Day Trading the E-mini Futures

[TheNegotiator 13]

You are correct, buying before opening was not good idea. Took my lost and learned from it.

 

 

 

Yes, I consider double bottom a support, but what I like to do is consider other supports (ie, trendline, pivot, LOD,etc.) as well for more evidence. I also, like to match with the 5,15 min RSI or Slow Stochastic showing some buy signal when going long.

 

Tonight, I will read up on how to determine true double bottom.

 

Thank you.

 

The question which needs to be asked is what is a double bottom/top telling you. It tells me that it is an area that although there was sufficient opposing trade to reverse the market, it was not especially convincing. i.e. it couldn't reverse with conviction before retesting it. So if the same area is again approached, does it matter how we approach the area? Does it make a difference if we are moving towards the area as part of a strong move or if it is simply more of a range expansion?

[TheNegotiator 13]

35.50/35.75 is important to hold for shorts.

[Predictor 11]

I've hit my profit target for today and done for day. Buyers are still in control... but I would not be surprised if shorts re-assert themselves but now they have to demonstrate.

[TheNegotiator 13]

Given the action so far- i.e. OD down after big gap down, followed by a poor extension, I'm looking to see what happens at the 40.25 level. 40.50 is also the 27.2% extension of the IB and if we breach that (possibly upto 42ish) I think there'd be a decent chance of a decent attempt into the gap.

[TheNegotiator 13]

I've hit my profit target for today and done for day. Buyers are still in control... but I would not be surprised if shorts re-assert themselves but now they have to demonstrate.

 

I've marketed in at 1335.. will see how it goes.

 

On this trade alone? How much did you add??

[Predictor 11]

Neg, I think that makes sense... The down trend is pretty steep at this point. I view this as a higher risk market.. can't discount new lows.

[TheNegotiator 13]

Btw, that 1 tick break of the IB high given what I said, does not look great...

[Predictor 11]

Large limit traders and shorts entering at 40... not surprising.. buyers pushed right into them.

[TheNegotiator 13]

Neg, I think that makes sense... The down trend is pretty steep at this point. I view this as a higher risk market.. can't discount new lows.

 

Definitely. Pushes again as I'm writing though. Lol. The highlighted area could act as resistance and if it breaks through that could well be a strong hint at what might be next.

 

[TheNegotiator 13]

Definitely. Pushes again as I'm writing though. Lol. The highlighted area could act as resistance and if it breaks through that could well be a strong hint at what might be next.

 

 

Forgot to point out that if you look at the chart, this current 'pullback' is the first major one since the move down started last thursday.

[TheNegotiator 13]

Given the action so far- i.e. OD down after big gap down, followed by a poor extension, I'm looking to see what happens at the 40.25 level. 40.50 is also the 27.2% extension of the IB and if we breach that (possibly upto 42ish) I think there'd be a decent chance of a decent attempt into the gap.

 

Just to point out here, not saying that this will be a turn in the market, but see how the market is reacting to the possibility it could turn from the area. It frequently does this whether or not there is a turn from the area.

[Predictor 11]

Short here.. for a scalp. Gave about as much as I planned but I decided to push it... mistake. I've start to lose and shutting down. I'm slightly below my profit target today... should have taken that one off for break even but my machine froze. Not really time to call scalps here.. so far shorts keep getting stopped out... looks brighter for bulls.

Edited July 23, 2012 by Predictor

[joshdance 10]

1.1339.50 was a double bottom of support from 7/16/2012

2. Also lower indicators (RSI, and Slow Stochastic Oscillator) was oversold on 5,15,60 min.

 

Mistake:

1. Not waiting for the opening bell and letting the market decides it way first. I written this down in my notes several times to not trade before the bell, but tried to catch a bottom.

2. I should have confirm buy signal on Slow Stochastic Oscillator on 15 min chart like i normally do, but i didn't.

 

The US market is the last in the world to close for the trading day, so when it closed down on Friday, and all the European mess reared its head again on Monday, it's not surprising that markets continued their downward drift which then turned into more of a plunge.

 

Given that backdrop, and if you understand that the market is auctioning lower, looking for buyers, then it would not be prudent to buy before the open, knowing that the market will in all likelihood continue its search in the US session for buyers--and given the recent market behavior of the US market being much more bullish than the european and asian counterparts, a buy is not a bad idea.

 

I do not think that 39 is a bad location to watch for -- it's the low of the Bernanke day, and buyers certainly showed demand there. But the problem is, there was just not a strong enough reaction there, and as mentioned before, the timing that it found support in that area was before the open, and it's just not a good time on a day like this.

