Another spot on market call;  Last Monday, 8-22-11, in my blog posting, I called for the market to hold in the current area, and rally. At the time, the close was S&P 1123. A confirmation to the first target will be triggered when 1140 is broken and it hit that next morning. I said that we would soon see 1220 on the S&P with that rally and today, towards the end of the day, we hit the target 1220.10.  Then we saw an immediate price rejection of the target and prices reversed immediately in the last few minutes of the day.

Calling the daily market is no different than calling the hourly, 5 minute, or any size tick or range chart. It is all the same as the stock market is fractal in nature in relationship to different sized charts. The moves are proportionate to your risk at each level. In addition, less trades are generated when you increase your time frame.

I don’t trade the larger time frames, but I always look at them even if I am just scalping for points. It is a lot less work as you increase you time horizon as well.  Many traders search for what is there dominant time frame, short term, intermediate, long term. Each of these are and can be different for every trader, but I feel you should trade in line with your dominant trading personalilty.

As you do, you will not be fighting the process with either over-trading or under-trading, as that will be apart of your trading strategy. You only have to stick to your plan and excel in what you do.

When trading, you have to create a frame work to work from. Market structure is built and price is and can be projected through three elements, time, space and energy.

I have written about this before, but it might be worth repeating. It all boils down to understanding and building that frame work or market structure. The three elements mentioned above are all apart of that frame work and that is what gives you the edge.

The elements when understood, in conjunction with each other, can show you exactly where price will go in many instances and a likely time for its arrival as well. This can be done with small tick charts while targeting 2 points on the S&P and or a higher time frame view for 10 points or more. You will always have to invest more time for the larger moves and your exposure is increased, for the shear fact that you are in the market, but that may be a traders style, to trade less and shoot for that higher profit/loss ratio.

I have trained myself to trade for short targets usually in the 1-5 point target range and that will depend on market volitility. I always trade at a minimum of a one to one trade ratio and have a daily stop out point so that I will never get a blow out day where losses are off the charts.  I like to get a daily target that is close to what my daily stop out point will be for any one trading session.

This is like having a 1 to 1 profit/loss ratio as it relates to the trading session. Having a loosing day of 3-4 S&P points will be overcome by just one normal regular session of gains that is equal to that. So, if you take a loss for the session, the next session puts you right back at where you were before the loss and you don’t look back.

I do look for on occasion those days where price action is telling me to take the easy and obvious trades for much bigger gains and point values. There, on those days, I can come away with 3 times an average daily goal, but I never really go looking for those days. They just come to me and I go with it.

It is a good idea to not trade for more than two hours at one time. Traders don’t really realize this, but there brain will begin to slow down, and the high level of concentration necessary to capitalize will get lost. There, is where traders get into trouble. Trying to come back when they are not at peak concentration levels. Mix in a little emotion and you have a receipit for disaster.

This is the area, traders fail to hold it together. Many don’t really understand why they put on the trades that they do, as when in this distructive mode, only until after the dust settles and they look on in horror.

How do you stop that from happening in the first place? That is a question I would bet thousands of traders would like to know the answer for. I will only give you a very basic answer to this at first and may continue it in my next post, but much of that behavior and losses, could be eliminated by only trading for smaller blocks of time.

If you are a position trader still within the course of the day, then you need to wait hours at times, for your one or two trades a day. There is not a lot you can do, since your trading opportunities don’t come often, but in the case of much smaller time traders, you need to zero in all your energy into a small block of time and get your points there. When you stay to long, out of greed, or any other reason, you are often times asking for it.

Traders will never understand every twist and turn of the market, but we need to weed out that which we do understand and capitalize on that and just leave the rest. Always trade the easy and obvious is a motto I say all the time, that will serve us all well as we trade our way through the markets.

Good Trading to all, Vince.            Monday’s larger picture view below!

Related posts:

1. New Market Call
2. Market Call Completed, Exactly
3. Another Big Market Call Completed to within one tick

Its always a good idea to know where that opening is. If you use tick charts, it is easy to overlook it, as those charts have no gaps in them. Many platforms will allow you to type in a separate symbol for trading without the gap and it could be in time charts as well as tick charts, volume charts or even range charts.

The point is, always know where the days open is in relation to your trading. There is a very high percentage of the time that the gap gets filled sometime during the session if it is small one. Even with large gaps like in today’s trading, a trader can do himself right by being aware of this.

The information is good, but you need to be able to enter at the point of lowest risk and biggest reward. The market will do everything in its power to through you off.   There is a way.

I have my trades posted for today above. I was into it for around an hour and picked up some nice moves. I had a few good “Trade to Targets”, as I call them, where I cover into weakness (short)  as opposed to letting it come back up against me. You could see, in the chart, that I could have hung in there and took it down a bit further, but notice the little yellow line and notice where I got out on my last. It is almost the same place.

