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FuturesTrader's Journal - Trading ES with Market Profile
I traded very poorly today. I attempted multiple breakouts on balancing day which was completely inside yesterday's range and paid a heavy price. This entire week has been a losing week (4 days in a row). I fixated too much on the levels I had identified and I closed some trades even though they were not proven to be wrong and I ended up taking poor location longs later in the day (multiple times)
I just read my prep that I wrote on Wednesday evening - "Acceptance above PB Low will likely result in a choppy balanced market till yesterday's high's are cleared. Above it all time highs are in sight." There was acceptance above PB Low and yet I kept looking for breakouts. I had completely forgotten what I wrote in the prep document.
Outlook for today:
Yesterday was an inside day. Inside day is a form of balance. Go in the direction of break.
We are also gapping up by about 5 points. Gap rules apply.
Overnight inventory is balanced (It was short earlier but that seems to have been adjusted.
I misread the overnight inventory. Overnight inventory became long by the time market opened. ES looked 1t above open and sold off. Looking just one tick above and selling was sign of stronger seller. Given this open drive I should not have taken the gap trade, yet I did take it (trade 1)
In A period 2100.00 was bought multiple times. I wanted to short a bounce that slowed down, however I entered the trade too early at 2101.50. Even with a poor location, the trade was not wrong till yesterday high was breached at 2104, however I kept a tight stop. I was stopped and I watched the market turn around in disbelief.
A and B period formed poor low. There were stops accumulated below yesterday's G,I periods and today's A,B periods, however sellers could not push below and short covering rally started. Today was the third poor low in last few days.
B period was an inside bar, I took a long when C broke out above B. I was aware that yesterday's high was support and a better location, but in my mind I did not want to miss the opportunity and I was hoping that this was the trade that turns my month into positive. When it started going against me I just could not handle it and closed the trade, shut down my platform. This week caused some damage to my confidence. I was up 75 ticks after 3 weeks of trading in July and I lost 92 ticks this week (All my trades are live trades). I let go of my patience and process this week, I am aware of the damage it can cause and I will regroup and start fresh in August.
Thanks to everyone who followed my journal this month, it has helped me a lot becoming consistent. Also a big THANK YOU to Big Mike.
Monthly Bar Chart:
ES is in a 5 month balance. There is no excess at the 5 month highs. The lows are clustered together with heavy stops below likely. The 6th month is opening in the upper end of balance. 2074.50 marks the halfway point of this 5 month balance. This will likely be a support area.
Weekly Bar Chart:
The weekly bar chart also shows a 25 week balance.
Daily Bar Chart:
On Friday, ES looked above the 2 day balance and failed. The destination is the lower end of the 2 day balance at 2087 area.
Daily Profile:
The image below shows the mechanical trading occurring from 7/20. Multiple poor highs and poor lows have been left behind. As of now, 2087 (which is the low of the 2 day balance) is the likely destination trade. If this area gets tested, it is highly likely that the market will break down and test the thin zone below, created on 7/28. 2074.50 which is the 5 month mid could be a likely support if this happens and 2 poor lows will get repaired.
If the low of the 2 day balance does not get tested, then the upper references will be back in play. Heavy stops are likely above 2112. The market sold off multiple times from mechanical references on 7/20, 7/21, and 7/22. These are signs of weak mechanical daytime frame sellers and these poor references are likely to be repaired.
Yesterday ES opened at 2098.25, looked above but could not test settle and sold off. It bounced from prev day low and the poor lows became even weaker (cumulative exponential effect). Once the bounce failed, the prev days poor lows were cleaned up and stops below ONL were run.
AB period made a good low and ES returned inside yesterday's range. I initiated a long but it quickly dropped out of range and I closed the trade. I was away from my desk rest of the day.
E period failed 1t below open and FGH 1 timeframed lower. IJKL periods balanced before inventory adjusted when M period broke out of L period inside bar.
2091.75 is rally high. Change occurs below this level.
NYSE Volume yesterday was 3.4B. This is very low for for an almost 20 pt day that was mostly directional. This leads me to believe that yesterday was mostly liquidation only.
Overnight inventory is mostly short. As of 8:12 am CST we will open near the rally high. We are also in the middle of yesterday's range, let the market shake out unless it is high confidence open.
ES opened in middle of yesterdays range and we ended up with an inside day. Inside day is a form of balance. Balance rules apply. Go with the direction of break. POC at 2089 is 11 wide and in order to move away from POC we wil need strong conviction and higher volume.
NYSE volume yesterday was 3.5B, again on the lower end. Lower prices are not attracting more activity.
Overnignt inventory is 100% long. Expectation is that there will be correction of the inventory, if this doesnot happen it indicates a strong market.
Yesterday's high at 2096.26 and 2 day high at 2099 are possible support area later in the day.
I will post my yesterday's trade results later today.
My trading has been dismal in last 2 weeks and I am stepping away from the market completely for next week (no recaps or prep). I will start the recap reports after one week break. In the mean time here are my poor results in last 3 days. As you can see my stops are getting tighter and tighter and this is no way to trade ES.
Yesterday ES looked below previous days range and failed to go lower. Destination trade was high of previous day (89.50) I took long twice at 76 area but I panicked each time market fell out of range and I closed the trades with loss. I was too early in getting long and what I missed was that selling in A period was Open drive (only 1 tick above open) but they simply couldnot push the market lower. The best opportunity to get long was when B period looked 1tick below the previous days range and there were no more sellers to be found. After getting stopped twice I was too hesitant to get long again.
ABCDEFGHI periods one timeframed higher, inventory corrected in J period.
I took a long in C period at 86.25 after BC made a poor high, I closed the trade at previous day high 89.75.
K period matched the low of J period and did not stop one timeframing. ES closed near the highs at 2099.25
Profile was a beautiful example of value and POC following price on a trend day up. POC shifted up gradually from AB->DEF->DEFG->GHIJKLM. This indicates a strength. ES had an outside day which is another indication of strength. All time high's are in play.
2095 is the afternoon pullback low (PB Low). Change occurs below this level and auction remains to the upside above this.
Overnight Inventory:
ON Inventory seems balanced. ONH is 2103.75, ONL is 2092.25.
As of 8:15 am CST ES will open at the upper end of yesterday's profile, near POC.
