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Crude, in the zone 2

Learning in real time

Swimming with whales

A deepening understanding of Fractals

Lightbulbs and gradually sudden enlightenment
autodidactic trading

Highest density of epiphanies during any single trade so far

And the bodhisattva vow

Today was easy.  I got my blog entry done during the trade, by filling Facebook chat with live commentary.  Now I’m done early!  All I have to do is paste in all the snap shots of the action.

Brendan got something done too, work on his shed, while I jabbered at him.  So, valuable day all round!  (He had already doubled in acct in one night on Monday, so he was taking the prescribed big win break.)

Whether or not anyone reads this, or if it benefits anyone, I myself feel quite edified.  I have never been so “in the zone.”  Good practice session.  Good workout.

I felt like I understood many new things, or old things on a deeper level, all in real time.  So, good show, blog done.

If anyone does read this, I urge muddling through the early confusion, or skipping ahead to 7:47AM, when the light bulbs started to flicker.

IMO, there be nuggets in dem der epiphanies, that might be exchanged at the tradin station for some gubburnment notes…(at least for me, and hopefully friends, family, and in the long run…we’re all friends, right?)

I’ll go through the text and try to add notes where jargon or shorthand is used.  FT71 has a glossary for many of these terms, at:

http://futurestrader71.com/glossary/

Pictures start flowing in chat at 8:58 AM, so scroll forward for visual references.

If you can’t stand trading, but like spiritual claptrap and crazy talk, scroll forward to 11am, when the trade was winding up.  Supercalifragilisticexpialidocious
for the commonly experienced disgust with the taste of trading!  Or is that a spoon full of sugar?

First hour

(There are a lot of famous trading exercises.  One is narrating the market.  Out loud.  One thing it might do is give one insight in to ones own way of thinking….thoughts which might be sub-conscious if not articulated.  Thoughts which in some cases can cause us to make wrong choices.)

Before the chat started, I spent the time from 6am to 7am dipping my toe in the water with some early trades.  I got short on a failure back in to yesterday’s range, and got one scale out.  Then price stalled.  I took a snap shot of what looked like a bear flag, because it was an upside down mirror image of how the market ended yesterday. 8-4-16 upside down mirror of yd top

The slight poke through a level, the curling away from that level on the second attempt.  Yesterday, in the long run, this did become a bull flag that completed up.  Would this one be a bear flag that completed down?  You can see my targets in the blue lines below, where I wanted to cover my short, and reverse my position.  The reason was, this level was 50% of the entire up move from yesterday.  The day that was driven by the big 24,000 contract buyer.

8-4-16 50% of up move

 

Never completed

It never got there, and my early gains were whittled away, and I never got my long on from $40.32.  Here is what happened next, from 6:30-8 am PST.

8-4-16 upside down mirror of yd top 2

The chat log begins at 7:20 am.  That is right about the time you can see I added to my short (the little purple dot), at half of the down move, expecting the bear flag to continue, to the point where I wanted to get long, at $40.30.

Then at 7:30, you can see where I realized I was wrong, and stopped out.  A little slow there.  Bad trader!  Hand slapped.  A few hundred bucks up in smoke.  Should have seen it when it pushed through that liquidity directly above my short add, at $41.77.

As the Facebook chat log proceeds, an idea dawns.  That idea is reflected in the picture above of the blue dots around 7:45, where I started to get long.

The rest is history.

Facebook Chat Log


  • 7:20am

Brendan Hurley

That little push by the Asians should have been a little more suspect to me.

