Monday, April 20, 2009

ORB Green Light for Monday, April 20, 2009

Friday is a NR7 day per so we have a green light for the ORB (opening range breakout) today. I got a backlog of paperwork for journal entries from last week still will catch up later.

Thursday, April 16, 2009

April 15, 2009 Wednesday Short EUR/USD and Short AUD/USD

Forex Trade 3 of Month of April 2009 - Shorted 10 microlots of the EUR/USD on failure of the daily pivot point, was faked out we had a buying spike (follow-through from bullish US session to the Asian session probably). Stopped out -43 pips.

Forex Trade 4 of Month of April 2009 - Shorted 10 microlots of the AUD/USD on a breakout failure of the yesterday's high level. Noticed that the MACD on several timeframes formed nice divergences with price was waiting for some sort of confirmation to get short. Failure of the magenta line (yesterday's high) was my trigger to get in. I scaled out 5 microlots at 28 pips and tried to trail the remaining 5 microlots for yesterday's low but saw the daily pivot point (yellow line) holding so just got out. Short AUD/USD 10 microlots +28 pips on 5, +36 pips on 5.

Trade 3 (Short 10 microlots EUR/USD Stopped Out -43 pips):
Trade 4 (Short 10 microlots AUD/USD +28 pips on 5, +36 pips on 5):
Trade 3,4 of Month of April 2009 Screenshot

Treading water today in Fx tonight, down...$10.55 USD :(

Wednesday, April 15, 2009

April 15, 2009 Wednesday Day's Trading Analysis

I had mostly the right trading ideas today, although too early on entries without waiting for good bid/ask volume confirmation. The VWAP was an excellent indicator, not because it acted as great S/R but because it was NOT respected, showing us the market's character was that of a Z-day (range-bound choppy day where fading extremes in price is the best way to trade).

On trend days the VWAP is well-respected. If you are lucky to get a pullback/throwback to the VWAP, that might be one of your few retracement opportunities to ride a strong trend.

The second trade was really the only one that didn't make much sense and didn't meet any of my criteria.

April 15, 2009 Wednesday Trade 4 Long 2 Contracts Stopped Out -2.25 Points

This setup was a bullish Gartley (it is basically a pattern where you have one big push up, two pullback waves back to the 61.8 or 78.6 Fibonacci retracement of the first big wave, then the upmove continues from there) fade the extremes, reversion to the mean trade. The setup idea was sound, but the entry was too soon to get in after a broken trendline support level (e.g. going long too near resistance) without very good volume confirmation to get in to the trade, therefore I was stopped out.

Trade 4 (Long 2 Contracts Stopped Out -2.25 points):
Trade 4 Screenshot

Following is a screengrab I did showing a better entry for the same setup idea and why it is better. Basically waiting for 3 minute bid/ask indicator to show several bars where buyers are control (green part of bar on top showing more big trades at ask), allowed you to take the same setup idea with a stop 2 ticks below 834 that would not have been hit (even though there was a pretty scary down bar after the volume confirmed):
Better long entry point screenshot

Note: Trade idea OK but entry too soon after a trendline break, so fighting really strong resistance in addition to not waiting for at least one 3 minute bar showing buyers in control. The price needed time to correct sideways and get away from that up-sloping resistance level where there are still tons of people selling.

This will be my last trade of the day. It has been a very tough options expiration week for me I think I will take the rest of the week off.

April 15, 2009 Wednesday Trade 3 Long 2 Contracts +1.75, +.5 points

Went long 1 contract on oversold 3 minute stochastics and price showing VWAP level holding, and added another contract on volume confirmation. We got a good buying spike from beige book at 2 PM Eastern time showing overall improving economic conditions but this didn't last.

Trade 2 (Long 2 Contracts +1.75, +.5 points):
Trade 3 Screenshot

April 15, 2009 Wednesday Trade 2 Long 1 Contract Stopped Out -2.25 Points

Went long too soon, there was a huge large bar of selling when the daily pivot was rejected (largest big volume trades at the bid of the day), got hit by the sellers one 233 tick bar after I entered quick stop-out.

