Good with the Bad

Thursday May 31st, 2007

Spot Light Trade(s)

See the three circled areas for today's spotlight trades.

Trade 1 - The first circled area at 11:05 CT on the 1-minute chart above is one of the few good pull backs in price that had a nice defined stair step higher in my direction line on the 5 minute chart for today, and traded for decent distance in today's smaller range day. This low came in with a nice relative low in the NYSE Tick.

In the 20 minutes prior to this point in time, the higher volume spikes in the 1-minute chart were mostly sell volume. The price action "looked" like it was curving lower like it could break lower. The NYSE Tick was staying mostly above the zero line, so I was not really interested in trying a short, but it was enough to distract me from thinking long. I missed this one and this is usually a trade I really like.

Trade 2 - A similar setup to trade 1. This time I was ready and jumped on the signal and got long. Price worked to 1 point in favor, I wanted to try and hold for more profits. After all, it worked great on the prior trade right. Well.. that takes us into trade 3.

Trade 3 - Similar setup again, only reversed to the short side. Wanting to hold the prior trade kept my focus from the short side. The 5-minute chart had "flat lined" the trend for about an hour and did not give me any indication of this move. By the time I realized I had missed a short signal, I was lucky to scratch out of the last trade at break even. It would have been good to reverse my position from long to short, but I have not allowed that in my rules yet.

Why would I do this? There are some subtle clues. The Volume is really light compared to what is expected. But if you look at the 5-minute volume, the "heavier" volume candles are the Red candles. It is hard to say heavier when the volume is this light, but a warning sign.

I think I wanted to see an end of month rally make my long trade a winner. This kept me from seeing the short trade and acting upon it in time.

Trade Wise, Trade Well

John

Tight Price Action

Thursday May 31st, 2007 ES Futures

How did it go today

The 5-minute chart does not do the price action justice. Most of my entry signals for today came while price was in tight sideways chop. Notice in the light blue lines in the 5 minute chart below. These lines defines my calculated "immediate trend" that tells me the direction to focus on trades. If the lines "stair step" lower, I look for short entry signals and if the lines "stair step" higher, I'm looking for long trades. As you can see, there are not many steps in the same direction today.

Too often it seemed price was buzzing sideways in about a 1-point range for 10 to even 30 minutes. This left me scratching my head saying the signal really worked. It was just me who did not trust that price would not actual "move" against my entry and cause me to use a bigger stop that I wanted for the trade.

Trade Wise Trade Well

John

Ten Rounds

Wednesday May 30, 2007 ES Futures

How did today go

The title of this post says it all. I feel like all I did was fight the market today. I need to figure out why I fall into this ruts where I fight the market and worse yet... fight what my own system is telling me to do. I took more trades than I should have today and too many of them were short trades.

Not good when the market goes up 20 points. Chalk up another day in the not what I should have made today category. Today's price action seems to consolidate sideways for 10 minutes then pop up or down quickly in just a minute or two.

My bias last night was to watch for a potential trend day for the end of the month. Well... we got a trend day. I normally try not to have a bias and just trade the price action. I guess I did too good of a job clearing my head of any biases.

Struggling for a good spotlight trade to present for today. I'll see if I have more time later tonight.

Trade Wise, Trade Well
John

New Style - Spot Light Trade

Tuesday May 29th, 2007 ES Futures

Trying to be more brief - let me know if you like this format or the long style with more details.

How today felt

I was overly cautious today. I knew I would be gone for some of the day and did not want to dig a big hole when I would not be around as much to work my way back out. I felt I kept my focus pretty good in the morning, but still managed to force a few trades to add some small losses to my mix of trades.

Spot Light Trade

I caught one very good entry. Just before 10:42 CT I had a short signal. The initial look at the 5 minute chart makes this look like a counter trend trade. But by the close of the 10:45 CT candle, the 5-minute chart had a slightly lower high to indicate a potential change in direction.

