Tuesday, November 11, 2008

Chop Fest

The first chart is a follow-up on yesterday's swing trade. I was fortunate enough to be able to get out a BE on the 2nd half, so I'm happy with that.

The second chart is the S&P E-mini futures. I shorted when price took out daily support . Price retested before moving down to the 38% Fib. ext.. Price couldn't hold the 38% level for very long, so I took a partial. ES formed a base and I was stopped out on bal. Turned out to be a head fake.

After chopping around some more on low volume. Price broke out at the black line segment. I was on the phone and missed the entry so I waited for a NR consolidation which conveniently occurred at the base of daily support. Took a partial after 3 WRBs and was stopped out on balance. ES carved out a big H&S top and I shorted back down to extension. More than made up the head fake.

4 comments:

QQQBall said...

excellent trade management on cutting your losses to BE on the 2nd 1/2. thats the one thing about trading gaps, you know how to deal with them.

Jamie said...

Thanks QQQ,

Yeah, I was happy with BE given how bearish the day was setting up.

Tyler said...

Jamie,

Great trades today!

I have been using only the 15 and the 5 for entry and find that a lot of my trades are not working out. When I pull up the 1 MIN chart of a trade that did not work out the moving averages are not lined up, but they are on the 15 and 5.

Even though you have been posting 5 MIN charts are you still aware of what is going on on the 1 MIN?

Like your ES H&S trade. The moving averages on the 5 MIN were crazy, but the 1 MIN was great.

Thanks,
Tyler

Jamie said...

Thanks Tyler,

The second ES trade was event driven so it generated a big profit but much riskier. But yes, I was watching the lower timeframe as well.

Markets are extremely volatile and it is best to stick to high quality setups of trending stocks to avoid analysis paralysis and stop outs. On 15 min. I would look for NRBs and preferably NRIB (NR7) with volume contraction. If price is testing a key pivot point, it can generate a big profit on successful BO. CNQ today is a good example. Also look for patterns such as flags and C&H. If well formed, they are quite reliable.