Archive for the ‘Price Action’ Category

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What is Sniper Day Trading ?

Wednesday, December 14th, 2011

12-13-11; What is Sniper Day Trading?  Day Trading is when you initiate a trade during a single session and you exit all positions before the end of the day. Some of those trades can last last minutes to hours depending on your method or style of trading.

The Sniper part comes in when you are able to zero in on your entries to such a degree that your risk is very limited and reward well worth the risk taken. I minimum risk reward ration is 1:1 and often much better at 2 or 3:1 and higher.

Every trader comes into this with different objectives and it is rarely the same for any two traders. Some try to trade all day and take several trades throughout. Others are more selective and only trade a limited number of times. I have done both over time and find that I enjoy coming to the market when I am ready and look for opportunities that will take me to 2-4 points for the session. I call that “my daily goal”.  There are times that I will trade more and hit 3 or 4 times my daily goal and or higher. I don’t look for those days they just happen, usually about 2-3 times per month. That can make up for days I have a daily stop out, out which is right around 4 S&P points.

My choice for when I start to trade and for how long I trade and for how many points I will trade for, are all personal to me. It is different for everyone and there trading style should be apart of there personal trading plan. This is in addition to there trading method. That covers all the aspects of what a trade setup is and how it can be read. Where the trade is likely to go and how you plan on managing the trade once you get in it. That is all about the trading method.

The trading method is price action driven and that means, we always look to the price first as that is what always leads any trading indicator. The price is first so it only makes sense to learn how to read the price and that is all very possible.

We use more than one time frame and they fit inside each other actually acting as one chart. The first is a zoomed in view of the second which is larger as that brings the view to light in a way that can be exploited when you again know how to read the price.

I do have some charts that I trade with that have no indicators on them at all to keep a clean pure view what I need to see with my eyes apart from indicators. I do also have other screens that do have them up as it should only be a confirmation of what you are doing, but all for its own method reasons apart from any indicators and the influence it might bring. That is a very important point.

There is no substitute for learn how to trade this way. Doing so will empower and enable you to trade any Stock, Commodity, Forex or Index future you choose to.

It is a good practice to wait for the best entries, but I often as mentioned trade when I am ready and take what is available. That may not really be the best for the best results, but I figure I gain my freedom in its exchange. If I were to stalk a big trade move for hours before coming into it, I could make more, but I have to give up my time and have to commit more of my day to the screen. This is just a personal choice and I usually choose not to. I like the fact that I can come into the market for an hour or two, get what I am looking for and leave. That is not always that easy to do for many others as the market does tend to have an addictive element to it and that has to be acknowledged. Failing to accept that fact can lead to over-trading and trading fatigue which will weight down on your overall performance.

Getting impatient can lead you to make mistakes and I make my share of them. I made a bad trade today on entry and exit. Its not the norm but it happens. Fortunately I had three other nice trades, especially my last with increased size.

Every trader needs to have a solid trading method to follow and adhere to. You then need your own personal trading plan to complement your trading method which will encompass many things as mentioned above like trading style including time frames, when you plan to trade, how long you plan to trade and for how much etc.  Not yet mentioned, you need to know how and what you are going to do to feed your mind with the right stuff to keep you balanced, committed, disciplined and patient. This is what Sniper Day Trading focuses on in full and what has helped me in my trading. Again this method is price action driven with clearly defined rules for entry, exit, stop placement, etc. It has a very simple element to it and a much more advanced element to it as well which comes over time.

That’s all for now as I will post my days trades under this. I have taken all indicators off my screen shots as I want to drive this point home to those who may be following. I wish you all the best.

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Trade in the Now, Leave the Past Behind

Monday, December 12th, 2011

Today is Monday December 12th and I think when looking at the big picture, the market is marking time.

What I mean by that is time needs to pass for the ability to make higher prices. That is an unpopular position as the world looks like it turning upside down, but it is still the likely path for price at this time. At this time is the key phrase as the market refuses to crack. Many are expecting a crash and they have valid reasons, but I still think we have time. We could see prices in the daily market to make slightly lower prices, but think there is another rally behind this last one, we shall see.

