Posts Tagged ‘counter trend’

Continued downside in the Market Index’s

Wednesday, February 23rd, 2011

2-23-11;

Today, we saw continued downside in the markets as I thought we would, but after a bottom was reached right to an area I had marked out in previous training video’s with my group, we moved up and started a retracement move later in the session.

In today’s trading, I took three trades, the first one was a counter trend trade and flat. The next was a 1.25 point gain and 1.25 point loss and the third was a 1.25 point, 2.50 points and 3.75 point gain. Trading time was around 35 minutes for the session.  I tried to hold the last trade a little longer and did, but there was more in it that I left on the table. I wasn’t mad about it, just happy to reach another modest goal with little struggle.

I have some notes on the chart if you care to see and read. I am out of town and will have to keep my post today short, so until tomorrow, good trading.

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Day Trading and Power of the Mind – Free Book Offer -

Monday, February 22nd, 2010

Hello, Today is Monday February 23rd and the market is still trading while I write this, currently up 3 S&P points.

So far with 30 minutes to go, the market is holding up. The volume has been so slow, just now at 1 million contracts and 30 minutes to go. I can not remember a regular session being that slow, even back during the holidays. With low volume and movement, you have less opportunities to profit. That is why I feel it is important to be able to scalp a few points out of small trading ranges. Often, that is all the market is going to give you. You can always elect to sit it out and wait for things to improve but if you don’t have patience enough to do that, you may be tempted to trade in an environment that you are not trained for. The best course of action is getting trained for it, so that if you find yourself in it, you will know what to do and how to do it.

Scalp trading is not for everyone, that is true. It can be better for some to wait for moves that are for several points, but as I said, you don’t always know when they are coming. If you blow your opportunity, you may have to wait now for hours. Do you have the patience to do that. The answer for many is “No”. That was and is my answer too. I don’t want to wait for two hours to take one trade and wait another 2 hours for the next trade. I don’t need to hit a 3 to 5 point trade to come out on top. Three one point trades counts just the same and with the trading leverage tied to the emini’s, you really don’t need much. To me, two to four points per session is plenty. If you can average just the two points per day, that is 40 points in a trading month. Some days you will have more points and that can make up for the days you get stopped out for the day. I have a 4 S&P point daily stop out point. This ensures that if I am having a bad day, that I don’t do any really bad damage to my account. Getting the upper end of my daily trading goal, is always nice at times. This also protects me from any day that I may come up short.

I was working with someone earlier this morning who was having a little trouble. After our session, he saw things much clearer and had a new sence of confidence, always a good thing. His confidence reconfirmed in the method he had learned and trained on, but needed a little guidance and one on one time. After our session he took three trades for 3 points in an hour. I felt happy for him, but better than one days profits, he has a clear picture of what he is looking for and how to go about getting it.

In todays trading, I took a few trades, nothing earth shattering and could have done better, but it was enough. Trades are as follows; flat, +4 ticks/+5 ticks, -1 tick, +2 ticks/+2 ticks, +2 ticks/+1 tick. The last trade was the only counter trend trade that I took and am trying to take less of them these days. The bigger move came from just above my last trade short and was what I was seeing, but decided to not trade any more and let it go. Tomorrow is another day.

Just a reminder, it may still be a little while before I get the “Free Book on Concentration” up on my website. If anyone wants it now, just email me. It is very good. It pertains so much to trading and what we do, that I am sure it will help every trader who reads it with an open mind and applies its principles. When you start reading the first chapter alone, I believe you will be impressed.

Day Trading has much more to it than getting the entries down and knowing where to exit. You will discover so much more about yourself than you ever thought you could. Some of it good and some of it, not so good. It will bring to the surface all of your weaknesses and expose them, to yourself.  Unless you know what to do with that and how to adjust, you will eventually be working against yourself. Why would we allow ourselves to do this. Well, many traders do not realize how the mental side of trading is always at work here.  The path of least resistance is to do the wrong thing at the wrong time.

Having the mental clarity, focus and mind power to do what you should do and when you need to do it, is imperative while trying to trade the markets. If you find yourself listening to competing voices in your head, second guessing yourself about every trade, not allowing the market to work for you instead of against you, as so many traders end up doing, you will struggle. 

