Archive for January, 2012

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Scalp Trading the Emini

Tuesday, January 31st, 2012

Today’s Trades are below;

Here in this last day of January 2012, scalp trading the emini markets has grown in overall interest the last several years. There are new players coming into this market all time as the opposite is also true with players leaving in defeat.

What does it take to find your way to profitability? It is usually harder than most believe as they are drawn to the often fast action and allure of financial freedom. Sniper Day Trading will attempt to bring some of this into perspective.

Scalp trading is a way to participate in a very large leveraged market with limited trading risk. With margins as lucrative as 50:1  or more for pure day trading margin, it is easy to see why so many feel the lure of participation. That leverage will work for you and against you just the same if you don’t know what you are doing.  Using excessive day trading margin is also another reason why traders struggle, as they always trade to their margin limits and increase their losses all at the wrong time.

Knowledge is power and those who have it, can leverage the knowledge to obtain their trading goals. Without a working knowledge of how price action takes place in the course of a day, you will get whipped around and be left for dead when its all said and done.

Limiting your trading risk down to a very small window is in my estimation is a big key to success and stretching out gains when it is appropriate is also important. The key here is, when it is appropriate. How are traders to know when that is?  To answer that, it takes us back to knowing how to read the price action charts as you take in time, energy and space as it relates to support and resistance, which is often misunderstood.

Support and resistance in trading is often applied in a way that will cause the average trader to lose on his position because the market has a way to get you in, only to take you out and then on in the original direction, but without you in it. This again has to do with knowing all of this ahead of time and waiting for those false moves for the real move, the one with the limited risk and high reward.

Scalp trading at key energy points will yield you fast acting trading results combined with low risk, giving you the best of both worlds. Knowing when to cover your trade is also just as important as knowing when to enter. You can have large profit in a position only to quickly see it disappear as you are looking for more. That often leads to frustration and more bad entries.

Which brings us to the mental side of trading and that is a whole other issue that keeps traders from gaining traction. You need the trading edge in mind and method. Most do not realize it, but they are the problem, not the market, to achieving the results they seek. The market is there and it will always be there with the participants coming and going, but not having a solid mental strategy in addition to a solid trading strategy or method is where the separation begins.

To many traders become “feeders” for the professional traders and institution as they strip newbies of there capital. The best strategy to not let this happen is take your time and triple the amount of time you think you need before going live in the markets. Get your mental game down and don’t become reactive but proactive in stalking trades as you wait and let them come to you. This is the approach of Sniper Day Trading and reason all of this works. One needs to take into consideration all the points mentioned above and then the playing field can not only be leveled but tilted to your favor, giving you the trading edge.

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Small Scalp Trades Today

Monday, January 30th, 2012

Today is January 30th and we saw a large trading gap down this morning early on and a recovering market the rest of the day. The action in the daily market has been very orderly with mild price swings in both directions with an overall upward bias. The rally has slowed this last two weeks since I was calling for a top around the 1308 area. That happens to be where we ended up today in fact, 1308.

The market is consolidating its gains over the last 6 weeks and think we should see a change coming up soon. For the time being, we seem to have containment on the upside. The market sentiment numbers will coming out this week, Wednesday morning, as the bullish bias has been strong. It has not been strong enough to signal any significant change and so the market buys its time until everyone is fully invested, then it will reverse on the masses.

I got back to trading today and had an OK day, with a few losses of just a few ticks early on. Later, I missed a large move I saw coming and elected to not chase it. I was left with small scalp trades in both directions to try and pick up my daily goal of which I did. I had to switch screens and view the market from a smaller scalp trade perspective. I shortened up my targets and took what I could get as per the method and finished well. The days trades below.

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Fed Declares Low Rates Till 2014

Wednesday, January 25th, 2012

1-25-12;  Today, the market was moving very slowly until the Fed declares low rates till 2014. Things suddenly picked up and started to move.

It was a good thing as seen by those on the street, but it is likely be very inflationary. With the Fed’s target rate for inflation at 2% it seems unlikely that in the real world that real people will experience a rate that low. It has been said, that illusion is greater than reality and maybe that would apply here. Gold and Silver thought as I did with a huge rally in both of the metals.

In today’s trading I had three trades 2 early on and one much later in the day, as seeing the price action was so right for an addition trade and took one, which was good for about 5 points at the top as I scaled out on the way with a larger position. The days trades in the chart below.

I have two charts up on one screen again today and don’t know how long I will keep doing that, but I still am for now.