In the chart, there were two more good short term moves down that are identified by the arrows down and both of those would have been OK for at least a small scalp before the market turned. I just elected to stop trading with what I had.

Back to the first point, when you cover into weakness (short) at a key spot on the chart for good reason, often times you will do just as good as squeezing out every tick and getting out as the signal at the bottom indicates.

That signal at the bottom left did work out and was the low of the day, but the market first needed to build up a bit more pressure before it was released back up into the middle of the range.

That’s it for today, be back tomorrow, until then, good trading to all.

Related posts:

1. Day Trading and the Opening Gap
2. Market Needs More Time to Get Into Position
3. Up 5% in S&P since I made the call, 4 days

We saw a big reversal today with the market recovering all of the gap that we saw on the open and then some. I did have the gap clearly in my mind as the morning session was getting under way. I missed several good crystal clear trades after the open and started my day with a 1 point S&P futures loss. Came back just after with an OK entry for a three point gains, followed by a small scalp trade to finish the day. I did have a flat trade after that, but had to leave the room for a moment to long before I could take 1 point off, my original plan. I ended that trade flat as stated, but ended the day up for a modest daily goal.

Nothing to exiting there today, as I have been taking off early and have not had much screen time the past week. This will continue into the rest of this week as I have a few other things going on. I will try and get a few points before I take off but that is how my days are going right now. It will change back to having a bit more time to settle into the trading session and do some training video’s for my students, but I have to take one day at a time right now. Next week will be more settled for me. ( I guess out of default, I will be showing my trades for a while until I can come up with something else in a different time frame or something different, not decided)

It was nice to see that the market ended the day on high note. I know their is so much bad news out their that what is happening within the markets, does not seem to exactly reflect the current financial environment.

http://finance.yahoo.com/news/Foreclosure-freeze-could-apf-3924319053.html?x=0&sec=topStories&pos=9&asset=&ccode=

Their was a ton of fraud going on in the mortgage industry and it was not going to come out good for the home owner. Their can be a lot of finger pointing and blame to go around, on both sides, but the fact is, the mortgage industry has shut down basically all foreclosures on homes until they can get a handle on what is happening. This is bad news long term, but it is not so bad right now. This all plays into my theory of an expanding market until some event or catalyst kicks into gear. That will take the market down fast and furious, but just not yet. We are building into that as we speak, with the market moving into an area that will yet again captivate the public to invest again. They will not see what is coming as usual and get hurt again.

The market sentiment will give you the sign as to when this fleecing will be rip for the fraudsters to start the cycle all over again. Right now, they are drawing the public and any other, willing to buy into this rally. So, buyer beware is the story of the day. Their is likely more to go as I do see higher prices coming. I put out a few numbers last month and updated that last week and we are getting closer every day to hitting it. I will do a recap over the weekend on what I think and where we are in the cycle. This is all readable as I so often do, read the market. It can be done on  daily charts, hourly, minutes, or any other measure of movement, like tick charts, volume charts or range charts, all of which are pretty popular to traders.

So I will pick it up tomorrow and go from their.   Good Trading to all, from Vince

Related posts:

1. Today’s Target Hit in S&P 1110 Market Call
2. Target Call Complete, with 940+ On Today’s S&P
3. Market calls, right on target

We saw a very nice day today to the upside. I said yesterday that I was a bit undecided but wanted to see a break of two numbers, one down or one up. Which ever one breaks, that is where the move is going to come in at. We got the up move and the number I gave yesterday was 1030. That was right in line with a nice break to the upside at 6:55 am West Coast. There was only one other trade after the open before this main break out that could have been traded, so you did not miss much of the move after the market opened.  The market did not look back and we moved up +29 points after that 1030 number to close at 1059.25.  A nice call.

I did not come into today’s market until later on in the session and did pick up my daily goal. I had two 1 point losses and 1 tick loss with 8 gains that were scaled out of. Today was not a big day but still a nice daily goal. My losses were 100% my fault and could have had all winners again today. Bad timing and not doing things right will most often not give you the results you want. Just the opposite is true. If you do the right things at the right time, you will be rewarded, plain and simple.

There were so many good trading signals today and yesterday, it is not even funny. I love my trading method because it will work in any market condition. I can always scalp a point or two out of the market even in low volatility days. A few points and I am done. When the markets are moving, you have the benefit of catching a lot more if you want to. I have two main models to trade out of ,my T-1 screen (scalp screen setup)  and T-2 screen. I mainly use tick chart in my trading, but time, volume or range charts can be used just the same.

The second screen, of which only a fraction of the whole screen is shown, is my T-2 screen and is mainly for trending markets. I have other things built into the all the screens, but can only show you a limited amount. (Something is better than nothing). You certainly can scalp a point or two out of this as well and I often do just that. I have become a bit partial these days to the T-2 screen, as I am trying not to take counter trend trades and this screen does help me see that better.