7:40am

Kelly Evans

I’m back to playing paper

reads harder for me today

out of yd range, back in, got some good short scales

but didn’t reach target of 50% of upmove

impulsive back out of yd range, back in

ES and NQ acting similar

NQ getting very bullish

was up quite a bit at times, now back to flattish

back through 50% of that up impulse

think I’ll give it a rest, and see if anything clearer forms

I shorted the second failure back in to range, which worked….but with NQ and ES holding above their yd ranges…

took it off early

7:45am

Brendan Hurley

Yeah I’ve got the day off but have to finish the shed project and not hitting my targets.little off

Choppy

Big build here as you thought

7:47am

Kelly Evans

what could be happening here is

that 24k buyer from yd

could be pushing through local levels

not letting it get back to technical pull backs, buying it up

day is a massive bull flag now

I’ll try a long

might get chopped

but I think that big guy is still in control

7:50am

Brendan Hurley

I don’t like it in the middle here

7:50am

Kelly Evans

normally no

7:50am

Brendan Hurley

But looks like it wants higher

7:50am

Kelly Evans

but I have a theory

let’s see how it works out

7:51am

Brendan Hurley

Good

7:51am

Kelly Evans

also ES and NQ ripping

7:51am

Brendan Hurley

Gotta play fhem

7:51am

Kelly Evans

bigger time frame idea

it’s already pushed above yd range twice

it’s exactly at that choppy close from yd

not respecting mids at all today

not working

somehow or other, I think we’re gonna get out of yd range and close above it

it’s an interesting situation, because in this case we specifically saw this one big buyer

7:57am

Brendan Hurley

I was just thinking about the 25K guy coming into the bear cave, he has work to do

7:57am

Kelly Evans

we know he was there

all we have to do is guess his time frame, and potential size

usually we are guessing more about big players

We see them in the action, and the volume

but we don’t know it was one guy

NQ trending up

7:59am

Brendan Hurley

Definitely could have been a group

7:59am

Kelly Evans

I think it’s one guy

7:59am

Brendan Hurley

It looks like it wants higher

7:59am

Kelly Evans

just think about it

let’s say you have a $100m fund

you could easily do that

and that’s not that much

here he comes

poised right at that close

ES above poc (volume point of control) of 13 day range

HUM behaving trippy

it’s become my pet stock

NQ straight up

no pause

one of the things I’m meaning to write as part of my training series is

what is happening inside a flag

I’ve thought about the participants

and of course it happens on various time frames

I think I’ve figured out what plugin can make the web page behave the way I have in mind, but it’s hard to get the time to do it

here we go

locals (smaller time frame traders) shorting here

more locals shorting

did you ever hear that famous story about a technician trying to call a level to a seasoned commodity trader? *(footnoted)

sucking in more shorts

I predict trend day 2

BAM

locals smoked

I was waiting to say that J 🙂

I added long 2 seconds before the pop

8:26am

Brendan Hurley

Thumbs up (emoticon didn’t copy from FB)

8:26am

Kelly Evans

aiming for a scale at on (overnight) high

you can just imagine how many locals get smoked by this type of action

I did many times in the past

with ES and NQ you can’t really imagine this is one guy….but in oil it might be

or, like you say, a small group of large players that collude

one guy could initiate it

I wonder what the legal issues are around this

looks toppy and more shorts piling on

Sorry Charlie…another pregnant line

and again, the shorts at on high

I should have been playing this with real money

but at least it’s got my practice acct near the live trigger target I’ve been shooting for since April

I would be live already, if I hadn’t made mistakes, and had set backs and draw downs

I am live sometimes, just not today

anyway, I got that scale

note how it didn’t even get back to 50% of yd up move

that is how it behaved all the way up from the bottom (since February 2016)

And in Bookmap, you can see (in yesterday’s blog entry) that this big buyer stepped in at $39.60 and started buying, 40 cents above the 61.8% technical fib level

It just took enormous size to stem the bleed

My commentary is my journal entry for today.

Killing two birds with one stone.

Just have to add the snap shots

The log is like the light bulb going off for me about what is happening

and on the topic of what is happening, more speculation on players of that size

on one hand, a single guy with a $100 m acct could push around 20k contracts without even using leverage (other than the leverage of futures contracts themselves.)

There are a lot of accts that size.

One guy could be much bigger than that.

A small group could collude, and push the market around even more.

On the other hand, these guys are also like giants locals.

A clash of the titans.

