Monday, April 22, 2013


ES opened below the "WHITE ZONE"  (1) We are currently below the 1556-1558 WHITE ZONE -sellers in control.will start looking for signs of a long near the 1546-1544 S/R zone us know that sellers were in control.  he market was unable to reach the 1556-1558 & no trade was to be had using the most basic of strategies.  Important to note that even though no short trade was generated it is just a s big to not have a large loser right out of the gate!  Market rotated down to the 1549.50-1551.50 zone where the market paused.  Again,  sellers in control and I saw nothing that indicated reversal.  I simply passed on the long set up.  @ 8.50 am ES closed out of the 1549.50-51.50 zone and proceeded to trade back into the zone from below.  This generated a valid trade but it was in front of news.  A stop behind 1551.50 would have kept you in this trade for several very nice scales. (2)

I tweeted at 8.42 am  We are currently below the 1556-1558 WHITE ZONE -sellers in control.will start looking for signs of a long near the 1546-1544 S/R zone. ES rotated from the 1549.50-51.50 zone down to the 1544-1546 zone.  Tick divergence @ the back of the zone  (3)  ES rotated up out of the zone and choped around just above the 1546 and vwap.  You had to be careful here, the choppy action that took place chews up many traders. (4)

I tweeted @ 10.34am  ES trying to resolve here in a mini bull/bear fight. I don't see a real edge, Bulls need it back above 1552 & bears need blow 1544 ES finally resolved to the upside, this move up was the 2nd time up into the 1549.50-51.51 zone and per my trade plan, 2nd time up is a lower odds trades in all zones & particularly given the bull/bear fight that took place just below.  

ES traded above 1551.50 and this essentially became the new buy/sell line,  you had to be quick but there was a quick test down to the 1551.50 for a long which gave several nice scales. The market continued its rotation up now that it had bears trapped and they pushed all the way to 1560 going into the last hour.     I tweeted:  @1.53pm Heading into the last hour when trading above 1st hour high makes for a low odds short.  @1:54pm we have had a good move off the lows so a pullback would not surprise, just doesn't pay often enough to play.  @2pm what I try to ask myself here is what is the fuel that will run the market higher. ?? @2.01pmBulls were trapped this am and Bears were trapped mid morn. Both have had their puke time. Best guess is the best moves are done.    With that my day ended. There really was not much to do while using my highest odds strategy.  Would have been a great day if we traded into the WHITE ZONE off the open, but did not get it.  From the chats I had today this is my biggest takeaway,  sometimes even if you dont get your trade executed, but you avoid taking a losing trade because the plan was well thought out, then you still have a very strong plan.  The key is knowing you have an actual edge and consistently trading it.

It is incorrect to say its ok to take a trade and give it a shot to see if it will work because your using a tight stop.  Those small losses add up and I believe the most important thing a trader can do is to keep their equity curve heading north. Hope everyone traded well.  We get to do it all over again tomorrow.  Rest well.  

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