Today I didn’t have any time to post my pre market analysis and I decided to do my end of day review when I got home. At work it is difficult for me to have that little bit of time I need to do post market review. The market closes at 4PM and I still have an hour of work left so I need to go outside and wrap my work day up as well. I will do a post on some changes I decided to make to my routine.
ES opened above Friday’s value area and responsive sellers stepped in to test some areas in Friday upper range. We found buyers and rallied back up to 1367.25 making new highs again on the year and which was also a low volume area back in May of 2008. ES had put in its IBH by that time and we rejected the break above the IBH a few times which was a red flag for buyers. We traded back inside the IB by 6 ticks and retraced back up into the IBH which is a set up that I like taking. I didn’t take this because the price action was so slow and choppy that I decided to pass but I was fully aware of it unfolding. We traded back down to LOD at 1361.75 which was IBL as well and bounced off the 1359.50-1361.50 level I had on the chart. Plus at these levels I would expect some selling to come in eventually. This was a good area for exiting shorts from IBH and to look for longs but you would have had to keep it tight and possibly scratch if need be because the move down left a 15 min momentum candle stick and more down side was likely to come. The market traded lower closing the naked vpoc from Friday and trading into Fridays range. I tried a short at 1358.50 to sell against the LVN from Friday to ride with the momentum but the market just shut off and I was stopped out for -1.5 points. I should have waited for the better 50% retrace of the entire move lower. I tried shorting again at globex low at 1360.00 and was stopped again because the market was just grinding higher. So I gave it one more shot at 1360.50 38% retrace of move lower and this one worked. I did take some heat as the market went to the 50% retrace level and IBL retest but it finally worked out for me. The 50 % retrace and IBL level would have been much better to short against but the fear of missing the move kicked in and I had to try early. Logically I was trying to go with the momentum so I was looking for something to sell against but like I said the market did one of them slow grinds higher on me. My target was the lows of the day at 1356.50 for 4 points and target was achieved. So I had 2 stops totaling -3 points and 1 winner totaling +4 points. Good example of money management there.
I’m really happy with the way I traded today. I had a plan and a bias to go long on pullbacks. And I had to change my hypothesis to look for shorts and I didn’t give up on the idea and look for longs at all after the market changed its face from being bullish to bearish. I came into the day bullish and the market showed me why I needed to change my bias. I didn’t take longs after the rejected highs of the IB and I became more interested in the short side as we moved lower.
Then ES proceeded to trade lower down to the 1354-1355 area I had on my chart and this also provided a long trade set up. With the recent bullish action buyers are just waiting around for an opp to get in. But it was too late in the day for me to want to take anything so I passed on it.
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