The markets were rising early on in the week, only to give it back plus a little more. As the week moved on, the selling was contained. I am pretty sure that we are going to hold up in this area. There are a few cross currents taking place, but I think this is what is needed to purge the excess out of the market before any future advance can take place.

Looking back I was a little off in initial support of the market, which it did come in as expected, but it did not hold. The lower area of support held more or less, off by a couple of points (S&P futures 1065), as other factors take hold of this market in its support for a possible sustained rally.

The market sentiment changed for the better in defense of the bulls, in that the sentiment turned a bit more negative, which in turn is positive. We never did get the big rally, but only a smaller reaction rally coming off the lows of the much larger sell-off from months past. The market needs time to fill in the gaps and that is what it was doing. I would add, if the market really wanted to go down, it sure is in a perfect place right here to “crack”, but somehow, I don’t think that is going to happen, again, just my opinion, which could be wrong.

I see the current position in the market as finding support in this area. We may hoover for a couple of days, as again the new sentiment numbers will be voted on after Tuesdays closing market. This is useful for a couple of reasons. Last week the market sentiment turned down from 41.7 to around 37%.  That was significant because the signal changed as the market had advanced sizable on the day of the poll.  So we saw a 4% shift negatively as the market advanced. The selling that took place Thursday and Friday should add to the negative sentiment if the market can hold in this area come Monday and Tuesday. Either way, there is a lot of negative sentiment floating around which usually can only be erased by a market advance.

The market needed to work off the excess and time needed to pass to better allow the market to be and get in a position so that it could move out. Either way, the energy is being built up so that it can be expelled in one direction or another. As day-traders, we don’t really care which way it goes, only that it goes and it will.

So my best guess is that we consolidate in the general area for a couple of days, further building up this market pressure for a surprise market advance later in the coming week. This time, the market should have some staying power and the shorts will really be covering themselves in full force. I do realize that something could make this change of which I have no control, not that I had or have control anyway, but this is just the big picture and how I could see things shaping up. Late July and early August the market wanted to advance, but a continued move from that point would have been to obvious, so a little head fake was in order. In addition, this move back is very normal and consistent with general market movements before a rally, again I say if it comes.

I want to through this in, just to balance out my opinion on the coming move. When I look at the daily charts, I see the other side of the equation as well and I need to look at it no matter how or what I think will happen with the next move. In fact before I continue with my reasoning, this is exactly what needs to take place for any smaller market move when deciding to go long or short. You size up your analysis based on your trading method and which ever direction has more evidence for that directional move, you need to consider a trade in that prevailing direction. Looking at the other side of the equation though is just as important. I know when I get one-sided in my opinion I can get tripped up as any trader can.

With that said, the market is also in a perfect place to continue its sell-off,  if in-fact it wants to.  I will put up a daily chart of what I am talking about so you can see all of what I am saying. Where the S&P 500 currently stands, their exists a free flowing path to the downside area, around the bottom red line as drawn would be normal and natural for it to occur. That would be looking at both sides of the market and a wise thing to do. This is where market sentiment can give you a clue as to the next major market move and where I am taking one of my clues from. I have been following this “Investment Advisory Market Sentiment” figures for a long, long time and have seen it come through time and time again.

If the market can hold up Monday and Tuesday, the outlook for the market advance becomes stronger. Again, be sure to take a look at the daily chart below. You can also see market resistance coming in at around 1110 or so, the top red line. Currently the daily and hourly momentum is down and the path of least resistance is down, but lets see if we HOLD this Monday and Tuesday to give my scenario a chance for life. 

I did no trading this week as I took some time off to spend with family. I have a couple of shots below of my area, where I got out to enjoy some of God’s creation. My kids came to visit and it was great to see them. My son John, 28 who is an electrical engineer in Portland Oregon and my daughter Angie, 24,   (entrepreneur) visiting from the San Francisco Bay Area.

We hiked on the Pacific Crest Trail which is a trail that links from Mexico to Canada and passes right through where I live.  I have a shot of a nearby waterfall and swimming hole a couple of miles from my home, very cool, take a peek if you care to.                                 Thanks for stopping by and Good Trading to all,  Vince.

Related posts:

1. Market Ready for Continued Advance
2. Market Now In Position to Rally as Bearish Sentiment Builds
3. Stock Market Showing Weakness before Unemployment Numbers

The market was virtually flat today and off its highs, closing closer to its low for the session. The short term momentum has been lost with the hourly chart just about to turn down. The daily chart is still holding it momentum edge, but time will tell how it fares going forward.

You can see in the chart I have below, that there is containment taking place in the Dow and it is holding the other index’s back. We may see prices stay inside of the Dow formation until a clear break out is again present. That break out can come in bullish or bearish fashion and does represent a good longer term trading opportunity. For day traders, that may mean two to three days. So, the thing to do is watch how prices handle the edges of that formation. Until then, you could see some consolidation inside the range.

The Dow has shown resistance 9 days, as the red line across the top has proven itself to be clear “TRADING RESISTANCE” overhead. As the bottoms of the chart move up, you have what is called a “Rising Wedge” in a downtrend.

I would have to call the current position of the overall market in a downtrend. The weekly chart is clearly down, with the daily charts trading counter trend to that. Even if the current pattern were to move all the way back up to the old high, you would put in a classic double top, at which time would be met with selling. All the people who wish that they got out at the previous high, will not miss there second chance and have there finger on the trigger.

