Progress Update on my TopstepTrader Combine

Trading has been kept to a minimal as volatility is dying down. This was especially observable over on the FX side where most pairs produced small overlapping daily candles. I did take a few trades that have failed in spectacular fashion or experienced mediocre success.

At this point, I've been taking it slow. I am currently in one trade, which is AUDNZD. There's not much going on so I'll keep this brief.

AUDNZD 1-Day

The setup on this is quite simple. Unlike the other trades, this one was generated on the daily time frame so it is taking its sweet time to play out. I have a daily level plotted at the 1.0648 level. Once price has crossed this level, it pulled back the following day. I saw the retest and it closed lower.

On a lower time frame, you can actually see that price crossed above this level and then sold right back below it. This is a pattern that I look for when planning my entries. It's something that I also do when trading futures. Currently, this trade isn't deep in the money. I'm not going to close it out simply for the sake of closing it out. As price failed to make higher highs, I do think there is potential to make new lows.

Onto the topic of trading futures, I think it has helped with my overall trading. Given that the futures market moves significantly faster than spot (retail) FX, timing my trades is paramount. Sometimes I won't even be in the trade and just consider it as a missed opportunity if my limit order was set too far away and didn't get hit. I've come to learn that it's simply not worth chasing the entry only to sit in a duration of losses because price pulled back.

I also found that I'm more conscious about creating certain rule-based entry plans. One of the key patterns that I look for is price making an engulfing bar and then pulls back. Once the pull back fails to break the boundary set by the engulfing bar, that's when I enter. During the price formation process, I'm beginning to consciously come up with "if this, then that" statements that will outline possible outcomes for the price behavior. If the outcome is in my favor, that is when I would take a trade. If I am unable to come up with the "if this, then that" rule, then I sit out.

My progress in the Combine has been going well. I'm still in Stage 2 as this Combine requires that I trade for 10 days. I have already fulfilled this requirement by taking on a quick micro contract on the days when I cannot commit to a full US session. I did commit to two whole sessions yesterday and today, which went well as a whole even though I returned much of the profits on the second day.

I am beginning to formulate a process and I believe the best way to review this process is by explaining it.

My process:

1. Take a quick look at the fundamentals. Specifically, this would pertain to any high impact news events that may sway the markets, e-mini S&P, in one way or another. For example, I'm currently monitoring the coronavirus situation in anticipation of a second wave or a second round of quarantine, which could potentially be less receptive. Of course, there would be significant economic downsides should we go into the second round of quarantine.
   
   
2. I'll go into TradingView and pull up the time-based charts to look at the daily, hourly, and 15-minute structure. The hourly chart is key because I'll see key levels where we can see major momentum if they break and hold. Once I plot these key levels, I know what to look out for on an intraday basis. When price is trading chaotically away from these key levels, I stay out.
   
   I don't really see the benefits of plotting key daily levels since they'll be violated quite easily. Instead, I'll look at the formation of the candlesticks over on the daily time frame. If price does not make multi-day lows and flatlines, then we'll want to plot key floors over on the hourly.
   
   I plot most of my levels on the hourly timeframe. I find that they provide enough information, but also preserve enough information of the larger market structure.
   
   
3. On my actual trading platform, I'll plot my charts using the 1,500 volume bars. They provide me with more of a microstructure in seeing how contracts have been traded against price. This helps to refine my entries along the major technical levels plotted. This chart also helps me establish intraday structure. For example, I'll consider a sentiment change when price consistently trades below and level but then fails to hold below it. I'll enter along with the wave of fresh volume.

Even after explaining this process, I'm still in the process of refining it. Here are a few details that have my attention at the moment:

1. Optimizing the number of contracts to be used as a volume chart parameter.
   
   
2. Evaluating the strength of certain levels plotted on the volume chart as price tends not to respect these levels as cleanly.
   
   
3. I have found that volume charts provide me with a bit more information as opposed to tick charts. However, I did not incorporate footprint charts or time of sale into my entry analysis. Should I be? This is a question that I'm still asking myself.