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Despite only making a couple points on a day like this, I performed much better than I did yesterday. With that being said, I don't intend to make this post lengthy, as I've sat at my computer for most of the day and need to move around. I typically stop trading around 12PM, but I decided to go until 2:30 today from 8:30. I'm not happy with my progress so far as a trader, and since I want to do this for a living, I think I need more screen time and experience (and honestly I need to put more effort in all around). I do need to change my schedule though, as I can't stand sitting for as long as I did today.
Like yesterday, we were bearish from the cash open, and even before that. The volatility to the down side gave me my direction to trade in, and I was basically just trying to trade a pull-back. I did a higher timeframe analysis last night and this morning, and I literally wrote this down today: "I can still easily see price going down to price magnet 3091 in the near-term [given the crazy weakness we had yesterday]. It's possible that it could happen today, even." So that's where my mind was at before today's session. When we broke 3091 before the cash open, I naturally became more bearish, unless I were to see inordinate strength in the footprint at some level.
Anyway, it took us 20 minutes to reach the LOD out of the gate. We bounced off of that low and traded back up to the 70's. Price was quickly approaching LVN 3074, and that was my opportunity to ride the trend. I placed a limit sell order for 1 contract at 3074.50, and was surprised to see strength take me out for a 2 point loss. The bulls had me spooked for a second, but the cumulative delta was still pretty negative, and the prior bearish actions of today took precedence over this buying that just happened. I thought perhaps I was just a bit early. I placed another limit sell order for 1 contract at LVN 3079.25 (2 points of risk as usual) and was soon filled. I took 5 ticks of heat, and then the market reversed back down to LVN 3074 where I decided it would be a good idea to close, given the maintained pressure by the bulls. I ended up taking profits a bit too late, closing at 3074.75. I did have thoughts of riding this trade back down to 69, but greed has screwed me over lately, and FT71's words stuck with me from his Trader Bite this morning (I watched for the sake of hearing his take on todays news releases, and ended up watching the whole thing.. )
1st trade: -2 points.
2nd trade: +4.5 points.
By the way, @TopGunNote, thank you for the news sources (I made sure to check https://www.investing.com/economic-calendar/ this morning so I wouldn't step on my own foot like yesterday). It seems we have some news releases tomorrow that I ordinarily would've been totally ignorant of. I'm making a habit of visiting this page every trading day.
Another thing.. Going from using market orders to limit orders feels like cheating. It's much less stressful because I'm not trying to time the market like I was. It's much easier to put a limit order on for a pull-back in the direction of current momentum than to guess to the tick where to execute with a market order, and there's no consequence to cancelling a limit order if things change in the short-term.
No trades today, but it was an excellent day nonetheless.
I've been putting a lot of effort into my homework lately (nightly prep / theorizing for the next day), and I certainly did last night. Had things been slightly different in the RTH session, it would've literally paid off, and this is incredible to see.. Especially on a slow day like this.
I had a bullish bias going into today that was affirmed a little bit by a big bull candle that brought price up to the 3108's at 4-5AM. For starters, I found it odd that price made a low of 3069 yesterday, yet the MES closed over 20 points above it at high volume node 3091.Alongside the fact that the monthly and weekly charts of the ES/MES were and still are bullish, I interpreted this as a pretty bullish signal. I wrote down in my analysis this morning that it was likely to be a slower paced day, given we had 2 trending days in a row (I'm not sure if this is valid technically in terms of market profile, what I'm saying is we've been very volatile the past 2 days), and that today was an opportunity for the bulls to show their strength. Plus, on a simpler level of analysis looking at the daily, it seems wise to buy at LVN 3088, given yesterdays candle. 3091 and 3088 are structural support in the daily.
I also wrote down that if we were bullish today, the market could be attracted to HVNs 3114 and 3119 (I think the HOD today is 3119.50), and that if we were bearish, price would be attracted back down to HVN 3091. I thought that the bulls could come in at that level or underneath it at LVN 3088, so thinking forward it seemed to me that the bulls had the edge given the situation/context.
As for todays session, the first hour traded well enough, but after 10:30AM EST or so participation was low. After the market broke LVN 3111 around 9:50 and started trading above it, I was trying to determine if we had enough strength and volume to continue to the upside for a pull-back long entry at 3111. I thought it was likely we'd reach HVN 3114 then, but the main problem for me was the 30 minute charts local structure and diminishing volume:
LVN ~3111 was 3-4 points above a level I would've preferred entering at, and was locally boundless. From the perspective of a bearish value trader, 3111 could've even been a decent price to short with a late entry. Given the empty space around the price 3111, it would've made for a good stop run, too. So, I didn't take the trade- but because of the low volume / low participation, we didn't have enough weakness in the market to pass LVN 3111. I considered this possibility before the first test from above, but I wasn't willing to take the risk. 3111.50, the 12's and the 13's continued to be great buy opportunities for traders familiar with this environment. If I'm being honest, I was expecting that level to break at some point in the afternoon ("weak high"), but we broke it at the close instead, touching 3108. We settled at 3111.50.
So yeah, I watched the market for 8 hours, and even when there's low participation, the market trades according to certain levels. There is order to markets..
Feel like posting my prep this morning that was continued from my homework last night.