For those who follow daily charts in stocks and options, this is where you want to watch volume. If the volume is weak as prices rise, that is a pretty good indication that the market is rotating into weak hands and more susceptible to a drop. I just looked at some of the volume figures for the S&P and it at this point it does look like the big up days were on lighter volume and the larger volume days saw little directional movement. In addition, the four big sell off days, (2 & 2) came on very large volume. That is typical for this type of move. With that said, the market can still move higher, if it breaks out of the over head resistance area, but it is possible that it will only be short lived if it does.

All of these issues are taken into consideration when understanding support and resistance. Looking at price structure with support and resistance in mind, will bring a clearer picture for where we go from here.

We had a few nice days up and I would have to say the move that I was looking for is complete. We may move higher, but not until the Dow can break out over the resistance area mentioned.

On another note; I came back from the S.F Bay Area to Northern Cal (close to Oregon) last night. I got caught in a snow storm with “white out” conditions, wow, that was not fun. I was exhausted when I got home. No time to update my blog.

Yesterday I did trade for just a few minutes and took only one trade. I did something from the day before that I don’t usually do. I carried one of the three contracts over into yesterdays session and sold near the high of the day. I took one trade for one point and hit it. When I closed it out, it took the “first in – first out” approach, so the new position had one left over. My stop was hit before the market could turn the corner, which was fine for a 6.50 gain from yesterday.

Today, I had one of those off days. I think driving white knuckled for so long, must have had an impact on me. I just did not have good judgment today. My first trade was a small gain, but I had three losses in a row and stopped. I was down about 2.75 point and could have taken another trade or two to try and come back, but I could see I was not thinking clearly and packed it in. I did not even feel like trading, so I thought, why push it. That is a good lesson for me. If I don’t think I am firing on all eight cylinders, take a day off. There is no rule that says you have to trade.

Well, that is it for tonight, I will have more to say tomorrow as we get new developments.

Good Trading to all.

No related posts.

Before you start trading, it is very important that you know what it is that you are doing and what you are trading. It is similar to trading stocks but at the same time, very different. There is a definition of terms for those who need to know the basic language in the glossary.

We are trading the S&P 500 E-Mini Futures contract. This represents a shadow or a mirror of movement in the S&P 500 cash index. Traders and institutions across the globe buy and sell contracts with each other. For many, it is a hedge against a portfolio they own and sell contracts equal to the value of their portfolio as a form of insurance. Pension funds and large institutions do the same as well as mutual fund managers.

They are buying and selling protection in the form of contracts against the Index. To do this they need a very liquid pool of futures contracts to draw from and that is where the trader comes into the picture. He or she may not want to hedge their portfolio, but may want to speculate on the future direction of the market. Traders are an essential ingredient to offer the liquidity that the institutions need to quickly move into and out of the market.

I once heard a man ask a trader what he does for a living and his answer was, “I am an asset liquidity provider, how about you”. That statement is true. That is what we do.

Each contract traded represents 50 times the current value of the index. Lets say that the Index is 1000, a nice round number. Multiply 1000 x 50 = $ 50,000 and that is the value of one contract. If the index was trading at 1100 the value of the contract would be $ 55,000. You need to put up a deposit for the right to buy and hold a contract. If you hold the position over night, you will need about $ 5,000 deposit. If you close the position at the end of the trading session the margin will go down to about $ 1,250 for one contract.(day trade margin)

At Sniper Day Trading, we trade for a modest daily goal most days, between 2-4 points. The S&P 500 emini futures trades in ticks. There are 4 ticks that make up one point. Each tick is $12.50 and since there is 4 ticks to a point, one point is $50, 4 x $12.50= $50. If our daily goal is capture 2-4 points we are trading for $100-$200 dollars per contract traded. With an opening balance of $5,000 you could conceivably buy or sell 4 contract. So to use the example above, 4 contracts traded x 100 to 200 each contract, you would be making $400-800 per day.

We don’t recommend that traders start trading the maximum, but start at the smallest and work your way up. It is possible, averaging 2 points per day that in 4 weeks you could be trading at 4 contracts and bringing in the kind of money above. You can stay at that level or increase it over time. What ever you feel comfortable with. You may decide to go slower and reach that level in 2 or 3 months and that is OK. The main thing is averaging that 2 points per day over an extended period. It is very possible, people are doing that and more all over the country and you could to.

On the main page we talk a lot about discipline, patients, and focus, all essential things for reaching your goals. But first you need to know how to trade. I offer that in my course and if you decide to become part of the family, I will see to it that you understand my trading method and how to apply it.

When we put on a trade, we teach how to enter at just the right moment as the momentum will carry you higher or lower which ever way to you are trading.

Make Money as prices go up or down

Which brings me to my next point. You can make money in either direction, up or down. Often, prices go down a lot faster that they do going up. The principal works the same. When you put on a trade that is going up, we would call that a LONG TRADE and when you put on a trade that is going down, we call that a SHORT TRADE. We teach how to take these trades in a clear concise way. No gray area.

When we take a Long Trade, we Buy to Open / Sell to Close

When we take a Short Trade, we Sell to Open / Buy to Close

There is always someone on the other side of the trade to take the position, the price is the only thing that changes. If you sold the futures or “Shorted” the market at the S&P price of 1091 and you covered the trade by buying it back at a lower price at 1088, you just made a 3 point profit of $50 X 3 points = $ 150 dollars per contract traded.

Remember that each tick is broken up in quarters and 4 quarters make up 1 point. You can think of it like 4 quarters make a dollar, but in this case, it makes $50, because each tick is worth $12.50.