Trade 2 (Long 1 Contract Stopped Out -2.25 points):
Trade 2 Screenshot

April 15, 2009 Wednesday Trade 1 Short 2 Contracts Stopped Out -2. -2.25 points

Saw that the VWAP was not respected today, and crossed through both sides so shorted an extreme resistance area. The volume the whole time though showed more bidders with large trades mostly at the ask, so eventually the longs won and cracked the trading range.

Trade 1 (Short 2 contracts stopped out -2, -2.25 points):
Trade 1 Screenshot

Note: Market still extremely strong on the daily timeframe, it probably faked out a lot of swing shorts.

Tuesday, April 14, 2009

Found Resource for FXCM Micro Trading Station II(TM) Indicator Development

For those of you who use FXCM Micro Trading Station II(TM) to trade your FXCM Micro accounts, I found a blog site dedicated to .lua indicator development for the platform. The URL is as follows

April 14, 2009 Tuesday Trade 3 Short 2 Contracts

Observed the VWAP was not respected today, making me suspect we were due for a Z-day (rangebound chop day where price oscillates between extremes of price). Saw that the daily pivot level was rejected with good selling volume (bid/ask volume indicator on both the 3 min chart and 233 tick charts showing big trades mostly at the bid) so shorted retracement back up with volume and price confirmation on 233 tick chart.

Trade 3 (Short 2 Contracts +1.5, +3.5 points):
Trade 3 Screenshot

April 14, 2009 Tuesday Trade 1 and 2

Trade 1 - Waited for overbought condition on 3 min chart to short near the VWAP (volume weighted average price) expecting a nice push down due to the topping formation (potential head and shoulders) shown on the hourly chart. I scratched the trade because the price action was too strong. Short 2 Contracts Scratched Trade +0, -.25 points

Trade 2 - Same setup, saw VWAP had tailing piercing through it and we were overbought shorted 2 contracts. Here shorts were actually trapped there was a really strong ramp up. Short 2 Contracts Stopped Out -2.5, -3 points

Trade 1 (Short 2 Contracts Scratch +0, -.25 points):
Trade 2 (Short 2 Contracts Stopped Out -2.5 -3 points):
Trade 1, 2 Screenshot

Note: The VWAP did contain the price but only for a short time. Basically the price followed slightly below the VWAP sideways, which is more of a bullish flag-like pattern, a lot of shorts were trapped it fueled an extremely fast short squeeze.

April 13, 2009 Monday Short GBP/USD 10 microlots

I actually shorted the GBP/USD here which was failing the yesterday's high and yesterday's close levels, because it was lagging behind the EUR/USD in terms of breaking down. I first noticed that the EUR/USD had started breaking down first from similar levels but didn't want to short EUR/USD directly because it was extended and the stop might have been a bit big... Unfortunately, although GBP/USD did lag in following the EUR/USD down, it was too strong to produce a significant downmove so instead I took a small stop. I should have picked another pair the GBP/USD was far too strong.

Second Forex trade of April 2009 (Short 10 microlots GBP/USD Stopped Out 28 pips):
Second Forex Trade of April 2009 Screenshot

Tough day for me, I feel like I need another vacation already.

April 13, 2009 Monday Trade 8 Short 2 Contracts

Since the price was drifting up without being able to make new highs and some 10 minute candle tails showed rejection of resistance I tried another short here. The first target was hit but the trail stop was hit on the second contract. Here the price action was very strange, I got filled on the very low tick of the first down wave, but immediately the upper edge of the bull flag (a 60 minute flag) found support and the price ramped up to make new highs.

Trade 8 (Short 2 Contracts +2 -.75 points):
Trade 8 Screenshot

April 13, 2009 Monday Trade 7 Short 2 Contracts

The rejection of the yesterday's high level showed some extremely good down volume (on the bid/ask volume indicator there was a lot of trading at the bid taking the majority of volume on many 3 minute and 233 tick bars). Shorted retracement of initial downmove. I scratched the trade due to strong price action and support holding.