In the smaller times frames of which I trade, that is where the rubber meets the road. We started off in the early session, leveled out mid day and put in a rally late in the session. I started the day late and was in the slow chop section. The move I had been showing to members in a training video is the move that did show up. In today’s case, the market had to mark a bit of time before it was ready for the advance.

Today’s trades below and some additional comments;

I took everything off the screen today as I want to make the point that we do not trade off of trade indicators. Those are only a reflection of the price which always comes first. Indicators can be misleading at times for those who don’t know how to read the price first.

What came first, the chicken or the egg. OK, maybe that may not be the best example, but the price always comes first, then the indicators reflect what the price is saying. If you know and learn how to read the price and that means entries and exit, and managing the stops, you will be able to really trade. You can trade anything in any time frame.

Using more than one time frame is something we do. There is a complete reason for doing so, as there are trends and moves inside of others. Every chart in its own time frame is saying something about where it is and where it is likely to be going. If you learn the launguage you will do well as long as you have the  trade discipline to follow it. Many traders have a great method, but lack the patients and trade discipline to act only when called on.

This is something every trader always has room to improve on. If traders would work on themselves in this area just as much as they do in learning an actual trading method, they would see the results they strive for. Success lies within each one of us and it is just waiting to be released. You need to direct your energy in every area of your life to a balanced approach so that when you arrive to the trading part, it is synergistic to every other area and in harmony.

There is a lot to what I just said, but this is some of the most difficult stuff for traders to first see, then accept and finally act upon. If you are looking to find your spot in the markets, first look within and be honest with where you are and your abilities. Then take the steps to move forward. If you keep making some kind of progress, you will always be moving towards your dreams. Just be sure that it does not get stuck in the dreaming phase, because that happens to everyone. The sooner you move past that, the sooner you will get where you want to go.   Trade in the now, leave the past behind.

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Daily Reversal

Saturday, December 3rd, 2011

Today’s post is for December 2nd, 2011 were we saw a “Daily Reversal” in the markets. Yesterday I had written about the prospects of the stops getting hit and pushing the market higher and or lower. We saw that early on as the market again in the night session pushed ahead 17 S&P point triggering the stops overhead to cover and then the market fell back to put in a “daily reversal” and closed near the lows of the session.

That does and can happen at market tops. Pushing participants into the market only to take them out as the market starts to fall. The key to Friday’s action is that at the end of the day, the market was at the lows of the session. Typically, that would not be a good sign for this coming week.

From where we are now, it does appear that we could see an early move up to yet again draw in those who feel the current price is a bargain in Monday mornings early action and that would be a reaction to the sell-off from Friday, but what could come after that is the possibility for a pretty big drop. Its not totally conclusive, but we could see that move to 1200 on the S&P that I mentioned on Thursday over the next couple of days. This is just my opinion and nothing else.

In Friday’s trading I did good with only one trade for 4 & 5 points. I called out another trade in a training video for about 5 points, start to finish and it went right to the “trade to target” that I called as in the first trade. The screen shot below.

Trade to targets are area’s where the entry and exits are clearly seen all before hand. It can give you the patients to stay with the trade for the finish of the move if you can see it ahead of time. This is different in that you are not really reacting to the little twists and turns the market may show you, because you feel you know what the end result will ultimately be.  That’s in for now and until next time, good trading to all.

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Buy and Sell Zones

Thursday, June 23rd, 2011

Today, we saw volume swell in the S&P emini futures market to double the average, over 3 million where we have been used to seeing 1.5 million contracts traded.  All of that volume seemed to push the market around a great deal, which is nice to see in general. A moving market means opportunity and that can mean money.

The market closed at the highs of the session and only down slightly from yesterdays open. That kind of buying off the bottom is usually a good sign for follow through in the coming days. The up move from this recent bottom has been taking its time, as we saw a back fill, into the middle of range with buyers coming in strong.

I just checked the news and it seems that some kind of financial deal for the Greek debt has been struck and it looks like the market liked it. It sounds like a good reason for buyers to bid up prices and they did later in the session.

