Posts Tagged ‘equity’

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Market hits resistance today

Friday, April 3rd, 2009

Today is Thursday, April 2nd and the overall market ran into some resistance today.

I have not talked much about daily market direction lately, because I had not seen anything that was worth pointing out. I wish I had posted what I saw yesterday, but today is still OK. I will give you a 5 minute overview on what I see and how it could be played out over the days to come. But before I do that I want to give a quick recap of today’s trading.

It turned out good. That is always music to my ears, but as I mentioned before, if you are not in focus and have distractions going on, your performance is going to suffer. That is how I started out. I was giving a trading lesson to one of my students and I had not yet gotten my points. My mind was not on the current price action and when I got around to taking a few trades, they were good for gain, loss, gain, loss.

I did that three times, back and forth, until I settled down. Part of the problem is trying to trade in the slow patch of the day. I needed to take my own advice from yesterday’s trading tip.

I thought about that today as I found myself in the red. On my way into negative equity territory, I had to pause, take a deep breath and relax. The market has a natural flow to it and you need to find that rhythm or flow. I cleared everything out of my mind and just waited for the trade to come to me. I did not have to go after it.  After that point, I had 10 gains, one loss and one even, to go from -600 to + $2,000, much better.

My daily loss limit is two times my minimum daily goal, (between 2 & 3 point) and I have yet to stop trading because of my loss limit. It has not happened yet with my daily gains now stretching into the start of my third month in a row. The actual trading totals have been on average about 3 times my daily goal. For a long time, I was struck on trading 5 contracts and I must have been averaging 3 times that on a daily basis. I have currently wanted to trade less and increase size, so I have been doing an OK job with that.

You need to be emotionally ready, as well as financially, to increase your size. But, if you are able to see the trades each day and know why and where it is you are taking those trades, then it is just a matter of doing what you know. Leave the fear behind. In a market with volume, you will not be in the trade for very long and this will cut your anxiety or fear down to manageable levels.

Again, for the trader who is just getting started, you need to be able to put those winning days together, one after another. That is why, I feel, you should not be in the market all day. It is too much for most to handle. The market has a way of wearing you down, until you get sloppy or let your guard down. Then you may find yourself in the fight of your life. Don’t put yourself into that position. Get your points and get out.

I have seen just about everything the market can throw at me, but I need to respect it, or I too will be humbled. There are times when you should not trade at all. Erratic movement without periods of consolidation and choppy direction-less formations are all telling you to take a break.

It is amazing what that decision can do for you. When you come back after an hour or so, it can look like a whole new market, with predictable swings and volume.  That is the environment you want to be in.

Tomorrow I will record a few of my live trades with commentary as I was doing before, for those who are looking for that.

 As I promised, below is a short overview of how I see things in the daily’s. I hope it helps, but remember, you need to think for yourself and see it for yourself to be able to trade it for yourself. 

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

http://www.screencast.com/t/bljwZXzuz9e   Market overview on the Daily – video 5 minutes

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Posted in Chart Patterns | No Comments »

“Keep An Open Mind”, while trading the S&P’s

Wednesday, April 1st, 2009

Today is Wednesday April 1st and I had another quick day of profits.

I start out today with a nice one point trade short for half of my now higher daily goal, followed up with another 1 point trade just after that, for a quick $1,000 dollar daily goal in just a few minutes. With the commission cost it put me just above $900 and I  needed one more small trade to at least get over a thousand. The next trade came to me very nicely for yet another 1 point gain, but with only 4 contracts on board to safely give me a little over $1,100 for about 20 minutes of trading.

That is what I like about trading the way that I do. I have said this before a few times, but it bears repeating. No struggle, just a few quick easy high percentage trades. When checking the stats for how long I was in the market to get my trades today, my computer told me that it was only 3 minutes of actual in the market trading time. That is an average of 1 minute per trade. That is COOL. 

When you are in the market for a long period of time, you do have higher exposure, no matter what the circumstances are. More time in the market = more risk – period. If you know what you are doing, you can minimize that risk with stop loss orders, but none the less, you have more risk.