Trade 7 (Short 2 Contracts Scratch +.25 +0 points):
Trade 7 Screenshot

April 13, 2009 Monday Trade 6 Short 2 Contracts

Shorted slightly below yesterday's close level, but this entry was going against a recent trendline break (a somewhat large 60 minute bull flag breakout) so was a bad idea. Also, the yesterday's close resistance is not as strong as the yesterday's high (since Friday was a trading Holiday, Thursday's close) level so I should have waited for yesterday's high to be tested.

Trade 6 (Short 2 Contracts Stopped Out -2 points):
Trade 6 Screenshot

April 13, 2009 Monday Trade 5 Long 2 Contracts

Went long 2 contracts on 50% fib pullback and multiple layers of moving average support and VWAP (volume weighted average price, thick black line) support. This trade entry was not bad and had good volume confirmation but I did not take my first target soon enough (perhaps was a little greedy?). I was looking for a bigger first target near the highs. The trade went about 2 points in my favor but shorts took control and the longs could not hold the VWAP level, which told me to expect chop for the rest of the morning.

Trade 5 Long 2 Contracts (Stopped Out -1.5, -1.75 Points):
Trade 5 Screenshot

Note: VWAP worked well to show that the market was directionless/choppy because price went through it from both sides. Good entry but greed turned a winning trade in to a loser.

Monday, April 13, 2009

April 13, 2009 Monday Trade 4 Short 1 Contract

Should have picked my levels better this area had good resistance but it would have been better to wait to short yesterday's (last Thursday's) high.

Trade 4 Short 1 Contract (Stopped out -1.5 points):
Trade 4 Screenshot

Note: Didn't pick a significant resistance level to short.

April 13, 2009 Monday Trade 2 and Trade 3

Trade 2 - Went long two contracts for another gap fill attempt. Here we had a good hook up in price from the strong daily pivot point support level but the sellers flushed it down with a selling spike. This entry was not too bad but the morning today was kind of tricky. Long 2 Contracts Stopped Out -1.5, -1.75 points.

Trade 3 - This was sort of an impulsive short of two contracts. I figured because the daily pivot had snapped (we did get 2 points below) there was a good chance of an opening range breakdown to the downside of working. Unfortunately I only succeeded in trapped myself short at nearly the low tick of the push down with my oscillators oversold... Future rule, no impulsive range breakouts/breakdowns allowed. Only pre-planned ORB are allowed. Short 2 Contracts Stopped Out -3.25 points.

Trade 2 (Long 2 Contracts Stopped Out -1.5, -1.75 points):
Trade 3 (Short 2 Contracts Stopped Out -3.25 points):
Trade 2,3 Screenshot

So what ended up happening is, the price was able to get 2 points below the daily pivot point, then proceeded to rally for a gap fill...Very wicked and tricky.

April 13, 2009 Monday Trade 1 Long 2 Contracts

Long 2 contracts on open for gap fill. A bit too soon sellers were in control in the morning for a while, should have waited for a better support level to go long. All we had as support was the premarket lows which was not strong enough.

Trade 1 (Long 2 Contracts Stopped Out -2, -1.75 points):
Trade 1 Screenshot

Saturday, April 11, 2009

VWAP, Trend Days and Rangebound Chop Days

Thursday April 9, 2009 which saw a huge 22 point gap-up and rally illustrates a low volume trend day before the Good Friday Holiday (U.S. equity markets closed) where the VWAP (volume weighted average price) served as the ideal first pullback entry point for a decent up-move that lasted through the afternoon. I saved a chart on Thursday highlighting all the good points with the intention of later posting a blog entry. The only thing missing to buy the pullback was a lack of volume confirmation:
VWAP and R2 pivot ideal pullback buy area

On trend-less, range-bound chop days (what famed trader and fund manager Linda B. Raschke calls a "Z-day"), where the VWAP is not well respected (e.g. price will just go right through from both directions) it is still useful because it can give you a clue as to the day's nature. If the VWAP slope is flat and the price crosses through several times that is sort of a big clue. In these sorts of days, some experts (reference to Dr. Brett Steenbarger's article on identifying trend and rangebound days) will fade the VWAP extremes for "reversion to the mean" trades. I am currently using the free NinjaTrader(TM) VWAP indicator available from their support forums (just search the NinjaTrader(TM) Indicator forum for VWAP) that plots the VWAP and is configurable to show up to 3 standard deviations. The thick black solid line on my 10 and 3 minute charts is the VWAP and the thin black dotted bands around it are 1 and 2 standard deviations. I now use these as additional S/R levels and guidelines.

