I'm once again going to try and explain how I trade within this trading journal. I did such a poor job within the contests a few months ago that I thought I would try it again. Quite frankly, it was a big distraction from trading and I did not realize how difficult it would be to detail my trading style. But upon closer consideration while rewriting My Trading Plan, I think I have a better grip of how I can explain how I trade.
This journal is simply just that........how I trade. I will answer any and all questions and criticisms.
I'm not some trading guru nor I'm I pumping up or you I say pimping myself to sell my system or a subscription to some web site. It's just how I trade. YOUR TRADING DECISIONS ARE SOLELY YOUR RESPONSIBILITY!
Remember, The only Leading Indicator is the Market.
It does not matter what The Market does...it only Matters what you do.
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12/09/2011 Here is this mornings trading plan for the YM and the ES.
Here is this mornings trading plan for the YM and the ES.
The 1st photo is of a Daily chart for the ES. As you can see it is trading above the 200 ema. The yellow line is price at the 200 ema. We can clearly see a V pattern starting from the 10 day low on 11/25. Yesterday's sell off was the reaction of price entering into previous Resistance of the past 4 trading days. That concomitant with the V pattern suggested that I will be on the Sell side of the market. It was a good day!
With that said; the good news from Europe found Support at Yesterday's low on ONS and has traded above the 200 ema on 1600 tick bars. Presently at 8:37 Support at the 200 ema 1600 tb is being challenged. If it breaks lower I'm looking at yesterday's Support line of 1236 for a entry into the ES and YM. A strong bounce off 1236 with a strong candlestick pattern will have me going long.
Any break down below 1236 and I will look to Sell on a pullback to 1236 area with again an appropriate pattern.
On the other side if the ES trades higher at the Open I'll look for weakness within the ONS high and Thursday high for a quick fade between 10:00 and 10:30.
Remember, to use the Market Internals to confirm your trades.
And ....of course...I'll change my outlook and trading plan based on what the market is telling me!
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Good morning Traders!
Here is a quick recap for my morning trades for the ES.
I got the quick fade Sell signal at 10:10 for the ES.
It printed a Spinning Top at the ONS High/Resistance.
.I sold the low of that 512 tick bar(tb) @ 1248 and fill at 10:14.
1st target was 5 tick or 1.25 points. 2nd target was place in advance of the trade at Thursday's
previous Support turned Resistance of 1245.25 looking to see if this area would act like Support again.
I place projected Targets a few ticks ahead of Support and a few ticks below Resistance.
Filled at 1245.50 at 10:26 for 10 ticks.
Total 15 ticks profit.
Footnote: For the this journal I will only denote only 1 contract for each Target. I trade 2, 4,6,8 and10 contracts.
I use the profit from my 1st trade as my Pstop for the 2nd trade.
2nd Trade: Previous Support turned to Resistance and back to Support in the 1245 area
When Long @ 1248 at 10:52 after the ES printed 2 large Green Hammers.
Place Pstop at 1244.5....14 ticks below entry. 1244.5 was the Low for the 10:44 512 tb.
1st Target was 1249.25 (5 ticks) and 2nd Target @ 1255.00 just under Wednesday's
high of 1256.50 for the Day Session(DS)
Total: 19 ticks
34 ticks for the day.
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I draw the High and Low of the previous 10 days. I count the up days versus the down days.
The main reason for looking at the past 10 trading days is to get a perspective of where the market is trading in relationship to the 10 day high and low. Generally I use the High as Resistance (red) and the Low as Support (green). I also look for other Major Resistance or Support levels on longer time frames.
The daily chart of the YMH2 shows a large red line of the 10 day High. Just below that is a slotted red line showing previous Major Resistance. Notice that Price traded into these areas 3 times before the gap up this morning during the overnight session (ONS) #4. Price stayed near the top of this area over the past 4 days suggesting Price may go higher.
My Main Trading Rule: Time
The Market changes direction during the morning session between 10:00 to 12:30. Generally the first morning turn is from 10:00 and 11:00 am and is most successful the closer it turns at 10:30. Why? I don't know. The flatter the Internals are the more successful the turn and the trade. This is my main trading Time. I trade 2-4-6-8 or 10 contracts.