BECAUSE there are a lot of people with money on that scale.

So while their action may push through local technical levels, and rip up day charts, they would be looking at larger time frame technical levels. In fact, they would have CREATED those levels by their actions.

So that’s how you get the larger fractals that turn smaller sets of levels in to noise, chaos.

HUM, interesting failure in my pet stock

big tail, green to red, back through yd close

all following positive earnings report yd, on which the stock did nearly nothing….but is right in the middle of a seeming bull flag….a bull flag within a bull flag….more speculation on that elsewhere

So now oil has moved a buck

it has technically completed yd move

it has doubled this morn range

In theory it could be done

but on a larger time frame, this range could be a version of a bull flag…that just looks different

The first impulse on that time frame went from $39.19 to $40.40….$2.20

the base of this range is $40.43

$40.43+ $2.20=$42.60

Is there anything interesting at around $42.60?

whaddya know

8:58am

Kelly Evans

 

8-4-16 8 58AM

8:58am

Kelly Evans

42.70 ish was all those spring opens and closes

A burst through the breakout level of $41.83 will trigger a lot of stops

At that point, the big guys can just sail with the wind they created

snap shot of all the stops and sell orders at 41.83

8-4-16 upside down mirror of yd top 4, approaching stops

9:02am

Kelly Evans

ES sliding up the upside of the 2 week volume mountain

Everything sucking up

snap shot of a short squeeze

8-4-16 snapshot of a short squeeze

9:07am

Kelly Evans

Now I see that what looks like grinding through sell orders on a trend day is actually a short squeeze

now it will probably pause here and go sideways

and bull flag

maybe for an hour or more

Would that twer always so clear

I guess this is how you felt that night you rode the short trend all night and made a fortune

9:12am

Brendan Hurley

Except today, I missed it, and Tues but yes it felt good but also a lot to take in

9:13am

Kelly Evans

Well, you had a big bet on the line

I’m just absorbing how the phenomena is created.

9:13am

Brendan Hurley

You nailed today

9:13am

Kelly Evans

And making my journal entry in the process 🙂

9:13am

Brendan Hurley

Should have jumped on

9:14am

Kelly Evans

I should be making real money instead of fake….but mental capital is nothing to sneeze at

here’s a tiny wash out

some of those sells around $41.83 would have been stops and some actual sellers

But it topped at $41.96

So anywhere down to $41.66 is noise, one standard deviation

And actually, on a day like today, the volatility in increased

so the standard wave size is different

If it holds above $41.66 it’s very tight

but could even wash lower without breaking the up trend

Lotsa light bulbs going on for me today

Also this is a realization of what mid really means

It’s the bottom of an enlarged standard wave size

on increased volatility

9:19am

Kelly Evans

 

8-4-16 bull flag and mid

9:19am

Kelly Evans

so mid is way back at $41.24

which would be a long if it got there, but it probably won’t

 

  • cool, found out I could copy our conversation from here to word

It even has our little FB icons. I wonder if those are hyper-links that will copy in to my Word Press blog.

9:27am

Brendan Hurley

Less than .30c pullback still

.29c, looking flaggy

Bounced at a perfect spot

9:28am

Kelly Evans

yep, tight

we’ve seen that often during this time slice on a trend day

9:29am

Brendan Hurley

Little break and shake

Did I just coin the phrase?

9:30am

Kelly Evans

text book bull flag snap shot

8-4-16 text book bull flag

9:32am

Kelly Evans

trading does lend itself to slang design

metaphors and idea fractals that become little nuggets of knowledge

I think it’s because when we are looking THROUGH charts, we are actually seeing human behavior

the actual push and pull of competition in action

which is the root of evolution

nature in action

9:36am

Brendan Hurley

If you can read the break, you could sell and rebuy

9:37am

Kelly Evans

yeah, possibly

9:37am

Brendan Hurley

Collect .30c more on the run

9:37am

Kelly Evans

you think it will pull back here?

oh, you mean try to scalp this noise, and improve position?