So basically the theory is, on strongly trending days the VWAP itself is used as a retracement area to buy/sell on pullbacks/throwbacks and on rangebound days, the standard deviation bands are used as the buy/sell areas with the VWAP as the profit target area. I'll try to post future blog entries with a link back to this article to see how well this works.

For more on VWAP refer to the popular blog and video series by Brian Shannon

Friday, April 10, 2009

April 10, 2009 Saturday Key Reversal Times

Here is a good summary of the key reversal periods to look for intraday while day trading. I will make it a permalink on my blog links for future reference. If the time period coincides with your trade setup, it gives more confirmation, confidence and confluence for the trade entry.

Image Source: Toni Hansen's "Building a Successful Forex Futures Trading System" Webinar for CME Group Thursday April 9, 2009

Thursday, April 9, 2009

April 9, 2009 Thursday Trade 3 Short 2 Contracts

A long upward-sloping bear flag breakdown on 3 minute chart with angle of ascent less steep than the initial steeper-angled topping pattern. This is what Toni Hansen calls an Avalanche(TM). Took target at minor support because this is still a very strong uptrend. This will be my last trade of the day due to shortened Holiday trading session.

Trade 3 (Short 2 Contracts +1 points):
Trade 3 Screenshot

April 9, 2009 Thursday Trade 2 Short 2 Contracts

With the 3 minute chart remaining overbought and having formed a lower peak in its stochastics to confirm the price lower high, saw evidence in the bid/ask volume indicator that sellers were stepping in again with a good hook down from high bands on the 233 tick chart (price confirmation). When I saw my uptrend line on the 233 tick chart tagged and the lower bollinger band on the 3 minute chart also tagged just got out the second contract due to this very strong gap/uptrend.

Trade 2 (Short 2 Contracts +1.25 +1.75 points):
Trade 2 Screenshot

Note: The ORB (opening range breakout) did work this morning for 4.25 points profit but if you for example had placed your stop 2 ticks below the low of the 15 minute opening range, you would be risking about 4.75 points to get 4.25 points. 15 minutes is just one way to bracket the range but that is a common one. I did the opposite of what I did yesterday, did not take the ORB instead faded the extended move. I think lately the abnormal trending of the market has been messing with my psychology and normal trading habits. I feel ORB is good only under special conditions. Yesterday I took it haphazardly without considering whether or not the special conditions are met, so I lost. Normally if you buy a breakout with high bands on your oscillator it will fail.

April 9, 2009 Thursday Trade 1 Short 1 Contract

We had a huge 22 point gap-up due to positive Wells Fargo news and better than expected jobless claims. This setup was straightforwards, short against the strong daily swing high of 848 which should have a strong first rejection, on an overbought condition with the bid/ask volume indicator showing good down volume (more big trades at the bid). I got out early because I saw buyers stepping in and no follow through.

Trade 1 (Short 1 Contract +.5 Points):
Trade 1 Screenshot

Wednesday, April 8, 2009

April 8, 2009 Wednesday Trade 4

My last trade of the day. This is a case of negative psychology having a bad influence on my decision making. I had three previous losing trades in a row which conditioned me to think the fourth trade was likely to fail. This was actually a good entry that was worth a big move but I let myself get shaken out of the trade with a small loss. No risk, no reward.

Trade 4 (Short 2 Contracts Scratch -.5 -.75 points):
Trade 4 Screenshot

April 8, 2009 Wednesday Trades 1-3

Bad morning for me. The first two trades were simply bad trades, the third was an OK entry but too soon to go long against the morning's selling pressure.

