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I'd much rather be trading the opening 2 hours and call it a day.
As you can see on the chart we got a decent test of the highs after a bit of a sell off - followed by a test of the gap.
There were a few good trades here for me.
The I couldn't really get a handle on whether we were in a trend or if it was just a range.
Looking at the chart now it looks like a bit of a trend but those are 5 minute candles so it was certainly a slow moving trend at best and they're not the easiest to be trading.
Price then sold off in the arvo before a late rally.
After yesterday which was a really tough - we just got a ripping trading day.
I'd like to say it was because of all my skills and talent, but the reality was it was just a huge downtrend.
It was almost 100 ticks from the highs to the lows so by SPI standards that's big!
The day started and I was actually initially looking long when I saw a nice setup, however the AUD just started to tank and I got stopped out.
The market then proceeded to sell and there was really no reason to be long here at any point.
The news out of China was that it was going to start regulating financing of iron ore which is obviously bad news for OZ as we are big exporters of iron ore.
The thing that made this day quite good was that the pullbacks were really clean.
You can't see it quiet as clearly on the chart but on the DOM there was clear selling every time the market pulled back. Heavy on the offer always. Just what you want to see.
I took a nice early trade from around 45's all the way into the gap. I was pretty happy after the slow moving grind of yesterday that it played out reasonable quickly.
I thought the trend would stop around 5520 where I got stopped for BE after around 1000 contracts traded - but sure enough the selling just came back giving a couple more nice trades later.
In the end it kind of slowed but probably one of the better days you could hope for in the SPI.
After a good day yesterday we got a bit of follow through and it ended up another decent day to be trading.
The market gapped higher and basically sold off nicely from the outset.
A had a downside bias so my plan for the day was to only take shorts. I got a couple of really nice moves on the way down that played out pretty fast.
I had to get short a couple of times at 71's as I got stopped out to the tick which is always annoying. I generally use a 3 tick stop and that works well for me.
Around lunch the market began to flatten out a touch and kind of got into a bit of a range.
If you look on the chart, the pink lines are the market profile ranges. Basically these are the areas that have the bulk of the volume. So initially most of the volume was between 71-62. So if price was at the upper level , 71, I'd be looking to get short. Which I did.
Eventually the market pushed through 71's and a really solid MP range developed at 80.
What I mean is that at 5480 - there were 900 contracts that had traded. At 5481 there were like 100. So that's a significant ledge if you can call it that.
That's telling us that there is selling at 80. So I took a couple of nice little range trades when it came and retested that level.
In the final 30 minutes we had the month end saga.
If you recall from earlier posts at months end or something similar, you can often see some of the big guys exiting positions.
We got a nice big seller at 83 - good for a few ticks. The move was quite big on the chart but I wasn't able to get all of that by any stretch.
Generally those last 30 minutes are a time for scalping the DOM. I'd even put the charts away and focus hard on the DOM.
I suppose you are using the DOM (tape reading) to determine where the big orders are, aren't you? It would be usefull if you post some similar example, if you don't mind.
Good to hear from you. Bund/Bobl/Shatz are one of the best markets to be trading imo. I traded it for a long time myself. You'll get a heap of great opportunities and it's great for reading the DOM.
In the example that I mentioned, I saw on the DOM there was about 40 contracts on the offer (5483) at the time - however price kept on trading there. Maybe 500+ contracts traded at 83, yet the offer always kept on staying around the 40-50 mark.
What that was telling me was that there was a big seller there who kept on refreshing his order. Price just couldn't go any higher in the short term because this big seller was trying to execute his order.
If you watch the DOM for a while you'll start to see this kind of thing.
If I get a chance I'll post a video so you can see it happening live and it might be a bit easier to see.
Also if you are using ninja trader there's a great little free add on indicator that I'd encourage you to download.
It's called the 1 lot trader - or something like that.
It's just a DOM that shows all the volume trading at each price level and it will let you see the big buyers and sellers - which at the end of the day is what trading is all about. It's like a free version of what you get with Xtrader.