9:37am

Brendan Hurley

It went through .83-4 last time

Sure

But don’t take the short

Just wait

Then you’ve taken nice profit

9:38am

Kelly Evans

I’m pretty slow witted for that….just happy to have a few ideas forging new neural circuits…

hoping I can use these ideas in real life for years to come

9:39am

Brendan Hurley

Break almost over

If this is what is happening

9:40am

Kelly Evans

it’s back to that psychological level of $41.83

looks like the bull flag is breaking up, but may not, due to that level

We’ve only been consolidating 45 minutes so far

Bigger players might be taking lunch

It’s the noon hour on the East coast

funny how it seems like voodoo, until it doesn’t

“superstition: when you believe in things you don’t understand.” Isn’t that the Stevie Wonder line?

9:50am

Kelly Evans

HUM noisy, red to green again

9:51am

Brendan Hurley

Lunch is almost over

9:51am

Kelly Evans

The funky thing going on there is the combination of improving earnings, and the Aetna merger, and the DOJ trying to block that

9:52am

Brendan Hurley

9 more minutes

9:52am

Kelly Evans

haha, you think it’s that precise?

9:52am

Brendan Hurley

It will start a few before haha

9:58

9:52am

Kelly Evans

Ok Filbert, drink up, I already paid the check

9:53am

Brendan Hurley

Hahaha

9:53am

Kelly Evans

not sure whales are usually named Filbert

probably betraying my small fry ness

9:53am

Brendan Hurley

Yeah

9:54am

Kelly Evans

yup, lunch is over, time to get back to the arduous task of poking buttons

screaming in a pit in the olden days

in old stories, commodity traders, like the Turtle trader guy, and Jesse Livermore, could do breakout trades, and ride trends, because they were in the pit, and they could HEAR the screaming

9:57am

Brendan Hurley

Off by a couple minutes 😆😆😆😆😆

9:57am

Kelly Evans

BUY BUY BUY

It was easy in a way

Then you couldn’t do that as well when things became more electronic

For years prop traders traded off ladders showing the orders going through (just flashing #s…no charts…no visual reference.)

they had to make a mental map of the levels where pace picked up, and they sensed the excitement

Morad says that now we’ve entered a new era, with Bookmap. Because now you can SEE the order book history. And the excitement of buys in the yellow dots, and sells in the red ones

Now we have a potential failure

I’m reducing here

can always add back if it resumes

8-4-16 potential failure

10:01am

Kelly Evans

see how it pushed through the liquidity and fell back in?

that is the anatomy of a tail

that is actually a short on retest of 42

moved the mid up to $41.29

If it bursts up through $42 now, the uptrend likely resumes

if it taps it, and falls, we likely get an impulse down

In this little local range, we go back to the idea of a standard deviation being 30 cents

So that gives us, below $41.77 defines a down impulse, and breaks the up trend for now

Liquidity filled in at $41.90 (holding price down, reinforcing the short idea.)

