Posts Tagged ‘tick charts’

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The Perfect Trading Day

Saturday, December 17th, 2011

Today’s post is for Friday’s session December 16, 2011 as I had the perfect trading day.

There was some pretty good moves early on in Friday’s session in the S&P’s, but mid day things just went to sleep. I took only one trade and was actively participating in the market for 45 minutes and in the trade for 30 minutes and closed the last of my scaled out position for around 5 points. The perfect trading day, with little struggle and only one tick of draw down for the session.

For Monday’s session, I do think we will see a number I put out for Thursday’s session 1198/97 in the S&P futures but this time it will be in the active session. We hit that number called and got the desired reaction of a instant 22 S&P point rally of which I did say would happen and it did on cue, but do believe we will need to see that number now for the regular session.

I won’t be overly anxious about seeing that come to pass but just think it will come Monday. We are in a pretty good position to hit that in pretty quick fashion but again think we should see some strong buying power lift prices back up and would be looking for an up week in the markets overall. Let me post my day’s trades below.

Currently the S&P futures are at 1210 and 1197/98 is 12-13 points away, so don’t be surprised to see that move early on as it should trade in the regular session to that point. This is just my opinion and not trade or investment advise, so be sure to do your own research and analysis.

I have a larger tick chart here to fit in the whole day, but no trade indicators.  I have been trying to drive home the point that the trading method is not indicator driven and has all its own basis for taking the trades or not. It is hard to not talk about it and not say how things work, so I show something that traders who look on can identify with, trade indicators. They are consistent with the trading method but are not the basis for it. It is all very specific and clear with entries, stops and targets.

I wanted traders who are learning the method to rely on there ability to read the price apart from the indicators and do training several times per week for members to drive that point home. When you put some of the indicators back up, you will see that they confirm very nicely to give you the same exact points that the method will give you on own method analysis. I hope that is clear.

The goal is to get traders to be able to read any price chart and have confidence to trade it if they choose. It can be any style of price charts, candle charts, minute charts, tick charts, point and figure charts, range charts, it does not matter. Again, it can be in any time frame as well.

This can be very valuable when looking at one’s long term portfolio of stocks and mutual funds if you have them. The same would apply to those as well. This is a skill that can be learned. There is more than one way to view and understand the markets and the approach I take is different and not rarely seen if ever in its combination of techniques. It is my method approach that is unique to me, built up over decades, literally.

Many traders use different styles that can include some of the various bar charts as mentioned. Let me reiterate, you can use candle charts, range charts, tick charts, minute charts, as that part really does not matter. I use tick charts and build the screen with more than one time frame to get the chart to view as just one screen and time frame and that is apart of the trading method.

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New Stock Market Move Now Confirmed

Wednesday, September 14th, 2011

We are seeing a new market move confirmed in my opinion as of this Wednesday September 14th, 2011. I just took the time earlier to apply the Sniper Day Trading Method, to the all the individual charts of the Dow Jones Industrial Average and found my answer. I thought we were at least going to hit the 1176 number today and wrote about that last night while the night trading was down to 1148. That would be a 28 point S&P turn around, or 280 point equivalent in the Dow for the coming session.This was all from a much lower levels that I first made this call and today that was hit.

I know have any hesitation satisfied as to the move after that, as I mentioned a few days ago in my blog posting that the next move was conditional. If this, then that. The “this” was a close above 1180 on the S&P would take us up substantially. I don’t remember exactly the number I gave then, but it was around S&P 1245 or so.  In looking to my work, today, that is the number  I feel very comfortable in projecting prices to. It should come pretty fast and as I see now as I write this while the market still has about 90 minutes to go before the close, it would appear that we will close above the 1180 mark and thus confirming the call earlier in the week.

In applying the Sniper Day Trading Method to the daily market, I can see the confirmation of the move. If I had done that work yesterday or even a few days ago, I would have had the greater conviction to make the call. The stock market is fractal in nature and the same principals that apply in a tick chart or time chart can be applied to a daily and or even weekly chart.

Since I mentioned stocks, the trading method will work excellent on stocks in the various time frames. It could go to the daily market and or much smaller time charts, tick charts or range charts. People trade these markets and they are usually very predictable with there decisions when you apply the trading method to it.