Below are my trades for the day in the S&P emini futures. I have the chart marked with buy and sell zones.

I could not fit the whole day in as the volume was just to high. These are tick charts and as the volume increased, more bars are posted and the chart gets filled up pretty fast. I plan on doing a U-Tube Video of today’s action, that way I can cover the whole day and give a few comments about it along the way. You can go to the video gallery section on the top right corner of the web site and click there to view it if you care to.  In that video, you will see the whole days, buy and sell zones as I go through the chart. The most resent one will be today’s but have not yet as of right now put it up. By the time you read this, it should be done.

I always say that the trading indicators are not the method and that is very true. We look at three time frames and this is the smallest one. For those you want to get the bigger picture, the largest view does a nice job to spot overall direction when combined to the trading method.

The middle time frame, which I hardly ever show, is virtually the same chart as this but adjusted to scale, giving the same indicator signals exactly. This is the zoomed in view to best pin-point price entry. These two charts fit inside each other like a glove and is a very beautiful thing what taken together.

I successful trading method has to I believe start with understanding and trading the price. If you only lean on the indicators for-ever, you will not be learning to think as a professional. Most of these market turns telegraph there intentions, but you have to know how to read it and then trade it consistently as the trading method calls for. Without a road map, traders are left to follow there emotions and that is what many end up doing. You will never make it as a trader long term if you don’t have a set methodology that you follow. A two or three day win streak will quickly come to a halt when you are pulled in several directions and just find yourself guessing. That is no way to trade, in addition, you wont last. So many traders want to go it alone and figure it out themselves. You can do that, I know I did. I would have to say I had a pride issue and just didn’t want to get formal training. I paid for it anyway, handsomely as most trader do.

To learn the art of day trading for a living, is an expensive endevor. Most traders will pay there dues one way or another, but keeping it as pain-free as possible is the most desirable.

The main thing is keep learning and do the hard work. Don’t overlook working on yourself which most traders do. Work on discipline issues, patient issues, physical issues. Train your mind and body to do battle, but let it be a battle of your choosing. I prefer the example I gave in my last blog post as a Sniper. Still engaged in battle, but it is low impact. You wait for your enemy to come to you and then strike. You don’t have to do the GLADIATOR  thing and fight to the death on every trade. So, the point is work on yourself and come to the markets with the mindset that you are already victorious and your enemy does not even know it.

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Good Price Action Moves for Slow Market

Wednesday, June 22nd, 2011

Today, we did not see any meaningful follow through from yesterdays run up. In fact, we got a late sell off to yesterdays opening. I would expect a bit of support around the 1275 area were we are now in the night trading. Tomorrows opening will likely gap down to reflect this pull back, but I would some what expect this level to hold in the overall short term move back up to higher prices. We will see soon enough.

I only traded for about 35 minutes late in the session and took just two trades. One for a small stop of three ticks and the other for a 2.75 point gain for a net 2 point gain for the day. There was more in the trade as the market just kept on going, but took the easy road and closed it out. The days turns below and my trades.

Trade safe and always remain open minded to price direction.

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Price Action Day Trading

Thursday, January 13th, 2011

January 13th, 2011;

Today the market came under pressure as the Dow was off -23 and the S&P-2.  A late rally in the emini futures cut the losses just before the bell.

I just checked the market sentiment for any weekly changes and after having backed off slightly to 54.6% we saw a jump back up to 57.3 and a drop in bearishness down to 19.1%. This is close to rival similar low readings at market tops over the last years. Very few people are bearish, only 19%, that is an extreme minority and one that won’t last forever. Currently, the market is definitely in an uptrend, that we can not argue. It is best not to try and pick the top, as I did try in a post some time back. One of the few times I would have to just say I was wrong. We may see a little more to the upside and the market sentiment may yet move to additional extremes before a correction sets in, but know this, we are historically in the danger zone. Until we see a good reason to say otherwise, who can argue the strength.