Monday I talked about the two charts acting as one chart, and so started to show you what I mean in the last few sessions. I did include the tabs at the bottom of my screen as well. This is the middle view as I have series smaller and one series larger. I don’t show everything on my chart as I do have a few things taken off, but the point is, this trading method is driven by understanding and acting on that understanding of price first and indicators confirming.

Price has three components to it. Time, space, energy. We need to see time pass to allow for the build up of energy and while it is doing both of those, it is passing through space. It has to go somewhere and that is does. It gets expressed in the posting of price bars on the screen. The three components work in line with each other adding the fact that support then becomes resistance when broken. It is looking and understanding these concepts to a definable level where one can then apply these principles to make positive trades.

I don’t really like the term winning trade as that has a flip side with losing trades and the whole thing is equated with a gamble. This is not a gamble if you can steer the odds to your favor by using a trading methodology that will continue to express itself in positive out-coming trades, hows that.

Notice the word ” If “  as that is a big word with a lot of meaning. If you can steer the odds to your favor. How does one do that?  It can be done by understanding the three elements of trading and applying those principals to the charts.

That sounds easier said than done, but that is why we all need to continue to research and uncover the missing pieces. Some have all the time they need to do that, but time is money. It has taken a long time for me to piece all the pieces of the puzzle together and have come up with something that works. I show my trades every day to give those who look on a working understanding that this is possible and it does help me be accountable to myself as I do have an audience.

It is my goal to become a better trader than I currently am. I know my weaknesses and am trying to address them. I would love to get a much better trading schedule established, but I seem to trade when I am up and that always seems to be a different time. I was missing the easy early morning trades and stuck with the slow moving stuff during the mid-day N.Y. lunch. Starting a little earlier like I have been trying this week has helped make it easier on me to pick up my modest daily goal of 2-4 points in the ES each day I trade.

So far this week, I have put on 9 trades in three days and all for gains. I don’t like keeping tabs on this kind of thing, but I just plan to trade well, exercise patients and some form of discipline as it relates to the trading method.

OK, that’s it for now.  Trade well, trade committed, Vince

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Quick Trading Day Today

Wednesday, January 25th, 2012

1-24-12;  Today was a quick trading day and a quick blog post for me, as  it is Wednesday already, 12:24 a.m. and I am way overdue for sleep. So, I will only post my trades below.

In today’s trading, I took 3 trades for about 3 net points total and was done in around 45 minutes. I started just as that rally took off before my first entry and could see that there was a few more ticks left in the move. I could have waited, but was able to get a little before the turn. See notes on screen shot for the rest.

I made mention in yesterdays blog somewhat how I lay out and setup my charts.  I don’t show you everything that I use, but this may give you some insight on how I look at things. I won’t always show this full picture view but I am trying to stretch myself a little in showing a touch more. Best to all my readers, Vince

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Stock Market Buying Little Time

Monday, January 23rd, 2012

Today is 1-23-12 and it would appear that the market is buying little time since last weeks anemic performance. The volume has been very slow and the movement has been limited. This is not a very exiting market at the moment, but it will or should change. Looking back so far, the market only moved about 3 points on a closing basis over the 1308 target level I mentioned last week. We did not get the reversal I was looking for last week in the daily market, but we have not moved far off that level either. Today, there was a bit of a reversal that took place but am hoping for the market to hold up at least one more trading day through tomorrow session. This may help push the bullish market sentiment over the edge, thus setting up a good healthy market drop, just the opposite. Last week there was a pause in that arena and will be looking ahead for insight

Last week, I got a little sloppy and careless and had a couple of back to back losing sessions. That is a sign that I am not in sync with the markets and time for a break.  I stepped back and did not do a thing. Time has a way of changing things if you let it. When you are not doing well for what ever reason, that is not the time to force your trades, or go for the get even mentality which most often leads to more difficulties.

Taking a step back is never in my mind a bad idea. The markets will always be there, but you need to make sure that you are there to start up again. Being aggressive has its place, but it is rarely when you are not trading well.

Above are the trades I took today. I needed more room to fit it in so I am showing the second chart that fits together with the one chart that I usually show. The two charts fit together and act as one chart, not two, but this is the larger view of the two. I rarely ever show this second chart but elected to today. There is a series of charts that are smaller and a series of charts that are larger on different screens. Each of the screens are for different conditions and objectives. They all still fit together and can be used to gain perspective or trade with larger or smaller targets in mind.

