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wshahan

Week Two- Spookywill and the E-mini

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Steve46, despite all the comments about you here, you still don't get it. I posted initially asking you to let it go and let spooky do his thing. It's like you have to constantly be confrontational and put down every single thing spooky says. You are not the resident market wizard. As I understand it, anyone is invited to come and share what they know with others. If you want to start your own thread to continue your comments, then please take it somewhere else. I think you will find that everyone is 100% in agreement with me on that. Thanks.

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4.17 WRAP UP -WHAT NOT TO DO

 

 

This is primarily directed to those learning to trade as most veteran traders will have “been there and done that.”

 

I got stopped out of 3 trades in a row early in the session. I took a total of 6.75 points in losses which are in a very acceptable range for me.

 

I took the rest of the day off after my three loses this morning. I have a rule that if I have three loses in a row I quit for the day. Thus I avoid “get even” trades, “revenge trades” etc. And I give myself time to back into a place where I can listen to the market objectively.

 

I had allowed myself to get somewhat sleep deprived and I caught up on that today.

 

When I follow my rules I expect to have a profitable day, and I violated a number of them as follows:

 

Rule1. Do not trade unless I am physically and mentally sharp. The vast majorities of my errors occur when I am tired, and today was a good example of that.

 

The subtle error off of being tired is that it sets me up for numerous kinds of thinking errors, and today was a good example of that.

 

Rule 2. I was thinking I was smarter than the market. I ignored market condition and set up 2 legitimate short trades in terms of risk/reward. They were at the level of the previous day’s high, but they ignored the powerful up thrust present in the premarket. Another way of saying this is that I had had three big days in a row and I got cocky.

 

Rule 3. I instituted new trades without analyzing what had gone wrong with the previous trade. In the case, value was migrating steadily higher.

 

Rule 4. Here is where I compounded my errors, I increased the risk in the third trade while decreasing the potential return. By then, my target parameters had lessened. And, of course, I missed a big up move.

 

Rule 5. The big error was in ignoring market condition. I religiously begin every morning’s with a detailed review of market condition. This begins with a top down review of the long term 10 year chart through a 120 minute chart going back 3 months down to a 30 minute chart of the last week. I did none of that today. Market condition was clearly favoring the upside by the time of the US opening.

 

So I hope this is helpful to some of you.

 

I have confidence tomorrow will be a better day.

Spookywill

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10:52 CST WRAP UP

 

Trades:

 

1. Time: 807 AM CST Entry: Short Price:1383.25 Cover 1384, Result: -.75 points

 

2. 9:55 Entry: short at 1384.25, Covered at 1381, +3.25 points. Posted late

 

3. 1:35 Entry long 1380.50, Close at 1384. +3.5 points

 

4.1:59 Enter long at 1384, scrub trade at breakeven, 0 points.

 

Trades 1, 2,and 3 were legitimate trades for a day like today. The recommendation to go short at 1381 and trade 4. were not good entries because they were not made near range extremes and depended out breakouts which might or might not occu to be profitable.

 

RANDOM THOUGHTs FROM TODAY’S POSTS:

 

8:07

Yesterday’s day session top doubled topped with the April 10th high. Since then, prices in the ES have been working their way back into yesterday’s range and have retraced about half of the day session’s range. Yesterday’s run up was on low volume and could be subject to retracement today. The most likely case after a day like yesterday is for trade consolidation within yesterday’s range.

 

YES. THAT IS WHAT HAPPENED.

 

9:28

The 9:30 bar slightly exceeded the 9:00 one. We have also traded back into the lower part of yesterday’s high volume node and failed there.

 

An implication of this formation is that the high in the 9:30 bar has a 65% chance of becoming today’s upper range extreme and the 9:00 bar’s low is likely to be taken out.

 

FREQUENTLY A VALUABLE “HEADS UP”.

.

 

9:43

What we are seeing is no range development, i.e. no conviction, and hence poor opportunities so far in the session.

 

SAY IT AGAIN

 

9:43 Caution: Today s liable to be very choppy and very difficult to trade

 

THE ABOVE QUOTES PRETTY MUCH SAY IT ALL.