8-4-16 potential failure, liquidity fills in at $41.90

10:08am

Kelly Evans

Those were real local sellers

still, “should” retest 42 before falling

10:09am

Brendan Hurley

Today but if it’s moving higher, it wil probably fly

Toppy

10:10am

Kelly Evans

this is my new idea of reading a flag vs failure

10:10am

Brendan Hurley

Tails left in the dust

10:10am

Kelly Evans

through $41.77 and I’m out of the long for now

at $42 I’d also take it off

I suspect we fail here

Above $42 and the long is back on

10:11am

Brendan Hurley

But you can’t deny who showed up

They want confusion

They eat weak ones

10:12am

Kelly Evans

yes, but technically speaking, their original move from YD is already complete

10:12am

Brendan Hurley

Yeah

10:12am

Kelly Evans

and even though an equal size move takes us to $42.60

  1. it might not do it all in one go

and

  1. sometimes the second wave is smaller

10:13am

Brendan Hurley

Do the locals f up the technical aspects, who knows

10:13am

Kelly Evans

I think the auction sometimes gets local in the midst of a bigger move

I have to have reasons for my actions

So I’ve defined the plan

10:15am

Brendan Hurley

We took care of that high .60 area, now working on the psychological level

10:15am

Kelly Evans

now I have nothing to do other than act on it

I would try a mid long if we get back there

10:18am

Brendan Hurley

Trying to get some conviction here

10:18am

Kelly Evans

zooming out to see if that 50% level ($42.29) corresponds to historical levels

10:18am

8-4-16 looking at 50% $42.29 to see history

10:19am

Kelly Evans

Often I try to see if a top makes sense, because it sets up a mid at some level that makes sense

megaphone, reversal pattern

8-4-16 potential failure megaphone

10:22am

Kelly Evans

zooming out further to see why it might fail here

8-4-16 bull flag completion, potential failure. former selloff

10:24am

Brendan Hurley

Yep

10:24am

Kelly Evans

10:24am

Brendan Hurley

I think it will, just looking arced too

Es

10:24am

Kelly Evans

yeah, NQ and ES saggy

ES back below POC of 2 week range

ticks falling

but still not sub 500

8-4-16 tick resonance snap

 

10:27am

Kelly Evans

through the .77 by 2 cents

still might try to test 42 again, but failure is confirmed to me

trying to squeeze another 20 cents out of my last position

10:29am

Kelly Evans

8-4-16 micro failure confirmation

10:30am

Kelly Evans

you can see how it poked through that 77 level, see the local buyers were there

of course, the bigger time frame guys could negate all this

But I’m happy to get out there, on a retest of 42

if it burst through, then it’s possibly a break out trade

but now it has that megaphone phenomena going against it

Morad’s webinar on NQ currently going

As an S5 member you have access to those…they only keep them up for 2 weeks

these days he periodically trades a replay day, and explains what to look for

they do the replay not because he knows what happened, but because trading in real time is so slow

you’d get like a 4 hour webinar, or more

so they speed up the play back

It’s similar to what we’re doing here, real time commentary

Except of course that he has 16 years of success behind him, whereas I’m “getting” stuff for the first time as it happens

I mean, of course, to some degree I knew this stuff before

and before that, and before that

A remember the question: “Rinpoche, is enlightenment gradual or sudden?”

“Sometimes it’s suddenly gradual, and sometimes it’s gradually sudden.”

if it does’t retest 42 now, but falls first, that’s interesting

It “should” retest that level

so if it falls first, we might think it’s more likely for the long continuation from the mid

but we have to also consider the time of day

it’s getting late

maybe too late for a pullback to mid and then continuation

I still think the retest of 42 is more likely now

it’s gone to sleep

This could easily be like yd top

where it just gets noisy up here, forms a closing range

then of course, yd the Asians completed it up, even though the pattern wasn’t pretty

541 suddenly appeared as sellers at $41.82

8-4-16 potential failure liquidity appears

10:45am

Kelly Evans

real sellers or algo?

they are sticking there

bought through

here comes the 42 retest

more sellers appearing

334 at $41.92

they are really selling

likely scalpers

possibly an algo

you could probably code this

if this then this

It failed through that liquidity at $42, and fell more than 30 cents

unlikely to continue at close

noise at least likely

8-4-16 potential failure, liquidity fills in at $41.92

10:49am

Kelly Evans

Am I selling you on Bookmap?

10:50am

Brendan Hurley

Yes

Working on the shed, bookmap looks awesome

10:51am

Kelly Evans

got my 20 extra cents

I’m done

Bookmap is good for those of us who would rather stare at a picture than flashing #s

I wonder how many prop traders had epileptic seizures

didn’t quite retest 42

might not have gotten filled in real life. Should have been 1 cent lower

still, might retest again, or even break through

But even if it breaks through, now I expect a close more like yd, where it gets noisy

I’ll come back later and see how that worked out

10:54am

Brendan Hurley

Probably shut down at .84

Maybe move down a little on

Oh you just said that

10:58am

Kelly Evans

More free time for philosophical reverie

vis a vis the real vs simulated acct

and real life v simulation

self made rules for what allows “realization”

11:00am

Brendan Hurley

You either get the big day on that push or the timeframe ends

11:00am

Kelly Evans

did you hear that Elon Musk said “reality is almost certainly a simulation.” Like VR running on some kind of cosmic computer.