 I too have to watch myself in this area and need to be in the right state of mind when I trade. So, as I have stated before, I am often times talking to myself while I am sharing with my readers. I know what it is that I need to do and want to be sure not to go outside of that. If I am in the red, I am very confident that I will come back, but should not be looking at or dwelling on my past loss at that time. Traders to often, trade with their P&L in mind. It is hard to have the right perspective when money is on the line. The best place to be in when trading, is not having to need the money. If you need the money and the trade, you will be trading from a position of weakness, not strength. That is a mindset and often an economic reality for many. Try and get yourself out of that position and trade from a position of strength.

Mental preparation can make all the difference in the world. I strongly encourage any trader who is serious about making consistent income from the markets, to get my free book. If the book is all you want, that is all I will give you, if you want some advise, I can give that to you as well. (Free)

You have a lot to gain, if you have not considered the real impact, the power of your mind can have on your trading results. You have everything to gain and nothing to lose from asking for it. I have sent it out to some who have requested it and will report back here on how they liked it and how it has made a difference in there trading.  

So, until then, Good Trading.

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Will Dow Jones Industrial support hold?

Monday, November 2nd, 2009

This post is for Fridays session, October 30th.

The market sold off like fiercely on Friday and took the Dow down about 250 points. The S&P was off about 30 points. I did think that a re-test of the Wednesday and Thursdays low would come, but not so fast. I thought we had at least one more day to top out for the counter trend rally. There was news that came out on Friday, not really sure what it was to tell you the truth, but I could only imagine that it wasn’t good and the market reacted to it. It is to be expected.

Let me tell you, that in the month of September and October, the general public has become bullish. The last two months has only produced paltry gains when compared to the gains of the previous six months. That is where all of the money has been made. The general public is always late to the party and I don’t imagine that this time is going to be any different.

Mondays session is going to tell all, at least for now. What I mean is as I was telling you last week that the Dow has been outperforming the S&P and that was a problem. Well, it is not only the S&P that it is outperforming but the other index’s, but in a bigger way.

Based on my experience and I did not see this or hear this from anywhere, but years of seeing price action at work, the institutions are lightening up their riskier positions and reallocating equity assets in the high quality Dow Stocks. I mentioned this a couple of weeks ago, if I remember correctly. That is pretty typical at market tops

The Nasdaq Index is at a double bottom from its most recent pivot point low, something that the S&P is thinking about doing, to follow suit. The Russel 2000 Index has already overwhelmingly broke its most recent pivot low, by a wide margin. The Dow on the other hand has not broken down yet at all, but is sitting right on a major trend line support.

So, the Dow is the strongest, next comes the S&P 500, then the Nasdaq and lastly the Russel 2000. If the Dow holds and moves higher, the other indexes will only be making a counter trend rally, but will still remain in a down-trend, stopping at overhead resistance. Once the Dow does break down, all of the other Indexes will only go down that much farther and faster. There is a lot of room for the market to move back to the middle of its range of the last 8 months.

The last thing I will say about all of this tonight is, “Earnings”. I don’t follow this much either, but just the big picture. The projected earning that Standard & Poors are putting out for the S&P 500 for next year are a bit of a fairy tale. They have been constantly wrong and now they are painting a wonderful rebound of large proportion in earnings. Anything is possible, but I doubt it. I had heard, according to Bloomburg, that the S&P has had declining earnings for 9 straight quarters and only this last quarter have they been able to increase earnings. Those increases are from very depressed levels, not that hard. The increase in earnings in my estimation is coming from cost cutting in various forms. You can only cut cost so much and for so long, before you can not cut anymore. Where are the increases in sales going to come from. No one is spending and no one is lending and money??? INTERESTING.

That is why, the market is going to adjust itself to reflect where it is going to be in 6-9 months from now, probable lower. Just now the S&P is turning their earnings, like this month. If you invest in these companies now, you are going to pay way to much. But that is what the public does. You needed to be invested at least 6 months ago to be able to enjoy some of this rally, not two months ago, like I talked about at the top of todays post.

We need to see what the Dow is going to do in Mondays session. If it to breaks support, then all of the indexes will have downside momentum working for it. But if it can hold, there is now room for it to clear 10,300, a complete 50 retracement from it’s all time high. The S&P numbers for the same retracement are 1120. We got close.

The sentiment numbers backed off just a little last week. It is sitting at 48% Bulls. A reading of 55% is considered bearish. We only got as high as 51. One last push to the numbers above could push the reading to 55%, the big word in there is COULD.

