Jul 152014

Today a live trade was made.

Unfortunately, the trade was not as good as I would hope.
Fortunately, it was not too bad.

Two trades were taken.  The first was after a forceful down move shortly after the market open.  A large volume spike was seen on the chart and the market reversed direction.  Several up bars were seen and a trend line indicated further up possible.

After the trade was entered, the market went a tick in our favor but then reversed direction on a comment by the Federal Reserve Chair Person.  The software executed a fixed stop loss protection and a 4 tick loss was in the books.  The chart is below:

First trade at 1971.25 with -4 tick stop

First trade at 1971.25
with -4 tick stop

When the first trade failed the market seemed to want to reverse and an entry short was made.  This trade went in my direction about 2 or 3 ticks and then reversed.  I manually exited the trade with a 1 tick loss.  Had I not taken the stop, the 4 tick stop would have been hit resulting in a 4 tick loss.

After this trade, the market went flat and the Fed Chair Person was still talking so I decided to stop for the day or at least wait until a direction was determined.

Second trade with a 1 tick manual stop

Second trade with a 1 tick manual stop

Jun 302014

(This post is from Friday June 27, 2014)

After many delays and distractions I think everything is setup properly to begin trading.

Let me start by giving an introduction to my methods.

My technique is to watch the ‘order-flow’ of the instrument I am trading.
Some people call this ‘reading the tape’.  The technique requires watching the support and resistance areas on the charts and watching multiple time-frames of the same instrument.  The chart below shows an image of my desktop/workspace with all of the charts shown.


On the workspace I trade from the large chart that covers most of the image.
The instrument I am watching is always on this chart.
This chart has the volume shown at the very bottom in red/green columns
On the right side is the custom DOM (depth of market) with volumes traded in numbers for the bid & ask and shown in graphical format.  I can go into further detail but it will probably bore you.
Everything on this chart means something and helps me see possible trade opportunities.

To the left of that chart are several smaller charts.
Most of the charts are the same symbol but with different time-frames or chart types.

The two charts on the top left side are usually the other symbols I am watching.
These two charts are for reference only so I can see if they are setting up for a possible trade.
If I see something interesting I can open that workspace and examine it closely.


The primary symbols I trade in the futures market are:

  • US Treasury Bonds/Notes                  ZB   &   ZN     7:20 a.m.
  • WTI Crude Oil Futures                         CL                   8:00 a.m.
  • S&P E-Mini Futures                              ES                   8:30 a.m.

I may at times trade others but these are the ones I trade most often.
The regular session of the market on these symbols opens at the times listed to the left of each in the central timezone.

My normal routine is to get up early and check the market.  (Usually about 4 a.m.)
I watch the charts of the market while I am showering and dressing to depart for my trading desk.
I have found that trying to trade from home presents too many distractions so I have a quite place at my office where I can setup and watch the market in the early morning hours.  I normally arrive at my trading desk between 6:30 and 7:00.

After I get things setup and have been able to do my preliminary checking of the charts, I am ready to take any trade that occurs.  This means that many times I will be taking trades prior to the regular opening of the market.  I have found that this allows for less volatility but still is able to take advantage of increasing trade volume just prior to the open.


Today, I arrived at the trading desk a little early (about 6 a.m.).  It usually takes me a few minutes to review charts and setups before taking any trades.  Today an entry was showing on the charts as I opened them.  Without proper review of the charts before taking a trade the result can be unsatisfactory so I did not take this trade.

I have posted the chart of the trade opportunity below.

The candle at 6:08 was the ideal entry for this trade.
The volume candle on that time at the bottom of the page and the previous support shown on the supporting charts was the cue to enter.  The magenta arrows on the candle show an increase in volume to the downside without a break of the low.  This also shows a possible support area.

The candles that follow confirm the trade.  I have to admit that had this trade been taken it would have only resulted in a $35 to $50 profit because I would have taken an exit when the candle at 6:44 was being created.  I know in hindsight that the trade would have continued higher but during the trade it would not have been as evident and an exit would have been taken.

20140627 Pre-Entry ES

In the second chart you can see the results after the next resistance area was reached.
The buyers lost control at 1945.75 when the sellers regained the edge.
The result was a pull back to the previous support area.
There was no real signal to take a trade here.  The market was very sluggish and no momentum was present.

20140627 Pre-Entry1 ES

After this time, the market went flat (about 8:00) so I decided to add this entry to the blog and wait to see how things developed.



Jun 282013

End of the month volatility today is normal.
I made one trade resulting in a small loss.
Sometimes I’m wrong about being wrong.
It happens!!!

No one likes to admit they are wrong,
to admit you are wrong about being wrong sucks.

The trade I took was a SWAG (Super Wild Ass Guess).
My usual indicators were showing long and I took a short.
The trade was simply on ‘feeling’.  Never a good way to trade
(at least for me).
The rhythm of the action was short but Delta, Schaff were Long.
The short indications were Bid / Ask and Time and Sales both showed short action.

So I took the trade short.  I initially chased it 1 tick and then got filled.
The trade was fine and holding the level but then made what I saw as a significant Delta move up.  The Bid/Ask and Time and Sales turned to buying.

With a higher low and the change it rhythm to long, I took my exit with a 2 tick loss.  My stop was not hit and had two more ticks to be stopped out.  The exit was my decision.

As it turned out, I exited at the high point of that leg and the trade again turned to short.
The images are below.  It is still falling as I write this.

Sometimes being wrong about being wrong continues to suck.
But discipline is the best way to survive.

6/28/13 Trade Entry

6/28/13 Trade Entry

6/28/13 Trade Exit -2 Ticks

6/28/13 Trade Exit -2 Ticks

6/28/13 After Exit. Wrong about being Wrong!

6/28/13 After Exit. Wrong about being Wrong!

Jun 262013

I arrived at my trading desk at / near 7:20 just before the revised GDP report.
I watched the market rise (on mobile) all morning and noticed earlier that it was at an extreme but I was not confident it would drop because of the underlying volume pushing it up.

When the GDP report was released, I noticed an obvious top and I decided to take a stab at a short.  The results are below in the charts.  The only thing I should have done was trail my stop for a few more ticks.  That is easy to see in hindsight but in actual trading, the trailing stop would have gained maybe one or two ticks at the most.

Over all, I’m happy with the results of the trade and target selection.  A 10 contract trade on this trade would have been heaven but as they say, no balls, no glory…  :-)

Trade entry 6/26/2013

Trade entry 6/26/2013

Trade target placed 6/26/2013

Trade target placed 6/26/2013

Trade Exit 6/26/13

Trade Exit 6/26/13

After the Exit 6/26/13

After the Exit 6/26/13