I am going to cover some very specific points for today's review.
1) ES opened into the 1632-1634 WHITE ZONE. This generated the first long opportunity of the day. The WHITE ZONE is my highest odds trade and generated 2+ points out of the gate and established firmly that buyers are in control. This means that buyers will have the edge until we hit INITIAL RESISTANCE. I expect responsive sellers at INITIAL RESISTANCE & while that did not happen today we did have a significant pause at that zone. For less aggressive traders its always a good idea to take off a long at Initial Resistance if you had not already done so.
2) While buyers maintained control through out the day the middle to back of the zones provided excellent location for aggressive traders to take quick shorts. Every zone provided at least a 2 point rotation lower from the middle to the back of the zone. It goes without saying that you should always have a stop in place. One that is reasonable to allow the trade to succeed while still providing sufficient protection against significant damage to your trading account.
3) Take away: Some of the best trades in the market are quick ones. The WHITE ZONE requires speed and discipline If you wait to see that it is right you will miss it most days. Its an uncomfortable trade and exactly the reason that it is so successful for me.
Trend days are hard. If you do not get in early, It is often hard to find a good entry. Do not beat yourself up. While we have had several trend days lately the vast majority of days are range days with extensions.
It take s dedication and discipline just to admit that the best and easiest trades are gone for the day. Traders often feel left out or cheated. Just tell your self there is more to learn and another GOOD opportunity down the road. If you stick to your highest odds trades you will not have to trade for free tomorrow because of the loss you took on a low odds trade.
Its all about stacking chips folks.
Good to be back. I love the markets. See all of you tomorrow.
Oh, one last note. FED DAYS ARE HARD. I CUT SIZE, TAKE FEWER TRADES AND SOMETIMES DO NOTHING AT ALL. LEVELS DO NOT MATTER WHEN THE HERD IS ON A NEWS TEAR. SOMETIMES ITS BEST TO STAY AWAY. ALSO FRIDAY QUAD WITCHING WHICH COULD MAKE THURSDAY VERY HARD--MANY POSITIONS THAT EXPIRE FRIDAY WILL BE SQUARED THURSDAY. FIRST HOUR OF FRIDAY COULD ALSO PROBE MORE CHALLENGING THAN NORMAL. NOW THAT YOU KNOW, MAKE THE BEST DECISION FOR YOU.
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.