Day Trading the E-mini Futures

[TheNegotiator 13]

After it made it to 41.50 and then came back up, my gut said get out but I took my 5 tick loss anyway. Most important is that my risk was quantified and it's a tiny loss compared to the gains! I would still take the trade again, only this time I would probably bail earlier when the 43.25 was taken out.

 

Bad luck. I felt that once it moved back away from low vol 40.75 again, there were some nice upside high vol targets + half gap.

[joshdance 10]

Bad luck. I felt that once it moved back away from low vol 40.75 again, there were some nice upside high vol targets + half gap.

 

Well correct you were sir. My plan was to ride it to 37s, and then look to reverse long in that area. After 43s saw some absorption, it looked to me that 41 would finally be broken down, but no dice this time. At least it was a 1/2 position and a very small loss--those I can live with.

[TheNegotiator 13]

Well correct you were sir. My plan was to ride it to 37s, and then look to reverse long in that area. After 43s saw some absorption, it looked to me that 41 would finally be broken down, but no dice this time. At least it was a 1/2 position and a very small loss--those I can live with.

 

Yep. Important you stayed disciplined. One thing I would say is sometimes you get these real grinder days and when you do it's really important to not let it fool you into going against it unless it shows you something to strongly suggest a reversal is possible.

 

Here's the chart to explain what I said in the last post for anyone who didn't understand:-

 

[sdoma 10]

The key to reading this day was to see the market's failure to retest the lows in the 9:05 - 9:20 CST period. Volume dropped off as well, and in the context of the move we had experienced overnight, that was a clue to me to get flat and see what would develop. After that, the market exploded up. I caught some of it and had a good day.

 

Big gaps can be dangerous to fade, and you should never fade the open on a big gap, because probabilities favor at least one test down. I love to catch reversals off of them, however, especially down gaps. If you're wrong, it's immediately apparent, but if you're right, you get paid.

[goodoboy 10]

The US market is the last in the world to close for the trading day, so when it closed down on Friday, and all the European mess reared its head again on Monday, it's not surprising that markets continued their downward drift which then turned into more of a plunge.

 

Given that backdrop, and if you understand that the market is auctioning lower, looking for buyers, then it would not be prudent to buy before the open, knowing that the market will in all likelihood continue its search in the US session for buyers--and given the recent market behavior of the US market being much more bullish than the european and asian counterparts, a buy is not a bad idea.

 

I do not think that 39 is a bad location to watch for -- it's the low of the Bernanke day, and buyers certainly showed demand there. But the problem is, there was just not a strong enough reaction there, and as mentioned before, the timing that it found support in that area was before the open, and it's just not a good time on a day like this.

 

So in the first chart attached, note that the low of the day is the low from 7/13, the huge up day that took no prisoners. The second chart is a 60 minute showing the obvious demand and bullishness of that opening hour. So, 32 is a good place to look to buy, with the whole 30-32 zone being fair game in my book.

 

Knowing that, you witness a good 3 point rotation off of that price. Then what the market does next is the key--notice how it meanders down (check this out on a 1 minute chart for reference)? Sure, it could have melted further, but you have a decent location, a reaction off that location, and what appears to be the sellers showing a lack of enthusiasm about taking this to new lows after what is now a 44 point high to low swing over the course of 3 days. So I bought a half position at 33 with a 3 tick stop, was out for -3 ticks, and bought again at 33.25 with a half, added at 34.25 to make it full, and then exited into the open.

 

Location + read on the market + tiny risk = high probability trade

 

(by the way, use oscillators only when the market is balanced and ranging--when it is trending, it will tell you oversold or overbought all day long)

 

Thanks for your response and good analysis as to why you bought long. You are right, on down days and especially with the market context being bearish from Europe issues, i was better off waiting until the seller was done and buyers try to come back in. Atleast then, I am not the only buyer trying to push the price higher after the market settles.