Commission cost for the transaction varies on the broker but the typical costs is about $2.00 to buy one contract and $2 to sell one contract. The complete transaction is called “round-turn”, buying, then selling.

TIME CHARTS

When building our charts on the screen, we use tick data. Tick data is different than time data. Trading in a one minute bar chart is the smallest increment of time that you can use. When using TICK CHARTS, you can create a much more detailed view of the trading history. It is through this trading history that we are able to draw up our entries in this much more detailed view. It allows us to enter at the exact point, Sniper Style, to hit our mark. Get in, Get out, Get done.

We teach precise entry and exit points using these tick charts and with the ongoing training you will always see the method applied to current data.

Above, is an example of a Candle Stick Chart. These are typical setups for us, as you can see the entries short and then long. The first trade was good for 1 to 2 points and the second good for the same or higher.

I usually follow bar charts that have an open, high, low and close to them, as shown above. Some people like using candle stick charts and that is a matter of preference. Candle charts have a wider body and make it a little easier to see the open, high, low and close, but using tick charts, often we need the screen room to see the complete patterns developing as well as one feature that I use to help visually see the change in direction. Often, this change in direction matches the other components of the method which helps to confirm our entry, LONG or SHORT.

Different Types of Orders

There are three main types of orders used in our style of trading. There are “Market Orders”, “Limit Orders” and “Stop Orders”. I use all three of them at different times for different reasons and explain it all in my course and mentoring program.

A market order, in our style of trading is typically used to close positions that are still open. Others may use them to start a position but we don’t often do that. It better serves us to use this order when we have an open position close to our stop loss and decide it is better to close the position and the protective stop at once. Both done with one click of the mouse at the same time.

A “Limit Order”, is an order to buy or sell at the specific price that we specify. See the example below. There is a blue column, the “Bid Size” and red column, the “Ask Size” This is where I place my orders. By clicking inside the blue column, price 1091.50, I am willing to buy at that price only. When contracts become available from the other side, the red column, my order is filled and I will have gone “Long the S&P emini futures market”. The opposite is true for “Selling Short”. This is an example of buying or selling with a “Limit Order”.

The last order type, “Stop Orders”, are usually used to protect a trader from incurring a greater loss than what he has predetermined ahead of time. For me, it is 1 point or less on all trades I put on. ($50 dollars per contract traded or less). That is the maximum loss and is set automatically at the time I click the order to buy. No need to do anything else. You can set predefined limit order targets and they can go up at the same time as your order entry as well. One click of the mouse and the rest of the entire process is complete. You can even stagger your “Limit Order Targets” if you trade more than one contract, say 1 point and 2 points. If the first one gets hit and filled, your stop loss will automatically adjust itself to only protect now the remaining half of your open position. Nothing else needs to be done, but just the one click order entry, period.

This is a very nice feature for those who may lack discipline in placing their stops and targets when and where they should after they enter the market. You can even use the one click feature just explained and use a “Trailing Stop Loss”. This will automatically move your protective Stop Loss up with say a rising market. You can set a trigger point, say its one point. When you reach that one point level you sell half your first position, every tick the market rises from there, your stop will rise by that much, keeping a 4 tick stop position. If the market had moved up 3 points quickly and came back 1 point, you would automatically sell your remaining position at 2 points, locking in your profit. This is because you preprogrammed it to do just that. This again is a great way to capture more profit in a fast moving market all automatically. The only thing that starts the process is just the one click of the mouse. Done. Very Cool. I, most often do it manually, but that is me. I can show you how to set this upin a blink of an eye and teach you to effectively use this feature.

Different Types Of Trading

There are different types of trading. The three most common, “Day Trading”, “Swing Trading” and “Position Trading”. Day Trading is what we do, because we never hold any position over night and make a few trades inside the daily session. Swing Trading, will carry positions over-night and hold those positions for several days. Position Trading, will hold similar trades but for several weeks or months.

Inside of Day Trading, there are several approaches as well. We look at three main tick charts, separated by small, medium and large time frames. Depending on the traders preference, if he or she has one, we can tailor our program to match your current trading style, or mirror what I am using for my trading. In our first meeting together, I will be able to help you discover what is the best time frame for you to start with. Naturally, I will show you how I set up my charts and fully explain the way that I trade. After that, we can go from there.

Scalp Trading

Scalp Trading, is often misunderstood. There is really no set definition that will clearly define it. It may mean one thing to someone and something else to another. That said, what I most often do is Scalp Trade the S&P 500 futures emini market. You can trade other markets like the Russell, the NASDAQ, or the Dow Jones. Each has an emini futures market that is liquid and very trade-able.

When the trading range is very narrow, scalping 2, 3 or 4 ticks, may be all the market safely gives you, without waiting around hours for a good trade setup. This is how I would define Scalp Trading.

With our base daily goal of 2 points or 8 ticks, you only really need say, 1 trade for 1 point and two trades for 3 ticks and that would also cover commissions and you are done for the day.

The setups are the same in the smallest time frame, as compared to the highest time frame, because the market is “Fractal” in nature. That means the same patterns and setups occur in all time frames across the board, showing a trading symmetry that is often seen in nature, below is an example of that.

With my trading approach, we are able to capture what the market is giving us. If the trading range is expanding and large swings are showing up, we can capture those moves for multiple point returns.

