Tuesday, March 31, 2009

Notes for tonight's session


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Euro Futures should see range contraction until ECB's interest rate announcement early Thursday morning.

support @1.3180
resistance @1.3270

S&P500 Emini futures
That big selloff in the last 1/2 hr of today's session is my signal to sell resistance.

resistance @787, 805, 814
support @776

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Monday, March 16, 2009

More Room for Improvement

Traded SnP500 eMini Futures in the day session

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Entry: B+
Stop: B
Exit: D-

Focus & Alertness: C+ (decreased thru the session)
Emotional Mgmt: C

Same old theme of leaving a lot of points on the table. I am beginning to sound like a broken record when i say that i need to work on improving my exits.

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Sunday, March 15, 2009

Me 'n The Swiss Central Bank

Trading the EuroFX futures in the overnight session.

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As mentioned in my Twitter tweets, the Swiss Central Bank intervened in the Forex market, selling Swiss Francs and thereby driving up other currencies. With that as context for the EuroFX, heading into this session, I knew I would have to play it safe and save the home run attempts for later......

Trade1: long 6EM9 @1.2865
Added: 2nd long @1.2842, stop@1.2835
exited @1.2867

As indicated by the chart, the Euro, like the rest of the major currencies, gapped down to open the session. From my analysis, there was support @1.2865, since the Euro tagged that level several times on Friday as it chopped sideways.
Now that it was known that the Swiss is participating in this market, it would be better to work with them than against them.
First attempt to go long was to buy right at support. Nothing wrong with that idea, except sellers were not done. In fact, dropping a couple ticks below 1.2865 triggered a LOT of sell stops, and within seconds we were at 1.284. At this point, QStk and ADX were both pointing to a high possibility of selling exhaustion, and I figured the Swiss might take a nibble here too, so I added to my long @1.2842. It was here that I finally entered my sell stop, just in case i was wrong. After chopping around in the low 40's, price began stabilizing and recovered. Within 10min, it had stopped downtrend, and was challenging the declining 9bar EMA, which met my time stop expectations. I also saw a series of higher lows, which was good news to me. As price approached 1.2865, will it become resistance ? I had no clue, so I trailed my stop up to 1.285. The market told me very shortly thereafter, as I saw an impulse push above 1.2865. I exited near declining VWAP, 1.2867.
There may be more trades later tonight, but now that I have this under my belt, no need to be as aggressive.

Trade Mgmt: B+
Emotional Mgmt: B
Focus & Alertness: B+

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Saturday, March 14, 2009

VWAP re-visited

Review of Friday's trade....

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I was stopped out @753, gain of 2.75, but what hurts is that I left an additional 7 frickin' points on the table.

As usual, the timing of my entry was not the problem. The main issue was that i did not manage the trade properly.
There were two warning signs to exit the trade earlier:

1. Price could not break below overnight lows despite a downtrending VWAP
2. A series of higher lows and declining VWAP.
3. Time Stop - New lows made in the 10min frame prior to 644AM, but no new lows in any 10min. time frame after 644AM.

In terms of mistakes, I also failed to pay attention to TICK and ADD, two indicators that I usually use when trading ES. I was pretty close to the 10pts that I wanted to get out of the trade, and should have not been that greedy. Hopefully writing about this will internalize this lesson.

Anyways, once I started reviewing this trade, I also noticed that ES oscillated above and below VWAP, which as Dr.Brett has noted, is a good indicator of a range day. The earlier that I can recognize a range day, the earlier I can adjust my tactic to fade moves away from VWAP.

Looking back at my prior posts in the context of Dr.Brett's VWAP post, it looks like VWAP can help me to determine the market type for that session. This has given me some new ideas to try out for the coming week.

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Friday, March 13, 2009

Trade in Progress: Pullback


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Trade1: short @754.75, stopped out @756.5
Trade2: short @755.75, initial stop @757.5, still holding, moving stop down to 754.

ES acted like it was ready to rollover after it failed to test the overnight highs @758.25. First attempt at shorting it failed, but it did not change what I saw - ES still acted like it was ready to roll over. 2nd attempt worked out better.

Current support is @746.5. Next support is 735.
As I type this, ES is already making me nervous with a climb up to 752. I have to respect the buying strength, and will exit my short if it stays above 750 for longer than 30min.

