The gap I am talking about is the price S&P cash closed at. You then take that cash price and find the fair value for ES. For today the previous cash close was 1055.33. Adjusted to ES would give you a ES value of 1053.25 - 1053.5.
Thanks for spelling that out, it all makes sense to me now. The OP said, "My goal is to average 3 points on the ES per day." With the privilege of hindsight, and your (volente) insight ("You went long above a 6 point gap and nothing but air below to 53.5") when the long failed, ("Within about 3 seconds of hitting the send button I realized this was a bad trade, I was too focused on the previous peak.") a quick reversal would have put old T low in the spotlight . Thanks again volente for pointing out the dog that wags "this" tail. Recognizing you entered a bad trade and dumping it quickly was an excellent move, A+. I can also see how impatient short traders may have gotten stopped out while hoping to fill the gap a few bars after you entered, that tail above 1060 to clear 'em all out (that's probably where volente went short) . <*)))><
I agree. I watch SPY everyday and use it as my benchmark for the stocks that I trade. SPY has gaps while ES doesn't. SPY is a proxy for ES. SPY has a much higher chance of moving against the gap than with the gap. So chasing a gap at the US opening time is quite risky.
All I can say is, WOW, the pros must have cleaned up today...this is one of those homerun type days. For me...not so much. Definitely a bit frustrating and got a bit angry that I got stopped out of my first trade. But thanks to volente and following his gap rule, I played the direction correct this time, yeah! That was a pretty sweet piece of advice. Thanks Volente! Question for Volente (or whoever): How do you feel about Monday and the upcoming gap to try an fill from 8/23-8/24 to fill between 1063 and 1067ish? I guess what I am getting at is we are heading towards filling that gap, do you go into Monday with a long bias? Wait to see if we gap up/down on Mondays open? Do you only look at gaps from the previous day? Here are the trades: Trade 1: 6:39- Short 1049.50 6:45- Move stop to B/E 6:54- Stopped out at B/E +0.00 pts Uggggg...So frustrating and infuriating that I missed out on that gigantic downward move. As NoDoji mentioned earlier, I am going to have to go back through previous trades and look into my stops more and moving them to B/E or trailing or whatever. As soon as I saw the downward momentum start, it was like...oh man, this thing is tanking hard and fast and Im on the sidelines...Errrr. But I am proud of myself for not chasing the trade. There were a couple other entry points along the way, but things were moving so fast I needed a bit of time to think about the plan of action so I decided to stay out. Once 7:10 or so rolled around, I realized I was pretty mad and emotional. I decided not to take the long entry at 7:25 because of this; so it sucks I missed the trade but Im happy I wasn't trading angry. At 7:40, I took a break and stepped away from the computer for about hour to relax, chill out, clear the mind. I just kept thinking about how I missed out on almost 20 points worth of movement with trades that I had called correctly. Back to the computer at 9:00ish. Feeling better and calmed down. Trade 2: 9:44- Short 1057.00 9:56- Buy to Cover 1056.00 -Dog was freakin out needed to take him out +1.00 pts This trade was Ok at best. I was a little slow to pull the trigger so my entry price wasn't great, I was looking for something at 1058.00 but hesitated and it cost me. I wanted to stay in the trade longer and see it play out but the pup needed attention In the end, if my entry was better it would have been a stronger trade, but at most I think I would have gotten +2.00pts total so not bad. Trade 3: 12:09- Long 1060.50 12:30- Sell at 1063.25 +2.75 pts Im really happy with this trade...I feel like I followed my rules and followed my notes so everything went right for the most part. After the price broke down below the rising channel and came back up, I entered there thinking it failed to breakdown under the channel, then as it dropped back under for the 2nd time, I started getting a bit nervous, but I held my stop in place and didn't exit prematurely. I had down on my notes ~1063.50 is a major Fib retracement area and horizontal resistance so look to exit as momentum dries up...and it did...and I exited. Total Trades: 3 Winners: 2 Losers:0 B/E:1 Total Points: +3.75 Avg. Win: 93.75 Avg. Loss: 0 Total Win: 67% Total Profit: $187.50 For Week: Total Trades: 16 Winners: 5 Losers:8 B/E:3 Total Points: -3.5 Avg. Win: 101.25 Avg. Loss: 66.65 Total Win: 33.33% Total Profits: -$175.00 For the week, I give myself a "C-" I really screw up on Tuesday...and made some major mental errors. I did have some bright spots through the week and some mistakes. Again, I think the mental emotional challenge is going to be my biggest hurdle. If I can keep my mistakes down and emotions out of the way, I think I will progress nicely.
