ES Trend Following

Discussion in 'Journals' started by Bombardier, Sep 8, 2011.

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  1. I have been visiting these forums on and off for a while and decided to start my own journal now. My interest in particular is trend following the ES by simply using support and resistance levels in the one hour chart. I will trade breakouts to enter long and breakdowns to enter short. Perhaps more rules will emerge as this journal evolves. Meanwhile I will try to be as unbiased as possibly attainable since a common rule is to "trade what you see, not what you think".

    Although I read a lot about trend following, my impression is that this topic is very vague and hard to follow for a beginner. Hence I will give it a go. I spent quite some time studying the printouts of historical price action of expired contracts, and discovered a striking repetitive pattern of (1) reversal/ignition (2) trend (3) range (4) continuation/reversal. Charts will be attached as reference to illustrate my thoughts.
  2. Short @ 1180.25, Stop @ 1186

    Shorted when support at 1177 was about to break. Had been observing the premarket activity and noticed how the ES kept rising up from there but never meaningful enough. This support basis is perhaps more striking in the 4h time frame. Once it broke, I saw that the battle was lost for bulls.

    Holding my position with a stop at 1186 until further notice.
  3. Bought @ 1149.00, Stop @ 1127.75 (new Dec'11 contract)

    I covered my previous position since Friday for an average profit of 25.25 ES points ($1262.5) and reversed long with the new December contract. I saw a resistance area forming and blowing toward session close.

    Total profit since beginning: $1262.5
  4. Adjusted the stop to 1138 which is an important low in the new uptrend according to my understanding. Still long since yesterday.
  5. The stop is now put even higher to 1147, the low made earlier in the 1H time frame. This nearly nullifies my trade's risk.
  6. Good luck Bomb!
  7. Thanks, Snow :)

    The ES formed another higher low before breaking and holding new highs. Hence, the stop is now at 1154.25. Currently sitting on about $1,800 unrealized profits – we'll see where the market takes me, but definitely looks bullish in daily and weekly charts.
  8. I decided to set the new stop to 1180.50 because I see it as an important low that ought to hold for the current uptrend to remain intact. Thinking ahead, if this low breaks I do see a pattern of lower lows and lower highs emerge, which is clearly understood as a downtrend according to the Dow Theory.

    Going higher would obviously serve my interest, as I'm still long from 1149 ($2,362.50 unrealized profits).
  9. ES is not very trendy.

    What makes you think trend following works well in ES.

  10. Of all markets, it offers the best trends if you ask me. Support and resistance areas are very well respected.
    #10     Sep 19, 2011
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