Day Trading the E-mini Futures

[TheNegotiator 13]

Well we pushed the current balance low at 1209.25 by 2 ticks only to fail there. What I am noticing is the reaction to the 1211 area from the last balance profile. Possibly, we have our low already, but who knows really. More fed chatter could be just around the corner...

 

[TheNegotiator 13]

It'll probably immediately break now :bang head: :rofl:

[joshdance 10]

After a failed long or two (again), I bought 11.50 and exited at 16.50 near the prior R. Looking to see if we print lower than 10.75 or if this will be a higher low around 12-13

[TheNegotiator 13]

Nice trade Josh! Seems to be building here for a move one way or the other.

[joshdance 10]

Thanks N -- wish it was a trade building the green, instead of diminishing the red. Hard to trade out of holes dug by stupid mistakes. It's quite a lot easier to trade when you have a "buffer" for the day, mentally tough when you're down and trying to climb out.

[TheNegotiator 13]

Thanks N -- wish it was a trade building the green, instead of diminishing the red. Hard to trade out of holes dug by stupid mistakes. It's quite a lot easier to trade when you have a "buffer" for the day, mentally tough when you're down and trying to climb out.

 

Yes definitely. Getting something "on the board" gives you a platform to build on.

 

Pushed a bit lower since suggestion that low might be in. Target to see if a move up is possible is going to be 16.25/17.00 area in my mind.

[steve46 12]

Nice day today....orderly, although news driven as is often the case these days.

 

On the open we had an attempt to close the gap and a subsequent failure (the first candle tells that story...TICK, VOLD and ADD are useless so we are simply reading the action at this point.

 

Buyers came into the market at 6:50 and the tape is in play at that point. Test of our demand node (and the tape confirms) shows a nice buy there....if you were in the trade you looked for it to close the gap (and it did).

 

At the top we show a reversal pattern (red arrow) that we posted earlier....it is a high probability short. The profit target is always back to the demand node...

 

For me the important issue is that we are in a news driven market....if you know that...the terminology we use is that we "prefer shorts"....we are trading a thursday (near the end of the week) and the news (of the IMF reluctant to provide funds) was all that was needed to push it lower...My attitude is simple..if you do take a long position look to take profits quickly (say three points), conversely if you have a favorable short entry stay with it......if you do take profits, leave something in the market in case it runs...Protect yourself with a castastrophic stop loss placement and you're good to go.

 

Good luck

[TheNegotiator 13]

Buyers came into the market at 6:50 and the tape is in play at that point. Test of our demand node (and the tape confirms) shows a nice buy there....if you were in the trade you looked for it to close the gap (and it did).

 

To be clear here for anyone who doesn't know, Steve's talking above cash close at 16:00 EST.

 

I am using a simple sequencing technique that revolves around a basic reversal setup..

 

Steve you'll have to elaborate on this "sequencing" method.

[TheNegotiator 13]

Plenty of interesting structure for trading today. I left the chart fairly clear so you can just deliberate it without too much influence. I believe it's options expiration Friday.

 

[steve46 12]

I am testing new order execution software today and taking it slow

 

The attached chart shows a nice reversal trade at 20 (arrows)

 

The logic is simple (just the way I like it)...you wait for price to test the extreme of a local distribution....I look a reversal pattern...once I get that I read the tape (and take the trade of course) and then its up to the Gods...

 

Today that reversal went favorable for 5pts then reversed a bit, and now is putzing around as folks decide what they want to do.....I am betting they are going home flat...and that the market is heading south....a bit more than this...took half off at 5...letting the rest run...

 

Best of luck folks

[joshdance 10]

I am testing new order execution software today and taking it slow

 

The attached chart shows a nice reversal trade at 20 (arrows)

 

The logic is simple (just the way I like it)...you wait for price to test the extreme of a local distribution....I look a reversal pattern...once I get that I read the tape (and take the trade of course) and then its up to the Gods...

 

Today that reversal went favorable for 5pts then reversed a bit, and now is putzing around as folks decide what they want to do.....I am betting they are going home flat...and that the market is heading south....a bit more than this...took half off at 5...letting the rest run...