 

So in the first chart attached, note that the low of the day is the low from 7/13, the huge up day that took no prisoners. The second chart is a 60 minute showing the obvious demand and bullishness of that opening hour. So, 32 is a good place to look to buy, with the whole 30-32 zone being fair game in my book.

 

Knowing that, you witness a good 3 point rotation off of that price. Then what the market does next is the key--notice how it meanders down (check this out on a 1 minute chart for reference)? Sure, it could have melted further, but you have a decent location, a reaction off that location, and what appears to be the sellers showing a lack of enthusiasm about taking this to new lows after what is now a 44 point high to low swing over the course of 3 days. So I bought a half position at 33 with a 3 tick stop, was out for -3 ticks, and bought again at 33.25 with a half, added at 34.25 to make it full, and then exited into the open.

 

Location + read on the market + tiny risk = high probability trade

 

(by the way, use oscillators only when the market is balanced and ranging--when it is trending, it will tell you oversold or overbought all day long)

[Predictor 11]

Lol.. as soon as i wrote that... now we get the run down. oh well.

[TheNegotiator 13]

36.25/35.75 important .

[TheNegotiator 13]

Lol.. as soon as i wrote that... now we get the run down. oh well.

 

As an indicator of yourself, that's a pretty good one. Shows your timing is a little off probably and is a good time to stop trading- esp when +ve for the day . The thing is, all this kind of thing usually does is suck people back in - "Damn I was right, where can I get back in", is the thought preceding several losing trades in a row. :crap:

[goodoboy 10]

As an indicator of yourself, that's a pretty good one. Shows your timing is a little off probably and is a good time to stop trading- esp when +ve for the day . The thing is, all this kind of thing usually does is suck people back in - "Damn I was right, where can I get back in", is the thought preceding several losing trades in a row. :crap:

 

I'm kicking myself for taking that trade before the bell. Now price action is bouncing between 1340 and 1337.75. :crap:

[bakrob99 11]

Drawing a median line on a swing after a pushup gives me more confluence and confidence in targets. Here you can see that the 127 extension (pink) and the upper median line parallel (yellow) were in exactly the same time and price on the 10k ES volume chart.

 

Long came off the bounce at the Median Line lower parallel which offered a classic test - retest. (The cyan dots are automatically put on this chart by my indicator telling me to "buy").

 

 

 

Next target 1345.75 which is measure move and 161.8 ext.

[Predictor 11]

Market looking tired. Taking a small short trade. See what develops. Probably scalp only.

[bakrob99 11]

Market looking tired. Taking a small short trade. See what develops. Probably scalp only.

 

IMO, there is a chance that the sellers will get active again and we could continue the move down. My short is at 43.75.

[Predictor 11]

It was just a scalp for me. I don't know why any real trader would say they move their stop to BE as soon as possible. A lot of the time the market will retrace 100% before moving lower... The ES tends to have a buy surge before the bid drops. I didn't quite get what I wanted out of that trade.. fooled by the buy surge. I think too many herd are trying to get short today... making it more difficult.

 

Met profit target for the day.. I feel good about closing here. my take is that there are a group of large traders, liquidity providers, in ES that can push the market maybe up to 2 points. But as soon as the LQ providers run into institutions they have to give up... and the institutions often define a range they sell into and sit limit...

 

Bulls look willing to challenge 45.. if they take 45.. I'd not be surprised with a close around 44.50. Change that.. another short looks to be setting up.. if we break 42.25 maybe low 41's in play..

Edited July 23, 2012 by Predictor

[bakrob99 11]

Wouldn't be surprised to see 1338. ... needs to find more sellers but it's vulnerable.

[joshdance 10]

I don't know why any real trader would say they move their stop to BE as soon as possible. A lot of the time the market will retrace 100% before moving lower...

 

Depends completely on the context of what the market is doing.

 

The best, most explosive moves are the ones that never retrace much; if the market moves in your favor a certain degree (for me, this is about 3 points or so), it's foolish to let it come all the way back to your entry. If there was real demand and a real chance at the market continuing, it will usually not come back. Why would buyers pay up, if it keeps retracing back to my entry? Real demand (or supply) is evidenced by a swift movement in price. The market retracing to that point indicates, again usually, a lack of genuine demand or supply, and thus is not usually a trade I want to be in. Buyers paying up create the strong moves, and the best ones have little rotation.

[joshdance 10]

So we had buyers at 41, but I think the REAL buyers will need to be fished out around 37-38. Short 43.

[joshdance 10]

So we had buyers at 41, but I think the REAL buyers will need to be fished out around 37-38. Short 43.

 

After it made it to 41.50 and then came back up, my gut said get out but I took my 5 tick loss anyway. Most important is that my risk was quantified and it's a tiny loss compared to the gains! I would still take the trade again, only this time I would probably bail earlier when the 43.25 was taken out.