Friday’s session was incredible. So many great clear signals all day long. I only took one trade and it was split up, what I call a “T-2″.   The first half for +1 point and the second part for 3 1/2 points. I was in the market for less than 1 minute on the first part and 4 more minutes for the second part. I really only had my screen open for 15 minutes, start to finish. There will be plenty of other trading days to capture higher point returns. But my daily goal was meet, no struggle, no fuss, no mess. Just the way I like it.

Until tomorrow

 

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Screen Shot, S&P 500 Cash Index with Commentary

Friday, October 2nd, 2009

Today is Thursday, October 1st and today we got our answer. That answer came early on in the session.

The sell off came early on in the session and did not look back all day long. Today is what you call a solid “Trend Day Sell Off”.  The whole session was pretty much lower and lower to the close, all one way. You usually get about 3 of these a month.

Earlier in the week, I had talked about watching the market after the rally back up. That was going to set up a pivot point that was going to be critical. If that got broken to the downside, then you will likely get a move down to the lower end of the wedge, around 9300 for the Dow and 1010 or so on the S&P. That is about 19 points more on the cash index. This is one of those conditional situations. If this, then that. Today was the “if this”, in the breaking of the pivot low. The daily momentum had already slowed so it was reasonable to expect the break down. But had the event turned up and broke out of the tight consolidation range it was building, then you could have looked long one more time, but again that did not happen.

Today’s break, told traders to play the short side, the previous rally down and back up, just added more fuel for this break and this time, it did not come back up. At critical turning points the market does not like to make it easy for traders to establish themselves. If you know where the pressure points are, like today, as the sell off got under way, you take a shot at it and hold on.  I could see the wedge building and it looked likely, but I don’t like to get surprised if something happens that I have not thought of. Contingency plans are a must.

As I stated once before, you can not get into only thinking one way. If the move has not happened yet and it appears that a downside break is coming, you still need to see the possibility of any other play. If that play comes alive, you will not be surprised and can then easily adjust your mind around to the long side of the market. It is phycology. You will in essence created a mental block for yourself that could cost you a lot of money, needlessly.

You become to sure that the market is going to do something and when it does not, you then are only seeing what you want to see and not what is actually happening. This can cause you to take multiple stop outs  in a short period of time and that will only start to create a whole new set of problems.

Now that we know that the markets have broken the upper range to the downside, a trader can be looking to the short side of the market as the dominant trend and look to take short entries from that side of the market, giving him the largest return. The trader could have been doing that from the open this morning, as the break had become clear in the smaller time frame charts.

The market may be in a position to mount a counter trend rally. It is in a parallel channel at the lower end of its trading range in the smaller time frame. This rally could come early on in Fridays session. Until it happens we don’t know how to play that, (If this, then……..) Do you see what I mean.

If we get a momentum shift to the upside early on tomorrow, I see a minimum 10 point S&P rally. Notice again that I said “IF”.  It is a conditional statement and represents something that has not happened yet. In addition, “IF”, after the first hour of trading we don’t get an upside break, but instead continue the break, the selloff could be just like today, back to back. Traders need to be prepared for both scenario’s, just in case. That said, it appears that there will support at current levels at least for that bounce of 10 points plus.

http://www.screencast.com/t/wVzrqS1jdbI8          Daily S&P 500 cash market “still shot”

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Scalping the S&P 500 for Daily Profit

Thursday, September 24th, 2009

Today is Thursday September 24th and all the major index’s had follow through on yesterday’s sell off.

We had mentioned that if there was follow through it could be telling us something. I do see a rising wedge in this up-trend developing, but has not broken as of yet. There is support at just under today’s low and I think this level is really going to be important to hold. This sell off is and can be expected, given that we had this big run. There is some resistance above and as stated some support below. I would be surprised if we go right through support from here. I don’t think that is going to happen. I would expect a day or two of consolidation at or around these levels and a counter trend rally, just like I mentioned earlier in the week. You usually will get a counter rally back up and at that point, the make or break point will be at hand. It is still developing and will need to see the move back up to better determine what is actually going to happen. Still can not rule out higher prices. Dow 10,000 and S&P 1100 are not far away.

I had mentioned the sentiment had been falling and that can be a good thing for the bulls. After this weeks price action, the bears will make an even stronger case for the market to drop, thinking that this must be the drop that everyone was waiting for. I am a firm believer to always look at both sides of the market and that way you will not get blinded by what you want to see happen or your preconceived opinions of market direction. Wall Street is a two way street and right now, the flow of overall traffic is still going one way. Yes we have pulled back quite a bit, but the price action is not decisive enough to warrant an all out sell. We bounced off of some stiff resistance and appear to be pulling back. Lets just watch the price action over the next few days and the bigger picture will become more clear.

