Posts Tagged ‘chop zone’

Listen to Price Action while Day Trading

Monday, December 14th, 2009

Today is Monday December 14th and the market moved a bit higher across the board

The Nasdaq saw the biggest increase with a gain of 29 points or 1% followed by the S&P with + 7 points and the Dow comes up with +30 points or +.28%. 

The market is being so pinched and squeezed here at the very top of the range, something is about to give one way or another. I mentioned this yesterday with no great need to carry on. Time is going to expose its real intentions and so everyone is going to have to wait.

I personally would like to see the trend continue for everyone’s sake, but my personal wishes have zero effects on the outcome. As day traders, we only really need be concerned with the direction of the short-term moves of the market. I cover the larger direction because a lot of people follow it and it does help a bit in getting large direction in your favor, but I use my own method for telling me where prices are likely to go.

Yesterday, I was saying that it would be best to trade early and hang it up. That turned out to be good advise. The last 2 and half hours of the day today only saw a total swing from high to low of 2 whole points. That is it. I mean, that is sad. It has been a while since I have seen such little movement in the afternoon session, but that is normal and that is why I said anyone wishing to trade this market should look to the early morning session to get there points.

Now, I would be the one who really needed to take my own advise today and I mean it. Guess what, I got caught in that 2 1/2 hour churning, going nowhere fast. To be honest, I know I could have still turn it out if I had done a little different. Scalping in the chop zone would have served me well today, but no, I had other things in mind. My first daily lose in quiet some time.

I was not listening to the market and wanted, what I wanted. Too bad for me, I didn’t get it. Today, I had a net loss for the day of -2 points. I took 7 trades and thought about stopping earlier, but I tried to come back with no avail.

I was looking for a break out after some of that consolidation and we did not get it. I had many chances to do much better and actually hit my goal, but if I would have just scalped my way there, I would have had it. You could say, I had a touch of greed in me. The price action said, to take the profit, I said no. The price action said to get out at even, I said, no. I had 10 minutes to get out of one trade at even, but said no and it cost me 2 or 3 ticks.

It was a funny day, but I have 100% total confidence in my method and my approach. Losing days are going to happen, but you need to cap the loses to a minimum. Never let yourself have huge loosing days. It does damage to your confidence and sends a message that you are not in control. That is a definite no-no. Don’t do that. You always have tomorrow to come back. You don’t even have to have it your mind that you are going to get your loses back in a hurry. Do it slowly and don’t think about it much. Just take the trades as they come to you and you could do the “Trade by exception” approach, so you don’t feel compelled to trade every wiggle.

Today’s early morning saw, beautiful price swings with sufficient volume for some easy turns. Lets try this again tomorrow and see how it goes, but lets all start early or not at all.

Until tomorrow.

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Live S&P Futures Trading Video’s Today

Monday, November 2nd, 2009

Today is Monday, November 2nd and the Market holds.

Well, we were anticipating some pretty important market action today and so far so good. The Dow was up about 75 points today, but in order to slow down and turn this market around, we will have to see about 75 more Dow points to the upside. That is current overhead resistance and will need to break above that (9860) pretty decisively.

I think I said it all in yesterdays post, so I won’t repeat myself here again. We just need some time to see how this is going to play out and the above scenario lays out the other side of the equation.  Tomorrow, I will post a daily chart of the Dow and S&P to better show you what I have been saying.

Today, I took 3 trades starting around the New York afternoon session, 11 a.m. West Coast.  The first was a split trade and half came off at only 3 ticks, the second half was stopped out for -4 ticks. I was looking for the turn and just a touch early. So this trade gave me a net loss of  -1 tick on half the position,- $12.50.

The next trade, I did find the turn that I was looking for and picked up + 1 point on 2 contracts and let the other half run for +8.25 points. I was looking for prices to get a little higher but I did not push it, I got out at 1035.25 and I saw a potential high for the move at 1038. We came within 2 ticks of that trade high call at 1037.50 before the market retreated 6 points.