His line of thought is very easy for someone like me to follow (or lead.)

It’s interesting in light of the term “realization,” that is used sometimes almost synonymously with “enlightenment”

to become aware of what is “real” or to become “real”

as a sort of event

and sometimes you get real for a little while, and run in to a brick wall, or get crushed…and then retreat back in to simulation

Practice some more (why is meditation called “practice”?)

Who set the rules for when we are allowed to go live? Is it us, or “the higher self?”

are we following the rules, or defying ourselves, or whoever

the weirdness of the nature of “self”

this is all obviously implicit in this oil trade J 🙂

I guess Zukerburg “owns” this blog entry, since I’m doing it in FB chat

Angelina told me I should just put out teasers of the stuff I write, because people can copy it

she is such a sweet person….her name is apropos

To think that stuff I write would get noticed in the sea of noise of the web

She reads it, or some of it. That is more than enough.

I’ve been talking to myself all my life. I’m easily “self-entertained.”

Hopefully self-educated

11:13am

Kelly Evans

Anyway, hopefully all this work leads to live profitable trading. Ramping up in size. Generating a lot of profit. Which hopefully leads to the “social hedge fund” idea getting realized

Have you heard the comment, “trading is the hardest easy money in the world?”

Something like that. I think Jack Schwagger (writer of Market Wizards books) said somewhere that traders were work a holics

I’m going on 2 years of practice now. 1 year of this full time, methodical, daily routine.

And only last April did I start to go in the right direction. Up to then I lost real money, then 70% of my simulated account.

Since then I’ve more than doubled it, allowing for big hiccups, spasms of stupidity, where I would have 10-15% draw downs. But before April, the draw-downs out-weighed the profits, since then vice versa.

In college, I used to take acid, and talk in to a tape recorder. (I don’t think I ever listened all the way through one of those tapes afterwards. Probably comes across like gibberish.)

But one thing I remember saying, sitting in Will Penna’s cottage that I rented, was something like, “I have no idea how I will ever make money, unless someone pays me for saying words like this.”

Well, that never happened. Or did it?  Maybe it’s happening now.  Or about to happen.  I can certainly see how it can lead there now.  So I’ve gotten somewhere since college.  I’m the one that’s gonna pay me for saying these words!

Another thing I recollect, putting the pieces together, reconstructing my life, was making the “bodhisattva vow.”

I was totally sincere. But I made up my own version of it. I said it to God, no human intermediary.

My version was, “I vow to do the greatest good. Please guide me through whatever I need to go through in order to achieve that.”

which was, and is, a scary thought.

Years later, when I got sciatica vigorously doing hatha yoga, I remembered my vow. “Well, I guess it wasn’t yoga I’m supposed to be doing.”

I mean, it’s not that I wasn’t willing to fight through the pain. It was something deeper than that. I wasn’t giving up. It was made totally clear to me that my body was not meant for that.

5 minutes to close.

Here we are, dead center, just like YD

If we close like this, will the Asians take it up after market, like YD?

or will the closers do it now? (which I predict they won’t)

620 (sellers) lined up all day for sale at 42, ever since it failed through there

And, dead in to close. Dead center, like YD

8-4-16 dead close

*footnote from comment above:

There is a famous story where a technical trader was brought in to a prop shop, and assigned to an old hand commodity trader.
They are watching soybeans, I think it was.
The technical trader says, “Price will turn around right here?”
The gnarly old commodity trader says, “Are you sure?”
The technical trader says, “Absolutely, guaranteed.”
The commodity trader picks up the phone, and, just to make a point, says, “Sell 100 contracts of soybeans.”
Price plummets through the technical level.

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