 

Best of luck folks

 

Steve, what "local distribution extreme" did this test at 20? I considered a short as well here as the tick above 20 failed. However, given the very strong push up just before this, and the bullish activity this afternoon, I did not take it. What was your entry price?

 

I was watching 19.25, as this was the open of the day, but to the left I see nothing of real interest until 20.75 (IB high) and the high of the day, 21.75. My chart attached shows this area highlighted in blue. So, what was it that caused you to shade your chart in the area you took the reversal trade in?

 

Also Steve, at 2:38pm ET, 18.75 printed, testing those who sold a break below the small range (19 to 20) that formed at 2:13 to 2:18. At this point in time, if I may ask, where was your stop, and had you decided to just keep the trade on no matter what, or were you watching to possibly close early or reverse and go long if it retested 20?

Edited November 18, 2011 by joshdance

[steve46 12]

Steve, what "local distribution extreme" did this test at 20? I considered a short as well here as the tick above 20 failed. However, given the very strong push up just before this, and the bullish activity this afternoon, I did not take it. What was your entry price?

 

I was watching 19.25, as this was the open of the day, but to the left I see nothing of real interest until 20.75 (IB high) and the high of the day, 21.75. My chart attached shows this area highlighted in blue. So, what was it that caused you to shade your chart in the area you took the reversal trade in?

 

Also Steve, at 2:38pm ET, 18.75 printed, testing those who sold a break below the small range (19 to 20) that formed at 2:13 to 2:18. At this point in time, if I may ask, where was your stop, and had you decided to just keep the trade on no matter what, or were you watching to possibly close early or reverse and go long if it retested 20?

 

OK so the local distribution is what you make it....depends on your training I guess. There are a lot of ways to visualize distributions, but the simplest is to look at the developing range...See the attached 10 min chart with blue rectangles showing the upper and lower extremes....

 

Can't go into how I place supply & demand...took me quite a long time to get it right..to evaluate each trade I use simple hierachy of data....first I look for price to show me a reversal pattern...next, the pattern must occur at or near the extremes of supply/demand, and finally I prefer to have this all happen at (or near) specific times of the trading day....after a lot (and I would like to emphasize that) of testing, I found that when all the planets line up....the odds are greatly in my favor, and when I "free lance" the odds of a winning trade are significantly worse

 

Initial entry at 19.75, again at 19.25 and if I wasn't testing new software I would have added more a few ticks lower....simply because (again through testing) I have found that when I am right price doesn't come back to press me. My stop is between 2 and 6 points depending whether I am day or swing trading. Today it was two (2) points. My profit target for this trade was 10 pts..

 

When deciding whether to stay with a trade, I look at several data points, first I think about the big picture...Do I want to be in a short trade on Friday late in the day, in a news driven market where any bad news might drive it down......answer is clearly yes....then do I think the current price action is bullish or bearish....answer is we have a low volume market and most of the professionals are gone after the lunch hour...so the price action is neutral to bearish...and finally I read the tape....all the data says to prefer short entries and stay with them as long as possible....without being impolite, what I notice about retail traders is that (probably because of lack of experience) they are overly cautious...and because they are unable to quickly and accurately evaluate the data, they lose favorable position on entry (late entry kills you in this market)....in contrast professionals tend to take the trade, because experience tells them that aggressive behavior pays.....In this market once I find a positive bias I continue to hit it until they make me pay up..and by that time, I have made enough money that it doesn't matter....

Edited November 18, 2011 by steve46

[joshdance 10]

Thanks for the info steve -- happy trading and a good weekend to you.

[steve46 12]

Thanks Josh...I was entering this screen capture into my blog and I thought why not put one more example onto this thread as well

 

As I mentioned previously I look to identify a distribution....once I do that my game is to play the extremes of that distribution, because that is where the highest probability entries are located.