I will make another call that looks like it is getting ready to move. There is currently no indication of this market doing anything substantial as of now, but in the days to come, I feel we will see a huge drop in the price of Gold, and Silver will be going along for the ride. I can quickly see a $150 dollar drop in Gold coming as the stock market continues to advance.

This drop in Gold is likely only temporary but it will non the less likely happen. I am looking for something to happen around Friday, but it could come as soon as tomorrow. This is all my opinion and something I have been watching and waiting for to call out. I could be wrong, so don’t take my advise to trade off of, use your own judgement and make your trading decisions in that area, as I am just giving my opinion on the matter.

In today’s trading, I had two trades for solid gains while only investing about 30 minutes start to stop for the session. I will post my trades in the chart below. One note, and I often mention this that the trading method is not about following indicators, it is about knowing how to trade by being able to read the price action. I do this in a very unique way far different from so many others. This is my own compilation of understanding markets and how to limit ones risk by being able to enter with very little draw down and virtually instant price movement gratification.

With all of that said, the trading indicators are extremely consistent with the trading method and it’s components, so following the indicators can help learning members get a handle of the turning points that happen through out the day. The method is customizable to the individual and can be adjusted to the markets you trade and the dominant time frames you currently use. I trade for short term moves mainly on the S&P emini, but that is me. The days session and it turning point and continuation points identified below.

As I finish writing this, I can see that the market moved up into the 1190’s and is settling back to around the low 1180’s. On the very short term, as in tomorrow’s morning session, a pull back to 1168 would be very normal and could be expected, so just be cautious and aware of that. Again, that is just my opinion and not trading advise. Best to you all !

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Buy and Sell Zones

Thursday, June 23rd, 2011

Today, we saw volume swell in the S&P emini futures market to double the average, over 3 million where we have been used to seeing 1.5 million contracts traded.  All of that volume seemed to push the market around a great deal, which is nice to see in general. A moving market means opportunity and that can mean money.

The market closed at the highs of the session and only down slightly from yesterdays open. That kind of buying off the bottom is usually a good sign for follow through in the coming days. The up move from this recent bottom has been taking its time, as we saw a back fill, into the middle of range with buyers coming in strong.

I just checked the news and it seems that some kind of financial deal for the Greek debt has been struck and it looks like the market liked it. It sounds like a good reason for buyers to bid up prices and they did later in the session.

Below are my trades for the day in the S&P emini futures. I have the chart marked with buy and sell zones.

I could not fit the whole day in as the volume was just to high. These are tick charts and as the volume increased, more bars are posted and the chart gets filled up pretty fast. I plan on doing a U-Tube Video of today’s action, that way I can cover the whole day and give a few comments about it along the way. You can go to the video gallery section on the top right corner of the web site and click there to view it if you care to.  In that video, you will see the whole days, buy and sell zones as I go through the chart. The most resent one will be today’s but have not yet as of right now put it up. By the time you read this, it should be done.

I always say that the trading indicators are not the method and that is very true. We look at three time frames and this is the smallest one. For those you want to get the bigger picture, the largest view does a nice job to spot overall direction when combined to the trading method.

The middle time frame, which I hardly ever show, is virtually the same chart as this but adjusted to scale, giving the same indicator signals exactly. This is the zoomed in view to best pin-point price entry. These two charts fit inside each other like a glove and is a very beautiful thing what taken together.

I successful trading method has to I believe start with understanding and trading the price. If you only lean on the indicators for-ever, you will not be learning to think as a professional. Most of these market turns telegraph there intentions, but you have to know how to read it and then trade it consistently as the trading method calls for. Without a road map, traders are left to follow there emotions and that is what many end up doing. You will never make it as a trader long term if you don’t have a set methodology that you follow. A two or three day win streak will quickly come to a halt when you are pulled in several directions and just find yourself guessing. That is no way to trade, in addition, you wont last. So many traders want to go it alone and figure it out themselves. You can do that, I know I did. I would have to say I had a pride issue and just didn’t want to get formal training. I paid for it anyway, handsomely as most trader do.

To learn the art of day trading for a living, is an expensive endevor. Most traders will pay there dues one way or another, but keeping it as pain-free as possible is the most desirable.

The main thing is keep learning and do the hard work. Don’t overlook working on yourself which most traders do. Work on discipline issues, patient issues, physical issues. Train your mind and body to do battle, but let it be a battle of your choosing. I prefer the example I gave in my last blog post as a Sniper. Still engaged in battle, but it is low impact. You wait for your enemy to come to you and then strike. You don’t have to do the GLADIATOR  thing and fight to the death on every trade. So, the point is work on yourself and come to the markets with the mindset that you are already victorious and your enemy does not even know it.