We look at different time frames as well, with the one I most often show, being the smallest tick chart of the three. Two charts are internally designed to work together on the front screen and gives you the zoomed in view for best entries (as shown) and a zoomed out view for the bigger picture. My custom trading indicators are intertwined together inside these two charts which gives the same signals on both screens, creating a synergistic effect.

I have a U-Tube Video of today’s trades, showing the smallest tick charts of the three and yesterdays trades, as well as all the trading signals generated by my indicators. Just following the indicators will generate consistent profits, but we teach how to read and trade the price by itself. The two are a powerful combination. Take a look in the video and see what you think. A trader only needs a couple of these trades to do very well each day.

Enough said about that. The sentiment numbers came out today and it was down 4% to 37% bullish. Very close to a big buy signal, but no cigar. We needed to see that 35% to get confirmation that this move will have legs.

Right now, the market looks good and there is likely more to go. I do see likely initial resistance at 1066 S&P futures, but may likely trade to 1080 after. The daily charts are still pointing down as are the weekly even with today’s move. We would need to finish this move up, then retest somewhere in the middle of this range to see if it is going to hold. So more work to be done by the markets to see if we can turn the corner in the daily charts. In the retesting between now and next week it could be enough to get the market to bit on the last 2 % needed in the sentiment index to give this market a real boost, we shall see?

If you have questions or want more information, drop me a line at vinnie@sniperdaytrading.com

Related posts:

1. Trading with Time, Tick, Volume or Range Charts, which is better!
2. Trading Tuning Points – S & P Emini & Two Stocks, Video !
3. DAY TRADING LESSON TODAY, understanding time/tick charts!

Time charts are what most traders are used to using, although tick charts have gained in popularity in recent years. Day Traders mostly use time charts and I would have to say the 80-20 rule here would apply. I can’t back that up with any stats, but that is what I believe it is.

Recently back in October last year, the (CME) Chicago mercantile Exchange, changed the way that they report tick data. It has caused a lot of confusion for traders as many did not know of the change and just started seeing the bar activity increasing on the chart. Depending on the trading method that they use, it could have caused problems. It could be hard to identify what you are looking for with all the activity on the screen. I am sure it even caused many to go back to time based charts.

I noticed it right away and took action to recreate the data after a little research. What ever the tick count you used to use, you should multiple that by 2.3 times the original is our best estimate to get things back to what it was before the change. I realize that this is old news, but I have more to say on the matter, so hang in there.

The other difference is that when the volume really picks up, like on Friday, where we had around 4 million contracts traded, you have to do some adjusting. The charts will be moving a lot faster than you are used to and that is the main reason I am talking about the subject. In November and December, we were barely hitting 1.5 million contracts per day. Friday was the highest that I have seen in a long time. The reversal probably had something to do with it. So the point is, don’t be afraid to adjust your chart settings to compensate, but do it proportionately to any of the higher time frame charts that are using.

The benefits of using Tick charts still out weigh any negatives. Tick charts give you a much more detailed view of the days price action and allows you to narrow down your entry price much better.

Let me give two other kinds of day trading charts that have gotten much more popular recently. In fact, some think this is  the new thing, giving some the edge and that is the use of Range Charts and Volume charts. Some people do not know a thing about it and that is another reason for the post. I am still researching it for myself, but I looked at the two kinds of charts and I would have to say, I do like them. Volume charts are very similar to tick charts, but the bars are placed by volume, just like the description says.

In my brief analysis of the two, a 10,000 contract chart is equal to about 2100 tick chart, about 5 times greater. That would suggest that the average trade on the S&P eminis is 5 contracts per trade or tick. The contract chart is going to add up all the volume based on total contracts bought and sold and the tick charts are going to count the actual trades that have gone off and when 2100 is reached, it will post a bar. I have noticed slight differences, like more big volume from large institutional traders at certain area’s and less bars posted at reversal tops, suggesting that the small traders are getting sucked in before the reversal. It is not a very large difference, but I can see it. Prices are posted the same as far as that goes.

The last type of data  charts is called, Range Charts and this is what I hear is the next big thing. I did look at these, but I have yet to make a conclusion. The basic idea is, if you put as an input say 6 tick range on the S&P. A bar will post when the range is 6 ticks from high to low and not before. It does not matter how long it takes, but when that condition is met, a bar is posted. The movement is calculated and then plotted. Trade Station is what I use and they have this in their platform. I am not sure about other vendors, but if it interests you, I am sure you can find out.

Now you know the different types of charts that are available. . If their is interest, I can help those who have more questions in this area. I can help give you the corresponding tick chart settings to match the time charts you are using and if you have any other trading questions I would happy to answer them too, so please feel free to ask.

Below is a 500 tick chart of the S&P 500 eminis and a 1 minute chart.

Good Trading, Vince

Related posts:

1. DAY TRADING LESSON TODAY, understanding time/tick charts!
2. Tick Chart Trading the S&P Emini Futures
3. 44 to 1 Up-Volume to Down-Volume Day for Stock Market