Now, I get to do other things, that can be very rewarding to me. Time is something that you can never get back, once it is lost. You can always make more money, but if you invest yourself in things that can bring you personal dividends, you can look back at your life and have no regrets. That is the way I see it. The key to making something like this a possibility is knowing how to trade, so that you can pick up your points for the day. If you need a mentor to help you through the process, send me an email and we can discuss how I can help you put it together.

Here is a little trading tip for the day:   KEEP AN OPEN MIND WHILE TRADING

In looking back at the one thing that I thought gave me the most trouble in my trading, that would have to be keeping an open mind as to overall direction and not having a bias. This is one of the secret killers that is always lurking, looking to destroy trading accounts.

If you make a decision in your mind that the larger trend is going up or should go up, then you will not be able to see the short setups that are right in front of you. The same is true in the opposite direction. As far as the bigger time frame, leave your mind open and let the market tell you which way it wants to go. If you have a strong conviction about direction and things start to change, you will not see it. I GUARANTEE IT. 

You will become blind as to what is happening, because your subconscious mind will not let you see. You have created a mental block as to the current reality of the present price action. On the other hand, if you hold your opinion to general market direction lightly, if things change, you will have no mental blocks to overcome when you need to take a trade in the opposite direction. The market trades on a two way street and you need to see cars coming in the other direction or else you will have a HEAD ON CRASH, with the outcome producing casualties.

Example:  In a past struggle, I remember thinking that the market should go down and I was looking for a short set up. I place a trade and get stopped out. I still think the market is going down, but my timing was off, so I re-enter short and again get stopped out. Something is wrong and I need to stop and check market direction because I am fighting the trend. That is what I should do, but I still have in my mind that this market should be going down any moment now and you try and short again. What do you think happens after that? Stopped out again. If I would have taken the correct action, like I mentioned above, I need to stop and assess the larger time frame and wait to trade in the correct overall direction. 

The moral of the story, KEEP AND OPEN MIND TO OVERALL DIRECTION and don’t let this happen to you.

http://www.screencast.com/t/IORB9MjZY                  Today’s equity chart

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Posted in Trading Psychology | 1 Comment »

Success continues in trading the S&P’s

Tuesday, March 31st, 2009

Today is Tuesday March 31st and the trading success continues in the S&P’s.

I did not trade very much today after yesterday’s killing. I did not post in writing the stats for yesterday’s trading, only in the equity charts below, when I saw that there was a problem in getting the link hooked up properly. I fixed it, but I would like to say that yesterday’s trading produced over 40 winning trades with only one loss and three break even trades.  In fact, I had 50 plus pieces of profit, because I had multiple exits on a few trades. I posted over $9,000 dollars in profits, again with only 1 small loss. I traded a bit larger size and remembered saying to myself that if I post 1 more loss, that I was going to hang it up for the day. Like I said yesterday, it never came, so I kept on going.

Today, I had to balance things out a little. I only had 3 trades, the first was for a solid 2 points and the next couple, a little smaller, for $1,200 profit. I finished in less than 15 minutes and turned it off.

That is what you have to do some days, which I learned yesterday. It was not a bad thing, but I still have to maintain discipline even if it is going in my favor. Who is in control? The only saving point from yesterday was I made a deal with myself that I was going to stop trading when I took my next loss. So I really did not go past what I told myself.

That made me feel better. I should not be complaining when you have a day like yesterday. It does good things for your confidence. What can happen when you have big winning days, is that you let your guard down, get complacent and think this is too easy. If you ever get that attitude running through your mind, squash it quickly.

If you do not maintain discipline while trading, you are going to feel the pain. So remember, if you do the right things, the right things will happen to you. If you do not get greedy and overshoot your targets, and take what the market wants to give you, you will be rewarded. Not everyone is going to be able to maintain discipline for several hours. This is another reason to get your points and get out.

http://www.screencast.com/t/fB5xshXA            Today’s equity chart

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Posted in Trading Discipline | No Comments »

Best day trading I ever had

Monday, March 30th, 2009

Today is Monday March 30 and today was the best day of trading I ever had.