In today’s trading I had only two trades and they were both late in the session, for nice gains. A modest day, but a easy day in reading the market as it was at least moving, unlike the bulk of yesterdays action. Another Video of today’s market turns and continuation points.

“Price Action Day Trading”, is best described as traders reading the price structure or composite of support and resistance. You are trading the price of the instrument based on past data, but as it moves into and is creating new data.

The movement of these, which can be stocks, bonds, interest rates, ETF’s, Mutual Funds and yes, futures contracts on commodities and Index’s which we trade. The concept is the same, as all of these financial instruments are driven by “People”, who are lead in one direction to buy and or sell. Everyone of these traders that participate in moving the markets do so for different reasons, but collectively they are who make up any given market. Implied value would be what someone at that given point in time estimates its worth. Based on that, action is taken to keep the instrument in line with its perceived value. It may or may not be what the stock, index or what have you is truly worth, but it by and large is to those who see it that way. Here perception is greater than reality.

All of that said for one simple reason, its is people who make the price move and people are known for being very emotional and predictable.  They usually tend to overdo it, in various things, what ever it may be. As it relates to money, even more so. This can be seen in bull and bear markets across the board. Getting to know how people will react in a given price action scenario is one clue or “Tell” to what is coming next. How does one get to know these coming moves?  Well, we are not born with this knowledge, that is for sure. If it were so, more traders would be successful, but only at the expense of those who are not.

In the game of poker, which I do not play, but know, it is not the cards that someone is dealt which will determine the outcome of the game. It is the astute player who can “read the player” or discover his “tell” or sign as to his next move. The one in the know, is the one who can read the player, and it is he that has the advantage. He bases his decisions more on the clues or signs that is left behind which lends him the clear advantage.  Here, people are acting consistently predictable and to those who have the skills to read the people first and cards second are the ones who regularly come out on top.

Price action day trading using tick charts to uncover the more detailed plans and intentions of those across the globe is no different. Allowing the market to create a detailed map of where it has been, can lead you to where it likely will go.

If someone knows these signs and has the ability to uncover the clues left behind, when it is combined with a disciplined structure of entry, exit and trade management, consistency in results follows.

The price is always first, indicators follow. If you learn to read the price, the indicators can confirm.  If you learn to read the price you will build your confidence and be able to add to your market knowledge, establishing a solid foundation, success will follow.

We are in the business of redistributing wealth. Just transferring it to those who don’t know to those who do know, which end would you rather be on. “Be in The Know”.

Good Trading, to all  !

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Fridays Scalp Trades

Sunday, November 7th, 2010

This is for Friday’s market November 5th, 2010 as the S&P closed up 3.75 and the Dow +9.

A last minute rally on Friday put the market back on top for the day and week, as things turned out well for those long the market. We hit my mental target on the daily charts of S&P 1120 with now a few points to spare. On Thursdays blog post I mentioned that we would likely push up the rest of the way to hit the 1120 S&P area I had been calling for months back. That is done and satisfied.

This market looks like it might have a little more juice in it, but I am not calling for any additional moves at this time. I would just like to see how the price action handles this new high territory. The max I could see if the market wanted to continue is rough 1148, but we may need some time to move over in the charts before we see that. As time goes by the target does potentially have more room to move, but there are many opposing forces at work here.

Just a quick note on the Fed move from last week. I knew that day would come when the gov would price there way out of the problem and they are. They put a fancy name on it, Q2 Quantitative easing. I just can hardly believe it, that they are doing this with a straight face. They have signaled to the world that the dollar is dieing and now even more so. Who would want to buy treasuries after know what is going on. That in and off itself is amazing. We gave control over to the Fed in, I believe 1913.  The Fed is a private corporation for profit and has nothing to do with them being a government agency. That would be like saying Federal Express is run by the gov.

All of this is no secret and is these days very public knowledge. It wasn’t always like that, but the Fed has gotten a lot of press these days. Somehow the markets are viewing this as a good thing. Well, it won’t always be like that. There is a lot of anger floating around the world as the dollar is the world reserve currency.