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Trading Discipline and Self Control- do you have it?

Saturday, April 16th, 2011

4-15-11;  Friday’s trading, was met with little struggle and little draw down after the entries. I only took three trades all gains and plenty for meeting my daily trading goal. I know I always repeat this, but it bears repeating. The trading indicators are not the trading method. There is a complete trading method built around price structure, a unique form of support and resistance and the use of momentum as it all relates to keeping draw downs small and getting the price to move out in my favor right after entry. The trading indicators I show here do very closely mimic or copy my trading method and I do find it very helpful at times to confirm what I am doing with the trading method.

It is still amazing to me that it all comes together the way it does and all I can say is that I am very thankful that I have come to learn all of this over my long trading career since the early 1980’s. I have seen a lot and have make every mistake know to man as it relates to trading, so I write and speak from experience and all I can say is that this stuff works, straight up. We are the ones at times that don’t work and that is where trading discipline and the controlling of our emotions is vital to our success. I will pick this up down below, so keep reading.

Friday’s trades below, which marks two weeks of daily gains in a row, and all of which is posted here daily for all to see.

Friday’s market was filled with good trading opportunities as we saw mostly upside buying pressure, to close on a positive note. We are likely to see a little more follow through come Monday’s market, but do believe that later in the week, we could see selling pressure come back in and take the market down to very key support at 1290 in the cash S&P. That is going to be a very important area. We may see one more bounce up off that area and that will tell us more of what the next move will be. Going forward just another move, if a bounce then comes back in off the 1290 area and then we break that, to the downside, that is going to be the turning point for a big sell off.

There is a lot of forward projecting here, but we first have to see how it shapes up. Recap; Monday’s early morning move to 1325-26 area, then bigger move back down during the week to 1290 area, then bounce up slightly off that and then we will see. A break of the 1290 area on a closing basis, is going to send the S&P into a sell off of a minimum of 100 S&P points or more in pretty quick fashion, 1290 to 1190 at a minimum with 1155 very reasonable as a destination area for that drop.

If the market holds the 1290 area and try’s to mount a continuation rally, we will just have to wait and see for that. With a massive shift in market sentiment, I am lead to believe that the break is going to take place and we are now only getting into position for a drop but I will update this as we go forward to confirm.  This is all my own opinion and not considered investment advise. Consult your own financial people before you make any trading decisions.

I look at market structure and that pretty much tells me, what is coming next. I have been doing this in small times frames with a great deal of accuracy and it is no different with large time frames. The stock market is fractal in nature and what that means is, that the same types of formations exist at all levels, whether it be in weekly charts, daily charts, hourly charts, minute charts or tick charts. Fractal, the same at all levels. The exact market flow exists at all these levels and is a reflection of the masses that drive them. Since people are basically the same in their make up, emotions of fear, greed, self-control and the lack of it, you can come to expect the same type of market behavior at every level.

Day Trading is achievable for those who want it, but there is a price to pay and that price is dedication, trading discipline and self control. If you don’t have those qualities, you can acquire them. I believe everyone has the ability to change. If you don’t see those qualities in your daily life in general, you won’t all of the sudden be able to muster them up when wanting to trade the markets, you will loose. On the other hand, if you have the dedication to learn a solid trading method and the discipline to stay close to it, followed by the self control to wait when you need to wait and pull the trigger when you are supposed to pull the trigger, you could do it.

Following our dreams is a great thing and I encourage everyone to do that, where ever they are at, but you need to be realistic and have a plan on how you are going to change and do what is expected of you to make any of this a reality.

Every trader starts out with the best intentions, but it is what we actually do that will make the difference, not what we want. You need a solid trading method to start. Then, you can start changing yourself and your attitudes to line up with success.

If you trade from a fear based approach, you won’t make it. You will sabotage yourself and your efforts for what seems like no apparent reason. Getting control of your emotions and removing trading fear to be replaced with confidence will take time. It is not going to happen overnight. If you expect that, you again will be disappointed. That is where dedication comes back in, trading dedication to the trading method that you are learning. Your confidence will grow as you see and experience market reactions being played out again and again. It is like exercising a muscle. The more you train, the bigger and more confident you become.