I had no idea that today was going to turn out the way it did. What a day. I was going to stop much earlier in the trading session, but I kept putting trades together and they kept hitting my targets. I said that I was going to stop when I had my next loss, but it never came, so I kept trading. This is one of those days that you get rewarded for doing the right things. I stayed out of trades until the trend had a high degree of follow through.

The thing about today, is that we had a very big gap day down and most of the drop occured in the night trading and premarket. I know better than to try and trade for long swings on days like this, especially in the morning. This is a day that you want to trade for short targets and be done with it.

And that is what I did on most trades early on. There were a few that I took for more, but they all added up to make for my best day trading. I was trading with bigger size after the profits started to pile up, putting on 10 and a few times 15 contracts. I had the room in my equity, so I went for it, all the while being patient, hitting the short term trends up and down, but mostly down.

Below is my equity chart and a little closer break down under that. If you are right with the direction of your trades, a 1 to 1 ratio (profit to loss) can add up very nicely. Timing is the key. Can it be learned? YES.

http://www.screencast.com/t/SpwL097Sh                  Today’s equity chart

http://www.screencast.com/t/52z5jIOWP                    Closer break down of stats

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Posted in Day Trading | No Comments »

Today’s Profits: Finished in 7 Minutes !

Thursday, March 26th, 2009

Today is Thursday March 26, and it was a quick day of trading.

Yesterday I had posted that I wanted to increase contract size and trade less. Well, I got my wish.

I was able to shift my thinking to attain my stated goal and it was nice. I had two trades, the first one for 1 point on 10 contracts, all in – all out. The second one was for 1 point on 5 contracts and 2 points on the other 5, and I was done.

This what I wanted to do as I wrote yesterday. $1,2oo profit after commission on two trades. Now I have the rest of the day to accomplish other things of interest. I would take every day in the same fashion, and will be working towards that end.

This was my original plan from the beginning and I will continue to work at it. Consistent daily profit is the objective, combined with the least amount of struggle to get there. Once you reach your daily goal, I will admit, it is and will be hard to stop trading. That is where you will also need a mentor, someone who is on the same desired path and can give you the support and discipline to stick to the plan.

Anyone who partners with me will have my full attention and support to help them see what I see and do what I do. It is hard to go it alone and you will most certainly pay your dues one way or another, but it would be my job to help make those dues as small as possible. There is usually no easy way around the fact that you will need help in trading consistently for daily profit. You will pay someone for the experience. Everyone does. You will pay the markets because of your losses and you may still not have learned how to trade consistently. Or you can pay someone who knows how to help you get there.

There are very few trading programs that are of any value and a lot of them are a waste of money. Many of them are focused only on indicators, or some other idea that puts you and your account at great risk before you are able to capture your occasional gain.

There are many ways to trade the markets and I believe that the way I approach day trading is one of the best available. When it comes to a choppy market, I love it. While others are just wishing for the day to be over. If we are seeing large swings up and down by several points, I love it. Because I can easily capture additional profits on extended moves. When the markets are showing long extended trending markets, no problem. We just look for low risk entry points along the way and pop in and out before anyone even spots us.

When you are able to trade the very small stuff, 3 or 4 ticks, you are able to take advantage of any kind of market, because you use the method to get you into a HIGH PERCENTAGE trade that gives you a pre-determined amount of profit. If you only need a couple of those trades for the day, it does not matter what kind of action the market is displaying.

In any of the three types of markets that I described above, you come out on top. There are many people out there that say scalping is the most difficult type of trading there is. In part, because they are not able to do it successfully, so they talk it down and people believe them. Then you look at the alternatives – trading a higher time frame chart, waiting hours for the right set up, risking 4 or 5 points on the trade, and then have it go against you for a loss. Now what do you do? You are running out of time before the day comes to a close and you want to be profitable for the day, so you take a less than desirable trade now for another loss and you are totally frustrated. Not a good day.

With my method, you will see plenty of trade possibilities in whatever type of action the market is displaying and have the ability to capture a nice trading profit each and every day the markets are open. That is the goal. Is it attainable? Yes.

If you have any questions, please email me and I will be glad to answer them for you. Have a great day.