Exiting half at the 1st target and the balance at the 2nd target. The stronger the Market indicates a turn the large # of contracts I trade.
In strong trending markets like this morning with the large gap higher in the YM overnight, the morning turns may act as pullback areas; offering new chances to enter the market. Strong Internal will help confirm. I generally trade 2 or 4 contracts on pullbacks even if the Internals are strong.
I would like to see the YM pullback into the 12260 area at the 10 day High then offer Support to enter Long. I don't see it happening today with the strong move higher in the ONS but could happen in a day or two if the ONS High at 12388 holds as Resistance. I'm also looking at the ONS low to see if it offers Support to enter Long.
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“I would like to see the YM pullback into the 12260 area at the 10 day High then offer Support to enter Long. I don't see it happening today with the strong move higher in the ONS but could happen in a day or two if the ONS High at 12388 holds as Resistance. I'm also looking at the ONS low to see if it offers Support to enter Long. “
Well if you followed the YM and other indices you saw the Markets continue to trade higher off the Open. It broke above the ONS High and then failed to find any new buyers. It bounced around the ONS High before finally turning lower at 11:06. You can clearly see that the YM consolidated at the ONS High and got weaker between 10:30 and 11:30. It finally broke (down) threw yesterday's morning Support at 12385. The strength of the Internals kept me away from selling Support at 12385 or the low of the 11:06 512 tick bar (tb) or the low of the 11:37 512 tb.
I'm working on it.
I draw gray lines for the High and Low of the ONS. They offer possible Resistance and Support as well as a possible trading range. During the 12:48 512 tb the YM printed the Low for the session at the ONS Low. Enter Long @ 12335 on the 1:00 512 tb. 1st target was for 12 ticks @ 12347 and 2nd target and exit @ 12370 for 35 ticks. Total 47 tick based on just 1 contract per target.
Remember: The Only Leading Indicator is the Market.
It does not matter what the Market does, it only matters what You do.
We can see the YM traded to the 10 day high (thick red line) with the good news from the employment numbers: then retraced back (and bounced off) to an area of Support @ 12340 area printed late yesterday. But has stopped short trading just under Thursday high (red line).
A quick look at 9:20 this am shown price just above late Thursday's Resistance area of 12360. From this chart, we see that the YM is above Support and Resistance and just below Thursday high.
I'll enter Long on a strong upward move through 12360 off the Open.
Or go Long off a pullback into Support at 12340 area confirming with candlestick formation/pattern.
It is days like today that I make a living trading. Quiet volume and flat market internals
produce some of the best Time Zone turns (reversals) in the markets.
The NQ traded higher from the Open to about 9:45 then turn and headed lower. As it traded lower to yesterday's low and previous resistance it printed a small but important Hammer at 10:01: so did the TF
at 10:01 on 512 tb indicating a reversal. See 1st and 2nd photo. The YM and ES did not give as clear reversal signal but started to consolidated in 10:00 Time Zone. See the 3rd and 4th photo. Earlier this morning the YM was just lagging behind the ES. All four were trading together. I entered Long at 2356.50 for the NQ and 759 for the TF. I used the two reversal hammers from the TF and NQ to enter Long for the ES and YM.
Once I had my orders in place I entered Long for the ES at 1282.25 and then the YM at
12350. They both were trading sideways for a few bars which allowed me to enter my trades. Since the ES was leading the YM, I enter the ES trade first.
Today all four markets were in lock step into the 10:00 Time Zone. The hammers printed for the TF and NQ gave me an edge for trading the ES and YM.
Watching the action and reaction of YM-ES-TF-NQ as a group is a key component my of my trading.
I am afraid to tell you, you are not alone to do this. This is also part of my framework. There is definitely something to be gained in doing this specially when a level is to be broken, volume kicks in all of them at about the same time when such an event is about to occur. Divergence among this group may also offer some clues about certain move that's about to happen.