Monday, May 13, 2013


ES opened into the 1624.50-1627.50 WHITE ZONE.  This is the same zone that was chopped through on Thursday & Friday.  My plan was to do less in this area until the market chose a direction.  (1) As ES made its way to the back of the zone at 1627.50 it provided excellent trade location for a counter-trade back to the bottom of the zone.   My thesis was that we would chop through this zone again today & I did not want to get chopped up.  I took the first rotation down & tweeted that I was waiting for resolution of the WHITE ZONE before taking another set up.  

2. ES found buyers just below the WHITE ZONE & drove ES back to the top of the 1627.50 placing buyers back in control.    I suspected this would happen & was glad I was able to sidestep the land mine.  Buyers continued to push towards the 1630-1632 resistance zone where it found resistance just shy of the front of the zone. We essentially chopped in this small area for the next hour and change before making a push up & into the 1630-1632 zone.  There were clearly stops sitting right behind the zone & they were triggered early into the NY lunch.  I did tweet that if one were to look for a good short entry that the back of the zone offered excellent RR and indeed the HOD was marked at 1633.25.  Only five ticks above the back of the zone.  The back of the zone is the highest odds placement for a counter trade.  As the current strategy does not take counter trades when we are trading above the WHITE ZONE,  the trade was not elected.  

3 As ES closed above the 1630-1632 zone it would trigger a long entry upon entry into the zone.  (4) The model calls for a three point stop & it was hit it a short period of time making the model 1 of 2 for the day.  It also took performance negative for the day at -1 point & I tweeted that no additional treads would be taken today.  

ES found responsive buyers at VWAP & continued to trade in a a tight 3.5 point range for the balance of the day.   My hope is we break away from the tight 12 point range so we can get some nice set ups again.  We will know more in the morning.  1620-1622 zone still is key for the bulls to hold. 

A few take away from the day.  1) the model is getting stopped alot on the second & third trades.  This is because the current settings on the model call for it to trade in the same direction of the break.  I may choose to make adjustments to the entry parameters to adjust for the lack of momentum.  Have not thought it through yet so for now on current coarse.  2) I dont panic when it doesn't go my way.  I lost 1 point today and just a few points off the high.   Instead I use the foundation I have build via my trading journal & spread sheets & examine if something has changed or if I am executing poorly.  What the numbers tell me is that the range contracted significantly in the last week & I need to make an adjustment.  Working on it. 3)Not reacting to a frustrating situation may be one of the best skills a trader can have.  At no point do i blame the market , my model or anything else.  Losing is just part of the deal.  I just stay focused on whats next & I know if will come to me.  

I thank you all for the positive feedback & welcome comments or suggestions.

You may encounter many defeats, but you must not be defeated. In fact, it may be necessary to encounter the defeats, so you can know who you are, what you can rise from, how you can still come out of it.” 
― Maya Angelou

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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