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At 1st i took a long and i had conflicting thought and closed for a small profit and went short
Here was the idea behind the trade when i took it
We opened way out of balance and way above the 11 day range we have been in this year
I saw i single print selling tale from 9/19/2012
So i was short from 95.12`s area looking for a rejection high above the TPO ledge and a rejection of the single print area above
Buyers didnt seem to be strong at 1st...well to be honest it didnt look like any one was in control
When then gained some momentum and ripped to the upside through the ledge
The inital balance came in and i shorted the highs of the IB area, we saw a probe higher and we dide seem to have buyers above the IB area so i tried to hold...we got a pull back to RTH Vwap and ripped up again stopping me out
SO when we broke the IB area i looked to start selling the 1st Ib extension @ 95.66
Took a short in that area and i got my 1st 2 scale outs as we came back into RTH vwap value
Im going to hold my last scale out untill we we either show a break of balance higher were i will get a B/E or a break out below value were i will tril my stop and look for a good target area
I found today hard as i really didnt not know what to expect in the situation we had at hands
The fact we had been in this 11 day range bracketting and we gaped up well out of balance way above the area we had been trading in threw me off gurd this morning
" I will follow my rules, I will take my stops, I will be disciplined and i will work with the market....NOT AGAINST IT! Professional mind control is the key"
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
Thanks Given: 1,713
Thanks Received: 3,863
Some simple questions to remember on the day that would've served as an excellent filter:
- Are we out of the previous session's balance? Yes, gap up;
- Is the ON session balanced or imbalanced? Imbalanced;
- Where do we open? Above the ON session's "value";
- What is the likely trade location? Top of ON value. Why? Because the market is in price discovery/imbalance mode. Taking an opposing directional trade when the market is telling you that it is clearly imbalanced is 100% price discovery and very dangerous;
- When does it make sense to take an opposing direction trade? When the market returns to balance/value where two way trade is taking place.
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
Thanks Given: 1,713
Thanks Received: 3,863
Here's a good trade on. Market was balancing and exhibited an epic stop run as seen on the cumulative delta I have on the chart here. You can see the huge candle as traders started bailing their short positions. This is a great short trade back to balance. I've scaled out of 2/3s and will just monitor to see if buyers step in now that all the inventory was cleared out.
So why take a trade like this? Market was imbalanced first thing this AM. We then came back into balance. After moving back into balance, the sellers backed off and buyers were still present which pushed price higher creating an imbalance. Because we're switching back and forth a short trade back to balance is feasible. And by balance, I'm referring to perceived value.
Not sure i understand. Did you go long at the point of capitulation or short at the top (96.04 2x IB)?
EDIT: ok i see you went short given your last post. What's the implication of short capitulation? The logic would tell the expectation is for trend continuation but you seem to see the opposite.
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
Thanks Given: 1,713
Thanks Received: 3,863
Yes, short from the 2nd IB extension back to the poc. The reason that I viewed the "trend" was done for the day was simply that the market came back into balance/value. The move higher was a brief imbalance/short squeeze from the shorts established earlier this AM from the 1st IB extension. Looking at the CD, you can see those shorts bailing as price blew through that swing high and stops got cleared out hence the term, inventory being taken out of the market.
Again, its about context and market imbalances. If you look at what the market is doing now, its selling off in after hours trading. Reason? The buyers were exhausted when the market came back into balance this AM. The mid-day spike was nothing more than a brief supply/demand imbalance which should be faded based on the previous explained criteria.
I thought this was a acceptable long.We were bouncing off of eht sd1 all morning, and this is also the case here.We had eth 1sd,rth dvwap and rth dval...the extreme.the developing value area is stepping up.Oh,i didnt take this by the way.....The earlier post by PB spells it out...and off the open, every attempt to go lower, was met with buyers...I just need to open my eyes....
Interesting response,
Im a PA trader and I have been profitable without them but they look useful in all the videos Ive seen.
I guess theyre just a mystery and thats why it was on my mind.
Anywho.
Also, I invite you to view my journal (upcoming)
" I will follow my rules, I will take my stops, I will be disciplined and i will work with the market....NOT AGAINST IT! Professional mind control is the key"