Trade 1 - Tried to go long to catch the opening range breakout, which do not work well under normal circumstances (take them, for example in the direction of gap fill right after a NR7 day). Basically I trapped myself long on an overbought condition near resistance, sort of dumb. Stopped out -2.25, -2.5 points

Trade 2 - Tried to go long again on pullback, but here we were not oversold enough or near any strong support area. There was bid/ask buying volume temporarily on our side and an oversold condition hooking up on the small 233 tick timeframe, but these positive items only produced a 3 tick pop before sellers overwhelmed the buyers. Stopped out -2 points

Trade 3 - At least this entry was oversold on the 3 minute chart and also had the 3 minute bid/ask volume bars green on top. The positive items going for the trade allowed the trade to go 1.25 points in our favor. However the momentum was such to the downside that some intraday support levels were overshot including the 10 min 200 sma, VWAP and 50 sma on 3 min chart. Finally support was found a tick above yesterday's low. Stopped out -2.25 points

Trade 1 (Long 2 Contracts Stopped Out -2.25, 2.5 points):
Trade 2 (Long 2 Contracts Stopped Out -2 points):
Trade 3 (Long 2 Contracts Stopped Out -2.25 points):
Trade 1,2,3 Screenshot

Note: These first three trades were all taken against the direction of the gap fill, there was a gap up this morning of 7.75 points at the highest level since the open. The gap was filled to the downside.

Tuesday, April 7, 2009

April 7, 2009 Trade 4 Long 1 Contract

This was nearly the same identical trading setup to trade 3. The 60 minute (dark green) trendline/50 percent fib retracement (812) showed price-wise it was holding support. The confirmation to pull the trigger was waiting for the bid/ask volume bars to show me big traders are jumping in (green on top and not just one 233 tick bar). I went with the big traders but waited for extra good confirmation this time (more green 233 tick bars) because it was not the very first test of the 60 minute trendline.

Trade 4 (Long 1 Contract +1.25 points):
Trade 4 Screenshot

April 7, 2009 Tuesday Trade 3

Saw that the previous low of the day was being tested (a double bottom test with slightly lower right leg) and also that this would be the first test of a massive 60 minute trendline that was also overlapping on the 50 percent fibonnaci retracement from the 775.5 swing low to the most recent daily high (812 area). I waited for the bid/ask volume to confirm for me big traders were stepping up to the plate and scalped out for +1 points.

Trade 3 (Long 1 Contract +1 points):
Trade 3 Screenshot

April 7, 2009 Tuesday Trade 1 and 2

Trade 1 - Spotted 3 minute chart divergences of MACD to price showing the sell-off from premarket was getting weaker, as well as oversold. The trigger to get in was to see support holding and for the bid/ask volume indicator to show that buyers were taking control (e.g. more big contract trades at ask than bid).

Trade 2 - Overbought and saw the 822 area strong resistance (prior broken support) rejected. Trigger to get in was the bid/ask indicator showing sellers taking control. Notice how both the 3 minute chart and 233 tick chart showed big contract trades mostly at the ask (red on top side of volume bar).

Trade 1 (Long 1 Contract +.5 points):
Trade 2 (Short 1 Contract +1.25 points):
Trade 1,2 Screenshot

I traded smaller size because noticed it was very choppy in the morning.

Monday, April 6, 2009

April 6, 2009 FXCM Trading Station II(TM) Pivots Indicator

Disclaimer: Use at your own risk, I make no warranties on effectiveness and assume no responsibilities on any damages or trading losses resulting from use of this indicator.

Here is the pivot point drawing indicator I made for FXCM Micro Trading Station II(TM):

1. Download and unzip the .zip file to a folder, which you should verify contains BTStandardPivots.lua and BTStandardPivots.lua.rc (the source code and language description resource file respectively).

2. From within FXCM Micro Trading Station II(TM), navigate to the Chart menu and choose "Manage Custom Indicators".

3. Click the "Load" button and navigate to the BTStandardPivots.lua file to import the indicator. The indicator should produce no error messages. If there is an error message make sure first that the BTStandardPivots.lua and BTStandardPivots.lua.rc files are both in the same place.

4. Add the indicator to your chart and set the High, Low and Close parameters according to the previous day's High, Low, Close (or week's data if you want weekly pivots).
Hint: Click on the "Chart Elements" button at the rightmost side of the tool bar to navigate to the pivots indicator, because the default values 1, 1, 1 might cause the indicator to appear far off your chart area. I circled the Chart Elements toolbar button in the following screenshot:

The pivot point formula matches will produce the same standard pivots as shown on the following site:
Pivot Points Site

What I do each day is key in the High, Low and Close from the Daily Pivot Point area of the above site for my currency pairs in to the BTStandardPivots indicator which I have on the 5 minute charts for each currency pair I watch.