"In the ON session, we made a low of 3107.25 (price of a HVN) while trading in a small range with the upper "extreme" being 3111.75, except 1 wicked candle reached all the way up to the 15's. At 2am, we closed above 3111.75 and continued higher to the top of the RTH range. Price is now trading between 3121.25 and 3124.75. So, the weak high we created yesterday by close managed to sustain itself and price rose higher to the 25's.The biggest HVN in the daily up higher is 3144- it seems from 3126 to 3142, comparatively less trade has been facilitated. We definitely look much more bullish in the weekly and monthly charts by candle, yet I don't trust what I see [as a bull]. From a bearish perspective of the daily, if price were to trade to 3126 and 3130, a reversal there would bring about a head and shoulders pattern.. So, if price gets above 3132.75 and LVN 3133.75 on strong momentum, I'll consider that a bullish action in the grand scheme of things.
3132.50 is a short opportunity given the right circumstances in the flow. Given strength and a retracement, 3122 seems to be a decent buy price for bulls. I'll have my eyes peeled for sellers at 3126, 3130.50, and 3134 (otherwise, price will most likely run right through those levels). Really, the first thing I need to do today is determine which side is stronger. Doing this lately as my #1 priority has kept me out of trouble.
Also, it should be noted that in the weekly volume profile value area, we've practically reached the VAH 3126.75, and naturally I consider the possibility of a re-test of the weekly VAL ~3084. In any case, the higher VPOCs and VAL's (of different value area time periods) are below current price. We might still have more trading at 3091 to do, perhaps from 3065 to 3101. I think that, with a lack of strength, it's likely that price will re-test 3091 (not predicting when or even if), if not 3084 or lower. As for today, I reluctantly think that if the market is bullish, our target is 3132, and if we're bearish, our target is 3107."
These are my views of the current context. My main focus though is to identify which side is stronger, and to trade with that strength with the outline above as a reference.
Took 2 trades today, +1 point. -$0.81 for commissions..
Kind of a disappointing update here for me, since it's been forever since I've traded like this.
I traded unlike myself today and closed the trades I did take way too soon. Every limit order I cancelled would've worked and been a successful trade, and the trades that I closed too soon also would've been at least 2 points profitable (I've decided I'll be taking 2 points a trade from now on in these sort of conditions). With that being said, I'm not too bent out of shape about it, it's just that it would've been awesome to end a day like this more profitable than I ordinarily would be on trending days.
So yeah, my trading sins today was closing way too early (I was suspicious of the orderflow) and cancelling limit orders for trades that fit my strategy.
On the other hand, my prep for today would've paid off if I wasn't being such a puss. At the very least, I'm glad to see that. I stated that our target for today if we were bearish was probably going to be 3107, but we passed it by 3-4 points or so. That's pretty great in my eyes..
Part of the reason why I closed my trades so early is because I didn't have confidence that the market could reach my 4 point p/t. The choppiness spooked me.. Still, levels trade. That's why I've decided to go for 1R on these days from now on.
Took a short trade at 32 with 3.5 points of risk and got stopped out. I interpreted this weeks events as bearish, so I suppose I have a false assumption: I thought that because there was so much bearish volume at the start of the week, and given the pattern in the daily, I thought it was likely we'd see solid resistance at 3132.50. I did write in my analysis this morning that the daily looked bullish because we closed higher, but I didn't trust the volume that got us there. I thought volume was a good indicator of sentiment, but we just traded up on light volume..
As for momentum, during the NFP, we jumped up to 3029 and really hesitated there. I placed a limit order at 32 for the fade, and added more risk to account for volatility. If we're being honest here, would you have been surprised if we reversed at 32? I don't think shorting at 32.50 was that outlandish of a decision. It just turned out to be wrong.
I stumbled on a write-up about this method about 9 years ago.
You can go back and look at as many NFP Releases as you like,
I think you'll find a relatively high percentage of the time this set-up works in your favor.
Let's check back on this trade at 12:30 Eastern today.
R.I.P. John Bottomley (Botts), 1956-2022.
Please visit this thread for more information.
With how things have worked out so far today, that's a beautiful trade. In reality and in retrospect, I had no business trading the NFP given I had next to no knowledge of its implications in the first place. Also, it seems my read of context was off, as another experienced trader essentially said the same thing as you in the regular chat of FT's Trader Bite this morning on YouTube. He said that the context was bullish. It seems that a daily bar candle close higher takes more precedence over volume- or at least it did in this case. The bottom line is, I dont understand context enough yet. Not good for a trader that trades context..
Also, because of what happened today, I've noticed a pattern in myself. This isnt the first time I've done this. In the past I noticed a head and shoulders in the daily in the ES during one of my night time analyses, and became attached to taking a technical-based trade, much like a swing trader would. This trade wasn't momentum based, it was more anticipatory. When I saw that hesitation at the 29s though, that was enough for me to enter short above.. Anyway, this affirms the point that I need to identify which side is stronger and trade with them. Its obvious I have a habit of trading this way that doesn't work for me, and it's getting annoying.
Might be some mistakes in this update as I'm out and about now. I feel good about what I've just written about, and will revisit this later on. I'm going to focus on my trading this weekend, because I really want to improve here.
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