 

Do you normally use small stops like 3 ticks? I once using 3 pt stops, but lately i have been doing a good job of reduces my stops to between 2-3 pts, by watching the reaction at support/resistance levels.

[TheNegotiator 13]

The key to reading this day was to see the market's failure to retest the lows in the 9:05 - 9:20 CST period. Volume dropped off as well, and in the context of the move we had experienced overnight, that was a clue to me to get flat and see what would develop. After that, the market exploded up. I caught some of it and had a good day.

 

Big gaps can be dangerous to fade, and you should never fade the open on a big gap, because probabilities favor at least one test down. I love to catch reversals off of them, however, especially down gaps. If you're wrong, it's immediately apparent, but if you're right, you get paid.

 

Definitely. You just know that every trader and his brother would have been going short and so when it couldn't follow through with the context of the big gap, euro worries etc., there'd almost certainly be people needing to cover.

[goodoboy 10]

Definitely. You just know that every trader and his brother would have been going short and so when it couldn't follow through with the context of the big gap, euro worries etc., there'd almost certainly be people needing to cover.

 

Thanks,

 

Are you saying that after the bell open yesterday and sellers could not take price down below 1332, they gave up and short covering occurred which may have cause prices to go up? Just making sure I understand you better.

[TheNegotiator 13]

Thanks,

 

Are you saying that after the bell open yesterday and sellers could not take price down below 1332, they gave up and short covering occurred which may have cause prices to go up? Just making sure I understand you better.

 

Pretty much, yes .

[bakrob99 11]

Mr Negotiator - could you please post one of those fancy composite charts of yours so we can take advantage of this wacky market?

[TheNegotiator 13]

Mr Negotiator - could you please post one of those fancy composite charts of yours so we can take advantage of this wacky market?

 

You mean one like this?

 

[Predictor 11]

I'm looking for a range bound day today.. I will look for opportunities to buy low/sell high or maybe not trade. I don't see a lot to drive the market either way. It looks like we may retest the low 30's

[TheNegotiator 13]

I'm looking for a range bound day today.. I will look for opportunities to buy low/sell high or maybe not trade. I don't see a lot to drive the market either way. It looks like we may retest the low 30's

 

We moved from one development to the other yesterday straddling the important 40.25 low volume area. If we develop above it today, that could give bulls confidence. If we fail and fall back below/develop lower, bears could take hold. I'm not saying it will or it won't move a lot. I'm saying from a profile point of view, today could be important. In fairness, we could range slightly lower or higher and then tomorrow or later in the week we could decide to make a move.

[Predictor 11]

Yes, I considered that too. I'm currently short. See what develops. Target somewhere in the 40s..

[Predictor 11]

Target met.. I could have got a bit more out of that. I'm close to my profit target today and so I will be slowing down...

 

Bidding long... missed it. Looks like market is basing here and going to retest.. not going to chase. could have instant reversed that short for a scalp.

 

Stopped out. I was at my profit target for day too. HFT bots flooded in front of my order. Long again.

 

Profit target exceeded. Done for day.

Edited July 24, 2012 by Predictor

[Predictor 11]

They pressuring the 40's.. if they take the 40's then a re-test in the 30's might be in play. If presented that could be a good opportunity to get long.. or an indication that my analysis was wrong and another trend down day is setting up. Fortunately, this early bird got the worm already.

 

I still think we are rangebound. I notice that earnings appear to be a bit weak(?) that might be driving the market.

[Predictor 11]

Market appears to be basing here. Strong buying interest at recent lows. Sellers seem to have lost interest. Strong selling coming in now. Unable to drive price. Possible liquidity trap developing.. could drive market back to 42s. So far just watching. Tempted to bid near lows.

 

Still Long... Notice that NASDAQ has broken out and DOW too.

 

Had good profits on that trade but let them slip... lost about 3 ticks. I was about 3 points. Bad management on my part. I do not like long side any more. I've started to lose, so shut down. Would have been very nice day for me too... as I had well exceeded my profit target. got sloppy or greedy. Finish below profit target.