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Thursday, March 12, 2009

For Future Reference


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I've had a bunch of small 1 to 2 pt losses in ES that added up to some frustation, and with today being rollover day, it caused my charts to load up strange (indicators are wacked), so I will take that as a sign to take a break, and post some charts to help me to internalize some important points to remember.

The above chart was Tues Mar 10/09. ES had run up +10pts in the overnight session, retraced a bit, then ran for another 10pts in the first 45min. of the session. Around the 7am reversal time, it paused again, this time forming a box play pattern. Going long after a 20pt run-up typically is not a recipe for success, so that just emphasizes how reliable this box play pattern is.
In this particular case, there was a retrace after the intial breakout of the box. So one would have needed a 2.5pt - 3pt stop (705.5 - 705), reward being at least 4pt target (712). To increase the profit potential, one could add to the position on the second break above 708.

Normally a series of lower lows makes for a good candidate to go short. However, this was a downtrend after the monster +42pt gap and run-up in the previous session. Shorts get a little antsy about a +42pt run-up, and when market gapped up, the first TICK retracement was a chance for the shorts to cover on the gap fill attempt. Selling accelerated on the break below 725 to confirm TICK retrace. Any reversal close to the gap fill level (716) would be a good long entry. In this case, ES ran 10pts from the reversal. If one missed the initial reversal, a break of the downtrend line presents a good second long opp.

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Tuesday, March 03, 2009

It's All In the Mind

Traded Yen Futures and EuroFX Futures in the overnight session

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Long 6JH9 @0.010253, initial stop @0.010247 (white line)
Got stopped out.
In retrospect, this was not such a good trade setup. I entered on the break above the 9 bar EMA, but my manually drawn downtrendline (red diagonal line) was not violated, which meant a high probability that the prevailing downtrend was still intact.
I had a "this doesn't look right" feeling in my mind, but ignored it because I wanted, and hoped that the trade would go in my direction. It's true what they say, it's hard to be neutral and unbiased once you have already taken a position.
So I wound up waiting painfully for price to confirm the truth that I had decided to ignore.

Long Euro @1.2624, initial stop @1.262, exited @1.2640

1.2624 was :
1) 38.2% retrace of the up move earlier in the evening.
2) the upper range of prior congestion
3) just under R1 pivot

Lots of good reasons to enter long, which i did.
1.2640 was the area where the 9/20 bar EMA was located, and also the upper end of the Keltner channel. This seemed like a natural point to exit my trade. How was I to know that Euro would continue on for another 20 pts ?
The problem was that my prior losing trade made me a bit overly trigger happy.

All i can do is keep practicing, and one day, I shall find the big profits.

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Sunday, March 01, 2009

Forex Futures gapped down!

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I brought up my platform this evening to find all of the currencies gapped down to open (with the exception of the Japanese Yen futures).
Euro gapped down below prior support @1.2625 after Merkel said that she wasn't going to support an unconditional bailout fund for the Eastern European countries. Regardless of the implications, the market responded bearishly as a result.
Anyways, I was looking for a potential spot in the Euro where the odds of a reversal might happen, but found nothing. The Euro was actually trending up this evening, but I could see that it was merely a retrace that could reverse at any moment in favour of the prevailing downtrend.

Turning my attention to the Yen, I found this chart starting to look interesting:

The Yen has been in a relentless downtrend for pretty much all of Feb/09.
However, the 1.0216 level was interesting, because that was the place of prior congestion, and also, two reversals to the upside occurred more or less in that area.
Which brings me to this:

Trade1: long@1.0222, initial stop @1.0214 exited @1.0238
Trade2: long@1.0243

In the first trade, I was playing around with my stop level, and a fat finger accidentally caused me to exit the trade. $&@#$%!!
So I went to help my wife prepare some dinner, and fed the kids to help me work off the frustration.
I came back and started watching it again. It climbed as high as 1.026 before pulling back. 1.0216 still held as the low for the evening. This fit the classic first-Thrust pullback pattern. I took the second trade when it looked like some stops were taken out to drop the price to below 1.0245.

I moved my stop to 1 tick above breakeven, and I think I will hold this trade overnight.

Like I said before, holding out for the big profits is not an easy task, a lot of things have to line up in order for this trade to work. Hopefully I will wake up tomorrow with some decent coin instead of being stopped out.

so much for that idea, stopped out @1.0252. Held it for an hour, and got only 9pts to show for that: blechhh....
Euro is trying to fill the gap, so the Yen will be range bound until we see a resolution w/ the Euro.

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