ES S/R ZONES TRADE REVIEW 04-30-2013

(1) ES opened above the 1587.50-1585 WHITE ZONE indicating buyers are in control  The market tested into the white zone off the open & triggered a buy signal.  Aggressive entry  was from the front of the zone + the highest odds entry was from the back of the zone.  While both entries rotated higher; neither achieved a 2 point rotation and I considered the trade a loser with any reasonable loss. (hypothetically calculated at 3 points)

(2) The second trade was triggered when ES traded back up into the 1587.50-1585 WHITE ZONE with only the most aggressive shorts getting filled.  The WHITE ZONE was broken to the down side control had switched to the sellers.  The trading rules for this strategy calls for passing on long set ups when sellers are in control.  the rotation down to the 1582.50-1580.50 provided the opportunity to cover for 2+ points. 

While this strategy calls for trading in the direction of control I tweeted that bears really needed to make a push here or that they would lose the advantage.  I also noted the higher low on a five minute chart and the lack of a negative tick greater than -400.  ES then rotated back up the the WHITE ZONE.  This was the second touch of the zone from below so no trade was triggered per the rules.  

(3) At 10.15 ES closed above the 1587.50 indicating buyers back in control which would trigger a long on the first test back into the zone.  ES  rotated up to the 1590.75-1592.75 which was also Initial Resistance.  I expect to find sellers at Initial Resistance. The rotation up provided a 2+ rotation for the 2nd successful trade of the day.  ES balanced in a tight range for the balance of the afternoon.  While sellers did appear at Initial Resistance a small rotation down was the best they could do.

Heading into the last hour I warned that we are trading near the highs of the day and above the 1st hour high; shorts are just a low odds opportunity.  Think about it,  what would cause the market to cascade in the last hour?  Today, nothing.  Shorts were pressed right into the 3.15 close.  I can not emphasize enough if you are a day trader that consistent high quality wins are the only way to make money.  6 out of 10, even 7 out of 10 does not cut it.  Its this lack of understanding that kills small traders.  Make sure you actually have an edge.  Consistency is achievable.  Anyone can do it with preparation.   

TODAY'S TTL TRADE TRIGGERS: 3    

WINNERS: 2,  2PTS EA PER TRADE PLAN

LOSERS: 1    3 PT LOSS ASSUMED. 

TTL GAIN/LOSS +1

“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win” 
― Sun Tzu, The Art of War

ES S/R TRADE ZONES & BASIC STRATEGY REVIEW FOR 04/29/2013

TRADES TRIGGERED: 3   2 POINT TARGETS ACHIEVED: 3  STOPS: 0

ES opened the day  just above the 1579.50-1581.50 WHITE ZONE.  The WHITE ZONE delineates control between buyers & sellers.  Buyers are in control above and sellers are in control below.  Opening just above the WHITE ZONE a trade was triggered on first touch down into the zone. (1)  Depending on your risk tolerances and aggressiveness there were two valid entries on the long side. Front of the zone is most aggressive and back of the zone is the highest odds. The back of the WHITE ZONE printed the low of the RTH session to the tick and for those wanting to swing trade or use a trailer, you had an 11 point + rotation to the high of the day with no heat.  Per the strategy discussed here buyers at the front and the back of the zone had easy 2 point rotations for a nice trade.

(2) Per the highest odds strategy I am discussing on this blog,  shorts are to be avoided in general  when buyers are in control  instead using zones above to scale if a trader has the ability to carry a trailer from lower levels.  The approach to the 1583.25-85.25 highlights why.  Had you shorted the front of the zone you had to cover for a loss-small or big was the only question.  Even the back of the zone proved to be a challenging short.  2 points would be hard to come by.  The easier trade and higher odds trade was to simply wait for the zone to be penetrated on a 5 minute bar and long the first test back.  That exact opportunity presented itself again & the long gave a nice rotation up to the 1587.25-89.25 zone for a 2 to 4 point rotation.  Again,  the most basic strategy calls for an exit at 2 points.  Anything more is just gravy as far as i am concerned.

(3) The third & final trade of the day set up when ES traded above the 1589.25-1591.25.  The close above the zone on the five minute triggered a long trade on first trade back in for a rotation up to the 1591.50-93.50 which was also noted as the days initial resistance. The 3rd and last trade was good for a 2pt rotation.   I would normally expect to find sellers at initial resistance and am at least going to close out a long there and look for shorts.