I had to get going to my youngest daughter's graduation from preschool and the price action was trying to hold up. The NYSE Tick was looking weaker and I still liked being short here. As I needed to be gone already, I took the first half off at +0.50 seconds before the market decided to dive. :-(

All of a sudden I was up 2 points on my remaining position. Under normal circumstances I would now take profits on the first half and I would allow the second half to run with a loose stop. You may have already guessed, wanting to lock in some profits I crowded the stop and got knocked out at +2.0 points just before the market started lower again and I ran out the door.

Summary

I'm still forcing some extra trades that I should not be taking. I caught myself a couple times today, but still managed to place some of these extra trades. As price moves without me, I can not let myself "Feel" that I'm missing out as this feeling builds and will eventually drive me to force some trades if I do not clear the thought from my mind.

I don't expect to trade every move in the market. My system does not try to stay in the market all the time. I need to focus on the clearest and best entry signals.

Trade Wise, Trade Well

John

High Volume Day

Market Observations

Today started slow. But it did not last long. Two of the first three 5 minute candles had volume less than the average expected for their time period. The average expectation for volume can be seen in the chart by looking at the blue line. this threshold value changes for each 15 minute time period of the day. Note how only a handful of 5 minute candles had volume less than the expected average.

The initial light volume had me cautious to trade in front of today's 9:00 CT report. I had nice long signals and wished I realized the volume picked up so this I would have tried one of my two long entries. The market took off to the up side after the report and hardly looked back.

Formidable Resistance. Price quickly turned when it bumped into the combination of the R1 pivot and the Market Profile Point of Control from yesterday.

Big Selling. Our afternoon sell off started early today. I can say I'm going to start allowing myself to take more counter trend trades. I had a "perfect" sell signal at the first touch, the second time up to the high quickly retreated back down. Secondary sell signals were a "higher risk" trade signal, but worked great.

Almost did it again. Did you notice where the Midday low came in? Well look... The initial low touched 1513.00 and this is 2 ticks lower than twice the first hours range.

S3 calling. Twice the first hours range could not hold up the market in the afternoon. The S3 pivot level was beckoning. It was a struggle to get there. We pierced through this value and hit the 1508 level which I still had noted as a prior POC level of importance. The market popped slightly higher to close for the day.

Trade Wise, Trade Well

John

How Long Can We Trust That

WOW...

That makes three days in a row where we have sold off hard in the afternoon and closed near the low of the day. Did you expect it again today? I did not think it would repeat this many days.

BUT...

I can not prejudge and decide what the market will do. I need to follow my trade signals to stay on the proper side of the trend and jsut see what profits follow. The first long signals early in the morning worked great. Then the anticipated pull back from the initial highs. From here, I wanted the market to blast to the moon.

I talked myself into a scenario where the market just could not sell off a third day in a row. This just has to be a fakeout. Make price action look like we are setting up for a selloff, then blast higher.

Well I did not get killed, but I scratched out of too many long trades at break even, longing for more profits, instead of harvesting the available profits. Worst of all, I was "looking the wrong way" and did not take trades with the trend. I saw my short signals, but did not "want" to listen. So when my long trades got stopped out, I'm not short and end up watching the move go without me.

Today should have been an awesome day with profits that some people would think of as unbelieveable to obtain for one day of trading. Instead, I'm left disapointed at my trading. From now on, I must take the trades and let the market "show me" what it is going to do. I'm killing my profits "wanting" or "Hoping" the market does what I decided.

Trade Wise, Trade Well
John

It Happened Again

Well... this makes two days in a row.

What is it

Today's high came in at exactly twice the first hour's price range again. To the Tick. You can see this on the chart as the top of the Blue background represents twice the price range from the first hour of trading.

Wishing I shorted it just for fun, but I did not. I need to consider adding rules to get me more aggressive at price levels like this.


Right now I protect unrealized profits or even take profits just below these key levels. But I do not reverse or short these levels just because they are on my chart. I do have to admit that I'm often watching good trades go by that occur at or near key levels like the hourly range and twice the hourly range. Other key values include the Pivots, R & S values, and the Market Profile levels.

Trade Wise, Trade Well
John