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did sweet FA trading yesterday as had some tax stuff to prepare for accountant. However, a pure structure based trade highlights importance of prep and structure
SPI
prep - as marked on 30M chart (purple circle) was calling this pre-corrective. typical number of legs is 3-5, and on SPI had had 3 into previous highs
gap on open, pump fake off previous high - scalped off a quick short and covered just prior to gap close
Can you help answer these questions from other members on NexusFi?
Just some long stock call options exits today due to other commitments.
Just scalped off 6 ticks in the ES in a trade I otherwise would not have taken if it wasn't for a buy signal in an indicator I've been working on, so may as well post some details about using an indicator to take profits when price has expanded and mean reversion is likely
Looking at price action alone, the entry is "late" to me.
But when the indi kicked up from the smoothed line (which is trending up), I entered and whacked a sell order in where price is well expanded away from the moving averages, while the 20 has expanded away from the 50.
Indicator interpretations
Together with market structure and bias, I'm using the indicator to help with:
staying on right side of trend
exit trends before they reverse (divergence + OB/OS)
take profits when signal line expands away from smoothed line as anticipating mean reversion in direction against trade
I'm finding this whole journal interesting and helpful, including the psychology comments. Very down to earth.
The reversions and divergences in the indicator look useful. Any hints about how you calculate the indicator lines? I'd like to play with them. Thanks!
I've just messed about with things like MACD's and other oscillators changing default settings - nothing special - divergences will show up on a whole host of oscillators and as for mean reversion, expanded prices show up on the MA's I use on the chart which are just a 20 and 50
The point of mentioning my interpretations was to give other traders other ways in which one can interpret MA's and Indicators.
I'm a bit slow Monday mornings... looking at the indicator, not the price action, I shorted into an up trending MA. I flipped the position when I saw the pivot following my short confirmed an inside support zone - but even that entry if I'm honest was reactionary as it was pretty late and therefore increasing risk - the return v reward on that trade was inverted
tried for a break of the day highs, then flipped for a short, flipped again for another break of the highs, got stung, and then joined the right side of the market for a short with trapped longs fueling the position
SPI today
looking at 30M (insert) to me looked like a setting up of potential trapped shorts covered first entry for scratch
re-entered once price rolled over. Didn't cover at first price extension down, held through retracement to break of support and exited when I though there was going to bid a higher low forming. Every now and then I try holding for longer - but usually its best (for me) just to go with the first thrust (if there is an initial thrust). The time it can take for a move to develop I rarely have the patience for.
SO, from 30M chart below, still bullish bias, as long as 5482 can hold
would want to see short term MA's cycle upwards before initiating longs as the level is quite obvious now having been tested numerous times over last session (including ETH).
I have long index calls purchased yesterday at this level - should this level break, then this position will be covered