If you need to tweak the formulas to your tastes, you can modify the BTStandardPivots.lua indicator source code file to change the local variables R3,R2,R1,PP,S1,S2,S3 as needed and then re-import the indicator per the instructions steps 2,3 above.

The following Web site has a pivot points calculator you can check your modifications against:
Pivot Point Calculator

Disclaimer: Use at your own risk, I make no warranties on effectiveness and assume no responsibilities on any damages or trading losses resulting from use of this indicator.

April 6, 2009 Monday Trade 6 Short 2 Contracts

The VWAP had shown itself to be good resistance, saw a double test of it and failure, with momentum confirmation of the bid/ask volume indicator on 233 tick chart showing sellers piling in and also price confirms.

Trade 6 (Short 2 Contracts +2 +2.75 points):
Trade 6 Screenshot

April 6, 2009 Monday Trade 5 Long 2 Contracts

Lunchtime trade, but noticed longs taking control on the bid/ask volume indicator with a higher low being formed on a basing formation. Also, previously it was shown the weekly pivot point 820.17 was a very good support area. VWAP slope also flattening, figured we were due for a turn.

Trade 5 (Long 2 Contracts +1.75 +3 points):
Trade 5 Screenshot

April 6, 2009 Monday Trade 4 Long 1 Contract

Counter trend so lighter size, went long at yesterday's high support level. The problem with this trade is it was at the beginning of deadzone (lunch time light volume trading period) and we still had the 3 minute bid/ask volume indicator showing shorts still in control.

Trade 4 (Long 1 Contract Stopped Out -1.5 points):
Trade 4 Screenshot

April 6, 2009 Monday Trade 3 Short 1 Contract

Saw the VWAP (thick black line) being rejected and the bid/ask volume indicator showing sellers taking control plus overbought on 3 minute chart, so shorted 1 contract. I did light size because the retracement was only about 23.6 percent since the premarket highs.

Trade 3 (Short 1 Contract +1.25 points):
Trade 3 Screenshot

This actually turned out to be the best entry of the day (making note).

April 6, 2009 Monday Trade 2

Saw big sellers, went with them on opening range breakdown. They couldn't break below 825 this first attempt and we were oversold so a lot of shorts trapped, just enforced stop.

Trade 2 (Short 2 Contracts Stopped out -2.25 -3 points):
Trade 2 Screenshot

April 6, 2009 Monday Trades 1

Big buyers in control (bid/ask volume indicator) and support shown at S1 daily floor trader pivot level, only went long 1 contract due to early morning and counter trend.

Trade 1 (Long 1 Contract +1 points):
Trade 1 Screenshot

April 5, 2009 Sunday Short 10 Microlots EUR/USD

Here is my first Forex trade of April, 2009.

The daily EUR/USD R2 pivot level (maroon line, hard to see on leftmost chart of my layout) was rejected, which also coincided with a 2 touch 60 minute trendline rejection and some MACD divergences on some of the timeframes with price. I was looking for the R1 daily pivot level (teal line on leftmost chart) or better to cover.

Short EUR/USD 10 microlots, scaled out 5 and 5 near R1 pivot for average gain of 22 pips:
First April, 2009 Trade Screenshot

As a side note, notice how in my trade screenshot the USD/JPY chart (rightmost) how the R1 to R2 pivot play in reverse also worked (e.g. R1 teal pivot was broken, got retracement found support, rally to R2 (light maroon line).

As a futures trader I am used to using pivot points as S/R. The pivot points are also well-respected in Forex. Following is a good site which has the daily and other pivot levels (put the daily pivots on your minute charts works well as S/R):
Pivot Points Site

It is sort of a pain to manually draw in the pivot lines so I made an indicator for FXCM Micro Trading Station II which will draw in the R1,R2,R3,PP,S1,S2,S3 levels automatically based on entering the previous day's high, low and close. I will post the indicator later on some time with instructions for anyone using FXCM Micro Trading Station II.