There were several clues that buyers were in control today.  These are important clues one should look for daily.  1)  No gap fill, sellers weak out of the gate.  2) small rotations lower and big rotations higher-always measure the size of the rotations for the clues. 3) TICK never registered greater that -200 until late in the afternoon.  If you know what to look for the market will tip its hand.

So there were 3 opportunities for long trades and 3 wins.  I followed my trade plan and my focus was on execution.  This is the essence of growing your capital and building wealth.  Its not a trick.  Its just focus and disciplin   Anyone can do it.  If you would like help, contact me.

TRADENPERFORM@GMAIL.COM

“You can be sure of succeeding in your attacks if you only attack places which are undefended.” 
― Sun Tzu, The Art of War

ES TRADE REVIEW 04/26/13

ES opened above the 1576.50 -78.50 WHITE ZONE. The WHITE ZONE determines who is in control. Above the WHITE ZONE buyers are in control & below sellers are in control. Since above the WHITE ZONE my trading rules call for me to assume buyers are in control. The first trip into the zone offered trade location at two points. (1) The front of the zone is the most aggressive point to place a trade and the back of the zone is the highest odds point to place a trade. Again, this strategy calls for only trading the 1st trip into the zone. While there may be subsequent trades into the zone that have nice rotations out of the zone for a counter rotation; the odds of a successful trade drop with each subsequent trade & call for a more advanced trading strategy. Weather a trade was placed in the front of the zone or the back of the zone traders were rewarded with a move up towards the 1581.75-73.75 resistance zone worth 2-4 points depending on trade placement.

The 2nd trip into the zone did not yield a successful rotation upward and eventually broke to the down side. This set up a potential short on the first trip back up into the zone. (3) Per my trading rules, a short was triggered and again depending on risk parameter there was good trade location at the front & towards the back of the zone.(4) The trade yielded a potential 3-5 point trade as ES moved towards the 1570-72 support zone. Remember a zone is support until it is broken on a five minute bar that closes outside the zone. The zone then becomes resistance.

 (5) The 3rd valid trade of the day per my trading rules came when ES moved back into the WHITE ZONE & subsequently broke to the upside on a five minute bar. The move back into the zone after the break set up a long. The long had a potential for up to 2.5 points as the market attempted to rotate back up to the 1581.75-83.75 zone. As most who follow me know, I scale my trades rather quickly. I am not trying for a home run. I leave trailers most of the time but I dont have targets. I simply assume I do not know what the market is going to do and all I do have control over is where I place my open orders and my stop losses. Each of the traders that where set up per my trading rules yielded a minimum of two points from the front of the zone. There were no losers.

 Ask yourself, how many points do you need a day to be successful. For me, 2 trades a day for 2 points is all I need. I am a day trader and I only want the highest odds trades and I want to play for the highest odds outcome. As you can see, the trader who tries to hold for more than 2 points at the end of the day was stopped break even at best. IMHO, for most traders, the hope of catching a 5-10 point move is just that-a dream. I want to set myself up for success and my trade plan and rules provide me with that opportunity.

 I welcome any questions or feedback. Hope everyone traded well. Looking forward to the next week.

 “We are not fit to lead an army on the march unless we are familiar with the face of the country -- its mountains and forests, its pitfalls and precipices, its marshes and swamps.” ― Sun Tzu, The Art of War

ES TRADE REVIEW FOR 04/25/13

ES opened the day just below today's White Zone of 1578.50-1580.50.   My trade rules call for a short on the first move into a zone.  The zone itself is a high odds location to place a trade.  The highest odds location is the back of the zone.  If I short the front of a zone, which I often do,  I assume that the ES may travel to the back of the zone before reversing.  Where one places a trade must be based on ones risk profile.  (1) Regardless of where I placed the trade,  I was offered excellent profitable scales.  From the back of the zone  you had a potential of 4 points and from the front of the zone you had a potential 2 point trade.  As I have tweeted several times; my trade rules call for scales starting at 5 ticks, 8 ticks, 12 ticks and 16 ticks and then a trailer.  As I have tweeted many times,  If one were to trade only 1 contract,  I would target 2 points for each trade.