Give it some thought, if have a good trading method that works, then the only thing holding you back is yourself. Change that and you will change your trading destiny. Good Trading to all. Vince

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Identify the Days Opening Gap

Wednesday, April 6th, 2011

April 7th, 2011;     Today’s market started off with a large gap opening higher. To many, it looked like it wanted to continue to advance, but had some very stiff resistance just overhead, so the only thing left to do is sell off and it did, all the way back down to the where it ended in yesterday’s trading. The opening gap was filled.

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.

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Price Action Day Trading

Thursday, January 13th, 2011

January 13th, 2011;

Today the market came under pressure as the Dow was off -23 and the S&P-2.  A late rally in the emini futures cut the losses just before the bell.

I just checked the market sentiment for any weekly changes and after having backed off slightly to 54.6% we saw a jump back up to 57.3 and a drop in bearishness down to 19.1%. This is close to rival similar low readings at market tops over the last years. Very few people are bearish, only 19%, that is an extreme minority and one that won’t last forever. Currently, the market is definitely in an uptrend, that we can not argue. It is best not to try and pick the top, as I did try in a post some time back. One of the few times I would have to just say I was wrong. We may see a little more to the upside and the market sentiment may yet move to additional extremes before a correction sets in, but know this, we are historically in the danger zone. Until we see a good reason to say otherwise, who can argue the strength.

In today’s trading I had only two trades and they were both late in the session, for nice gains. A modest day, but a easy day in reading the market as it was at least moving, unlike the bulk of yesterdays action. Another Video of today’s market turns and continuation points.

“Price Action Day Trading”, is best described as traders reading the price structure or composite of support and resistance. You are trading the price of the instrument based on past data, but as it moves into and is creating new data.

The movement of these, which can be stocks, bonds, interest rates, ETF’s, Mutual Funds and yes, futures contracts on commodities and Index’s which we trade. The concept is the same, as all of these financial instruments are driven by “People”, who are lead in one direction to buy and or sell. Everyone of these traders that participate in moving the markets do so for different reasons, but collectively they are who make up any given market. Implied value would be what someone at that given point in time estimates its worth. Based on that, action is taken to keep the instrument in line with its perceived value. It may or may not be what the stock, index or what have you is truly worth, but it by and large is to those who see it that way. Here perception is greater than reality.

All of that said for one simple reason, its is people who make the price move and people are known for being very emotional and predictable.  They usually tend to overdo it, in various things, what ever it may be. As it relates to money, even more so. This can be seen in bull and bear markets across the board. Getting to know how people will react in a given price action scenario is one clue or “Tell” to what is coming next. How does one get to know these coming moves?  Well, we are not born with this knowledge, that is for sure. If it were so, more traders would be successful, but only at the expense of those who are not.

In the game of poker, which I do not play, but know, it is not the cards that someone is dealt which will determine the outcome of the game. It is the astute player who can “read the player” or discover his “tell” or sign as to his next move. The one in the know, is the one who can read the player, and it is he that has the advantage. He bases his decisions more on the clues or signs that is left behind which lends him the clear advantage.  Here, people are acting consistently predictable and to those who have the skills to read the people first and cards second are the ones who regularly come out on top.

Price action day trading using tick charts to uncover the more detailed plans and intentions of those across the globe is no different. Allowing the market to create a detailed map of where it has been, can lead you to where it likely will go.

If someone knows these signs and has the ability to uncover the clues left behind, when it is combined with a disciplined structure of entry, exit and trade management, consistency in results follows.

The price is always first, indicators follow. If you learn to read the price, the indicators can confirm.  If you learn to read the price you will build your confidence and be able to add to your market knowledge, establishing a solid foundation, success will follow.

We are in the business of redistributing wealth. Just transferring it to those who don’t know to those who do know, which end would you rather be on. “Be in The Know”.

Good Trading, to all  !

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Low Volatility Keeps Traders Away

Tuesday, December 14th, 2010

Today is Tuesday December 14th, and what a slow day of trading until the Fed announcement at 11:15 West Coast today.

The last few sessions have seen slow range bound market moves that are very trying for many traders. I was happy to have basically stepped aside the last few days. I dipped my toe in the water today before the Fed announcement, but I did not like what I felt and left the trade with a one tick gain. I thought it just might have been best to close it up and see if I can wait for tomorrow session. I hope to be ready for the open and see if I can make up some ground for not trading much the last few days.

