Wednesday, May 8, 2013

ES TRADE REVIEW 05/08/2013

ES the tsunami of an up move continued today simply crushing anyone who dares stand in the way.   The bid is simply relentless. ES opened in the 1618 - 1620 WHITE ZONE.  THE WHITE ZONE determines who has control of the market; buyers above & sellers below. we opened down into the WHITE ZONE & the strategy called for taking a low risk short at the back of the zone. (1)  Sellers were in control until we closed above the WHITE ZONE.  Obviously,  the short was short lived as selling was quickly absorbed. ES quickly rotated above 1620 and closed there on a 5 min bar placing buyers in control.  The trade could be covered for a 1 tick loss at 1620.25. 

(2) A long setup was trigered with that close above 1620 but you would have had to be filled on the bid.  For the purposes of this blog,  that is considered a no fill.  However,  there was still a victory here.  I consider a set up that helps me avoid a loss a winner.  Knowing to cover the short is priceless.  Instead of having a 3 point loss (the stop I use for this blog) I had a 1 tick loss.  I know there will be more setups in the coarse of the day & the days to come.  Its my mindset that I never miss a trade, I am never compelled to chase.  If I had a better way of figuring out we were going up earlier & I could have gotten long earlier & reliably; I would have done so.  I did my job by following my rules, therefore, a successful sequence. 

The market continued its trek up to 1622-1624 which i had market as initial resistance.  Again, we are trading above the WHITE ZONE that places buyers in control.   Shorts are passed on in this scenario.  I want to trade in the direction that makes my odds highest for this trade.  This is a perfect example of why this is called for.  While ES paused in the 1622-1624 zone; it was just a pause. There was almost no way to enter a short position here and not take a loss. Again, not taking a loss is a win for me.   

(3) ES traded above 1624 triggering another long set up.  Again, do to the lack of rotation lower, there was no opertunity for a ling fill at or in the zone.  Nothing to do.  (4) ES did finally trade back into the 1622-1624 zone.  I passed on the trade.  It was almost the last hour which is a very tough hour to trade in; there is ALOT of air below these levels (reference to yesterdays 10 point drop mid morn) & I had no cushion on the day to work against.  Did the trade work?  Like a charm!  But I really don't care about any one trade & I am having a challenging time reading the PA other than to say it is strong as hell. 

Buyers did step back in on the 1st dip into the 1622-1624 zone and rallied into the close.  The buying shut off just 2 ticks in front of the 1630-1632 resistance zone. 

At the end of the day, trade location provided an obscene edge.  You don't need lagging indicators, fundamental news or anything else.  Trade location + knowledge of control + ability to exploit your edge is huge. You only need 1 high odds trade to make it in trading.
I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.
Bruce Lee 

Notice: This Blog & its contents are intended to be for educational purposes only & not to be construed as trading recommendations  in any way.  You should not follow anyone blindly.  Trading Futures & Options on Futures involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions are subject to change at any time.

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