Monday, May 6, 2013


ES opened the day above the 1608-1610 WHITE ZONE placing buyers in control.  My trade plan calls for me to buy the first dip into the zone. (1) An entry at 1610 quickly rotated up to the 1612.25-1614.25 resistance zone.  Because buyers were in control no shorts were taken here.  ES then rotated back down to the 1610-1608 WHITE ZONE/ support.  This was the second touch & the trading rules call for passing on all but the first trade.  The market was in balance and it was very choppy.   Doing less was defiantly more.  the market then proceeded to rotate back up to the 1612.25-1614.25  Again, buyers in control & second trip into the zone.  No trade here.  Finally, late in the day we broke above the 1612.25-1614.25.  This triggered a long per the rules.(2)  Unfortunately there was just no follow through.  I tweeted that it might not be a bad idea to exit the trade - 1 tick & there was several opportunities to get out flat. The stop was never hit & an exit could be had at the 3:14 close there was an exit for a 1 point loss.

Some thoughts:   First, its a skill set to move from a directional market to a sideways churning market.  Its not unusual for a trader to do really well in a directional move and give it all back in a sideways, slow consolidating move like we had today.  Second,  by avoiding the short, my trade plan let me relax and not have to work through hours of chop. It is mentally difficult to sit all day waiting for a market to come in. Your mind races with thoughts like - what if we get squeezed up to 1620.  My guess is most shorts covered above 1615.  The best rotation down was about 3 points.  Best rotation up was 5 points.  The range for the day was 7 points.  Just not a great deal of opportunity.  

What I love most about the way I trade is that I dont have to figure it all out.  I only had two triggers.  1 worked 1 did not and net net I made a little money.  IMHO figuring out what the market will do tomorrow  is almost impossible.  All I have to figure out is what I will do a certain levels & let the market do its thing.  Bigger picture buyers are in control & I expect buyers to step in on the dips.  Bull market corrections are fast  but short lived and I would expect any up coming corrections to fit that profile.

“He will win who, prepared himself, waits to take the enemy unprepared.” 
― Sun TzuThe Art of War

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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