This is just want happen. The world is having a party and all the countries are invited. They are serving lemonade as the main beverage and in the beginning it tastes great. But as the night moves on, someone is adding just water to the lemonade. They keep doing it through the night hiding at first, but as it get later, they are just pouring straight water in with everyone to see. The thing is, the participating countries have put in to throw the party and now are starting to feel like they are getting the shaft.

A corny example, I know, but its still accurate. There will be some fall out for this coming. When I can’t say, but the longer it goes the worse it will be.  It has been like that for years and we will see change, that is for sure, just like it was promised.

Gold and Silver are spiking as confidence is waning in the U.S.  How it will all shake out, is not a pretty picture and won’t begin to speculate.

As traders, we need to prepare for increased volatility. That may mean, bigger moves and a little more risk to match that. It is vital to a traders survival that he or she knows where to get in with a minimal amount of draw down. Doing so, affords, gives and creates opportunity. Coming back from a 3 point loss in the S&P emini’s is at times hard to do. If it came to you in one trade, you will need the three points + additional points to make a profit. It the market is not giving it up, you have a problem. On the other hand, if you took a 4 or 5 tick loss instead, that is very easy to make up and likely can be done in one very small little move, of which happens all the time.

Trader timing is critical, which is one of the three key elements for success that is needed. The three elements are “Time” , “Space (price”) and “Energy”.  The middle one, space, is just that price moves through space to get where it is going.

I will pick up from here in tomorrows blog where I left off on this today. It is an interesting subject and is the basis for how I trade.

Fridays scalp trades below, Good Trading this coming week.

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Market comes back to life, as called

Wednesday, October 20th, 2010

Today is Wednesday October 20st, 2010 and the markets came back to life after yesterdays sell off.

The market is not out of the woods here and I don’t really want to tout my last call, but so far so good. We will have to see what tomorrow brings, but the trend is still intact, so the benefit of the doubt has to go with the bulls right now. We are coming up to the election and a strong sell off in the markets will likely seal the fate of the those in power. I think damage control is the call they are making right now. This would suggest some form of market manipulation, well, I am sure I am not the first, and won’t be the last to make such a suggestion.

Their were some good earnings reports out today and it may have been a good excuse to buy, for those whose purpose is to do so. They did and the S&P retested its previous highs of 1180. I did say on Sunday evening that we could or should see higher price of which would close in on 1200 S&P early in the week. Well, we may just have to wait a few more days for that, but it does look likely that it will come soon enough. The surprises have been mostly to the upside as traders and investors are getting it from both sides. Fear of loosing a lot, (short covering) and fear of missing the move, both rolled up with a lot emotion.

Tomorrow I will report on this weeks new market sentiment numbers that were out today. We will see if the slow weekly increases continue as they have, an inch at a time over now the last 7 weeks.

In today’s trading I only took a few trades all of which was encompassed around one area. I was trading for only about 30 minutes today and did pick up what I wanted.  Their were a bunch of great opportunities that could have been had after the open. I included an extra chart today, because my closing position was not until late in the day. I did not have time to get back online and close it out earlier. Its to bad because their was plenty of good exit area’s at much higher prices. I planed to come back and check in the early afternoon, but couldn’t, no big deal. More opportunities in tomorrow session.

Just a reminder, the indicators in the charts below are not the trading method. I have to remind those who look on to that fact. They are only their to confirm or deny the method entries of which is based on something completely different.  This is the smallest time frame chart of which I use as the other charts are integrated into this one. The basis of the trading method is following price action.  Their are a complete set of guidelines to follow. It is a very sound methodology as many traders have been successful in applying its principles. With all that said, using just the one trade indicator I have here can help you improve your trade timing a lot. Holding you back from getting in to early and such. My first trade today, I did enter to early, in an anticipatory move. It proved me wrong with a 5 tick stop-out. The rest were a bit better allowing me to keep my risk low and take the move to higher ground. OK, That’s it for today,

Until tomorrow, Good Trading!

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Trading Gap in Today’s Market

Thursday, September 23rd, 2010

Today is Thursday, September 23rd, 2010 and the markets gave back a little during the session with the Dow off  -76 and the S&P -9 points.

