ES TRADE REVIEW FOR 05-16-2013

1) ES  opened into the 1654.25 - 1652.25  WHITE ZONE at 1652.75.  The WHITE ZONE dictates who has short term control of the market; buyers above & sellers below.  Since ES opened down into the zone, but not below, buyers retained control & the open provided excellent trade location for longs.  Responsive buyers quickly stepped in & drove ES up & out of the top of the WHITE ZONE.  (2) With a close above 1654.25 buyers reaffirmed control & set up a push to the 1657.75-1659.75  Initial Resistance Zone. (3) I expect responsive sellers at initial resistance & often look for a larger rotation down than the normal 2 point targets I look for.  Responsive sellers did materialize, pushing ES back down to the WHITE ZONE & a bit more.  Part of becoming a strong trader is recognizing small changes in behavior.  Yesterdays push up was relentless with very small rotations.  Today had large (relatively)  in both directions.  This is more of an indication of indecision by market participant as apposed to overwhelming weakness  & cued me to look fro balance, which I mentioned on twitter.  Balance can be very choppy in the middle and really chew up traders & I opted to wait for a resolution.

4) Despite the new low and the close below the WHITE ZONE on a 5 minute bar, the indications of balance meant I was looking for a move back tot he middle.   You generally want to trade balance days from the outside (where its not to choppy) to the inside, where it tends to be very choppy & you want to avoid taking trades where its choppy.  Sure enough, responsive buyers stepped in and drove ES back to Initial Resistance. (5) Initial Resistance provide fantastic trade placement to the short side all day.  Again, its an important skill to recognize what type of day you are in and adjust your trade strategy accordingly.  Bottom line Initial Resistance Zone was money all day long. Every touch provided a tradeable short entry.  Trailers paid particularly handsome all day. 

6) As we moved into the afternoon trade buyers had nothing left to push with and sellers finally gained the upper hand pushing down through the WHITE ZONE & down to the 1648-1650 support zone.  While the top to middle of the zone did provide a pause sellers were able to push down through the zone if ever so briefly. The strongest bout of selling came in the last hour. I can not emphasize strongly enough that the last hour is hard 7 countra trades are low odds trades.  Does a trader no good to catch a portion of yesterdays last half hour run up if you give it back today.  Successful professional trading is all about building wins; one on top of another.  Its not entertainment, its a business.   

Bottom Line,  Trade Location is everything.  chasers get smoked,  patience and strategy get paid.  It takes time to develop all teh skills necessary to bring it all together.  One thing that this blog should make clear.  You only need one trade. Once you have that one trade you can take your time in developing your other skills.  I am tired so I am going to leave it at that. Its nice to have consistently good trading opportunities throughout the day.  Summer is coming & it wont always wont be like this.  I for one am grateful for it.  

“When you decide to attack, keep calm and dash in quickly, forestalling the enemy...attack with a feeling of constantly crushing the enemy, from first to last.” 
―  Musashi, A Book of Five Rings: The Classic Guide to Strategy

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.

Updated performance data for high odds trade strategy as of 05-16-2013

The data is based on trades that would be generated based on my own trading rules.  I run multiple strategies   this spreadsheet is focused on one.  I am not encouraging anyone to run this trade or recommending it in any way. I post the zones prior to the open.  Reviews are written post market.  

Going forward ONLY the first trade will be posted until I can think of a easier way to go further in posting results of the strategy without extensively explaining the ins and outs- which has turned out to be very challenging via twitter. 

The point of this is to show that A) a plan with an edge can produce consistent results. B) You don't have to capture more than one or two points a day to grown your account. C)  a true Edge actually gives you , well an edge.  All charts are posted on the blog both pre & post market.  I encourage everyone not to follow anyone blindly, and protect your equity because it goes quick in this bis with just a few missteps.  No one talks about it on twitter or in chat rooms but there is alot of money going from the unprepared many to the prepared few.

I do offer very inexpensive coaching services starting at $200 for four group sessions to cover the basics to $125 an hour for one on one coaching. I priced it this way so that small traders could afford to get help.  Not sure how long I will keep it here.  I leave 10 hours a week to work with others. Its my way of giving back to the community.    If what I do doesn't do the trick I encourage you to get help somewhere else and above all make sure your edge is actually an edge & not a theory. Hope that helps some out there & I wish all the best of luck. 