 

http://www.screencast.com/t/gYuBtR2l              Today’s trades

http://www.screencast.com/t/GP2oGYTi            Today’s equity chart

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Posted in Profit Day | No Comments »

Quick Profits Today

Thursday, March 26th, 2009

Today is Wednesday March 25, and I am back.

I took a couple of days off to go to a conference on Monday and Tuesday and am glad to be back. The conference was not related to trading but of a personal interest.

I did not spend much time trading today, but that was just fine, since I was able to capture more than my daily goal for the day in less than 30 minutes. I was satisfied with my posted gains of just a little over $1,000 dollars. I had 6 gains with 1 loss to capture my total, with one of the trades having multiple exits. It was a very smooth 30 minutes, with little disruption.

I am going to increase my contract size tomorrow and make fewer trades, but capture increased profit. This is where you work less for more, but need to have good timing. So I may wait for higher probability setups, which will require a little more patience on my part. If you only have a few bullets, you need to hit your mark and make it stick.

If I traded 10 contracts and hit one trade for 1 point on 5 contracts and the other half for 2 points, that would be $ 250 dollars for the first and $500 for the second half – a total trade profit of $750, less commission. Then if I come back and hit 10 contracts for 1 point, all in-all out, for $500 more, that would be only two small trades for $1,250.

That could happen in 10 to 15 minutes. Why would you need to trade for more and create a possible struggle? It is nice to be able to do so, and I have been at it for sure, piling up much more profit than that in the course of a few hours. But some of those days were a struggle to get my equity up to higher levels. When you can trade in the 20 contract area and up, it sure adds up quickly when you are on the right side of the market. At that rate you double your profit to $2,500 dollars, and still you are only trading for the two – three point range.

The idea is to slowly build up and increase your contracts when you feel that you are ready. I have been at the 5 contract level or so for awhile and have the room to increase my contract size. We shall see, if I indeed do that tomorrow. Only time will tell.  

Below is an equity chart of the day’s profit. Until tomorrow, over and out.

http://www.screencast.com/t/6CL5zodFHWi                Today’s equity chart

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Posted in Profit Day | No Comments »

Day Trading Requires Focus and Discipline

Saturday, March 21st, 2009

Today is Friday, March 20th and the major indexes continued to back off.

The Dow was down 122 points and the S&P was off by 15. We will likely continue the retracement over the next few days as the market posted a back to back weekly gain, something it has not done since May of 2008. I have a daily chart below of the Dow and S&P and you can see that after redrawing the outside line, which I was off by a little originally, it is now lined up straight and the market traded right up to it. It also happens to be the broken support of a few months ago. I mentioned it yesterday, but you can see it today in the chart below. Support when broken will then become resistance when tested. That is what we have seen the last 2 days. The Dow also lines up, the same way.

I had a good day trading today. It was slow going in the beginning. I started late, during the slow volume time of day, and could not get any traction. I was splitting my trades when I would have done better with, all contracts in, all contracts out. After a slight draw down and the passing of a little time, the volume came back and I got myself on the right side of the trend and started putting it together. My equity had very little draw down after that, almost straight up. I settled the day out with $+1629 dollars after commission costs and had over 20 entry trades.  Still traded small for the most part and have not yet made any changes, like I was talking about yesterday.

I have one small video of a trade I put on and a still shot of the trades just after that. I backed off on the size again at the end, which is really a good idea. If you have solid gains and you decide to keep trading, you have to have a point where you will lock in your profits for the day and give no more back, if you fall below that point. If you start to over trade and make mistakes, you can give back what you worked hard to get. That is the reason for backing off on size at the end of the day when you already have your daily goal and good profits. You will be a conservative trader with this approach.  This is about money management as well.

Do not let greed creep into your mind and find yourself shooting for the stars. More is fine when it is the appropriate time. I would say that if any one is just starting out and you do not have anyone helping you through the process, you should only be trading for a small daily target. I recommend about 2 points and not really any more than that.  The reason is, you do not have enough experience to deal with all of the changes the market will throw at you. Eventually you will get taken out. That is the hard cold facts.