I re-entered long right at one of my “Turning Points” at 1033 and did not take half off early like I normally do but let the market take me to exactly where I thought it would, with the whole position. Once I was getting close to my target area, I took off half the position at +5.75 points of profit. I gave the other half some room to work, so it could make an attempt to hit the high side of 1040. It did not make it and I got stopped out at +4.25 points on the other half.

That was all quite OK.  I did notice that after I got stopped out, that the price did turn just after and move up to hit the 1040 level I had called. 

We were running out of time, but I did and still do see 1043 before the move is finished, but that will probably come in the night session or in tomorrow market. 

On that pull back, off the first good move, I was looking for prices to come down to 1031.75, which was 6 points off the previous high. Well, we came within 1 tick, 1031.50.

I make reference to all of this in the video’s I have posted below. These are live trading video’s of everything I just wrote above. The first three are tied to the first two orders and the last two are tied to the last trade.

I am not really saying how I come up with these trades on the video’s but I am reading price action. I do have a custom indicator that I have created that gives you these “Turning Points” and only risks 1 S&P point on the trade.  I do build my screens up with a few more tools to complement each style of trading I am in.

If I were to trade, this mornings session, there were good low risk turning points present there as well and would have easily gotten my daily goal, (2 to 4 points)  

Around 9 a.m. West Coast time, the market gave some traders a big gift, a 16 point sell off. I am sure I would have had some of that. I do see possibly getting out once and re-entering again short, but that was a fantastic move. Their were great add-on spots on the way, if you so chose to, but, what I am saying is these ”Turning Points”, happen all day, when the market is moving.

Yesterday was just incredible for my “Turning Point” signals. The market was definitely moving and if you knew where those low risk entry points where and positioned yourself in font of it, you would have done well. They were happening all day long, one after another, for huge moves.  My stops on the entries were still one point and the majority worked out for multiple point gainers.  

When the market is not moving much and price action is quite, I love to trade out of my T-1 scalp screen. Very accurate for short moves, averaging about 3/4 point each. I really only need a few of these to hit my daily goal and do just that, if the market is moving or not. Even in a slow chop zone, if you follow the method, it comes out. I will say, that the opposite is true as well. I am thinking and speaking to myself here. When I don’t follow my method and at times I don’t, just like everyone else, it does not usually work out and that is a good thing, believe it or not. I do not want to reinforce negative behavior and am glad the trades do not work when I go outside my method.

That is the exception, not the rule, because I do a pretty good job in following my method, plan and rules. The same will be true for anyone else who attempts to do the same.

These turning points are very easy to see and have only a few conditions attached to them before you can enter the trade, not to hard and very clear. I have all of this layed out in my 80 page manual and DVD video series. The price for my course is coming down as I have stated before. Any one interested to learn more, contact me at vinnie@sniperdaytrading.com

http://www.screencast.com/t/ZHl13cgkmDz2 

http://www.screencast.com/t/fUjVI35OFQQw 

http://www.screencast.com/t/JzGvvo6Ihy2

http://www.screencast.com/t/IZn8fKfNoM2 

http://www.screencast.com/t/9RC43BbNjSjh

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Trading Lesson: Part Four

Saturday, June 27th, 2009

Today is Saturday and as I promised, I have a little more meat for you to chew on over the week-end. Give this some serious thought for those who are motivated to excellence and victory. I am sure this stuff will help many.

I will do a recap of what I have been discussing over the last few days. These are some of the most common reasons why traders fail to take the trading efforts to the next level. It can mean the difference to actually being profitable at a minimum, weekly, if not daily basis. With modest targets a solid methodology and the self discipline to follow through with your plan, a trader with the vision and will can overcome and make it to the other side. Do you believe that you are one of those who can, or are you one that only hopes he can one day? That is the question, how bad do you want it and are you willing to make changes and sacrifices along the way to get there?

Many would be traders want the money and time freedom that trading can offer, but are unwilling to address personal blockages that hold them back. You may say you will go the extra mile, but in reality it often times is only words. All one has to do is check your actions and attitudes, if they seem to overall be the same, it may be good intentions but no real action behind it, which will result in the same outcome, struggles and frustration. It is during these times that you have an opportunity to get going with the things that will turn your struggle around. Don’t look at it as failure, but as opportunity to overcome.