Guys/Girls, A request...if you are replying to me or anyone else and you are quoting something, please delete the link to the chart/picture in the quote or just quote the sentence(s), in which you are refering to...(unless of course you need the chart in your reply) scrolling sideways sucks when reading threads The same goes for me...if you have to scroll sideways on the charts I post, please let me know and I will resize them. Thanks!
Hey how about me? SPY has a much higher chance of moving against the gap than with the gap. So chasing a gap at the US opening time is quite risky. Just kidding. Good job! Today's market was very volatile. Be careful with scalping on such days. Sometimes the market may move against you very quickly. Don't want to see picking up quarters on a highway and get run over.
Bol, Sorry to leave you out Thanks for the tips...ya scalp type trades were a little risky today. I just realized I haven't been writing my stops down..I think i will start doing that so you guys can criticize me on that part of my trading.
Nice work overall! I got a textbook short signal prior to Bernanke's speech, but chose to sit out because it wasn't a cut-and-dry news report and things like FOMC and speeches can whip price around so fast you don't know what happened (I traded once during FOMC and had no idea where price even went on my DOM after the trade was on). I too was frustrated that I didn't simply act on my signal but once the move was on I wasn't about to chase entries either direction. I agree that in this state of mind where you feel like you surely should've made a week's pay on those moves, it's a good idea to chill so you don't start trying to then get back what you missed by taking random trades. I'd like to elaborate a bit on moving stops because I often move my stops to b/e and sometimes too soon to my detriment. However, leaving initial stops in place until target or better is reached ONLY works well if you have trained yourself to trade every valid signal. If you pick an choose from among your valid signals, then you may actually be better off getting stopped out for no loss than end up picking the losers out of the day and leaving behind the winners. It's an odds game and you need to develop consistency all around. My inability to simply trade every valid signal compelled me to begin the automation process. My beta version "robot-me" yesterday put me to shame by capturing one of the best moves of the day, one that I hesitated to trade, thereby missing out on a single trade that nearly matched my whole day's P/L.
We won't know how ES will gap until Monday morning, US time... the ES ETF I trade climbed a little after the close Friday night, but that's pretty normal when the market closes on an upswing... the bigger after-close directional changes tend to happen after 7pm ET or in the early morning hours... also keep in mind there are economic numbers due at 8:30am ET on Monday, and some people get out of positions before those releases.
Please, let's say critique. Personally, IMO I think your stop placement is obvious that's why you've had 3B/E's and how many 1 pt or less trades? Your not a scalper right? I was wondering more about your targets. . Another great decision A+ (for now) you're a winner in the making. I know things move fast get use to it,,,, it's not going to slow down... I suggest you do your thinking, before someone initiates the launch code! Your statement above says "entry points" I invite you to think reentry, the safe play is on the sidelines the money is in the market. Take the 8-27-10 chart for instance (remember I'm not an ES trader) why did prices stop and rattle around the 1040 area before moving up? What was Thurs low? What was Wed low? What was Tue low? Hindsight is a wonderful thing. Your analysis on trade 1 was as good as it gets, you were short in the bottom 25% of the weekly range 12 points above an area that held 3 LODs in a falling market, to paraphrase ND, "sometimes you just have to whack the bid." Whoa, let's back up here! Did someone say Fibonacci? Now you're talking a language I understand! There's your problem!! You've gotten the P/A Gods pissed off (just kidding). If you're looking at Fibs and trying to sell at 1058 (50% right?) what was your target a retest of .382? If so take a look at those green bars from 50 to 56 they sliced through that 53 level and never backed up a single bar! Now, I don't know the ES or it's nuances but I'd bet that area just turned into a support level that's harder than a whore's heart! I think you were lucky to get a point out of that trade. As boli said, " Don't want to see picking up quarters on a highway and get run over." After watching you trade for a week and reviewing your well written thoughts, feelings and actions I'll file in behind ND and agree nice work overall. The Freudian slip LoL, about the Fib level and your willingness to muscle in that last trade gives that trade a little more luster in my book , good job! And good luck next week. How about a 5m chart for comparison sometime. I love the color <*)))><