Sunday, June 23, 2013
ES TRADE REVIEW FOR 06-21-2013
ES opened in the 1591.75-93.75 WHITE ZONE. The WHITE ZONE has a very special purpose as it sets up my highest odds trade and gives me an edge right off the open. Since we opened below 1593.75 ( the top of the WHITE ZONE) the trade was to the short side. Two points was easily attained & 4 points were possible prior to the second test of the zone.
One must understand the having a high odds trade can make or break a career. Do the math using your own trading size, if you hit 1 trade a day for 2 points every day, how long would it take you to build your account. The WHITE ZONE accomplishes this task for me and then some. Remember, you only need one good trade.
In my approach to the markets, the idea is pretty strait forward. The 1st touch of a zone. Each subsequent touch reduces the odds of a successful counter rotation. That does not mean you can not get it; 2nd touches are very tradeable. The point is however, to focus on the highest odds trades. Day trading is about attacking when your opponent is in the weakest condition to defend and to take what is most easily given. Two points imho is very easily given and where I focus the majority of my trades.
Once buyers were unable to push through the WHITE ZONE, sellers grabbed control & would probably maintain control until the market became fairly extended towards Initial Support or beyond.
Now you as a trader have 2 lines of thinking you can follow. 1) I am going to look to trade both sides meaning I am going to take longs and shorts. This is the most aggressive stance and can burn inexperienced or inflexible traders but can be very rewarding for traders who can remain fluid. 2) Recognize that your not that fluid and decide your only going to trade in direction of control until such time as we have a major reversal at an important point like Initial support or we have a major tick divergence or, as was the case Friday we hit a tick extreme of +1000 or more.
I actually prefer trading in the direction of control. It often gives me the least amount of stress & the quickest rewards. If you look at each zone as it was tested for the first time while moving up from a lower zone. Almost every touch yielded 2+ points to the short side. A close examination of the zones while we were moving lower reveals that many did not get a rotation up on first touch while the first touch of each zone on the way back up did yield a successful rotation lower.
If you want to be a successful day trader you have to know who has control and which time is the right time to challenge that control. You challenge when the market is stretched, when there is tick extreme or tick divergence. Otherwise, just trade with control.
This whole game is a crap shoot, you have to put the odds in your favor if your going to win.
If you would like to learn more about trading like a pro & winning consistently, you can contact me at Tradenperform@gmail.com
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.