If you set a daily loss limit, like you should do as previously discussed, you are immediately taking the pressure off of you. The very worst that can happen to me today is “X” amount of dollar or point loss. I use double my daily goal as my stopping point. You must resolve in your mind that you will stop for the day and come back tomorrow with a fresh start and chip away at your goal for the day. The market will give you opportunities to get more in any one day, say double, triple or better your daily goal, but you do not know which days those are, so you trade with your daily goal only in mind until it is clear that today may be a great opportunity to pick up more and you make up easily your previous losses in the week.

It is really an excellent approach to systematically handle your trading venture. Identify in yourself NOW, do you have the resolve to stop trading for the day if you have hit this point. The risk if you don’t is a massive blow to your trading account, that most up and coming traders can not afford to absorb. So, “JUST SAY NO”. You need to go over it again and again in your mind that you are going to be responsible and do just as you say. Come back tomorrow and you will be fresh with a new perspective and approach.

Trading is not a sprint, it is a marathon and you need to pace yourself or you will get burnt out and fade right out of the picture, only having memories of “should of – could of – would of “. The time is now to create what you do not have and file it away, bring it up on demand when necessary. Again, if you are able to stop trading for the day after you hit a modest daily loss limit, you will have scored a HUGE VICTORY in your trading ventures.

You may say, “What is so victorious about walking away with a loosing day”. All the reason’s I mentioned above is why. You will prove to yourself that you can do this one thing and in doing so, know that if you find yourself in that position again, you will be able to take the appropriate actions as your plan calls for yet once again. This is going to establish confidence in yourself that you are not going to blow your account up and will remain in control at all times.

Going through the process and having one day where you are able to stop at this predefined point is going to possibly be a turning point for many in and of it self. This will be a big victory for many traders who struggle to limit the real bad days that seem to come out of nowhere. The market has a way of purging the system of weak traders who struggle with this lack of control, even if you have a solid trading plan and know what it is that you are doing. If you don’t limit your losses on bad days, you will never make it. The market has a way of only letting the cream rise to the top, don’t be one of the ones that settles to the bottom.

I got off on a whole new tangent there, but all of these ideas just came to me and felt I needed to roll with the subject for  while, before I run out of room for this posting.

I see that I have so much more I can say and will just go back over Friday’s posting and touch on that one point again. Look at both sides of the market and keep your biases to a minimum as far as short term direction.

This is so important. Don’t find yourself taking stop after stop and wonder what the heck is going on. If you take two stops in any one directional move, you are out of sync. If the market is going to break and you enter, you may be off on your timing or the market may push you out by a tick or so, but the direction is still right and you believe the move is ready, so you re-enter again and take your position, only to find out that you were wrong again and the market is just toying with you and many others to create doubt and take your capital.

Don’t give a third opportunity to do it again. Wait it out and give it some time, get up and doing something to get the blood flowing and re-access the situation after you see what is really happening. Often times the market will just go into a chop zone and start swinging high to low knocking out stops in both directions, step back after your second stop and wait it out. Once the dust clears you will see the real trade develop and it may be a 4 or 5 point gainer, easily making up for your earlier mishap, but you won’t be in that position if you don’t stop and wait it out. SELF DISCIPLINE, find it with-in yourself before you continue to trade and you will be glad you did.

Lastly, just think about this. When you cross the street at a busy intersection, you may be waiting for the light to turn green, we all do that, but when the light changes do you just start walking without looking hoping that others will obey the rules or do you look both ways before crossing. I always do, and you should too, if you value your life. Looking both ways says you see the cars coming in both directions and you know the risks. The same is true with trading. Waiting for the light to turn green would equate with just following indicators and going when it says to go. If you fail to look both ways you are taking a chance with your life and assuming all is well. Don’t take that chance, “ALWAYS LOOK AT BOTH SIDES OF THE MARKET AND KEEP AN OPEN MIND”.

Trade on, fellow travelers.

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Fed Decision Day Today

Wednesday, April 29th, 2009

Today is Wednesday April 29th and the market is waiting on the Fed today.