You may contact me at tradenperform@gmail.com

Link to full spread sheet:

  https://docs.google.com/spreadsheet/ccc?key=0Ap5hOyO4ONQLdEh4blB3aU81Smk0a1VBVFZZRnVqb2c&usp=sharing

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.

ES TRADE REVIEW FOR 05/15/2013

1) ES opened below the days 1646.24-1648.76 WHITE ZONE.  The WHITE ZONE determines who has control; buyers above & sellers below.  With sellers in control my trade plan calls for a short with the first move into the zone.  Responsive sellers pushed ES back towards the 1642.75 low providing 7 to 8+ ticks from the initial push into the WHITE ZONE.  If you follow me you will find this is my primary & highest odds trade. 

2) Responsive buyers then pushed ES back up towards the WHITE ZONE WHERE it chopped for pretty much a solid hour.  The second time into any zone always has lower odds of having a rejection. Also important is to recognize when the market is in chop mode.  Inexperienced traders really get hurt in this tight whipsaw action.  I noted on twitter that less is more in this situation & to wait for the market to resolve before committing   

3) At the top of the hour we had resolution as ES closed out of the WHITE ZONE on a five minute candle.   This put buyers in control & triggered a long signal on the first dip into the zone. 

This is a major benefit of the WHITE ZONE; even if you can not get long, you know to use a great deal of caution putting on or pressing any shorts.  

Bulls proceeded to push ES into the 1651-1653 zone easily giving a 2 point profit target. Sell supply emerged at the zone,  but only enough to cause a small pause before pushing out the back of zone. 

4)  The close above 1653 generated another buy signal upon the first dip back into the zone which was again met with responsive buyers that drove ES to the 1656-1658 Initial Resistance Zone, again generating the primary 2 point target.  

A quick note here, under most "normal' circumstances I would not be eager to take a long here.  The market was very extended from the lows & I would normally expect a rotation lower.   We are not in a normal environment & thats just how it is.  Caution is warranted on longs & shorts.  If your struggling in this environment just waiting for an easier environment to operate in  is probably a good idea.

5) Buyers continued to push ES into & towards the back of the 1656-1658 Initial Resistance zone.  I expect responsive sellers at Initial resistance.  Buyers were not quite finished and made one more push out the top of  the zone towards 1660.  I tweeted that at this point I was not taking any longs unless we spent significant time digesting the move up or had a big pullback.  Again, i consider avoiding taking a losing trade as valuable as a winning trade.  The market had made an almost 16 point advance with no rotation lower.  As it worked out responsive sellers finally showed up in force and proceeded to drive ES all the way back to the top of the 1646.25-1648.75 WHITE ZONE.  This was a  retest of the initial break higher. It was in the last hour of the day & I pretty much avoid putting on new positions in the last hour. That being said I tweeted that buyers were still in control as long as we held above the WHITE ZONE.  In addition,  the markets overlying theme at all times is to punish chasers. 

6) Sure enough the touch into the WHITE ZONE brought responsive buying that drove ES all the way back to Initial Resistance.  Late shorts were smoked at the WHITE ZONE just as late longs were smoked at initial resistance.  Same song, different day.  Trades in the afternoon tend to have a higher difficulty than trades in the am.  You may want to keep that in mind if you are struggling in the afternoon.  

This can be a very rewarding business if you can create structure around a market that has no limits.  Once you create structure you can trust possibilities open & you can see so much more.  Opportunity becomes clear.  Without structure,  the market is a scary place with threats at every turn.  Hard to have a calm mind in that environment.

If you would like to learn how to think & trade like a pro you may contact me at tradenperform@gmail.com

Hope everyone did well today.  Dont forget that its only one day of many.  

"Never try to be better than someone else. Learn from others, and try to be the best you can be. Success is the by-product of that preparation.” 
― John Wooden

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.

  

ES TRADE REVIEW FOR 05/14/2013

ES had quite the day. ES opened at the very top of 4 day range and took zero time breaking out, making the smallest attempt at gap fill. The WHITE ZONE of 1631.50-1633.50.  The WHITE ZONE determines control; above buyers have control/below sellers.  ES quickly tested the back of the WHITE ZONE & experienced the briefest of rejections.  The back of any zone holds the highest odds for a successful trade lower.  That being said,  the gap into the top of the trading range after basing for 4 days called for a bit of caution.  A short with a tight stop right behind the overnight high carried a small risk but you had to have the discipline to cover.  The first 5 minute bar closed above the WHITE ZONE & the overnight high.  I  posted that buyers were in control & shorts were a bad idea. The set up was a bit tricky because of the of the ONH being directly over the WHITE ZONE.  The entry was on the back side test of the overnight high. 