Saturday, April 4, 2009

April 4, 2009 Saturday Adversity is a Catalyst for Change

Due to the beating I took Friday in my day trading, it prompted me to reflect on what went wrong and what I could do to improve my trading method. I have now tweaked my trading to try to stay on the right side of the market and go with the smart money (or at least don't go against them) and stay away from over-active trading. Here is what I did. A while back I had placed the VWAP (volume weighted average price) on my 10 minute chart to use as a bias line in terms of what direction I wanted to trade in (e.g. if the price is above the VWAP and VWAP is sloping up, try to trade from the long side, and vice versa for the short side), but made it a light gold dotted line which is hard to see so I basically ignored it. Now I have VWAP on both my 10 and 3 minute charts as a double strength black line, impossible to miss. I also adding a slight coding modification to my bid/ask volume indicator (NinjaTrader(TM) has a good free indicator on its forums called BuySellVolumeTop), which shows you for each bar if there are more trades at the bid or ask and therefore if buyers or sellers are in control for any given bar, to filter out smaller lot sized trades. In other words, I changed the indicator to throw away counting up trades for lot sizes less than 50 contracts for the ES. This way when I do my volume analysis I can see when the smart money (big traders) are taking control and go with them if my other criteria are met. I tested the new tweaks to my method by hand-trading an old tick-by-tick replay I had recorded in NinjaTrader(TM) (5/8/2008) with good results. I think this should work, at least I will not do something stupid like try to short when there are big traders trading mostly at the ask and we are above the VWAP line :D

Friday, April 3, 2009

April 3, 2009 Trades 6-10

Bad end to the week for me, at lunch I was stopped out 4 times in the row trying to short and my last trade of the day I was stopped out as well.

Trade 6 - I shorted the daily pivot failure the problem was that I was really shorting a base that had formed below the daily pivot (double bottom with slightly higher right leg 823 on 3 min chart). If you short a shallow 23.6% retracement the downtrend had better be really strong (refer to 10 min chart, I am including the premarket trading). Stopped out -1.75, -1.5 points

Trade 7 - Shorted retracement also, but this one didn't make much sense because the stochastics were still embedded in the high bands (bear trap) and we were not near any major resistance. Stopped out -2, -2.25 points

Trade 8 - Shorted retracement also, the 830 premarket level was resistance but the stochastics on the 3 min chart were still embedded in the high bands this was not a good entry either. Stopped out -2, -1.75 points

Trade 9 - This time an OK entry because I waited for the 3 minute stochastics to cross down below 80 and we had a double layer of resistance with the 10 minute 200 sma and 50 sma converging, and also the 200 sma on the 3 minute chart as resistance. As happens often the moving averages are overshot a bit. The upswing was stopped right at the daily midline 833.63 (50% fib retracement of the high and low of the day which includes the premarket trading). The stop would have needed to be about 2 ticks wider for this trade to work with the entry I got. Stopped out -2.5, -2.25 points

Trade 10 - Went long at lower edge of big uptrending channel. I initially was considering shorting the upper edge of this channel (a .618 rejection on 10 min chart and bearish Gartley) but decided against it because I didn't see a divergence to confirm. Instead I waited for the price to get to the lower edge of the upchannel. This entry was not bad, had oversold 3 minute stochastics and strong support, but sellers won. Stopped out -1.5, -1.75 points

Trade 6-10 Screenshot:
Trade 6-10 Screenshot

April 3, 2009 Trades 1-5

I am doing all of my morning trades in one screen grab and blog since I was active this morning and didn't have time to do individual blogs.

Trade 1 and 2 are trying to get long on pullback of initial buying spike from the NFP (non-farm payrolls report). The first try was dumb didn't wait for a good enough pullback so took a stop, trade 2 worked but eventually the failure to retake yesterday's high and hold showed a failure.

Trade 3 was a long for the gap fill after seeing some support but this was stopped out as the gap close level was unable to be filled this morning due to the sellers being in control of the market on failure of key level.

Trade 4 was a short to go with a opening range breakdown.

Trade 5 was shorting a retracement to go with the downtrend.