The market seems to be a bit resilient in that it does not want to go down. Since Thanksgiving, the market sentiment turned very bullish which generally is not a good sign and will likely mark a coming change in direction. I have seen many times over the years, as if you don’t get a reaction after the shift in market sentiment, a bigger play is at hand.

More and more traders, investors, and the like are and have become more bullish as the tax repeal seems like it is going to go through which for one, will keep capital gains at the lower level. If for what ever reason, it seems like capital gains tax will go up, you will see the peoples reaction in selling equities.

In looking at the daily charts, I do see a little more room up if the market wants to exercise that, to around 1260 or so, but we will take one day at a time. With the masses being so bullish right now, a sell off can come in at any time. The longer it takes for things to settle in, the more people will become fully invested and the slaughter will become that much more painful for those who don’t see it coming. I have never seen an extreme bullish bias correct by itself without the help of a falling market. I am sure this one will be no different, but we will just have to wait it out.

Currently, the daily momentum is still  pointing up, but the last two sessions we have seen late sell-offs towards the end of the day usually not a sign a strength.

Below is a U-Tube video of today’s action leading up to the Fed announcement. Nothing to exciting but show a few scalp trades entry spots that could have been had. I trade and teach how to trade based off of the price and the traders that drive the price. If you know how they typically think and react when certain conditions are present, you gain valuable insight into the next move. That is what I teach and how to project where prices can go. You can take this method and move it  to different size tick or volume charts and or move it to time charts. It will work on stocks and or other futures.

In the video above, towards the end, I show the S&P 500 cash market in a daily chart and point out some of the corresponding trade signals based on the indicators, but that again is to show how they line up with the indicators on a much larger time frame. Trading and following indicators is not the Sniper Day Trading Method, but understanding price action and how traders react to certain area’s as it unfolds is. The indicators can confirm your decision to buy or sell, but is no means the reason.

Good Trading to all.

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Reversal Day Off Highs

Tuesday, December 7th, 2010

Today is Tuesday December 7th and we saw a powerful reversal day in the stock market.

The Dow and S&P gaped up on the open so that the Dow could move on up to that double top high that I thought might happen. The move took the Dow to within 1/2 of one Dow point, to 11,450.81 before it retreated lower. Both markets traded at their lows for the day and marks a pretty important development. So often, traders will take that double top as a reason to unload some of their positions. What happens after that, often times is an exit for doors all at once.

The good news is out (no tax increases)  and is also another reason to lighten up on positions, the old adage, sell the news. Since the Dow was lagging as compared to the S&P as I mentioned yesterday, another good reason to bid up the price to the old highs. It often times acts as a trade to target by so many, in addition, it also acts like a low risk selling opportunity by others.

The main point at this time is, the market reversal. The index’s and the stocks that make them up, closed on their lows of the day, which is not a good sign for the bulls. This is the double top I was looking for and we now have it. The last few days we saw good price movement back up, but I can’t call those that bid the price up on the daily’s, “Strong Hands”. They are coming in late, because they thought they were going to miss the next big leg up, but the problem is their is not likely going to be a big leg up. These late comers do not have built in profit from much lower levels like so many others who bought off the lows in late August / early September. At the first sign of trouble, these guys will start to bail out, but only after they have big losses.

The time frame mentioned about was when I was calling for a big extended market run, just like the one we saw over the last few months. I called nearly the exact top with a 4 S&P futures points coming off those lows mentioned. That was 180 S&P points higher and 160 points from the 1060 area where I said confirmation of the move would take place.

That is all old news right now. The S&P did make a new intra day high today, but not a new closing high, so the top still holds. A new sentiment poll is coming out tomorrow and it is possible seeing new highs, even if they are intra day highs, will sway the News letter writers and thus the public, to become more bullish to add to their already strong bullish bias.

Today’s move is a mild version of the perfect storm. If the pull back continues off of today’s close, this could be all this market has in it. With the bullish sentiment lingering for a few weeks, that only makes the case for a counter move back down even stronger. It won’t be long. This is all of course my own opinion and is not to be taken as investment advise. That is just the way I see it.

Reversal Days are significant, in that a gap higher on the open, shows an over exuberance, combined with the fact that the market then closes on the low of the day. Not quiet the same conviction as it started out. This is often a sign to sell as it shows a lack of conviction to hold on at the highs of the day. This has to be some of the riskiest area to a long term holder of stocks right now in my opinion.