2  If you missed that entry the next best entry was on the first zero tick reading of the day.  this is a high value entry point on trend days & each subsequent zero tick reading provided a good long entry. At approximately  8.48 am central we had our first zero tick and a fill at 1635.75 should have been very attainable.   As always i encourage scaling & leaving a trailer. If you were to leave a trailer you had a 10+ point trade available to you.  a good trade by any measure

3 ES continued up through the 1638-1640 zone.  I warned that shorting was a low odds affair on a day like today.   Buyers continued to drive right into the 1644-1646 Initial Resistance zone.  I expect sellers to materialize at Initial Resistance & responsive sellers were not able to make a significant push lower they were  able to slow the advance.  ES made one last push above 1646 before beginning a rotation down towards VPOC.  Sellers could not muster enough strength to get to VPOC & it was clear that buyers remain in control.  

4   With sellers unable to muster anything better than a 5 point rotation lower buyers had no problemm driving ES back to the highs of the day. Simply a fantastic day.  

A few take aways from today.  Being able to recognize trend days is essential.  So many traders that are use to fading simply get killed until they can recognize the clues. Inability to get gap fill. No meaningful negative tick readings.  Hard open drive up.  A move out of a basing range (prior 4 days) No rotations or very small rotations down.  First step is getting out of the way, second step is harnessing the power of the trend days.  Get it right and it can make your month in a single day.  get it wrong or spend all day fighting it and it can destroy your account.  So many traders come to the market with ideas of how it should work.  After years of that mental exhaustion i just accepted that I dont know. I am just not smart enough to have an edge over everyone else in thought.  I am smart enough however to sit and listen to what the market is saying .  It communicates in rotations, speed, higher highs and lower lows.  It says something when gap fill is not attained or when it is.   Listening to what the market is communicating is more valuable than what I do or dont think is possible because at the end of the day I have no idea whats possible. I know that I dont know. Unless your really really really smart, you dont know either.  

So many top callers and day traders who insist this is out of control have blown up or not made any money.  Its been so easy to make money long.  No one wants to say it, its almost wrong.  I am not thumping my chest as if I know everything, I dont.  But the set ups and rotations have favored long positions for a while now.  You gain nothing as a day trader standing on principal.  No one pays you to have an opinion.  your job is to find an edge and exploit it.  That is what i try to do every day.  Its what you should try to do if your day trading.  I dont give a damm where the market will be next week.  1500 is as good as 1800 to me.  there is going to be an open, a few rotations up and a few rotations down.  I hope to collect a few dollars inbetween.  Thats what matters if your a day trader.  Sorry if I went on a bit.  Its late. And with that I hope everyone had a wonderful day & a good night.  Dont forget to tell your family you love them no matter what kind of day you had.  Thats your greatest asset period.

“Life is a series of natural and spontaneous changes. Don't resist them; that only creates sorrow. Let reality be reality. Let things flow naturally forward in whatever way they like.” 
― Lao Tzu

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.

REVIEW OF MORNING TREND TRADE & ZERO TICK LONG ENTRY 05-14-2013

Quick review of morning trade:

ES gapped to the top of  the value area and to the back of the WHITE ZONE.  Back of the WHITE ZONE often provides great short location with a tight stop.  The close above the WHITE ZONE placed buyers in control   Tweeted that I am looking for a long position.  with no dip back into the WHITE ZONE the first opportunity came at the first zero tick as highlighted on the chart and an excellent entry at 1635.75 as tweeted.  I scaled a bit early and left a trailer which it turns out I scaled early to but +6 is really nice trade.  warned repeatedly that shorting is an epicly bad idea.  Market has traded up & into 1644-4646 Initial Resistance.  I expect sellers to materialize at Initial Resistance but as noted earlier,  shorting even here is for the brave at hart & simply dangerous for small accounts.  Even if you missed every long entry.  Not being short today could save you unlimited stress & distress.  For me,  not taking a losing trade is as valuable as a winning trade. I am looking for an extreme tick to put a cap on the buying.  +600 is best high tick so far.