We all like to think it won’t happen to us, but that is presumptuous on on our part. Being honest with yourself is the first step to victory and that victory can come in the form of two points a day. If you can pick that up, consider it a big victory and try and do it again tomorrow.  A common scenario is, you will pick up a few points and think it is easy, then let your guard down.  The market then gives you a read that you have not seen, or are not familiar with, and the gains are gone. You then say, “Iwill get that back,” and don’t exercise patience having already lost your focus, because you are thinking about the money and your losses increase.

You have to be able to stop yourself, if this is happening and walk away. Clear your mind and when you take your next trade, don’t be thinking about anything else, other than the process. Are you doing the right thing based on the method? Don’t be thinking about getting even with the markets. That has been called, REVENGE TRADING and it can do a lot of damage, not only to your account, but more importantly to your ability to have confidence in what you are doing.

By losing your focus and discipline, trading like this, you only join the ranks of so many others who thought they could. The battle is greatly in your mind. That is why I have some very good books on my web site to help you with the process. If you have not read any of them, I recommend that you do. Some of them are not even related to trading, but it sure does apply and can help with many other areas of your life as a bonus.

http://www.screencast.com/t/MHjVQ0SI8L              Today’s equity chart

http://www.screencast.com/t/qBfXqtoGBXq             Live trade video

http://www.screencast.com/t/ITUh0ylJ                      Still shot of some trades, end of the day             

http://www.screencast.com/t/M4FpJW2M8kx          Still shot of Daily S&P

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Posted in Trading Discipline | No Comments »

Controlling Fear and Emotions while day trading !

Thursday, March 19th, 2009

Today is Thursday, March 19th and the markets back off on light volume.

The Market, in general, slowly backed off its highs from yesterday. The night trading saw a move back up to yesterday’s high and when the general market opened at 6:30, the Dow shot up 50 points and the S&P about 7 points. There was a gap in the S&P and when you get an extended move, like what we have had the last couple of weeks, with the market trading near its high at 800, it was likely the gap would be filled rather quickly.

I missed the initial move down by a second and found myself a little frustrated, not a good emotion when trading. I was looking for a low risk short entry and took a trade a little early and got high tick stopped. I was in a little heavy, I think 7 contracts. I was sure we were going down but was just a little too anxious. So I started to back off on size a little. I had to wait the market out, but I was still a little anxious. I prefer to see a choppy market early on, because there are usually a lot of small trade set ups, but when it is trending right off the bat, it can be hard to find a low risk place to get in.

All in all, I did OK, making 15 trades with 9 gains and 6 losses. I scaled out of all the trades with 2 targets. Posted about $800 dollars in profit. I made a few mistakes today, but it happens. The market did just what it always does, so I definitely can say that I was to blame on a few of the losses that I could have avoided. The other losses were no one’s fault – just probabilities that show up.

After yesterday’s big gains, I decided to back off a bit. I am trading a lot more than I usually do and I can’t complain. I have been posting very solid profit every day for about 7 weeks of trading. I need to do some assessments and go over my trading plan. I do not want to lose sight of my goals. I had wanted to increase my contract size and make less trades, but I have been making more trades with small contract size. Again, I can’t complain. I have been getting the increased gains that I had planned on, but I have been having to work a lot harder to get it.

One interesting thing I recently saw, there is a TV show in England that took 100 people and interviewed them for a trading career. Out of the 100, only 8 were chosen, with a mixed level of education. To make a long story short, within 2-3 weeks of being properly trained, 4 were making money and 4 were losing money.

The person who did the best was a mother of two children who had an entrepreneurial background. The person who did the worst was a I.T. engineer. The I.T. guy said this was the hardest thing he has had to do in his life. When a program is not working right, he just reprograms it with the right settings and the problem is solved. He tried to apply the same principles to trading and could not do it. The next best trader was an ex-soldier. He said he was used to making quick decisions and was flexible to the current task at hand. He was not boxed in, with seemingly an absolute frame of mind.

The moral of the story is, that being successful at trading has more to do with your personality than intelligence or I.Q.  We follow principals and not so much rules. There are definitely guidelines to follow and you have to know what you are looking for, but having the right personality for the job is essential. The Mother of two was cool under pressure and applied what she learned. She was not overly scared, but placed the trades as they came up and she got the expected results.

