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Even though the long term trend is short I am keeping a neutral bias on my time frame. The market has traveled almost 200 ticks over the weekend. It could go many more to the downside, or begin to test some of the areas overnight in an effort to recharge for another move.
There are several places that could act as support and resistance from where price is now, none of which look particularly obvious or compelling. Therefore, I will not trade them blindly, but instead use them as "heads up" points for possible trend reversals.
I will be taking my first trade with three contracts today, then adjust thereafter depending on the results of the first trade.
In hindsight today was a beautiful trending day that yielded winner after winner for the trend continuation trader. These days are difficult for me because as the day develops in real time, the energy in the market, the slow grinding price action and the stair step pull backs seem to signal a trend reversal at any moment. I have difficulty finding places to sell at discount, since most pull backs look like the beginning of reversals and there are no clear resistance areas to lean on.
One technique I have been looking at is to wait for highly traded prices (pink boxes on the chart) to develop, then fade counter trend breakouts from these areas. Doing this today would have yielded three very nice R/R trades. Adding a fade of the OR to this mix would have produced another nice trade.
Of course, on other days, the first one would fail, a loss would be taken, and the trend would change. This is where having the proper perspective comes in. Philosophically, one must have the attitude that failure with this technique is quite possible on any of the pull backs, accept this fact, and take the trades anyway until the time it doesn't work. Days like today, with at least four 2R trades, would more than make up for the one loss.
Hey @Tap In, this is a nice journal you have here. Very neat!
I just have a few questions I would like to ask:
1.) In the first image, you have a previous POC labeled around 46.40. Do you think POC still have value once they have been traded "over" a few times? I ask because the 46.40 price has been traded many times since the POC was made on 6/27.
2.) I see you draw swing highs and lows on your Cumulative Delta indicator. I am a fan of the CD myself. Do you use those swings points as S/R or just as a visual? If you use it as S/R, do you think it has any value?
3.) What are the blue and red boxes on the charts?
I am just curious about your thoughts! I am not trying to be rude or anything. I hope you are not offended
I generally agree with your statement about POC's, except that the POC from 6/27 has never been tested from below during RTH. That said, the number I was really interested in was 46.33 which was the RTH low from yesterday.
Regarding CD, I often see turnarounds when CD hits a major swing while price is also doing something significant. Also, I watch CD for signs of strength and weakness compared to price.
The long boxes are S/R areas. The small boxes are prices that are heavily traded.
Yah, support becomes resistance and all that. I also think it matters whether it is tested during globex or RTH. In the end it traded through, but did have a small reaction that could have been taken. I did not
Long term sentiment is up. Price is currently hovering around the RTH low from 7/1 and a gap fill. There are two RTH POC's above and yesterday's RTH high below. On the macro, I will be playing for price to attack the two POCs above to test Tuesday's sell off
The immediate Hypos are:
1) price breaks out of this range and I enter on a small retrace
2) price goes down to test a developing POC around 47.70 then rebounds.
Price currently resides in a 50 tick box. My choice is to wait for a break out/retrace or fade the edges. I will probably opt for the latter. Non farm payroll report has ES rallying. This may portend the same in CL. Long term bias is down but CL could rally to test some of the areas above from yesterday.