In spite of the Tax increase issues Obama is taking care of, the economy has some very deep seeded problems. To sum it up, everyone is drowning in debt, all across the board and it is not going away any time soon. If you go to www.debtclock.org you will see on one page the state of affairs we are in. Everything is on that one page, 76 running tabs on various aspects of the economy. It is a tough one to swallow, but that is the reality of things. The best we could hope for is a soft landing and not a crash. I would love to be totally wrong about this one. I have gotten so many market calls right over the last two years, writing about them well in advance, but this one is one I hope I get wrong.

This is all in the daily market and I follow it for a variety of reasons. It is part of a bigger trending market, which is then tucked inside the weekly chart, but it all unwinds down from there, down to the hourly charts, into the various minute chart settings and into tick charts. The various time and tick charts are all fractal in nature. They all bear similar price action traits relative to the time or tick chart intervals. A hierarchy of dominance exists  based on these intervals where the higher time frame swallows up the smaller.

This is true when trading stocks just the same as trading index futures. You can put Forex right in their too, as the trading principles I use are the same in all markets. Not all markets act the same, but I have not seen any market that can not be traded by my method.

In today’s trading, I stopped after about 2 hours, I was up for the open or close to it as today was just a break even day more or less. I had a couple of losses to start things off and took larger stops than I normally take.  The next few trades were for nice small gains and was able to get to even. I was getting tired and needed to stop. Break even is not really a bad day, but I can attribute this to trader error on my part and not the method. Losing days usually only come when I am going beyond the trade method. If I stick close to what I know, the points add up without much struggle.

Good Trading to all.

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Successful Scalp Trading, Is It Possible ?

Tuesday, November 16th, 2010

Successful scalp trading, is it possible? That is the question that so many traders want to know and I will tell you the answer to that, which is “Yes”. It is not for everyone, that is for sure. Their are so many traders who are not cut out for this, but will only find out by going through the process. Getting good information and a solid trading method will have a lot to do with that success, but often traders will just beat themselves, through their own personal weaknesses.

If you have the passion for taking your trading endeavors to the highest levels, achieving success and harnessing your knowledge to produce the results you pursue, you will overcome all personal weaknesses.

Not all trading methods are alike and you need to find something that is tuned to your personality. What I offer may not be the answer for some, but on the other hand it could be just what the doctor ordered.

Being successful will require a lot and should not be taken lightly. Having the ability to block out distractions and focus on price movement will be the starting point. Trade indicators are only a reflection of what the price is doing and so the trade focus needs to be on the price first.

Recently, I have talked about the three elements for successful trading of any kind. “Time, Space and Energy”.  The first two lead to the third element, trade energy, but today in the daily charts, 11-16-10 Tuesday, we saw the first two elements exercised, in that the time accelerated the price, to the downside, to a level that I called yesterday. I said that I could see where prices were going to go on the S&P, 1175/80. I thought that it was going to take a few days to do it, so that is why I said 75/80. Not knowing that it would come all in one day with a near 200 point loss in the Dow and 20 point loss in the S&P changed the figure a touch. I would have said, 70/75 instead, but I did not know that then. Close enough through and would call that a good call. The next trick is going to come, when this market holds off of these levels and moves back higher. I would say, that we are in the general area of support and will hold these current levels give a take a touch.

Knowing what to expect from the market is key and traders can learn how to do that in any time frame if you know how to read the price. I look at price and can see basically where it is going to go ahead of time, so often. Many of those times, I would not want to place an order in all of those spots because we may have the third element missing (energy), but knowing what you can expect ahead of time is a great exercise for when it does line up and come together. At those times, the energy is their to carry the price through time and space as it releases the stored energy that was built up through time.

I look at three time frame tick charts and glance at a small time chart to better see the gaps, minus the Globex market. The first two time frames are really just one chart with the third chart an expression of the first two. Each time frame is much larger than the next, but it all works together.

The stock market is fractal in nature and I have pointed that out many times. Each time frame is apart of yet a larger time frame and so on. Knowing how to harness that information and put it into a structure that makes sense is essential. Market framework is another way of saying “structure” and shows how time, space (price is another way of saying it) and energy all work together to create small little windows of opportunities where prices can be exploited. Meaning, you have the clear advantage. But how can you see those opportunities and take advantage of the situation. It is all in “knowing”. Either you know how or you don’t. You may rely on other things that you do know and that may be enough if it works for you.


