit of 3400 EUR or a loss of 650 EUR have been realized after the last trade was closed.
  

22th July Down, Up, Up, Down

High of the Day: Prior Day High or Camarilla H3
Low of the Day: 200 EMA (10 Min)

Profit 5,5 R optimized or
Profit 3,5 R trading all signals


Whenever a market opens above the close of yesterday and trades back to the close (in otherwords no breakaway gap ups) there is a good shorting opportunity. Keeping this in mind and seeing all long setups not being traded by the system, i decided to discretionary trade short in the morning.

What the system traded very good was the long DP setup at around 4:45 am.
What did not work so well was the US stock market open, as no long setup but a couple of wrong short setups occured. Discretionary I traded the GAP Fill on the E-Mini S&P...

Therefore one new entry rules to avoid choppy market action:

• Dont take new trades between 7:10 - 8:06 and between 9:30 - 9:40 on 2 min charts
  
• Dont take new trades during 7:10 and 8:30 on 10 min charts

What I also implemented from looking at the last short trades today was these exit rules:

• set stop to breakeven for short trades on new long setups
  
• use the high of new short setups as places to trail your stop for an already running short trade.
  

21th July

High of the Day: 200% Extension
Low of the Day: 50% of Yesterdays Range

Profit 8,2 R optimized or
Profit 5,2 R trading all signals

Today was a very trending day, even though the strategy traded only 4 signals out of 12 it was a profitable day.

Like I highlighted yesterday, the basic entry rule to avoid short setups if the 50 EMA is not below the 200 EMA payed off this morning.

Also the setup rule to not take trades between 7:50 and 8:04 avoided today to exit the profitable long trade too early.

What we have not seen on the DAX so far was:

Exit Rule: Trailing Stops on the daily fibonacci targets (0.618, 1, 1.618 and 2 times prior days range added to the low of today) Using this rule exited the long trade today at the 200% extension right before the US market opened.

20th July Up, Side, Down, Up

High of the Day: R2
Low of the Day: Prior Day Open

Profit 1 R optimized or
Profit 2,5 R trading all signals


Today was very challenging with just one good long signal in the morning happening after the market created a double bottom base, later the market got very choppy so I decided to do not trade the US session but letting the short setup on the 10 Min Chart run..

Some specific rules the strategy used to avoid getting into too much trades:

• Entry Rule: Its always best to enter on the High of last bar +2Ticks, notice this morning on 3:52 the setup was not traded because the setup bars with the blue background color could not break above the previous bar +2Ticks
• Setup Rule: As a good guideline do not take trades above Camarilla H4 level in the morning, as there will be first a correction before the US stock market opens and then maybe the trend continues...
  
• Exit Rule: Before the US stock market opens there are sometimes very explosive moves (especially after 8.30 news) but sometimes like today choppy moves, in that case I move the stop to breakeven as soon as we have a close above the entry price.

02th Week of July A Very Bullish Week

This week was very bullish, with 3 really nice setups:

• The first one happend on tuesday evening, I was not sure to take it but as a rule of thumb: What ever looks uncomfortable usually will be a good trade. ATR trailing kept me till Thursday morning in the trade.
• I am trailing stops to the Low of last bar on 10 Min Charts when the first target was hit, that gave me a winner and avoided being stopped out on Thursday morning. I was lucky because there was another long setup on the 2 min chart so I got some more profits in the evening.
• Friday, as expected, I had a nice short setup, which I exited at the last target

To summarize this weeks theme was trading rule number 1: let profits run.

17th Friday Side, Down, Up, Up

After a long trend usually double tops end the trend, using following methods helped me trading this market behaviour profitable :

• Exit Rule: I close trades at the first target if there was a day with a huge rally before...
• Setup Rule: It really pays off to not take short trades in the morning when the 50 EMA is not below the 200 EMA, what was however profitable was trading the countertrend DP short setup.
  
• Exit Rule: Its wise to close the trade when was a close below the 50% line of prior days range
  
  
• Setup Rule: After the US market opened there was a wide range bar at 9.38 this canceled the long setup, however there was another valid signal at 11:16 am.

• Exit Rule: The upcoming short signals made me move my stop to breakeven and at the end of the day I exited the trade.

Comparing Historical Non Farm Payroll News Events

• On the 3th of april, the prices where already above camarilla H4 in the morning then retraced enought for a test of the double top was after 8.30 am the case.

• On the 8th of may, prices where already above camarilla H4 in the morning but did not retrace therefore no big move after the news release
  
  
• On the 5th of june, prices where above camarilla H3, so quite bullish, then retraced and rallied to R2 after the release, such quick moves obviously will be faded so going short after the US market open was very profitable
  
  
• On the 2nd of july, prices already went down to camarilla L4, then a choppy trading range prior to the news, so on this day staying short the entire day would have been the best decision.
  

Conclusion:

All NFP events are different, if we have a trend the NFP might just be a pause or push the prices even further in the direction of the trend. On a reversal its important to know where the next target is, if a news event pushes the prices into this target zone in a matter of 1-2 minutes chances are very likly that the trend will NOT continue in this direction as a double top or bottom is formed. Even after News events that push prices clearly outside of any support/resistance area, the trend will also not go forever but pause or even reverse at 3 new swing highs or lows.