Scalp Trading, gives you the ability to save time in your trading, by getting in getting out and getting done with it and on to other things. I don’t trade all day, like many do. This style of trading offers the “Time Freedom” that many covet. Having the Trading Discipline to walk away after hitting our Day Trading Goal is key in keeping the struggle to a minimum.

Getting what you need from the market, is like shopping for fresh meat and produce at your local supermarket. If you try to stock up on too much, it will go bad and you will lose it all. I find the same true in trading, getting what you need for today is a better approach and produces trading discipline, controls greed and keeps the traders struggle manageable. It is a lot easier to get 2-4 point in a day verses 8-10 points in a day. When you are not able to reach this high trading goal, it will produce frustration and feelings of failure can creep in, derailing all of your efforts.

Controlling Fear and Greed

Many traders just starting out, soon discover that they have almost what seems like uncontrollable trading emotions. They find it difficult to stay focused and maintain control. Often, traders find themselves trading with their minds to focused on the money. That is a sure-fire way to slow your progress and often ruin it entirely.

Most traders have gone through this, but most don’t know how to break the bonds of these powerful emotions, Fear and Greed while Day Trading. The good news is, I do know and is very much apart of the Sniper Trading approach. These are things that I uncover and address to my students and take this part very seriously. Starting out, many are not even aware of these dangers, but that is my job to prepare you for any unforeseen problems that can come between you and your modest daily trading goal each day.

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Related posts:

1. Training series / First in a nine part series
2. Technical Analysis for Today’s S&P 500 E-Mini
3. Trading Discipline, Part 4

The market did react like I thought it would today, which is always nice to see. I hold any opinions about direction very lightly. The market can always do something different, so I can not make my trading plans around what I think will happen in the future. If I do, I run the risk of trying to force my will on the market and that is never a good idea. For fun, I will put up yesterdays comment.

Yesterdays Blog comments: I do see some pretty strong over-head resistance just a couple of points higher from todays close. We very well may see a slight rise on the open, followed by a pull back down inside the range one more time, before we make another attempt to break out of the downtrend. We will see what tomorrow brings, it should be good. I think the price action is going to get better, with good swings in both directions.

The cash market closed yesterday at 1089.30 and we pushed ahead a couple of points to 1092 and then fell back inside the resent range back down to 1088. The resent range was 1084 low, to 1092 high and back into the middle range at 1088. Then the breakout occurred and with conviction closing at the highs of the day +14 points on the S&P and +111 on the Dow Jones. We could see 10-15 points plus more before this reaction rally runs out of gas. We may struggle here a bit first, there is some overhead resistance near by, but over the next few days it would seem that the short-term momentum is up. Cash S&P 1007  to 1017 should be the destination point. The daily momentum is pointing down pretty decisively, but it is normal price action for the market to recover some here first, before its next move unfolds.

Today I took only three trades and it was in the afternoon session. They were for -1 tick first trade / +5 ticks, +8 ticks/ and +10 ticks second trade / and the last trade was for +3 tick and +5 ticks. I traded for 35 minutes and wrapped it up. I have a video of the trades below.

Yesterday, I started to share something with you and did not have enough time to finish, so I will get right into it here.

I was saying, that I know there are many traders who know how to trade well, but it seems that there are some unseen things that just keep holding them back from getting to the profit column. This will apply to traders who are just starting out and want to live the dream as well. Both people in these groups need something that goes beyond trading the charts. They need a solid mental foundation to build upon.

If you try to build a skyscraper and do not do a ground survey, you don’t know how the weight of the building is going to impact your foundation. If the proper work is not done, the building could be in jeopardy some time down the road. Well, that is exactly where many traders find themselves. Their building is going up and something is wrong, but they don’t know what it is. It is starting to lean-to the left and you realize there is a problem. The foundation may be shored up after a survey is now finally done, but there are times that the best decision is to bring the building down and start over.

So, if you are not to far along in your trading career and can learn this point, you will save money and potentially be on the road to financial freedom. If you have many years into it and have not discovered some of the essential things that will complement your trading career, now is the time, before the decision to bring the building down has to be made.

I do some mental exercises and physical exercises to help keep my mind and body fit. I have put up on my website a couple of these audio scripts that I listen too. It is in my voice, but I don’t think about that, I just try and let the message sink deep into my mind and see it as so. I am allowing myself to think the right thoughts to help me line up where I want to go and what I want to accomplish. I have 10 more of these audio’s in my trading program, but chose to put up two of them for visitors of Sniper Day Trading.

This is not really my complete point, this is only part of it. Rather than re-invent the wheel, I have found a guy named Ralph Marston who does some things like this. A little different, but it is great stuff. As I said yesterday, I have heard of a few traders you listen to some of the material from Ralph and they said that it has turned their trading career around. I to, enjoy his writings and his attitude. That is what you are going to need long-term, the right mind-set to establish the mental foundation that will take you straight to the top, no looking back. If you skip this point, I believe, you will wish you had not.

I do not get any compensation for recommending him or his site, but I want the readers of my blog to have all the advantages they need to succeed at day trading for a living.

Ralph has a free audio on his site called “The Best Year Ever” it is in the top left hand corner. It is a twenty-minute audio that I feel every aspiring day trader should listen too.

He puts out a daily motivational quote and it is always different, some are longer than others, but they are all great. He has done this for over 10 years. The daily motivational writings are free but he offers an audio message each week that runs 20-30 minutes long and can be downloaded to an MP3 player so you can listen a few times throughout the week. He only charges $10 dollars a month and is totally worth it, in my opinion. That is .33 cents per day and the best money I ever spent. 

