when I enter the trade @11ish, I realize the trend is temparorily over... I waited for a deeper pullback -a cheaper price to buy and enter in a lower range. The chop was expected. And I am Ok with just scalp... But obviously, I should have trail the stop instead of jumpling in and out. -bad management You probably wonder why did I enter the pullback at 7:15pst. I was too concerned to buy the middle of the range at that time... and its not the best ABC wave pullback I am trading. But it ended to be the best trade of the day. Sooner or later, I will take trades at the open that might not have the "best looking". It's the other "edge" I am trying to study.
The early moves are usually the best of the day, but you need a pre-open plan to take advantage of them. When I fire up my platform in the morning and look at the 6 hours or so leading into the hard right edge at that moment in time, I make all my initial notes: Minor S/R levels off the 5-min chart pivots S/R levels off the 60-min chart (60-min bar highs/lows) S/R levels off the daily chart I note whether price has trended or ranged in that previous 6 hours, and where in the trend or range price is right now. I then note previous resistance points that can become support in an uptrend and previous support zones that can become resistance in a down trend. Once I have all that in writing in front of me, I look for levels that will position me long or short depending on the trend or the range in play. When I scroll my ES chart to the hard right edge now, displaying the 6 hour period leading into the market open, I see that following a nice move up out of consolidation, price has again consolidated in about a 3-point range between 1334.50 and 1337.50. 1337.50 is a double top, begging for a breakout when price consolidates in such a narrow range. ES breakouts sometimes be strong, but for the most part ES breaks out a little, then pulls back and once support holds, the real breakout occurs. With all this in mind, my trading plan for the open would be to buy inside 1334.50 (ES is notorious for taking forever to fill at a level, so by placing an order 1 tick inside the range low of 1334.50, I would expect a better chance of the order getting lifted). Since this is an anticipatory order in which I expect support to hold, I'd place my stop loss @ 1334.00 and, in fact, consider looking for a short entry if the stop is hit and price then leaves a lower high behind. The last couple of new highs made in the uptrend before the strong pullback in March moved between 9 and 11 points through previous consolidation highs, so my target zone on this trade would be around 9 points from the double top high of 1337.75. This is an anticipatory trade, which is scary because price has to fall before you buy, but the tradeoff is a tight stop loss. Bighog walked me through these kinds of trades and it took me a while to get my head around it, but when a level holds, it just plain holds and you're positioned about as ideally as possible. If you prefer a more confirmed entry, you can let the opening action unfold, watch for a breakout or a failure, then buy or sell a pullback off the opening move. Today there was key news at 10:00am ET, which you would have to choose whether to hold or not if positioned in advance of it. If long @ 1334.75 off the open, I would likely have held the position into the news because of the 2 point profit cushion. On the other hand, knowing me, I would've also very likely locked in 3 points on the breakout, expecting some power behind it. Then I'd be watching for a sign of support very close to previous support and would buy a close above the 20 EMA for a retest of the breakout level. Let's say the weak breakout on news resulted in a failure and price took out your stop or stopped you out break even. You then re-evaluate the price action to see if it's just a shakeout and the 1330's still hold up, or if a lower high is put in and a short entry is indicated. Matcha, I think doing a pre-trade plan like this, you'll find trading closer to the open to be more comfortable. Mid-day mush can be very frustrating to trade, especially ES.
Yes, the 2 leg move to EMA type of pullback (current focus) don't happen very often at the open. Which is why I have been studying Opening trades in a very different way. To me it requires different mindset and lots of experience. Thanks for sharing how you trade the openings, I will test out the "anticipated" entry strategy. And I will do more prep work from tomorrow and train my self to "anticipate and be ready" for all the possible moves. here is what I have been working on: I am in the process of quantifying all the "opening" setups that I can take. There are lots of variations. So far, 2 of them I have confidence to take. 1. A clear trend from the open then offers a pullback, 2. a 2 leg pullback "clearly" sets up at the open.(EMA angles up/down clearly). They don't happend a lot though. Besides looking at the premarket patterns and Swing highs/lows. I look for some opening reversals then I enter with the 1st pullback. Yes, I would like to see more confirmations: Bear/bull strength, 2nd failures, 2nd attempts, Bar formations, patterns from YTD....I am the "2nd option" trader as you described above. For example, the 7:15 bar is the entry bar for my opening setup-the pullback. I haven't been trading it that much since I still get a bit unsure most of the time. Like today, my concern is buying in the middle of the range. So I didn't take. Instead I want to wait for a Breakout Pullback or Breakout test setup that never happened, It might take a lot more practice for me to get there. And to trade the open, I should not be "concern" too much... And I have rule that I will get out postition before news...so anything before news are scalps. Trading AM is truly very critical to a trader. Most of the trend moves are in the morning. I would like to start to "get some" and be done for the day. and I believe if I can trade openings with confidence, I then have more "edge" .
Yes, catching one or two good morning moves used to be my signal to stop trading. Now with CL, I can trade that thing all day, but with momentum stocks and stock index futures in general, once the big boys and girls go to lunch, the professional scalpers set to work raiding the accounts of inexperienced traders. An anticipatory method of entering on a pullback following an initial breakout like this morning's break to 1338.50, is to place your limit order at the price area where previous resistance should hold as support. Again, the overall failure rate is higher than with price action stop entries, but you can place a smaller stop most of the time. So this morning you'd look to buy 1338.50 after the second breakout to 1339.50. Since this breakout was very shallow, I'd use a very tight stop (a point or so). No need to take a big loss if previous R doesn't hold up, because you can always try a second entry.
Hi Matcha, Your 3rd Trade was awesome! I was busy for the most part of the day. Traded 2 times in the morning, net +0.50 pts. --po
Hey, I thought the first trade was awesome as well, good setup, good good entry, and good management. The second setup was a bit iffy because of the higher low, but great entry and trade management as well. It's not whether price goes to target that makes the trade; it's the fact you identified and traded the setups, and managed them well that defines "awesome"! When you got the third higher low and exited that second trade, look for a long entry for a break out of that range. Also, on the last trade, consider re-entering when you see previous resistance hold up easily as support. If you look at that little pause on a 1-min chart it's just a mini-bull flag, preparing to move onward. The fund managers will dominate the close and expect continuation of the trend as long as there's no sign of a reversal
seems like your trading instrument has been changed to ES. missed that big run, i trade only 8am-10.30am US time (am from Singapore, local time 8pm-10.30pm)