Above is a short U-Tube Video I did today showing the basic entry points I might have considered. These area’s happen all day, every day, with today being very normal and not anything special.

The power went out in the mountains where I live today and did not have enough battery back up supply to trade. I waited it out as long as I could and came in for the last 30 minutes or so. I hit my goal and that was good, but still was off in my timing. It still all came out good, but I was anxious because of the lack of trade time. Again, I forced my first trade and tried to take a counter trend trade short for just a few ticks, but got stopped out for a point. The next trades were all gains, but wish I could have waited a minute more to enter. The price would have been the same, but the timing would have been better. I am hard on myself at times because I know I can do better. Even though it came out in my favor, I rarely look at that. Doing the right thing at the right time is much more important than getting a winning trade. I don’t want to develop bad habits. I have to be my own trading coach and writing my blog is one way for me to do that.

Good Trading to all,

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Trading the Opening Gap

Monday, October 25th, 2010

Today is Monday October 25th, 2010 as the markets took off early on to only fail late in the session.

The Dow was still up about 30 points and the S&P up a few points also, but could not hang on to the early gains. Much of the move came early in the night session and the mornings open prices jumped to catch up to what the futures traders deemed as fair value. That value was later adjusted in lower prices as the session went on.

Often times when you see a gap opening, it gets filled. Most of the time depending on the size of the gap, it gets filled quickly, but not today. When you see a jump in the opening prices, their are no stocks that had a chance to trade in between that gap, again after the open. Prices tend to fall back and “fill the trading gap” as it is called, usually around 70% of the time and do it rather quickly. So, having a good strategy for playing the gap openings, is a good idea.

As traders, you need to have an entry that is low risk. You can not just sell after the open, because you see a gap higher. You need to know exactly where your lowest risk entry will be and then you can enjoy the strategy. At times it does not come back all that fast as in today, where it was dragged out for some time. Only until late in the session did prices give up their hold on the market to adjust itself. The S&P filled the trading gap to the tick and held while the Dow still has about 30 points or so for its gap to get filled. We are likely to see it filled in the early session tomorrow, then we will see what the markets true intentions are.

When you have gap days, it is best to get the gap filled quickly, because it tends to pull on the market. Once filled, the market is somewhat re-balanced and it can continue on with normal market flow patterns.

This is just something to be aware of, if you see it again in the future. I have one screen devoted to little or no indicators and on that screen I have a separate window using a 2 minute chart of the S&P futures and a 2 minute chart of the cash Dow. For the futures, I use a continuous contract chart with a .d after the symbol. In Trade Station it is @es.d    for a continuous contract chart of the S&P 500 emini without the globex or night trading in it. So in this chart you only see the price action start at the open. It is very easy to spot where any trading gaps are by using this type of chart. In addition, it is no secret that I trade using tick charts, but I do look at time charts for a variety of reasons. I glance at them to see if their are discrepancies between the two style charts. Time charts show me when the market is slow at a glance as bars are being posted with little or no movement behind them. In addition, support and resistance analysis can get thrown off when using different tools. Also, this shows me, what the bulk of other traders are looking at and how they might react.

I am sure the 80/20 rule would apply to the amount of traders that use time charts to tick charts, 80% using time charts and 20% using tick charts or some other style. (range charts, volume charts)

In today’s trading I did not make my daily goal. It happens sometimes and I am not crying about it. Losses are apart of trading and I had some today. It wasn’t bad in that I was only down about 1.50 points or so, but it didn’t have to be that way. I had a good trade working and added one more contract to it and was up about 4 points at one point, just what I was looking for. Problem was, I had to leave the room for a few moments to long. With stop in place, the market ran up and immediately ran right straight back down to my original stop for -3 ticks. To go from +4 points and see it closed out at -3 ticks is not typical for me, that is for sure, but it happened and felt a bit stressed looking for trades before the market closed on me at the end of the session, not usually a good idea.

I didn’t really have a choice but to check on something and it cost me. Of all the days to see a top like that come so quickly with a hard reverse.  I could have had a target and cancel set up, so if my target was filled, my stop gets canceled. I didn’t have it set for that and would have to have it in place at the time of entry, so I live with it. Tomorrow is a new day and new opportunities and I am sure I will find them.

Until next time, good trading.

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