As I said, I want the readers of my blog to get relevent information that can really help them achieve their goals. So here is the link for his site.  http://greatday.com/motivate/100202.html  His site is called “The Daily Motivator”.

I hope my readers see the importance of going the extra mile and building a great foundation. This is the kind of thing that can increase the odds of bringing it all together and living your dream.

No related posts.

Currently, the momentum on the daily charts is down and the 120 minute chart (2 hour) has just turned up today. The weekly chart is flirting with a turn in the momentum, but it has not happened yet. A lower weekly close and I am sure it will turn down. So, a pull back up for now, will bring a moment of pause to the market from this recent sell off. We could see a sizable move, if the market can get up over todays high with any conviction.

I do see some pretty strong over-head resistance just a couple of points higher from todays close. We very well may see a slight rise on the open, followed by a pull back down inside the range one more time, before we make another attempt to break out of the downtrend. We will see what tomorrow brings, it should be good. I think the price action is going to get better, with good swings in both directions.

I did not post anything for Fridays session, I had company over the weekend, but I will post a video managing Fridays last trade + 5 S&P points and show my results for the rest of that day.

In todays trading, I did pretty good. I could have had all winners, but I did not take enough time after a break I took, to better accurately see where we were and likely to go, resulting in a loose of one point. Other than that, I had several trades that I scaled out of the positions for multiple point gains and a few 1 pointers or so. It’s in the video below if you care to take a look.

I was going to stop after my first three trades, which was plenty for my daily goal, enough for even the high side. After taking a break for about an hour, I thought to come back for another session. I don’t always do this and I don’t always recommend traders trade all day or even most of the day, because fatigue can set in and the likelihood for making mistakes goes up.

If I do come back, I almost always cut my size down. That way, if I have losses, it is not going to impact my gains as big a degree. If I have additional gains, it only gets added on for nice day. This is a conservative approach and is recommended if you already have made your daily goal.  

We have all heard of “Money Management” and how important it is. It is true. If you increase your size when you are not trading well, you make everything harder, not easier. Traders often try to get back what they lost by doing so, which is one reason of many, that most don’t make it. I hope that is not the case for those who take the time to read my trading blog. I try to give a mix of different idea’s, thoughts and insight into a day traders world.

Most of us pursue this business because we love it. We love it for the opportunities that it can bring as well as many other reasons.  Some traders want to make it ($) fast and lots of it. I don’t recommend that either. If you go to fast, you only speed the process up to the point where you will again make mistakes, loosing the hope you had when you first started out. You can’t change past trading mistakes that we all make, but we can try to uncover what it is we just did, why we did it and what are we going to do to change. If we don’t take all three of those seriously, we will only come back another day and repeat the same trading mistakes all over again.

I was watching a movie recently where a patient was seeing a doctor. He told him, it hurts when I do this. The Doctor then said, if it hurts when you do that, then don’t do it. We don’t like it when we take losses that are not apart of our plan, strategy or method, but your first loss is best. Why is it that we to often take trades that don’t fit our model. Lack of patients is one of them. I admit, I don’t have all the patients I could use sometimes while trading. That is why I trade small time frames. I don’t have to wait to long for another trade to come my way. If you are trading 15 minute  bars or even 5 price bars, you may have to wait for some time.

The point is, everyone is different and we all need to find our strengths and weaknesses. If you know what your are strong in, work on making it better. The area’s of weakness, take extra time and reflect what is holding you back. To often, it is in our minds. I am serious. There are a lot of good traders out there that are just an inch away from bringing it all together. They just need a little help, guidance and support.

Let me give you two things that can really help those who feel that you are so close to bringing consistent profitability to light. I know of and have heard of traders who have done this and they say, it is the best thing they could have done. I have talked before about how important the mind is and to often, how we see ourselves inside, gets transferred outside. If you don’t have the inside part right we only work against every good thing we try to bring to the trading screen.

There are many ways to go about thinking the right way, not only when we trade but throughout the day. I can see that I am close to my typing limit and I will probably just wait until tomorrow to better give you the right background on this. If traders take this seriously, I truly believe it will help some if not many bring up there, BOTTOM LINE. 

No related posts.

At the open, the market was in a very good spot for a pull back, because in the night trading, things moved up pretty nicely. We saw close to a 10 point move with the follow through from yesterdays close. It wasn’t the 20 points I thought we might see but it was still a good move. Well, since that move came when no one was able to trade it, the market at that point set itself up for a nice retracement, which was exactly what we had. Just after the open, it rolled right off a nice little ledge and dropped pretty hard for the next few hours. After consolidating at the bottom for a spell, we did see a nice rally back up of some significance, only then to fail again. Pretty typical market action

Currently, the daily momentum is down as well as the 120 minute time frame (2 hours bar chart). If the market is going to attempt a reaction rally from this point, it is going to have to first get over 1088, then the next hurdle is 1093. Those are two area’s that need to get taken out if the market sell off is going to slow. Other than that, the momentum is pointing down currently and the path of least resistance is that direction. Each day unfolds more pieces of the puzzle and pretty soon, the picture will become clear what the next move will be, straight down or reaction rally, putting in a pivot.

Over all, I still do expect that the market will trade back to the middle of its long-term range on the daily and weekly charts. That is quite a long ways away still and it could take some time to get there.

Tomorrow I will be back in my home office and will do a little trading sometime in the morning. It should go well. The price action is pretty normal and I am sure, enough good trading moves to get a few points.