 

On this chart what you see is how a market establishes a distribution...right off the open, we see a gap down...immediately I am looking long, why because we are at the beginning of the week (not the end/re-read my previous post if you need to) so this market is likely to shrug off any bad news from last week and at least for the moment, try to fill that gap...now the question (just as before) is where do you get on the bus....and the first place is the reversal pattern (the left most red arrow)....the next is the re-test....(again...once I see something work, I will continue to hit it until they make me pay) and then up we go until we test the previous week's low at 1206.50....yes they take it out...but they cannot find buyers to continue the move AND you can see where that move ends as it tests overhead supply....this is what I call a layup short....and now I have a distribution and I am going to play ping-pong until they prove me wrong....and even if they do I have already made a few bucks..

 

I hope the message is getting through...different day....same story.....

 

Good luck this week...

Steve

Edited November 21, 2011 by steve46

[joshdance 10]

Steve did you mean to attach a chart to your last post?

[steve46 12]

Here's another chart with the most recent entry (right most green arrow up)

[steve46 12]

For me the main problem these days is boredom....Attached please find our last screen capture for this evening.....

 

As you can see price tested down, taking out the previous low (a simple shake out move) and then retracing back up to re-test the previous week's low at 1206.50

 

Depending on your understanding of how the Globex works, you could have taken trades a several points on both sides of this distribution. I am guessing a trader with a small account could have generated oh, $500 to $1000 in about 4 hours....

 

I've had enough for the evening and I am going to go watch TV

 

Good night folks

Edited November 21, 2011 by steve46

[TheNegotiator 13]

Well I hope everyone had a great weekend. ES is lower overnight so far and unless it pulls a big move out of the hat it is going to gap lower on open. As it has dropped below its last balance low 1206.50, that would be my first point of reference before the higher Friday close 1213.50. Whether we get early week responsive buying is a question I'd like answered as I don't think things are looking so rosy right now. Hiccups with previous Eurozone problems and more focus on who's next have the market in sceptical mood imo. I'd like to see a move up to judge it before commiting to short. That said, it could also tank on open. But who truly knows. That's the beauty of this game.

 

[steve46 12]

Here is today's open

 

Usually trying to decypher the opening direction is a bit more complex. Today was a layup

 

We knew that Asia and Europe sold off significantly

 

We knew that we had a pending econ report at 7am PST..and that it was likely to be "more of the same" at best...

 

There were two strategies in play...the first was to pre-position (several places to do that in the overnight market)

 

and the second was to short the market at the open (if you had a way to get on at a reasonable cost)

 

We had an immediate short off the opening reversal pattern. and two countertrend trades (we did not take them)

 

For this attachement we put Bollinger Bands in place to make it easier for folks to see the volatility extremes. Normally we eyeball this and use proximity to supply and/or demand to make our decision. No reason you can't do both....

 

Thats it for the morning...we are going to get some sleep and come back to trade the afternoon session.

 

Good lujck folks

Edited November 21, 2011 by steve46

[TheNegotiator 13]

This is how I saw it:-

 

[steve46 12]

Nice....there you go....price trading at the extremes of a distribution and because the volume and interest isn't there (and the news is negative)....where is this likely to go off the open?

 

For me I don't see how it could be any clearer....good for you.

 

Hope you all made some money

[TheNegotiator 13]

For me I don't see how it could be any clearer

 

Clarity is gained through a combination of knowledge and experience. It's good that you have it now, but like us all at some stage I am sure it wouldn't have always been so clear. Anyway, my 84 area was hit and there was some buying, but really I want to see 80.75.

[joshdance 10]

Is that like a 2K chart or something N? I have a 2K open and looks similar.

 

Re: your chart, the only fake that fooled me was that it popped up from that distribution, came back down and tagged the POC (95 I think?), and then had a bullish move up. THEN, it struggled.

[TheNegotiator 13]

This one is a 2.5k but 2k should be fine also. Just whatever you prefer. I'll also look at around 5k at some points too. Just remember though if you are looking at volume charts you need to be aware of lunchtime lull.

[TheNegotiator 13]

So we finally managed to trade the 1180.75(well 80.50)!