Normally I would characterize this as an "easy day" however TODAY I have a retail trader watching me execute (just doing my boss a favor), and I am reminded of how difficult it can be to just sit and wait for a for a test to either take out a price or fail, and for a position to get some cushion. As with most days, the signals are straightforward. You watch, you anticipate, you put on the trade and you manage it. In contrast, retail traders watch and second guess and wait too long to enter, too long to exit, and then spend the rest of the time beating themselves up instead of monitoring for the next trade. Best of luck to all
Just for grins I will post the signal times Test #1....Signal at 6:42 Test #2....Signal at 6:51 Test #3....Signal at 7:26 Test #4....Signal at 8:36 All times PST
Okay so here is an update that is timely Why? Because of the recent posts where folks "suggest" A. That it is unlikely (read impossible) to make money trading off the screen and B. That one can make money using only the MACD First the background Market opened near its highs. Right away (in my office anyway) we are looking for a failure trade and a retrace down to Previous Value (from MP). Market opens and futzes around like it often does just above a pivot. Normally we look for price to take out the pivot to the downside and retest. At that point we would like to find favorable short entry on the retest and failure. Check out the chart. We are sitting right next to two retail traders looking at the same chart. We are all supposed to be thinking in the same way about how to interpret the data. We "prefer" to find setups that offer more than one reason to get long or short. This is called "confluence". In this instance we have A. Price taking out the pivot and retesting b. MACD showing possible momentum move down c. $VOLD, $ADD and Prem "confirming" a possible move down We all get short and what happens after that tells the whole story. The stop for this trade is 2 points. Short entry at 950.50 I pull the trigger, set my stop and lean back to watch. Couldn't give a damn less, as I have seen this about a thousand times before. On either side of me, the retail traders are filled at the same price and they are "tick watching". This means they are nervous and they are watching closely to see what happens. They want something positive to happen right away. Look at what price does...it says "fuck you, I am going to move up and shake you out" and it does just that moving up to 951.50 As price is moving up, the retail guys are asking ME what to do and I am smiling at them and saying "what do YOU want to do?" and they say "WELL IF ITS NOT GOING DOWN WITHIN THE NEXT MINUTE OR SO, I AM READY TO GET OUT WITH A SMALL LOSS." So I shake my head and say "fine, your call champ"....lets see what happens....as price retests the high point again, they "cave" one of them decides to get flat and predictably the other can't stand the tension of waiting and boom they are both out with a small loss. One filled at 951.25, the other filled at 951.50 (the exact friggin high tick). As you can see, the market broke down at 6:43 and continued down, taking out several pivots to a low of 933.25 for 18 ES points. THIS is why retail doesn't make money. Not because they don't have an edge. These guys do...Not because they can't pull the trigger...They got on the trade....But because they have trouble managing their emotions once they get filled. This is why retail are called "weak hands". Can't say it anymore plainly than that. Back to work
http://www.goodmorningwallst.com/files/gmws060509r/gmws060509r.html i dont trade with the macd but this little video might be of interest to your newbie's hungry for clues
I doubt that its a coincidence. If you took a moment to do your own homework you would see that protocol works well in mean reverting markets. Makes sense that other professionals would come to a similar conclusion.