Below is a video from yesterdays price action. I almost made it to the end of the session. There were some nice moves that you may not have seen, but I think you will get the picture.

With yesterdays post in mind, the chart is marked as the turning points take place. I don’t say that I could or would be trading all of those turns, I would only need 1 or 2 small trades from the pool that is on the video to make my daily goal. Once a traders goal is had, I feel it is best to close it up and move on to something else, but that is me. There is a good reason for that. You keep the trading struggle to a minimum, as I know I have said before.

This is a trading method that I follow. The indicator that I brought up afterwards,  just happens to matches the overall method. This can bring some degree of confirmation to a trader, who is trying to bring it all together.

Again, all of these turns are not really meant to be traded. It takes a lot of concentration to keep up the pace of trading for the whole day like this. Again, that said, this is really pretty typical of the trading day. After looking at todays price action, I don’t see anything that is very much different. A lot of really good trades. Using discretion on which trades to take is defined in the trading method itself. I often, do take trades counter trend, but other less experienced traders may not feel comfortable doing that and that is fine. Going slow and only taking the best trades in the direction of the trend is really probably the best strategy for new traders, but you will have to exercise your discipline and patients to wait through some of the setups.

The turning points that I have marked, is really something that happens everyday, and those turns are identified by something other than the indicator I have up on the screen. I don’t say what that is or how I changed it, but it is something that is not going to change. If it did, the markets would have to do something it has never done, since its beginning and I don’t that is going happen.

The second video is the stock charts that I mentioned in yesterdays video. A 60 minute bar chart of AAPL, Apple computer and daily chart of Rimm. The same is true here as I have said above. The signals are generated by the trading method, which is as I said yesterday, not rocket science. If I were to put up one of the indicators I use, like the one in the first video, It will match near perfectly generating the same signals, which only confirms or coincides with my trading method.

I think you get point, so I will end it for today. If anyone has any questions, feel free to contact me, vinnie@sniperdaytrading.com .  I do have my email back up and running and getting my computer back up as well, it was a lot of work and slowed me down, while traveling, I am glad that is over.

Good Trading to All !

Related posts:

1. Live S&P Futures Trading Video’s Today
2. Today’s Turning Points in the Sell Off
3. Scalp Trading for 2 points a Day

Todays Index’s were down across the board, with the NASDAQ getting the worst, followed by the S&P -10 points and the Dow, -30 points. We are very close to the extended March 6th trend line support on these index’s. If that support breaks, it will be the first clue that we may have turned the corner on the rally. But still it remains intact and all is well.

As I had thought, today we saw the first signs of life in the futures market, with volume coming in at over 2 million contracts. Just what I was saying yesterday, that 2 million contracts traded in the emini futures market is considered good volume and we hit it today. It has been a long time, probably longer than a month with this kind of volume.

As day traders, we need volume to push the market around, otherwise it becomes more difficult for traders to make money. It is always easy for them lose money and with low volume, bingo, you are there.

Most traders do not know how to trade in shallow trading ranges and end up getting beat up pretty bad. But if you know how to Scalp Trade this market, taking a little out of the middle, you can survive in any kind of trading environment. That is not easy to do for most people and there will be those that say it is foolish to try. Probably because they were not able to make it work for them. Traders are doing this all across the globe and they are taking it from those who think they can.

Some people only scalp trade and that term can mean different things for different people. To me, taking 2,3 or 4 ticks, will qualify as a scalp. Others will call taking a 2-4 point profit on the S&P emini’s, a scalp. So, the term is used widely. If I can make a profit on these small trades while keeping my losses to an equal amount 1 to 1, I am doing OK, because my percentage is pretty high. You need to have 60% or better with the better being more like 75 and up.

When I trade, I look for both kinds of trades. If the market will give me an extended move, often I position myself to capture it. At times I take half off early which gives me the extra ability to ride the move out. It’s a good way to trade.

In my trading today, I did not do as well as I had wanted, but I had a few bigger trades to cover myself. I came in late in the day and missed some big moves short. Overall I think a came a little short of my daily goal because of commission, but close. I had 10 trades 5 gains 5 losses, but had a few trades for higher point returns. As I said I was off. Lack of concentration and I did not take a break from a training session I had with a student.

My timing and concentration was off, with the first two trades as loses. They were not good entries and it cost me. I could have avoided  some of the lose by closing the trade out early as I normally would do once I start to lose the edge. To me and my method, the Trading Edge, is clearly defined and when I lose it, I need to get out, often avoiding  my full stop out of 1 S&P point. I start out with a 1 point stop on all trades, but it almost instantly goes to three ticks when I get one tick of movement in my favor usually when I am in scalp mode.

Often times I am able to catch trades for several points as I did last Friday with a 4 and 5 point gain. It does depend on the price action and what the market gives you. If the markets clamed up and its daily trading range shrunk, many traders would suffer, because they only know how to trend trade. When its choppy, they often stay out, but only after they got burned by non directional non moving market. Being able to Snipe or pick off a few trades makes life a lot easier, providing that you can do it. You end up having the ability to pull a few points a day out of the market, no matter what kind of market you have.

I will make a few comments from where I left off yesterday, about needing all three components to become successful as a trader. It does not matter what you trade, these are things everyone in this business needs.