It is all price action driven with the trading indicators confirming the method, not the other way around. That is different and unique when compared to others who will generally fit a method around trading tools. Every trader needs a solid understanding of how the price flow works, as the market will take you up only to take you down and if you don’t know how to read it, you will get frustrated and constantly second guess yourself. That is no way to trade these markets as professionals feed off of this kind of uncontrolled behavior. Don’t let yourself be taken down, empower yourself with a working knowledge and the trading edge. It does not have to come from me, as this is my own approach that combines low risk with good reward.

In today’s trading, I took three trades all profitable for good modest gains. I could have had more and made a few notes on the screen above, but I will never complain over a good clean day. I would only say that I saw a little late the likely path of price short on my first entry and wanted to be sure that I booked a gain on my first trade out. Again, all OK. I just had to wait out the rest of the moves and really exercised some patients to let this market play out a bit.

OK, that is it, until next time- good trading to all.  Vince

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Price Rejection in S&P E-Mini

Wednesday, January 18th, 2012

Today is January 18th 2012 and will be looking for “price rejection in S&P E-Mini in tomorrow’s action. It’s important to remain open minded still looking both ways during intra-day trading, but we could start to see cracks showing up.

Monday was a Holiday and so put us back one day into Wednesday being some form of a top in this market for the time being. This is only my opinion and I could be wrong, but Friday I posted that Wednesday would be the likely day we would see a top for the time being in this market.

We had one thing that did not happen, but many things that did take place in the price action leading up to this resistance area. Back in mid November I wrote on my chart the number 1308 and talked about that a few times since then. I can see in this evenings night session that we hit 1307.50 and pulled back down to 1302 where we ended in today’s session. The 1308 is very likely the intra day high for a 20% move in the index’s since the early October low’s of which I was very Bullish.

I won’t get to caught up in calling this market, but do think we will see lower prices coming going forward.

I have been a little preoccupied the last couple of days as it relates to my own trading and had two days of back to back losses. They were small losses of just a few S&P points, but felt no need to push it. Today, I did try and double up on size to make up for yesterday, which is not really a good idea, and the reason I cut today off short since I did not start off well. I have not had back to back losses in as far back as I can remember, but it can happen and that is part of trading. I did not want ego to get in the way and try and push it through to recapture a positive day when I was just not feeling up to it.

I have been starting the sessions to late, close to the N.Y. lunch and getting caught in the chop, both days. The early session had very good moves but slowed up as I came on. Usually that does not matter, but I just did not have it, especially starting off with losses.

The first trade of the day is actually very important and I am rushing into it to quickly, without doing proper analysis, again, all my own fault.

I will post my trades for the last two session below and wrap it up. I wish you all the best.

Today’s trades;

Tuesday’s Trades;

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Large Market Move Coming !

Friday, January 13th, 2012

Today is January 13th 2012 and things continued to move very well just about all day long as we loom closer to a very large market move coming, or not?

We are mid month into January of 2012 and facing some strong head winds. I will give you only my own opinion of what we should be aware of. Anyone with long positions should be very careful right now. This rally has dragged many a trader and investor to the long side of the equation if they liked it or not, but that may soon come to an end.

From mapping things out as I do, I could see a large sell off coming on as soon as Wednesday of this coming week. Again, this is only my opinion and not investment advise, so do your own research and make your own conclusions about market direction.

On December 14th, 15th, and 16th, I was calling for the market to bottom around the 1198 level and from there I said it would advance for several weeks and we did just exactly that.  If I remember correctly, I did say we could easily see 1300 area as major resistance and a target area.

In mid November I did think then we would hit that 1300+ area but we did not and fell back but before that did call the that huge rally up to that point. I don’t really trade the daily market, but I like to follow it, write about it and call it out as I see it. To me it is really no different than a small tick chart as the market is fractal in nature and will perform similar but in much different time scales.

I think the market has drawn in a good deal of traders and investors into this area for a very good reason; and what would that be?  To sell it off fast and furiously.

I don’t yet have any solid numbers on the down side but I think it will be at least 100+ S&P 500 points lower starting as soon as Wednesday of this coming week.

I know I am going out on a limb and I will be the first to say I could be wrong, but there are forces at work that are signaling this kind of drop coming. As I mentioned before, being able to read the market is a skill and it can be learned but you need to know the language. If you do, it can become invaluable to you as it can be applied to intra day data just the same. The daily price bars just take longer to play out, but it is still really all the same language.