The market pulled back overall after a gap open lower. We did see a nice controlled, orderly move back up to close the trading gap after the open. Prices on the Dow and S&P, came back up to the tick and closed the gap that was created from the lower open. That is so very typical and usually present good trading opportunities in the opposite direction of the opening gap.

We are still seeing stiff resistance that has recently been talked about coming off the 10,800 Dow area and the 1140 S&P area. If we can break out over that, we will likely see higher prices, but this area will be very difficult to overcome.  I know that traders and speculators who are bearish are really drawing this area out as their “Line in the Sand”, and rightly so.

Today’s trading went fine. I waited for the afternoon session to get anything started today. The market was already on its way back down the other side of today’s high. There was more room in a few of the trades but I just played it safe early on. Putting on the last trade raised the stakes a bit but it worked out fine. The reason I don’t like taking late trades is their is not any time to come back from a loss. The very safest way to play that is, only take a late session trade if you are comfortably ahead on the session and if you trade multiple contracts, its a good idea to lighten the size a little. The best thing that can happen is you make a little more. The worst thing is you drop back on a little and still end the day with a nice day.

Today’s trades above.  I only have a straight chart, no indicators of any kind. I might be putting these charts up for now, but I am still thinking about it. I often show how a few indicators respond to my trading decisions to give traders an idea on the timing of it and that it can be traded accordingly, but I trade the price first, always have. The trading method I trade is one based on price action and that is always first. Traders should train their eyes, mind and emotions on just such, to best be served by the markets. Trading indicators are a reflection of what the price is doing. So, if you can understand the hidden language of the price and find a way to harness that on a consistent basis, you will be doing yourself a favor. Bringing a few indicators in to see how it confirms or denies your trading concepts is a good place to start.

If you need a complete trading method, I have that in Sniper-Day-Trading. If you have your own, keep working on it to best help yourself identify the price movements and try to understand why price is doing what it does. Their are reasons for just about every major move in the market. If you can uncover those reason’s you will be making progress.

Good Trading to all readers !    Vince

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Quiet Trading Leading up to F.O.M.C. Annoucement Tomorrow

Monday, August 9th, 2010

Today is Monday, August 9th and the market is holding up pretty nicely in the face of that large sell-off and recovery on Friday.

The Dow is up 47 points with 35 minutes to go and the S&P +5 points as this market comes into the close. Tomorrow is a big new day as the F.O.M.C. will be meeting to decide what the direction of interest rates will be. It may be that they leave it alone, but may comment on the current environment going forward. It should get a little spark in the market because today was the slowest volume day I have seen all summer long.  This is typical, but no one seems to like it.

The only thing one can do is be sure to trade the first 60-90 minutes of the day. There you will usually find the best volume of the day and the moves to go with it.

I only have a small posting today as I have company coming over and want to get this posting up. I did not trade as I had problems with my data feed getting my charts loaded. I have a video showing only half my screen loaded with the trade matrix missing, the most important part. I can’t trade without that up, so, I did not make a big deal about. I still did a video showing the days action from the open and did take it back to the pre-market. You can see the simple turns in the market as identified by one of my trading tools. I never say what that it is and how it works, but it is a tiny part of what I look at. We make buying and selling decisions on the price as it relates to the current environment, long or short, this indicator is just a guide. That is the only and best way to trade for the long term. What we teach at Sniper Day Trading, will last the test of time because this is how the market works going back decades. This style or trading method will never become obsolete or irrelevant in future.

Above is a U-Tube video I did of today’s action as it was in progress. I show the last move and called out the market top around 12 pm West Coast at 1126.75 / 1127 and the market when up to that tick and turned down by three points, showing that was significant short term resistance as called. You can take a look at the video if you care to. It is not earth shattering, but you can see the quiet natural flow of prices in a small tick chart format.

Look for the market to trade quietly until the Fed announcement tomorrow at 11:15 West Coast. Then, we should see more volume and movement as least for awhile. Good Trading,    Vince

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