We all need to know how to trade, by following a methodology or system of some kind. Next you need trading discipline, as it is often talked about.  The last thing is, you need to be aware of the forces that are naturally working against you. What forces are you talking about?  Well, for starters, yourself. When trading, there is something called our human nature. That nature says many things about us and our ability to become profitable. It is to often, the unseen things that holds us back from realizing our dreams.                                                                                                                         ————————————————————————————————————————————————-Let me focus on one point and see how far we go. GREED. That is a human emotion that all of us are faced with. We did not learn it, it comes very natural for most of us. I believe, we need to unlearn it or decide ahead of time, by an active decision to not allow this emotion to take root in us. If we can, it will make so many things better not only for our trading endeavors, but in every other area of our lives, good stuff.

The only way we can ever address it, is if we are first aware of it. After that, what are we going to do, to get a handle on it?  This emotion has been one of the leading causes for traders to blow up there accounts.

We need to be content with modest gains when we have them. The opposite of content is discontent and the twin brother of discontent is greed.

Unless you are content with your piece of the market, you will continue to strive for more. In trying to get more, you will lose what you have. Take control of your trading and your emotions. Trade with a purpose and a goal.

No related posts.

There are many ways to day trade, that is for sure and Scalp Trading, I feel ranks pretty high. This has been said to be one of the more difficult methods to master, but the rewards are great. Those who can excel in this type of trading can virtually write their own ticket.

Scalp Trading, will force you to learn so much more, so much faster than other forms of trading.  ”Price Action” is so much faster because of the smaller time charts that are often used. You will see pattern setups that are very difficult to see on minute charts.

When placing your orders to go long or short, you can not afford to have large draw downs. In fact, just a few ticks against you should be your maximum. But how do you do that? Well, there are tools you can use to help you see what is present in the “Price Action“, but it should be price that ultimately determines your entries. The tools can help, depending what you use and how consistent it is. Most tools for this kind of trading are not very good for most people, because they don’t know how to use them and don’t filter out the false signals that invariably turn up with generic indicators.

One of the key things to try to get a handle on is, why prices move in the first place? I believe I touched on this in an earlier post some time ago, but that is the question? The market has a “Natural Trading Rhythm” to it and we need to not only see it, but feel it. Getting in tune with this trading rhythm or trading vibration is key.

Scalp Trading can mean different things for different people and there are ways to minimize your risk and still maximizing returns. One such way is to scale out of the trade on certain setups. Every trade setup is slightly different and some produce bigger returns then others. Over time you will come to learn which one’s are better and on those trades, you can leave a portion of your trade open.

Taking half of your trade off, when you get to a break even situation is a great way to minimize your risks and still capture higher point returns on those special setups.

For me, I often take half of my trade off at 3 or 4 ticks and leave the other half run, when it is appropriate to do so. With this type of trading, I feel you have to trade with the momentum only. You can whether small pull backs of a few ticks once you have the room to do so, but you should not lose the over-all momentum of the move.

Placing the order where you are going to get a sudden burst of movement is all about understanding price action. A trader places his order to go long, at that point his stop is set under his entry somewhere. Other traders are going to place there stop order in the exact same place and so. You want to try to find out why and where those spots are. If you do, then you will be able to take advantage of that burst of energy that has built up and which give you the power behind the move, but, all to your benefit.

A lot of traders know where these spots are but are not conscious of it. Ask yourself, if I was in this trade here, where would I place my stop-loss order, long or short.? When you come up with the answer to that, often times that is where you will want to take the opposite side of the trade. It is a little strange to think that way, but that is exactly how you need to think in order to start understanding daily price action.

That is why I have come up with my website name. Trading like a “Sniper” is what it is all about. You can not afford to miss the mark and have a wide range for error. “Sniper Trading”, zooms into that small window, whether I am using my “Scalp Trading” screen or my “T-2″ setup screen. Both models narrow the entry down to that small window where the energy is built up, ready to explode.

Trading with this kind of focus can protect your trading capital by only allowing yourself to take small losses. Others may be taking 2-4 point stops on there trades, when trading the S&P 500 futures, but I think that is way to much. It is very hard to come back inside the session to recover losses like that, especially if the “Daily Price Range”, is narrow.

Setups like these also take a long time, where to often you run out of time in the trading session to ever recover.

To Recap:  Look at tick data, not minutes, look to place orders where other traders are placing their stops and consider splitting up your exits to reduce risk.

All of the above information is broken down and explained in my “Emini Trading Course“. If you have questions, I will be happy to answer them for you. Even if you just need some information about trading more profitably with your current approach. I am willing to help, it is not all about the money. I do enjoy helping traders. Visit my website and drop me a line  www.SniperDayTrading.com , the New Year is just ahead, start off on the right foot, take action.

No related posts.

No personal trading for me, but the market did have a good day, posting some gains against some pretty stiff resistance.

If the market was going to go up, it now has a green light to do so. The momentum on the 120 minutes chart is still up, but more important, the daily has turned up for the first time since December 2nd. That is pretty important for the bulls.

The numbers on market sentiment came out yesterday and I would say it is good news for the bulls. With the market showing strength all week it could have influenced the bulls to get a bit excited, but it did not move. The current numbers are still 52% bullish and bearish at a 5+ year record low of 16.7% for now several weeks.

The bullish number is the more important number and at 52%, says that there is still room for a rally. With the daily just turning up, it is very possible that we could see a spike in prices. If it happens, I would say to be cautious into the rally. The bullish percent is going to give you a clue if we are going to run out of gas, so look for it.