(2) Es then traded back into the zone for the second time in the morning.  The second trip into the zone is a lower odds trade even though the zone is resistance until it is broken, at which time it becomes support.  My rules define a zone as broken when ES closes out of the zone on a 5 minute bar.  In addition to the second touch of the zone we had several clues that shorting was not a high odds affair.  First,  traders were unable to push down to gap close, 2  we did not have a tick reading great than -200 on the first rotation back down.  Once the trade broke above the 1580.50 level, control shifted to the buyers.  For me this means several things.  First,  if I am short I need to cover quickly. Secondly, I need to get long at the first test into the zone if I get an opportunity   I do not chase.  I execute at the zone or I let the trade go. Once the zone was broken we had a quick retest of the top of the zone & then rotated up to the 1583.50.  If one had not scaled by the time we got to the next zone the front of the zone provides a logical place to either scale or exit the trade.  Since buyers are in control my rules for this strategy call for passing on taking the short.  As you can see, taking a short here or anywhere in the zone would prove very challenging. ES then chopped in a tight range into NY lunch.  I noted on twitter that the rotations down were very small and that the tick had still barley been negative.  These are signs that shorts will be difficult and favor longs.

(3) ES proceeded to break the top of the 1583.50 to 1585.50 triggering a buy signal per my rules on first trip back into the zone.  The test down did not get to the zone and I was unable to get long.  Even with that being the case,  I was not short and not having a losing trade is as valuable to me as having a winning trade.
I mentioned on twitter that all indicators pointed to buyers wanting to take ES to the 1588 to 1590.  This zone was market as initial resistance.  This is often where I will begin to look for shorts.  ES traded to 1588.25 and marked the high of the day. (4)  The move into the zone was also market by tick divergance giving further indication that initial resistance would hold.  Again, this strategy I am featuring calls not taking short as long as buyers are in control.

The market then proceeded to rollover and trade back down to the White Zone.  This highlights several things in my trading approach.  ANYTHING can happen. Managing risk is everything.  Oppertunities are constantly offered by the market.  I cant miss a trade, I simply learn something new and move on.  The afternoon trade is harder than the morning trade.  My goal in this strategy is to find 2 to 3  trades a day.  I have already accomplished this.  My goal is to grow my equity in a consistent manner.  Most small traders try to capture every trade.  Its just hard to make multiple trades in a row and get it all right.

(5) ES rotated down to 1585.50-83.50 zone.  This is the first rotation down from a zone above since buyers took control and we have had tick divergence the zone above. ES could not even muster a 5 tick rotation up from the top of the zone after sitting there for 20 min.  Another clue that buyers hands had weekend.  We then rotated down to the bottom of the zone and broke below.  At this point,  we now have the biggest rotation down since buyers have taken control.  Another big clue that taking longs would be challenging.

(6) As we trade back down to the WHITE ZONE  for the second time of the day, my strategy called for passing on the long.  Again, I am only seeking the highest odds trades in this strategy. As is clear to see the zone did hold and had 2 nice rotations up from the back of the zone.  Trading here required a more advanced and higher risk strategy that I teach my clients to trade.  Lots of ways to take advantage of the market.

Remember,  your job as a trader is not to catch all the trades or even trade all day.  The only thing that matters is day to day consistency and growing your bottom line.  Most traders fail miserably here.  Most retail traders lose.  Make sure you have an edge and a trade plan you can follow.  Wiping out an account is not necessary.  Hope everyone had a great day.

ES Mid morning trade review w notes 04-25-13

ES TRADE REVIEW 04/24/13

I am running behind tonight and a bit tired so this review is going to be on the short side.  ES opened under the 1574.25-76.25 WHITE ZONE.

  When the market is trading above the WHITE ZONE buyers are in control-below & sellers are in control.  In the strategy I discussing on my posts I am describing my highest odds trades.  First time into the WHITE ZONE is a high odds counter trade.  The most aggressive trade is from the front of the zone, the least aggressive trade is from the back of the zone.  Both trades gave multiple scale opportunities with a max possible gain of 6 points. (2)  ES traded down to 1 tick infront of 1570.50 zone before rotating back up to the 1574.25-76.25 zone.   Today turned out to be quiet the chop fest.  Many traders have difficulty when a market suddenly switches from making fast directional moves to slow grinding moves.   Following a trading plan and not running many trades makes navigating these days much easier.  The market chopped through a top range until just after 1 pm central.  I pointed out on stock twitts that if the market closed above 1576.25 on a five minute bar that it would generate a long trade for me on first test into the zone.(3)  I took the trade at 1576 and had two scales for +5 ticks and +8 ticks.  I was stoped on balance at break even.  It was a difficult trade to take.  Market internals were not really confirming an extended move up and it was late in the day on a choppy afternoon.  emotionally I wanted to talk myself out of  the trade.  Thats where trading rules always come into play.  There is always a reason to not take a trade, or finding reasons to take a trade.  By having clear cut rules, there is less thinking and just following the set up.  I would have missed my profitable trade and that would have been very disappointing.  ES had a pretty good bout of heavy selling into the close.  The last hour is always tricky and the market seemed off balance on whole, probably because of the ridiculous news event midday yesterday. Tomorrow a new day.  i am off to get some rest so i do a good job in the am.  Hope everyone did well today.  