In possible anticipation to what the Federal Reserve will do today, the market is making a move. The move looks like it is on the UPside, at least for now. There is more room in this market like I having been mentioning this week and last. We shall see what is in store. The Dow does have some pretty strong resistance around 8250, so that will be a number to watch. I will talk more about upside targets in the next day or two, but remember that number.

The trading as I write this has slowed to a snail’s pace at 9:00 am west coast time. I will write about what happened this afternoon on tomorrow’s blog. What usually happens when you have a Fed decision is the market will move early and then continue to slow as the clock gets closer to around 11 am. Then it starts getting a bit jumpy in anticipation of the news. Traders are trying to outsmart the news and take positions before hand, which is not usually too smart. Most of the time, you will get a move big enough to knock out any close stop positions in both directions and after that happens it will make its move. It’s hard to say how it will turn out, but the momentum right now is to the upside. Be careful.

Today’s trading took a total of 45 minutes, from 7:45 to about 8:30 west coast time. If you look at a larger time frame, you can see that there was only two real moves of any significance during that time, one down and one up. Seeing that the market had made a significant move already and it may just be in a short chop zone, I elected to shorten everything up, given that today was Fed day.

That strategy seems to have worked just fine for me. I had 9 trades and picked up a little over 4 points and got my daily goal. The thing is, I did it in small bit sized pieces. I followed my timing model for very short moves and easily picked up my trades that came in the form of mostly 1/2 point trades. The moves traded for more than a half point and I am just fine with that. After my fill, the trades did not go far, before they started to run out of gas and then reverse.

The thing is, I was in the reverse and then again the new reverse and so on. I could have only taken the two moves that showed up, but at the time, I did not know which way the market wanted to go and if it had follow through ability. The overall trend was up, but there was some down drafts in there.

During Fed day, there is usually a lot of indecision and rather than try and be a hero, I just took the very high percentage trades that I knew I could get, 80-90% usually. While doing this, I was running only a three tick stop, but once the move started in my favor, it easily moved only the short distance that I needed it to go.

My strategy is really only targeting for 2 points plus daily. Since I am trading smaller, 5 contracts, it takes double the the distance to get to my goal and that’s fine. Had I been trading 10 my end result $’s would be 2K instead of one, again fine. The point is, I moved in, got filled at my entry point and quickly got out. There was no struggle here, just waited until the time was right.

If you are going to have anxiety about missing a big move, this is not going to help you. You have to know when to trade for the bigger moves and when not to. After having significant moves to the upside already and coming into a resistance area, you can’t expect the market to give you what you want, you have to take what it will easily give you with the least amount of struggle.

Had I been trading earlier, I saw two great set ups for some real nice big moves. I would like to think I would have had some of that. Just after the open, a real nice Symmetrical Triangle was setting up, plenty of time to see it develop and take the move for a split trade run. First half locks in guaranteed profit, second half allowed to run. At around 7 am, a very nice Rising Wedge with a confirming break, good for a nice counter trend move, followed up with a Symmetrical Triangle continuation breakout that piled on a real mover. Again, a great split trade setup.

You don’t need many moves to pick up a daily goal of 2 to 3 points, so keep your sights realistic on a daily basis. It’s nice to think you can pick up 10 points a day and there are days that can happen, but keep it simple and modest. You will come out ahead in the long run.

The mental challenges that you will potentially face along the way will be enough of a victory to overcome, while attaining a modest daily goal. That is why it is called a DAILY GOAL, because you are expected to get it every day. It is not called a Home Run Goal. If you do the math, trading 5 contracts for an average of 3 points a day, in a months time, is $17,500 for the month and just two net points $12,500. That is only two little points, but every day. Day after day.

The problem is, that most people see that two points is not much and think that 10 points should be the amount that they should get. When you think like that, it’s like grabbing a handful of sand at the beach. Because there is so much of it, you watch it all fall out between your fingers until you realize that you don’t have any sand left in your hand. WHAT HAPPENED? Think about it!

http://www.screencast.com/t/mix1ShOmxl Today’s equity chart

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