Today is Wednesday, April 22nd and I had a very nice day today after a wobbly start.

In today’s trading I did not split any of my trades but just took single entries with single exits. I missed a real big move to the upside and the strategy I wanted to implement would have worked great on that, but it passed me by. Since I did not get in it early on, I just let it go.

Once it reached the top of the range, it started in with the CHOP. I had a few gains and a few losses, up to 500, back down to zero, or little less. I got stopped out of a few times in a row and had to take a break. I came back and the formation changed up just enough for me to get a good read on what was happening. The move I was trying to short earlier, just took a little longer to build and it was now ready for a move back to the middle, which was a big 10 point move down.  I picked that whole move up, but built into the position and pyramided myself a very, very large gain.

This is what I had in my mind from this morning’s open, and the move I was expecting was to the downside. Each entry has its own stop and can be treated as a separate order.

The idea is, once you put the first order on and the move starts to go in your direction, it will slow up and build a little support until in breaks down again. When it breaks down for the second time, you add a new position on and pull your stop down to match your new entry stop point. If the second entry gets stopped out for a one point loss,  the first order made you 2 points, so you net 1 point on the trade.

That is not what happened. Instead, it dropped in the desired direction – down. Now I have two positions on of 5 each, but no additional risk. The process happened  three additional times, with each order as a new position and continuing to drag all my other stops down to match the stop from the last order.

That is a way to build a very large stake without any additional risk. Each order placed is standing on its own. You really need to use the triple screen, to make sure you are inside the larger trends which will carry you forward to your desired direction – in this case, short.

The move started at 9:20 and lasted about 45 minutes. I have done this before, but never this big in size. These are the Mother Load Trades that are nice to capture now and then. I just wanted to prove to myself, that if I want to, I could trade for larger returns and keep my RISK  still to a very minimum.

If it had not worked out like I experienced the trade before, I was only going to be out $250 plus commission. But once you see the potential of a big mover and you play it right as I explained, you are looking at thousands, without any additional risk other than your first trade. Very interesting, isn’t it. I will be looking for more of these trades as they come up and will try and record one of them for you to look at. Don’t know when, but I will be looking.

After all is said and done, I took 21 trades with 15 gains and 6 losses and came in around $7,700 for the day. A big one.

As I write this blog, it is just before the close and I see that there is a 20 point drop in the works and upon inspecting the potential add on shorts there, I see 5 possible low risk entries on that move. In fact, that was the move I was really expecting.

After the one I was in, the market rallied back up to new session highs, which I am sure caught tons of people off guard. It caused them to cover their shorts and buy back their contracts, thus pushing prices up. Once all the shorts covered and a very nice pivot point established at the top, LOOK OUT BELOW, for a 20 point drop. Again, that is the one I thought I was in originally. With that kind of move, I wonder what that would have yielded to the bottom line.

There sure is merit to getting large gainers and I see that played out here today.  The big moves are available, but they do not come that often. The key is, can you position yourself to take advantage of moves like that, but only risk 4 or 5 ticks on the trade.

Most people need a three or four point stop to do that and most of the trading day. I am able to take what the market gives me, sometimes it will allow me to take more, but I may not be ready to receive it. Until I am, I will continue to squeeze out a few points a day and hit a minimum daily goal for myself.

Today was a nice warm up. The very last thing I will say is, if you know how to position yourself to take advantage of Low Risk Entry Points and work that into  bigger time frames, you will have the skill to trade any kind of market on demand. How cool is that?

http://www.screencast.com/t/txJ1iBrLC Today’s equity chart

http://www.screencast.com/t/iXjXif3RH Decided to include today’s video of 1600 tick chart

Related posts:

1. Additional Market Risk & Exposure
2. Limited Gains on Large Gap Higher
3. Trading & Risk Management
4. Managing Trade Risk
5. Access Trade Risk

Tags: low risk trading, trading strategy