HOW TO FIND CONSISTENCY AS A TRADER

I hear traders all the time, quietly, explain how they are struggling to break even.  Its a quiet suffering, no one gets on Stock Twitts and shouts I can not stay consistently profitable. Most make one trade and kill it followed by a series of trades that nullifies all the good work.  Before you know it,  your back at scratch or down.  Its humiliating.  I have been there- many times.   

This kind of trading can do awful things to a person, from frustration, to depression to low self esteem.  It can be so frustrating to lose one day when the previous day money seemed to be falling into your lap.  Or perhaps you first two trades were winners that had you feeling on top of the world followed by 3 trades that wiped it all out in the afternoon. 

If your like many of us, you have kids to take care of and wifes/husbands to keep happy and retirements to be concerned with.  It all adds up to alot of pressure.  Throw in the guys we see in stock twits and twitter who seem to nail every move.  Its pretty easy to feel like you do not measure up pretty quickly.  I have been there and I can personally tell you it feels like shit.   It so felt like shit that I swore that never again would I trade if I could not trade consistently   

These are the steps I followed strictly   and they took me from a looser to a winner:  

(this assumes your trading plan actually has an edge( MAKE SURE YOU HAVE AN EDGE) 

1)  I wrote a trading plan before market specifying where I would take a trade and exactly how i would scale it.  I had the exact number of contracts i would trade and exactly how i would scale them.  Pretty much no thinking.  

2) I would not enter a trade after 11am central.  Period.  

Most days I would get 2 trades,  sometimes 3.     So lets say I had a 10 k account.  I started with 1 contract and I scaled for 8 ticks each time.  There were some losers but the gross majority were winners. (see my daily postings & blog the trade is very spacific and its win rate is close to 90%).  Lets assume 8 winners a week and 2 losers on 1 contract using a 1 to 1 risk reward scenario.  Thats a total profit of $600 a week.  At the end of the month its $2400. Its a real big return and there are many weeks where the trade hits 100%- no losers. Again,  I post the work and send out the rules ahead of time, so one can watch and see that what I say is accurate. 

When I had my 2-3 trades,  I was done for the day.  Period.  

The next step in making this work was critical.  I DID NOT LOOK TO SEE HOW MANY WOULDA COULD SHOULDA POINTS I COULD HAVE HAD.  That is the killer in this bis.  Everyone always says I should have left the trailer or I knew it would make a huge move.  DOESNT MATTER.  All that matters is that you make you account grow.  You dont need a million trades, you just need ONE TRADE that will let you consistently grow your equity.  If you dont, you will be out of the bis.   

At the risk of sounding like i know it all,  I have sat in a dark quiet room after spending time loosing ungodly sums of money and wondering how it got this way.  How could I see so many good trades and still end up losing money at the end of the day.  So I gave up and admitted that all I had was one trade, and so should you- if you even have that.  

Work that one trade till its a bloody pulp.  Hit it again and again and grow your equity to a sizable amount, increase your trading size as you move along and increase your profits   If you want to know the secret, its the secret.   We are not all George Soros, or  Cohen or FT71's  or any other awsome trader out there.  

Most of us are every day guys with a dream.  The dream is to have the financial freedom trading can bring.  But the dream gets distracted and diluted.  We want to do everything great- and for most of us its a pipe dream.  So instead my suggestion to you is to do ONE thing GREAT.   That one thing can make you more money than you ever dreamed of.  Once you make your tons of money and you wan to see if you can pick up more trades-- go for it.    But first show yourself, your family and your sense of self worth that you can do this job on the most basic level.  You have one trade, you exploit it to your advantage and you dont look back.

You will feel like your on top of the world if you can do that.  Its late,  i hope this made some sense. 

PS -- this will not work if you don't actually have an EDGE-- critical.   

TradenPerform.  

Comments Welcome.