October 19th, 2026
This week marked another adjustment to my trading strategy. I’m not completely changing my system, but rather refining what I’ve already been working on. The underlying strategy remains the same: trading MNQ when price is moving outside the central VWAP line, using the VWAP bands to identify opportunities and potential profit targets.
However, I’ve made two important changes that I believe will help improve my entries and overall execution.
A Slight Change in Strategy
The first adjustment involves how I use MES to confirm my MNQ trades.
Previously, I was trying to get MNQ and MES to align almost perfectly before entering a position. In theory, this made sense. If both markets were showing the same directional momentum and reaching similar VWAP levels, it seemed like a stronger confirmation.
In practice, though, it was creating problems.
Sometimes MNQ would move first, while MES would lag behind. Other times, MES would lead the move, leaving MNQ playing catch-up. Waiting for both markets to align perfectly meant I was frequently entering trades too late or missing opportunities altogether.
The confirmation system wasn’t necessarily bad. In fact, it probably kept me out of some losing trades. But it was also making a relatively straightforward strategy unnecessarily complicated.
So I’ve simplified the rule.
MES must still be trading on the correct side of its central VWAP line, but it no longer needs to be at the same VWAP deviation band as MNQ.
For example, if I’m looking for a long entry on MNQ, MES simply needs to be above its central VWAP. It doesn’t necessarily need to be approaching or crossing the same standard deviation band.
This allows me to maintain some market confirmation without sacrificing entry timing.
Replacing MACD With a Stochastic Heat Map
The second major adjustment was removing MACD from my entry confirmation process.
MACD has been one of my biggest frustrations over the past several weeks. While it’s useful for identifying momentum and filtering out unfavorable trades, it frequently responds too slowly.
By the time MACD confirms a move, a significant portion of that move may have already happened. This becomes particularly frustrating on strong trend days, when some of the best opportunities occur early in the move.
I’ve now replaced MACD with a stochastic heat map, which is similar in concept to an RSI-based momentum indicator.
So far, I find it more responsive to changes in price action. It helps me evaluate whether momentum supports an entry while also giving me a better sense of when to stay in or avoid a trade.
It’s not a perfect indicator, and I don’t expect it to be. But I believe it offers a better balance between confirmation and responsiveness.
The goal is to keep the strategy relatively simple without adding so many conditions that I become hesitant to trade.
The Biggest Problem Now Is Execution
At this point, I believe my biggest obstacle is no longer the strategy itself.
It’s my execution.
I’ve spent considerable time backtesting the system, reviewing historical charts, and making adjustments to improve consistency. The historical results suggest that the strategy has a positive edge, although that doesn’t guarantee future profitability.
Now I need to become more comfortable actually following it.
More specifically, I need to become comfortable with drawdowns.
Every trade isn’t going to move immediately in my favor. Sometimes price will pull back 20, 40, or even 60 points before eventually reaching its intended target. As long as the original trade remains valid and my predetermined stop hasn’t been hit, I need to be able to accept that movement.
Of course, this doesn’t mean ignoring risk or allowing losses to grow indefinitely. It means trusting a properly defined trade and accepting the normal fluctuations that come with it.
That’s something I’ve been struggling with.
Looking back at this week, I estimate that the valid opportunities I identified could have produced approximately $1,000 in profits. Instead, I finished with around $200.
That’s frustrating, especially because much of the difference came down to hesitation, early exits, and emotional reactions rather than an obvious failure of the strategy.
But I also recognize that these larger hypothetical profits are based on hindsight. The objective isn’t to capture every possible dollar. It’s to execute my rules consistently enough to realize the edge my backtesting suggests is there.
Day 92 Travel Poster
Monday’s Trading: A Good Setup, but an Emotional Challenge
Monday, October 19, was a good example of what I’m trying to overcome.
There were only one or possibly two legitimate trading opportunities throughout the session.
The first trade was somewhat difficult to identify initially. Price was approaching the second VWAP deviation band, and I wasn’t immediately certain whether the setup qualified under my rules.
That hesitation meant I wasn’t as responsive as I should have been.
Eventually, I entered the trade, but then came the uncomfortable part.
The position experienced approximately a 63-point adverse move.
That drawdown made me nervous, even though the trade had not necessarily been invalidated. I started questioning whether I should remain in the position or exit before the loss became larger.
This is exactly the emotional response I need to work on.
A drawdown isn’t automatically evidence that a trade is wrong. It’s part of trading, and I need to distinguish between ordinary price movement and a genuine reason to exit.
Ultimately, the trade did work out. I held on and finished profitably, which was encouraging.
However, I also exited earlier than my original targets would have allowed. Had I managed the position according to the full plan, I could have captured a larger portion of the move.
So while Monday was profitable, it also highlighted the same recurring weakness: I’m identifying opportunities, but I’m still allowing fear and hesitation to interfere with how I manage them.
The Lesson: Trust the Process, Not Every Price Movement
The biggest takeaway from Monday is that I need to become more disciplined with both entries and exits.
If a trade meets my conditions, I should execute it without unnecessary hesitation. Once I’m in the trade, I need to respect my predetermined stop-loss and profit targets rather than constantly reacting to every fluctuation.
That doesn’t mean blindly holding every position or assuming every setup will work. It means making decisions based on rules instead of fear.
I also need to stop measuring each day against the maximum amount of money I theoretically could have made. That mindset only creates frustration and puts additional pressure on the next trading session.
A profitable $200 week is still a profitable week. The fact that more money was theoretically available doesn’t make the actual profit a failure.
The real question is whether I followed my strategy correctly.
That’s what I need to focus on.
Final Thoughts
Monday was a relatively quiet trading day, with only one or two meaningful setups. The trade I took was profitable, but I could have managed it more effectively.
More importantly, it helped establish the theme for the rest of the week.
I’ve simplified my MES confirmation, replaced the slower MACD with a stochastic heat map, and kept the core VWAP strategy intact.
Now the focus needs to shift away from constantly adjusting the system and toward consistently executing it.
I need to accept that drawdowns are inevitable, that not every trade will be a winner, and that successful trading requires patience as much as good entries.
My goal for the rest of the week is simple: take valid trades, respect my risk, follow my targets, and stop allowing emotions to make decisions for me.
Monday was another profitable day, but also another reminder that identifying a good trade and executing it properly are two very different skills.
And right now, execution is the skill I need to improve most.
Total Profit: $12.60
MNQ Chart