We all can learn from this story, including myself. There is no place for FEAR when trading. If you are afraid, then you are not ready. You may be trading with too small of an account or you may not really be able to take on the risk. The best way to approach this is to allocate an amount in your account that you can comfortably risk. If you draw down to that amount you will stop trading and give yourself a month off to assess the whole situation.

So if you are OK with risking, say $500, that would be 10 S&P points with only one contract. You could give yourself a daily loss limit of say just 2 trades or 2 points. If you are not on it, with gains out of the gate, then you wait until tomorrow and try again.

But do not trade with fear at your side. The worst thing that can happen is already predefined, so accept that fact and go forward. You have 5 days of losses, assuming you lose every day, before you get to your total limit for the month. That is really not too much damage to take on, when you look at the big picture of hitting your daily goal of 2-3 points per day.

http://www.screencast.com/t/RVRfEqSe19Y             Some of today’s trades - Still shot

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

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Posted in Trading Psychology | No Comments »

Federal Reserve takes drastic step, Buys 300 Billion in Treasuries

Thursday, March 19th, 2009

Today is March 18th and the Federal Reserve took a big step to buy treasuries.

All I can say is, “What a day.”

I did not know that today was a Fed decision day. Shame on me. I usually check the economic calender for that. I don’t usually pay too much attention to news, because it always shows up in the price anyway, but that is one I always look for – because of the explosive moves following the news.

It usually happens at 11:15 am West Coast time and I was in a trade just before the announcement, with only 1 contract and then, boom, a 10 point move for the S&P in minutes. I re-entered for another move up after a consolidation for another 11 point move and again I only had on 1 contract. I kept re-entering long, and some short, to the very top of the market.

The S&P hit 800, which was the support at the purple trend line that I had talked about a couple of months ago. Support, when broken, usually then becomes resistance and the market traded right up into that resistance. After noticing that,  combined with the fact that now we had traded exactly to a 62% retacement from 873, the last recent high, to 666, the last recent low and back to 62% retracement at 800 and previous resistance, it made more sense that this would be a higher target for the market to trade up to. And it did – with me in it.

Once the top was reached I saw a good spot for a short and went with it, still trading very light, I think I had 2 contracts there. That was good for about 12 points to the downside. I must have had about 50 S&P points in all, which is about 25 times the amount I need to get my daily goal of 2 points, but that would be at 5 contracts. I traded very small once my equity started to get over $1,500, but it added up real fast for a finish to the day at $5,500 after commission. I took 33 trades total. Yes, that was a lot. But it still turned out better than 75% winning trades in about 3 hours. I have a couple of short video’s showing some of this, take a look below, at the end of the first one is where the Fed released the news and the market shot up.

I must say, that I was a little surprised that the Federal Reserve said that it was going to buy 300 billion in Treasury securities on the open market and 750 billion more in mortgage backed securities, bringing their direct involvement to 1.25 trillion. This is the first time they have done this since 1960. Does anyone know what that means? To me it looks like there was no one to buy the treasuries. China said last week they were very concerned with the U.S. debt market.

Do you know that the Federal Reserve is a private corporation for profit and is not a federal agency. It’s as much Federal as Federal Express. If you did not know that, all you have to do is Google it. The Federal Reserve is owned by a group of private banks from the U.S. and Europe. Basically, the government brokered out the job to a private banking corporation. I know this may be a shock for many, but people are reacting to the news like this is a good thing. This group is beyond reproach and no one has ever performed an audit on this group.

It is relative to the markets and to the economic equation because, while it is holding interest rates down for now, it will have a reverse effect in the near future. The Gold market did not like the news at all trading up nearly 6% for the day at 965 an ounce. The dollar did not like the news at all either, dropping against all major currencies. But the stock market did like it, or so it thought.

It is going to be good for the market in the short run – how long that is, I don’t know – but in the long run, it will be disastrous. There is so much money being floated out there right now that no one can keep up with it.

Here is another thing you may not have known. The total bail out so far is said to be 8-9 trillion dollars. That is a lot of money. Again, why is that relevant? It is going to cause inflation like nobody’s business. All I can say is be careful with your long term money. Let’s hope the market moves up over the next few months giving those who want to get out of their long term investments an opportunity.