If you would like to learn how to trade like a pro,  contact me at tradenperform@gmail.com

Trade Plan:

1 min chart:

A manager is responsible for the application and performance of knowledge.
Peter Drucker 

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.

ES TRADE REVIEW FOR 05-13-2013

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.

ES TRADE ZONE REVIEW & NOTES FOR 05/10/12

ES had a balanced day probing both initial support and initial resistance. (1)  Es opened at 1625.25 & traveled just over the back of the 1624.50 to 1626.50 WHITE ZONE.  The WHITE ZONE determines who has control; buyer above & sellers below.  Buyers tried to push above the WHITE ZONE & TAKE control but failure to close above the 1626.50 on a 5 minute bar left sellers in control.  Sellers were able to push to 1623 & was sufficient to take 2 points+ per the high odds strategy no matter where a trade was taken in the WHITE ZONE.   of into the bottom of the WHITE ZONE and probed to the top of the zone before reversing lower.

(2) ES got a  little tricky form here.  When the market is in balance the best was to trade it is from the outside in.  The middle will have a tremendous amount of chop & is the worst place to enter a trade. The WHITE ZONE was the highest volume area Friday for the second day in a row.  It is a rare occurrence & this area should be noted as a place to stay away from entering trades. That being said buyers were able to push & close above 1626.50 G a buy for the high odds strategy on the first dip back into the WHITE ZONE.  The push down had no rotation up & fell through the zone & stopped out the trade for -3 (again, this trade is for education purposes & not a trade recommendation) 

(3) Sellers pushed down to the 1622-1620 Initial Support.  I expect buyers to materialize at the first touch of Initial Support. Responsive buyers stepped in at the zone and quickly drove ES back into the WHITE ZONE. Because this was the first touch back into the WHITE ZONE after it was broken on a five minute bar, a sell signal was generated.     

Again,  this zone became the high volume area of the day making trades difficult.  Depending where the trade was placed; the front of the zone would produce a stop to the tick as the model calls for a 3 point stop.  Taking the back of the zone would produce a successful trade as buyers were unable to maintain control.  Two stops in a row shuts down the trade strategy.  My spread sheet tells me its rare to get two stops back to back & there are too many good days to risk taking a big draw down on any one trading day.  Again,  I trade multiple strategies & am simply highlighting the possibilities of trading just 1 high odds strategy.  That being said,  there are many ways to cut this cake.  

4  Sellers stepped back in at the top of the WHITE ZONE.  This is a perfect example of why I suspend the strategy after 2 back to back stops.  The move & close above the WHITE ZONE on a 5 minute would trigger another buy signal.  had it been taken a loss would have resulted.  No trade was taken.  Sellers pushed ES all the way back down to the back of Initial Support.  Again,  I expect strong buy responses at Initial Support & the back of the zone offers the highest odds for a counter rotation trade. I mentioned on twitter that the back of the zone offered excellent trade location & ES stopped at 1620 to the tick.  In addition,  1620 was a 7 point rotation down from the previous swing high and equal to the largest down rotation of the day.  Add to that that 1620 was the prior days low & this occurred on a low volume push during NY lunch & it was a powerful set up & a low of the day. Its simply very difficult to find a better confluence for a better set up.  It was the low of the day!  Just doesn't get better. 

5 Responsive buyers stepped in and again drove the market back to the 1624.50-1626.50 WHITE ZONE where it spend the better part of two hours chopping around in a tight zone before being driven up to the 1630-1632.50 Initial Resistance where buying was shut off to the tick.(6)

A couple of closing notes, 1,  I did not expect a tight balance day but as soon as I recognized something was not right I shut down a strategy which would have had several more losses through the course of the day.  The two stops back to back was important market information & I value that information.  the highest odds way to trade a balance day is from the outside in & avoid placing a trade in the middle where it will be extremely choppy.  It was a difficult day overall & over-trading probably resulted in large losses.  

I will be careful to not take a trade in the 1624.50-1626.50 range  & wait for the area to be resolved.  If we are going from a directional market to a range market--& I dont know that we are;  I want to focus on trading from the outside in & avoid the middle.  The quicker you can recognize a potential change in the market the quicker you can avoid taking unnecessary losses.  Hope all had a good week.  Tomorrow new opportunities await! 

The secret of all victory lies in the organization of the non-obvious.
Marcus Aurelius 

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.