 

 

9:55 Keep in mind the caveat: Today is likely to be a choppy day within yesterday’s range.

 

ONE MORE TIME

 

 

12:09 In a day like this with a narrow range and rotational type trading, if you get more than three points, conservative traders can profits.

 

Following this principle enabled me to almost equal today’s range in profits. A real good result for trading the US session on a range bound day like today.

 

Another potentially interesting factoid is that when you have such low range, rotational type trading in the early session, there is possibility that you will a sharp move later in the session. Be alert for this.

 

 

So far we have a balanced day and this frequently produces a good move later in the session. (See Above.)

 

WE GOT THREE SUCH SHARP MOVES WITH NO BREAKOUTS. BUT THE MOVES EXACERBATED THE TRADING DIFFICULTIES PRESENT TODAY AND INCREASED THE POTENTIAL FOR GETTING “WHIPSAWED”.

 

 

 

 

12:09

In a day like this with a narrow range and rotational type trading, if you get more than three points, conservative traders can profits. In today’s case prices traded down from 1385 area to 1379.50 and spent 30 minutes in the 1380 area before rising to 1383.50.

 

TRADES 2 AND 3 DEMONSTRAT THE UTILITY OF THE CONCEPT.

 

KEY FOR THE DAY.

 

 

 

12:09 No range equals a boring day. Boring days sometimes lead to “Frustration Trades”

or chasing trades. Go fishing for finny fish instead.

 

MY ATTEMPT AT A PUN, NO COMMENTS NECESSARY. TRADE 4 WAS A FRUSTRATION TRADE AS AN EXAMPLE.

 

 

FOUR THINGS ABOUT TODAY:

 

1. Trade Location is key. Only enter near known range extremes, then hope for possible range extension.

 

2. Moves in a limited range can tend to be sharp and quick.

 

3 The bigger moves leading to range extension tend to start in the high volume node and can be identified by a volume dry up at an extreme followed by a volume build up around the high volume price. Then a gradual build up of volume above the hvp. Frequently there will be a ledge which acts as a launching point for higher prices. Today we had such ledges both buying and selling which failed. That is highly unusual in my experience, but today was the ultimate non trend, range bound, rotational day.

 

4 .A day like today is very tiring if you choose to play it. The frequent rotations require constant attention which today I found very fatiguing. This makes one vulnerable to making poor decisions. See “boring” above.

 

May tomorrow be a more rewarding Day!

 

Spookywill

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Does anyone know if steve46 still uses the lines he drew on this chart? Or anything about the specific high or low of a distribution he mentions in this post?

 

Interesting...

 

Actually spikes on an intraday time frame are "created" primarily by automated execution as price hits a specific high or low of a distribution....The trademark of automated execution is the quick response as price tests a distribution extreme..If you go to a longer time frame chart and simply scan left, you may see that the price retracement coincides with an "up bar or candle" that forms a "ledge" and/or is at the origin of a previous trending move....(what a surprise)....this is in part how I generate the supply/demand nodes on my charts...

 

In addition, there are some folks who know about this and "wait for" these opportunities at specific times of the trading day...they look for these trade entries because in this market (S&P Futures) a test of a distribution extreme usually results in a low risk entry and a profitable trade...those of us who actually do this for a living call this a "layup"...

 

As for what it means on Monday....that depends on where the big boys (institutions and funds) want to move it based on Sunday's European news....it has very little to do with Mr. Dalton's commentary...

 

By the way I am enjoying the comedy act....please continue...

28500d1334526928-week-two-spookywill-e-mini-120-min-chart.thumb.png.d0ea55b279ba2cf84300beda49ca554e.png

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Does anyone know if steve46 still uses the lines he drew on this chart? Or anything about the specific high or low of a distribution he mentions in this post?

 

 

You might want to consider asking Steve46. He will be the one who can give you the most direct answer.

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steve46, do you use still use the blue trendlines and blue zones you drew on this chart?

 

I'm sure this is just coincidence. My "understanding" is after all, very limited....but in the attached chart you can see price trying to take out 1370, closing above it briefly, then failing...

5aa7113955ed7_Failure20at2013701.thumb.PNG.c05c096031f8475a2da5cb595965977f.PNG

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