Day Trading the E-mini Futures

[bakrob99 11]

The premarket moves in the EC often provide easier price action to capture and a great risk reward. Today the marekt rallied thru the VWAP and touched the 2nd standard deviation then rotated down thru the VWAP to complete the route at the 2nd minus standard deviation, where .... surprise it found buyers.

 

 

I find that during the premarket the ES and EC can confirm each other's intentions so I watch and trade both when they are in agreement.

[TheNegotiator 13]

For me, if we can't get above and hold the 1340.25's, I think we'll be rolling back down towards a test of 20.75's for a check of balance. Below there and I think a move back to 1307.50/08.50 seems likely. If we we're to break back into the 6-day balance from 1341.00-1369.50, I would suggest that we need to re-test the 1357.00's again as that is low volume and pretty much where yesterday's decent originated from. Much above that and we obviously have the rest of the balance profile but should it hold, once again we'll be in a low volume zone on the long term profile. I'd be looking toward a gap close to 79.50 then the VPOC of the balance I have from 3/13-5/7 at 1386.00 as key prices. Should we get above 57.00 and hold, given the strong move out of short term balance and re-entry into it, the chances of testing higher would be high.

[TheNegotiator 13]

The premarket moves in the EC often provide easier price action to capture and a great risk reward. Today the marekt rallied thru the VWAP and touched the 2nd standard deviation then rotated down thru the VWAP to complete the route at the 2nd minus standard deviation, where .... surprise it found buyers.

 

I find that during the premarket the ES and EC can confirm each other's intentions so I watch and trade both when they are in agreement.

 

So did you trade it here and what was your play? 2SD to -2SD?

[bakrob99 11]

I had a signal for the long at 6:20 EDT but I missed it as I was just getting my coffee and waking up. I got the short which was a confirmation entry at 7:35 EDT.

 

I am currently long at 1.2270.

[bakrob99 11]

A break of lows with volume would have me holding for 1316.50.

 

UPDATE 09:48 EDT upside I would target 1343.00 if we take out the prior swing high at 1337.

Edited July 11, 2012 by bakrob99

[TheNegotiator 13]

If chop is what you like, ES is not disappointing so far!!

[bakrob99 11]

Nice bounce off the Settlement in EC, Rallying strongly and I expect the ES to follow

[joshdance 10]

For me, if we can't get above and hold the 1340.25's, I think we'll be rolling back down towards a test of 20.75's for a check of balance.

 

Just checking here every so often, and good to see we still think alike N ;-) Though the market is not plowing down right now as strongly as I would like it, I planned this same trade before bed last night (40-42 strong sell) and happy to see it playing out at the moment. Market may not make a decisive move until the FOMC minutes later this afternoon though.

[bakrob99 11]

10:56 EDT Bulls are hanging onto the overnight low by the skin of their teeth.

 

Possible Bullish Gartley fwiw.

 

I'm expecting it to fail and 1330.50 to be tested shortly

[TheNegotiator 13]

Considering how ES was moving and the fact that yesterday was a big down day and that FOMC minutes are due for release, expectation was for a possible early move but ultimately some kind of range activity until later in the session. With this context, I've done a chart to explain early action as I was seeing it. It's always difficult to fully demonstrate market activity on a historical chart, but hopefully it helps to make things a little clearer

 

[TheNegotiator 13]

Just checking here every so often, and good to see we still think alike N ;-) Though the market is not plowing down right now as strongly as I would like it, I planned this same trade before bed last night (40-42 strong sell) and happy to see it playing out at the moment. Market may not make a decisive move until the FOMC minutes later this afternoon though.

 

Yeah that was the plan and it worked well. I actually was long from 34.50 too so that was nice! Always a positive to go into an announcement with some "house money" but important not be gung-ho because of it.

[TheNegotiator 13]

Market responding to its RTH session midpoint and that 36.50/37.00 area AGAIN!!

[TheNegotiator 13]

With the dollar quite directional at the minute, I think there is a chance of testing lower if we spend a decent amount of time below 36.50/37.00. If not right now, then perhaps after the minutes release. 23.25(gap)/23.50(high vol) and 20.75(low vol) major targets. That being said, if the FED severly disappoint the markets, forget those and look towards the 07.50/08.50 area maybe.

[bakrob99 11]

I'm short at 1336. 1/2 off and stop at 1337.25 See if we can take out the low. Who knows?