Edited July 24, 2012 by Predictor

[Predictor 11]

I no longer like long side... offers are thick and selling is able to easily push price down. Will continue to monitor... perhaps some news broke about Deutsche bank?

[goodoboy 10]

Took a long position at 1332.75 with 3pt stop and was quickly stopped out.

[bakrob99 11]

Took a long position at 1332.75 with 3pt stop and was quickly stopped out.

 

My observation - in the for what it's worth department (maybe nothing?)

 

You might have observed some details about where the market weas headed by looking for a measured move which had 1328 as its target

 

Also - if you studied Mr Negotiator's chart you'd have noticed a CLVN at 1326.25 which held perfectly and seemed to attract the price.

 

As well, you could observe that the161.8 extension of the 1st swing down off the failure at the highs terminated at 1327.50

 

finally for me- i have 1327.25 as a major support on the 60min chart

 

for me it (the confluence zone) was the perfect target area for my short up at 1338.75.

 

Your entry wasn't bad - but had you seen these confluence areas you might have been able to take the short on the breakdown of your buy zone. I wonder why you put such a large stop on it?

[Predictor 11]

Looks like new lows coming up shortly. Bid long. Previous call was good but seeing some buying now.

Edited July 24, 2012 by Predictor

[goodoboy 10]

My observation - in the for what it's worth department (maybe nothing?)

 

You might have observed some details about where the market weas headed by looking for a measured move which had 1328 as its target

 

Also - if you studied Mr Negotiator's chart you'd have noticed a CLVN at 1326.25 which held perfectly and seemed to attract the price.

 

As well, you could observe that the161.8 extension of the 1st swing down off the failure at the highs terminated at 1327.50

 

finally for me- i have 1327.25 as a major support on the 60min chart

 

for me it (the confluence zone) was the perfect target area for my short up at 1338.75.

 

Your entry wasn't bad - but had you seen these confluence areas you might have been able to take the short on the breakdown of your buy zone. I wonder why you put such a large stop on it?

 

Thank you very much for your comments. The trade I took was bad trade by me. 1332 was a support from yesterday and the other day when Ben was talking. The part I messed up was i normally use the slow stochastic on the 15 min for a buy signal when its in oversold area. This trade, I did not confirm this and I got tooken out.

 

The reason for 3 pt stop was because there is a s2 pivot at 1331.59 and I wanted the stop right below it.

 

Now that look I see that a bear flag did have a measured move down to 1328.:crap:

 

Thanks

Edited July 24, 2012 by goodoboy

[goodoboy 10]

Yep. Important you stayed disciplined. One thing I would say is sometimes you get these real grinder days and when you do it's really important to not let it fool you into going against it unless it shows you something to strongly suggest a reversal is possible.

 

Here's the chart to explain what I said in the last post for anyone who didn't understand:-

 

 

Thank you ,

 

Can you please comment what type of chart this is when you get some free time or reference?

 

Thanks,

[goodoboy 10]

Your entry wasn't bad - but had you seen these confluence areas you might have been able to take the short on the breakdown of your buy zone.

 

You right and my buy area was 1340 dis morning after the bell rung, but I didn't take advantage of it.

[Predictor 11]

Sellers remain in control. Moved from exceeding my profit target to taking a small loss.. maybe seeking too much gain. I will evaluate.. probably not be making too many calls here.. distracts me and makes me less likely to take a small loss.

[bakrob99 11]

... How did you get 1328 as a measured move?

Thanks

 

A = 9:27 High 1346.50

B= 10:50 Low 1334.75

C = 11:26 High 1339.75

 

Take A-B = 1346.50-1334.75 = 11.75 pts

 

C 1339.75 - 11.75 = 1328.00

 

BTW, I don't do all that stupid math - I just draw the first move down and copy-paste and place on the high of the upswing and mark the D-target. If the "C" high gets taken out, I move the line to the next high and the target shifts.