All of the last three large market rallies (first week of October 2011/ Thanksgiving week 2011/ and the week before Christmas 2011/)  I have been bullish on and this one I feel is coming to a close for now. I know many traders were bearish months back and when it looked like it was going to crash, I was bullish and we turned up each time. Things are a little different and I will give updates on Monday and Tuesday as things come together as slight new highs would and or could be first expected. Wednesday will be a key day so we shall see.

I did no trading yesterday and was limited in time today but was able to get a session in. I was running out time before I needed to be somewhere else and did rush or push my trades along today, but it did turn out OK. I increased size a little on my last trade to make up for my needed daily goal but just before that, I did take two premature long trades for a -4 ticks and -2 ticks. The next longs were good but still pushed the first entry before it really confirmed.

Here you can see that the trading indicators do not line up with those early entries long and are not confirming. Many times I do and can see the turns coming, but I too need to wait or I risk up-wanted draw downs just like everyone else even if you do know the next move.

I was a little hurried in general, but I really can’t make any excuses. I don’t mind taking legitimate losses, but the ones that are human error do hurt a little more. Still a good day and Monday is a fresh start.

Good Trading to all, Vince

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Low Market Volatility

Wednesday, January 11th, 2012

Today is Wednesday January 11th 2012, where we just keep seeing low market volatility day after day. During the Christmas Holiday’s it was understandable, but now into the new year, the amount of trading opportunities has gone down.

Day trading in a low market volatility conditions, will test the skills of all traders, as the moves are smaller and trading opportunities fewer. In addition, your level of patients will be tested as well, which brings me to today’s trades.

I was tested a few times with being patient, but I don’t fault myself for playing it safe.  I come to expect the market to react when conditions are right and when it takes to long, that can be a sign for caution ahead. Being conservative can keep your losses small, but if doubt is present, my view is to step aside until stronger conviction is present. The day’s trades below.

The trading method is separate from the trading indicators as they are there to confirm what is already present. That is very important and cannot be over-repeated.

Not every trading signal as shown is a low risk entry and would have passed on some of the previous signals. Using the mind and method to screen out which turning points are best and which are to left behind can keep your balance sheet healthy.

I have been on a little kick about this in my last few post, but it can be misunderstood as I just post the charts and such. I look to capture 2-4 S&P points for most sessions and call that my “Daily Goal”. When the market is really moving and opportunities are present for more, I will go far beyond that goal to help make up for any short falls in the previous days so I can keep pace with that average. It is a good way to approach the management side of your account as this will keep your stress levels down, not having to swing for the fences every day.

Which all reminds me of some trading advice I gave a member today. We don’t have to take every trade we see and we don’t even have to take “Any” trades. If we don’t like it or not sure, don’t feel like to you have to take it. We are not under any obligation to trade and so we should be free to pass. This will allow you to see the hidden gems when they come up. The perfect trades will just show up, without you having to hunt for them.

In market conditions as this, it is very important I feel to be able to “snip” or pick off a point or so on some clear trades. Doing so correctly can add up just the same as one good trade. If the bigger moves are not present, what you are left with is small moves. If you can not find a way to take points out of that kind of a market, then you are now at a disadvantage and subject to market conditions.

For some, this is no problem as I mentioned above, we don’t have to trade conditions that don’t meet our expectations, but I have seen market conditions last for months like this. If you can not make a profit because your conditions are not right, then you are out of business.

That is why being well rounded to be able to take a 1 point out of the market while not risking more than that, is of value. You can always trade the 3-5 point trades or more when they are present, but you are in greater control. Having the ability, even if you don’t need to use it often, will add a greater sense of confidence to any trader.

That is why I have different models setup for different conditions. The one I use mostly, is you could say the all purpose model. I have a higher time frame chart that fits in with the one I show (that is not seen) and they act as a team giving you a full picture as they are interlocked in my own unique way. There is one series of this below and one series of these above the middle one mentioned. All three of these can be used for insight and or trade opportunities to give you results based on market conditions

More on this in my next post….

Good Trading to All, Vince

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Trading Indicators Reflect Price part 2

Tuesday, January 10th, 2012

Today is Tuesday January 10th, 2012 as the market has been very quiet with low volume for the past several session.