[bakrob99 11]

Here's an article which is interesting and can keep you from overtrading prior to the FOMC minutes release.

 

Economist's View: The Puzzling Pre-FOMC Announcement "Drift"

 

It's on point.

[joshdance 10]

Here's an article which is interesting and can keep you from overtrading prior to the FOMC minutes release.

 

Economist's View: The Puzzling Pre-FOMC Announcement "Drift"

 

It's on point.

 

Excellent article and thanks for posting the link. Should note, however, that it is only referring to the actual eight FOMC announcements periods, not meeting minutes days like today.

[bakrob99 11]

Yes ... I realized that. But I thought it would help take your mind off of this chop before the minutes come out.

 

And speaking of the minutes - I expect that the reaction to them will take longer for institutions to digest so we may not see as much movement as early as one might expect. But the move once underway should keep going for a while.

[steve46 12]

well its one way of looking at things....unfortunately it not a productive way of seeing it but thats academia for you

 

Those who do this for a living have to deliver a result.....they look at real world action based on human habits....particularly the habits of people who put capital to work in the markets....

 

"Informed" participants (the pc term for smart money) will tend to pre-position, get some breathing room and manage the position into the release. The "drift" is the natural historical tendency of markets (and those who want to make a buck).

 

Its not only prior to FOMC that this happens....in fact I was taught to pre-position for the RTH session during the previous evening from midnight to about 4am PST. Works very well and I do it to this day (I was short from 4am this morning).

 

there are a number of different ways to make money in this business, to act in ways that aren't immediately obvious to the crowd has always paid off for me...

[bakrob99 11]

We finally hit 1330.50 ... managed to get short on a break thru the swing low at 1334.50 so that was nice. Out now and expecting another push down... but watching/stalking.

[bakrob99 11]

Update: 14:33 Fading the pullback to the IBL was the key for me. With selling coming in aggressively at 1333 - 1332.50 that was the short. Not sure how far this is going but I don't have too much to stop it here.

[bakrob99 11]

Price action after FOMC release

 

 

 

STOP RUN 2-3 PTS BELOW YESTERDAY'S LOW THEN BUYERS STEPPED UP

 

COULD GO MUCH HIGHER

[Lisyara 10]

well its one way of looking at things....unfortunately it not a productive way of seeing it but thats academia for you

 

Those who do this for a living have to deliver a result.....they look at real world action based on human habits....particularly the habits of people who put capital to work in the markets....

 

"Informed" participants (the pc term for smart money) will tend to pre-position, get some breathing room and manage the position into the release. The "drift" is the natural historical tendency of markets (and those who want to make a buck).

 

Its not only prior to FOMC that this happens....in fact I was taught to pre-position for the RTH session during the previous evening from midnight to about 4am PST. Works very well and I do it to this day (I was short from 4am this morning).

 

there are a number of different ways to make money in this business, to act in ways that aren't immediately obvious to the crowd has always paid off for me...

 

=========

Nice notation, fully agree, I always believed into pre-position, with like 5% to 30% of the intended tradable capital for the day (depending on the strentgh of expected event). When trading big book in real life you HAVE to lead the flock, otherwise you risk to miss big order execution/monthly ratings/and of course P&L... All of which is severely punished. But you have to do the homework, be it strategy team screwed, sales asked for client input or just pain vanila "direct little window to the outerspace" which is what I like to call when you know nothing (as all of us) but have to jump in and think you know the direction.

[bakrob99 11]

OK Back at the VWAP and this is where I am getting off the bus. Really good trading this news event. Market can still rally but I'm done for the day. Look for resistance around 1336.

[TheNegotiator 13]

Dropped below yesterday's RTH overnight so far and it looks like we'll be testing the low on open unless a drastic move happens within the next few mins. Tomorrow is possibly going to move things. Some decent eco releases, there are bank earnings and overnight is CNY GDP. So, what do I reckon? I think given attempted rally into close and failure overnight, we could have more downside. Could it be monumental? Hmm. Maybe, but with stuff tomorrow and very achievable targets as shown in my chart, I'd suspect that we might hold one of these prices- unless of course there's new data to price.

 

[TheNegotiator 13]

That looks like it could've been the 20.75 test although won't know until see the extent of rotation up. If it's to move higher, I'd like to see a fairly quick break of 24.00 (overnight low) and 24.75 (midpoint).