Taking the two together, posted as bull/bear ratio, today we are matching a 5 year high as of today. Below is the link that I use to see the numbers that I am talking about. As mentioned it is two days delayed but it is still good information. If you subscribe I am sure on time delivery would be yours on Tuesday. The delayed is OK for me, I just use it as a reference to give me some insight as to the, “Pulse On Wall Street”. So here is the link, and by the way, I have no affiliation to the site;  http://www.market-harmonics.com/free-charts/sentiment/investors_intelligence.htm .

So, let me recap. Currently all of the momentum gauges that I look at when it comes to analyzing long-term direction is now pointing up. The monthly is up, the weekly is up, the daily is now up, the 120 minute chart is up. I can not say for sure that the market is going to go up on Monday, but the direction is pointing that way as of now. Just reading the current price action.

Below is something that may be helpful for planning and using your time effectively. Learning to trade can be time-consuming and things can get overlooked. The following can help you keep perspective and utilize the time you have to the fullest while still accomplishing your goals.

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Time Management

Factors To Include in Your Time Plan – There are some basic factors that all schedules need in order for them to be realistic and effective:

1. PRIORITIZE. Write down all your tasks. Sort them into three groups: 1’s, 2’s, and 3’s. The 1’s are essential: do them first. The lower level priorities can usually wait.
2. WORK TIME. Decide how much time the task requires, and how much energy. You may wish to include the task’s priority level to help make this decision.
3. RELAX. Regularly plan time to relax and get it together. This time may range in units of 10 minutes to whole days according to your needs. You’ve earned this time off.
4. EXERCISE. Exercise is essential for superior performance. Your brain would not function well if your body is tired. Stress reduces performance. Workout regularly.
5. FLEXIBILITY. Allow extra time for UnForeseen Obstacles (UFO’s) that are bound to arise. Something almost always comes up to derail your efforts. Allow for it.
6. FLOATING TASKS. Floating tasks can be done anywhere, anytime. Carry around a book that you need to read, some cards to review, or a letter that you need to write etc.

 Compromise – Sometimes drastic change isn’t necessary. Learning to compromise can make your life more effective. Try the following suggestions:

1. RE-PRIORITIZE. Change the importance of various tasks. Reconsider the number of hours of work you’re willing to spend per week, the number of hours you want with the family, and the number of hours for yourself and pursuing your trading goals.  Are you trying to do too much?
2. POSTPONE. Determine the priority of each activity or task and postpone lower level tasks.
3. DELEGATE. Get someone else to do it. If it is a task that is not essential for you to accomplish, then this may be an option. Don’t forget to respect other peoples time before pursuing this option.
4. SPEED UP. Sacrifice excellence for expediency. Get it done. Often, this may be your best option.

I hope this helps, when looking at the coming New Year approaching. Get a jump on things this week and be prepared for new beginnings. If you are organized in your personal affairs, you will have tilted the odds of success in your favor when pursuing ultimate goals and objectives.

Merry Christmas to all my readers,

Vince

Related posts:

1. Steps For Establishing your Trading Goals
2. Be Determined to Reach your Trading Goals this Year
3. Trading & Risk Management

It seems pretty clear now, that the market is ready for a pull back. Over the next few days, I would expect the market to pull back to support, around 1077.  At that point, we will have to see, but the short-term momentum is down. I believe there is important unemployment numbers coming out tomorrow. I don’t know how or what that is going to do to the current momentum, but I would suspect that it isn’t going to change anything much, still down.

The daily charts on the Dow and S&P have been broadening, as I mentioned lately. It is getting strung out with a slight upwards bias, but that appears to be changing at least for now. Early in today’s session, we hit a new high in the index and backed off from there. We did close at the low of the day, which is really a bad sign. We will just wait and see how it plays out, but this is just what I am seeing.

On the sentiment front, I was waiting for the new numbers to come out and today they did. The bearish percent dropped again, by 1% to now 16%. That is low, very low. It has not been at that low of a level in the past 5 years or longer, I can only see the last 5 years. The bullish sentiment went down a little, from 50.6% to 50%.  We will just keep watching the bullish sentiment for changes.

With all that being said, the market can make its move down now if it wants to. You never want to place overly strict conditions on market flow. Reading the price action is the key and will always remain that way. Identifying sentiment conditions only gives occasional insight into major market moves, it is not full proof, but it has shown itself to be very accurate for the over 20 years I have been following it.

In todays trading I started trading again during the slow period of the day. That would not have been really to bad in and of itself, since that seems to be when I start most days, but I was feeling sick today. That was not fun. I should have taken the day off, but I didn’t. I hate getting the first trade of the day wrong, but that was how it went. I saw a move short that I was sure was going to pop, but I could not get into it fast enough and it threw my timing off. I did recover with a nice 7 tick trade a moment later, after that the market just stopped. It took forever to move a couple of ticks. I remember one small little momentum move took 30 minutes and it only moved a few ticks. I was dieing there, waiting through all of that and not feeling good to boot.

When I looked at all the real nice moves from the early morning trading I felt worse. If I would be trading the open, I would quickly have gotten my goal and could have ended it. When I feel better, I will be trading the early morning open, thats it. I have been trading OK, but it has been more work and taking longer because of when I start trading and am limiting myself because the moves are just not their.

The smart thing is to trade the open and take off the rest of the day, like everyone else. Enough about that.

I am going to have to end it here for today. Below is a video of my trades for the day.  

Related posts:

1. Unemployment Numbers to be released Friday
2. Stock Market Still Showing Signs of Life
3. Market Sentiment Numbers Helped Take the Market Down