We saw a large gap in today’s action and then the market went to sleep, again. It is hard to make money with low trading ranges and you need extra patients to let things come together and then again, let them get played out. Before I get going to far, I will post my last three trading session since my last post, Friday, Monday and Today’s. This kind of slow environment is best to be on the cautious side and not push the envelope and certainly not to over-trade, of which I am aware of. All three days came out good with the lightest day being today, but its enough if its on the positive side of the market. The screen-shots below.  Friday’s here;

Monday’s day here below;

Today’s trades below;

Trading indicators reflect price

Trading indicators are a tool that reflects the behavior of the price action it mimic’s. It is a reflection, but it is not the original. The original is always first and in this case that is the price. The price is the original and the indicator is a copy or reflection of the price.

That is so very important. We as traders need to be able to interpret the price first. If you can do that, you will know which trade is stronger and which is in a weaker position. We don’t have to trade every twist and turn the market generates, but only those trades that lends us the “low risk trading advantage” towards our efforts.

Limiting yourself to those low risk trades puts you in control of your trading and your results. We don’t have to hope or wish for things to swing our way, we only need to position ourselves where we have that trading advantage or market edge.

The market is predictable at certain points. You don’t have to know every move it makes but just accept it at its current value. When the market pressure is built and factored in, and time has run its course, the last part is for the market to express itself back onto the screen in an upward and or downward move. Position yourself properly, and you have a low risk entry and high reward return. Trading is not easy, but it can be simple in some ways.

Many come into this thinking that it could not be that hard, but the market is filled with emotions and it can make you do things that you would not normally do, to take the wrong side.

If you understand how to read the price action as it is reflected in support and resistance, you can find those low risk entries and profit form it, but you need a method that will keep you looking and doing the same types of things over and over again. Without one, you will be all over the map, and left with losses.

Recap, which comes first, the price or the indicator?  The Chicken or the Egg ? I would say, the first one on both of those, but some might argue that. The first question, it is undoubtedly the price. The price drives the indicator and that gets projected onto the screen. Learn to read the price and understand its nature and behavior and you will better understand what and when to trade. The trade indicators are a guide and they can be helpful to get you to see what is already there, but your eyes are just not trained to see and interpret it at that time.

Being successful is very possible if you take the steps that will get you there. It is up to each individual to find his or here way, but we can get help that will take us in the right direction.

There are many ways to trade the market, some of them are good, and other not so good, but the key is up to you. Do you have the drive, will and determination to overcome all obstacles.  If the answer is “Yes”, I would say, take your time. Don’t rush into anything, do your own homework and first see what type of trader you are?  Short term scalper or position trader? How much time do you want to invest in following the markets? All day, or only a couple of hours? Answers to those questions will help to uncover a few key objectives and match yourself up with a good fit as far as style.

There are lot more questions one could ask, but just remember, price is always first and if you train your eyes to see and learn what drives the price action on the screen, you will be on your way to building a solid foundation. Anything else, will just leave you unsure and loosing valuable time and energy. Think about it?

Trade Well, Trade Committed !   Vince

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Trading Indicators only Reflect Price

Thursday, January 5th, 2012

Today is Thursday January 5th, 2011 and have a video of some of the first trades of the year. I did take a few trades on Tuesday and posted them on my previous blog post, but here we have two days of trading with some of the market turns traded and shown.

It is important to know that the trading indicators I show are only a small reflection of the trading method and do not make up the method itself. The price action is always first and will always be first and is the reason to learn and understand price as it relates to future movement.

We are starting a new trading year and with it are opportunities for those that see them. Every day is a new beginning for traders and that is how it should be looked at. Yesterday may have had trading lessons but the right approach is always moving forward from where you are today. Learn from the past, but do better today is a simple approach but a healthy one.

To many traders get stuck in what they did wrong yesterday and carry it over into what they are doing today. That can be a drag on your outlook and thus results. We all have the ability to “Choose” to make things better, better than it was in the past, but we need to get over the past, as not doing so will result in that mental drag mentioned above.

Choose to make this the best year of your life first, then choose to make this the best trading year of your life. The first one has to come first to allow the second one to become validated.

Taking action that will move you towards your goals is the first step. Think it out on paper, be realistic, and be sure not to get stuck in the dream state. Action is tied to a plan, is the way to start out the year and remember to exercise your mind because that is the “engine” that will take you there. Think about it.

I wish you all the best, Vince

P.S.  A screen shot of today’s trades in case you don’t have time to view the video above. This does not have the large move short I was looking for at the close of yesterday but does include the two nice moves I picked up in today’s session.

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