Below is a short video of some of the trades I took in the S&P. These trades are out of the 100 tick chart and is by any measure a fast pass chart of price action. I look to two higher time frame charts as well but those are not mentioned or shown. It’s all about timing. When to pull the trigger and when not to. If your timing is good and you  have a road map to follow, you can do well. If you timing is off and you can not follow a clear plan of action then you most certainly will not do well. It’s just that simple. How do you know where to get in and out?  That is explained in my method in detail. Below, I have taken 15 trades in the last 90 minutes of trading and posted 54 ticks of profit and 15 gains, with one loss of -3 ticks. I show exactly where I get in and out but do not explain why and do not show any of the other parts of the method. We only need 8 ticks to capture 2 points for the day.  It can usually be had in about 30 minutes of trading everyday. If you are able to slowly increase your contract size while trading for a very conservative daily goal of 2 points, you will never worry about money again.

It is not that hard to learn, but the hard part is going to be dealing with yourself and the inevitable fear and greed which always comes into the picture when you have large sums of money at stake. There are things traders can do to overcome these obstacles, but very few ever think of what that is and even fewer are willing to do what is necessary even if they find out, what they should be doing to get to that level.

All I say is, it is possible, if you have the support and road map. I can offer both, for those who are interested. I will be coming out soon with a more favorable pricing structure for those interested that includes a much lower initial cost to get started. It should be up and posted in a couple of weeks. I am working hard on putting everything else a trader will need to get and meet there goals. It is and will be different than any other method or system out there, so stay turned.

Vince

http://www.screencast.com/t/15cxliWCm7g         video of todays trades and turning points together/ 100 tick chart

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Interesting Trading Lesson Today

Saturday, April 4th, 2009

Today is Friday, April 3rd and I had a good day, but not without a few problems.

I started out just fine. I almost had my daily goal in just a few minutes. But then I was not patient enough to wait just a minute more for a clear signal and sure enough, I got stopped out. That trade was going to put me over the top and capture my daily goal, about 15 minutes worth.

What happened after that is, I found myself in an up-trending market and was looking for a counter trend trade setup. This was the trend starting about 8:30 am W.C. time. I doubled up on a trade short 5+5 for two positions short and got stopped out with a 4 tick stop. Why I fought that trend up, I don’t know. This goes back to what I was commenting on earlier in the week. If you get a picture or idea in your mind that the market is going to do something and it is not co-operating with you, the problem is not in the market action, but with you, or me in this case.

This is why we all need to be humble and respect the markets. Trading success can be a great thing to give you confidence in your ability to put together winning trades, but it can also be an Achilles heel. Each and every day, you really need to keep an open mind to direction. This is what can happen to a lot of traders if they think they know the next move of the market. Let the market tell you and don’t be impatient. If the whole series of moves looks a little confusing, just let a little time go by. That is what I did today, when I was up to almost daily goal and slipped back just a little in the red.

I took a break and came back a little later and started nailing it. I came right back like I have done in the past to post some real nice gains for the day. I ended up taking it to two times daily goal or around $2,500 in equity, but it took me some time. I just put on mostly small trades, 1 point, 3 ticks and so on. I was just focusing on market timing. I took my trade size down to average 5 contracts, some smaller, a few bigger, but averaged around 5. With a 5 contract average I probably picked up a net after commission 10 points of profit to get my totals.

If I am having trouble, for whatever reason, I almost always go back to my bread and butter trading. Sometimes when you are targeting 2 or 3 points in a trade and the market is not giving it to you, change and be satisfied with 1 point here and 1 point there. It adds up pretty fast, if you keep stringing them along one after another. It counts just the same as a 3 point trade. Trading is not always easy and there are many unseen factors you could be battling, but try and keep it simple. My method is simple, but not easy. And there is a difference.

I have a short video of some of the last trades I took today. It is on a clean chart and I will show you some of my timing techniques while using trendlines. I could have captured a lot more points on a lot of these trades, but that was not even in my mind for the most part. I was concentrating on market timing. If I just get that part right, I know I can pick up the profit, it all adds up the same at the end of the day.

Have a great weekend!  Vince

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

http://www.screencast.com/t/e73y7VRj1                  Trendline trading lesson,  video 5 minutes

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