Everyone has been trained in thinking, “it will come back, it always does”. This time could be different. Do your own research and think for yourself. Don’t listen to the experts and don’t even listen to me on these matters, but spend the time and check it out.

If you do a Google search using “total bail out so far”, you will get a few figures, but they are all up in the range I mentioned. It is nowhere near the figures we hear on the nightly news.

Sorry for the ramble, but it kind of ticks me off when I hear news like this. To those who are considering a career in trading and have the risk capital, the time to make money is now. The markets are moving nicely up and down and there is profit to be had for those who can wade their way through the noise.

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

http://www.screencast.com/t/u9xVvzQlpfW             Some of today’s live trades

http://www.screencast.com/t/kTfMA2×13w              Some of today’s live trades

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Posted in Market News | 1 Comment »

Called Live, Short Term Top In Today’s market.

Tuesday, March 17th, 2009

Today is Monday March 16th and I posted another good day on the e-minis.

While Trading the S&P e-minis today, I called out the short term top in the market before it happened. You can hear me make the call before it happens exactly at the the high of the day. Then you can hear me make the call, on how we will be pulling back from that high point down to lower levels. At the close of the day, the S&P pulled back off of my short term target, by 20 points. That is a lot in two hours, with the Dow off 190 points.

This is going to lay the ground work for a continued pull back. I suspect that, at the open, we will get a small reactionary rally, but I would definitely be watching for short trades. We have had some technical damage and the path of least resistance should be to the downside.

With this being said, the market can do anything it wants at any time, there is no guarantees. All I can tell you is that when I see a pattern like the one I am looking at right now, a pull back is what usually follows. I will be watching for short trade setups and will stagger some of my exits. That does not mean all of them. I always watch price action to tell me what to do and that is what I will be doing.

I try to not have a strong bias for direction too far in advance, but it is something I will be looking at. It may be that the big sell off does not come until the afternoon session, or it could come early on. Price action is what will influence my decisions at that time. I only lay this out for you because I am looking at the daily chart, just like I am looking at a 5 minute chart or tick chart for that matter. The price action is the same and currently looks bearish.

The day was really pretty smooth. I had the time to trade, so I just kept at it. I started out with some nice gains and within a few minutes I had my daily goal. I cut my size back but kept on trading and added to earlier gains. I mostly traded small all day, 2’s and 3’s were the most common contract size. If I had some draw downs it was not going to eat into earlier gains with the small size. I did have some good runners today and captured some of them on video below, so be sure to take a look.

There are different ways to approach the trading market based on price action. If we are in a choppy market and you are trying to go for bigger moves, you are going to struggle. One way that I overcome some of that is to first identify what kind of market we are in. If its choppy, don’t even think about going for more than 4-6 ticks. You will have another trade in just a couple of minutes to capture additional profit. If in a trending market, you can set yourself up for a few more ticks, but you have to know how to play it and not get greedy.

Again, in today’s market, I had quit a few of these. If you have the time, take a look. If short on time, you can always come back later. The bottom line is that I try to get myself in a break even situation first, then a small gain, locked in. After that, if the market runs, it’s all gravy.  By only trading small, I was still able to post some nice gains because of the runners.

I closed out a long position that I got stuck with over the week end for a profit of several points. That gain did not count towards today’s numbers below. Today, I took 32 trades, 25 gainers and 7 losers and my total scaled out percentage was 77%. The total equity gain for the day was just a little under $2,500 dollars on mostly small size.

During a couple of the videos I am calling the intermediate term direction and as the next video progresses you can see it come to pass. We hit the short term top in the market today and pulled back 20 points, take a look.

http://www.screencast.com/t/oPiqTiFG6              Today’s equity chart

http://www.screencast.com/t/P9iiuTUPd              Some of  Today’s Live Trades

http://www.screencast.com/t/Bna8H6Oe              Some of  Today’s Live Trades

http://www.screencast.com/t/NAik15UUR           Some of  Today’s Live Trades

http://www.screencast.com/t/y7YeoTIZC            Some of  Today’s Live Trades

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