Trade 1 (Long 1 Contract stopped out -2.5 points):
Trade 2 (Long 1 Contract +1.5 points):
Trade 3 (Long 1 Contract stopped out -2.75 points):
Trade 4 (Short 2 Contracts +2 +.25 points):
Trade 5 (Short 1 Contract +3 points):
Trades 1-5 Screenshot

Something noteworthy to mention is the 15 minute opening range breakout or breakdown trade is working like a charm lately due to trends not wanting to end. Usually it does not work so well in the ES.

Thursday, April 2, 2009

April 2, 2009 Trade 7 Short 2 Contracts

ES failed to make new highs, simple setup just short retracement in to initial selling spike from the lower high on good confirmation such as bid volume overwhelming ask volume and 233 tick chart hooking down from high bands on stochastics. The 3 minute stochastics were also in a downtrend.

Trade 7 (Short 2 Contracts +1.25 +3.5 points):
Trade 7 Screenshot

Haha, I am down $-7 today. Fishing for the bull flag continuation in deadzone was a mistake I caught a small move on the third try (which happened to be in line with the 2 pm Eastern reversal period and no longer in deadzone) but got worn out and didn't try to attempt the fourth try which would have been a home run. The psychology of such things is insidious.

April 2, 2009 Trade 6 Long 2 Contracts

The oversold condition finally took hold a bit better here, but the trail stop was again hit. Was hoping for a rally to test the highs.

Trade 6 (Long 2 Contracts +2, -.5 points):
Trade 6 Screenshot

April 2, 2009 Trade 5 Long 2 Contracts

There was better confirmation on the 3 minute stochastics which crossed 20 but shorts were still in control here took the stop.

Trade 5 (Long 2 Contracts Stopped Out -2.5 Points):
Trade 5 Screenshot

April 2, 2009 Trade 4 Long 2 Contracts

I should have reallized a divergence had formed on the latest push up and that the selloff was a bit steep to be thinking about buying pullbacks. Also the 3 minute stochastics was starting to become embedded in the low bands. Took my stop for -2 points.

Trade 4 (Long 2 Contracts Stopped Out -2 points):
Trade 4 Screenshot

April 2, 2009 Trade 2 Long 2 Contracts

Did long scalp on pullback to almost oversold on 3 minute chart and good confirmation on 233 tick chart. Only trusted it for a scalp as it was lunchtime and volume declining.

Trade 3 (Long 2 Contracts +1.25 +1 points):
Trade 3 Screenshot

April 2, 2009 Trade 2 Long 1 Contract

I bought another pullback which had a very good 233 tick chart oversold condition and confirmation but the 3 minute stochastics was still overbought so I only went long 1 contract. Since mark to market positive news was announced I gave this one a lot of room to run. Trail stop hit for 1 point profit.

Trade 2 (Long 1 Contract +1 points):
Trade 2 Screenshot

April 2, 2009 Trade 1 Long 1 Contract

I waited for the 15 minute opening range to develop, bought the breakout but only with 1 contract because the stop was wider than normal. Only got 2 ticks as my trail stop was hit.

Trade 1 (Long 1 Contract +.5 points):
Trade 1 Screenshot

Wednesday, April 1, 2009

April 1, 2009 Trade 2 Short 4 Contracts

I saw a huge volume selloff bar on the 3 minute chart, where the trades at the bid overwhelmed the ask trades showing the sellers took control. Just shorted a retracement in to the initial downthrust, with bigger size than normal because this looked like a convincing move failing some strong resistance.

Trade 2 (Short 4 Contracts +1.25 +1.25 +1 +.75 points):
Trade 2 Screenshot

This will be my last trade today, it is good to get the new Month/Quarter started with an up-day.

April 1, 2009 Trade 1 Short 2 Contracts

Haha, I was super careful on this counter-trend waited for really good confirmation at this double layer of resistance (Yesterday's high plus the Daily R1 floor trader pivot) but was only able to get a wimpy scalp due to this abnormally trendy market. I gave the trail a nice wide BE-2 ticks stop, no go.

Trade 1 (Short 2 Contracts +1.25 -.5 points):
Trade 1 Screenshot