Nov 182010

Yesterday I showed evidence of professionals buying the lows.  I woke up with a nice surprise:  ES gapped up big time, taking out my 84 target and stopping at Tuesday’s high at 90.00.  I weighed my options and I felt the risk of 90 holding during globex was too high to risk giving back some of this profit.  I do think we’ll fill the gap but there could be a pullback first.  So I took profit on the last portion at 89.75 for a gain of 15 pts on the last portion.

If we pull back and I see some buying I will consider going long again.

On Twitter someone was asking what was going on in Europe to cause the gap up.  I replied that the move up was totally predictable, but the magnitude of the gap up was a surprise.  I believe the smart guys often move the markets overnight so that everyone will chase it.  This is also a method to clear resistance by taking advantage of low liquidity in the overnight session.  So while I was surprised that the gap up was 12.50 pts (as of the time I’m writing this), I’m not surprised there was a gap.  And I don’t pay attention to news.  If anything, I’m looking to fade it.

I have found that the market moves quite a lot overnight.  There is money to be made if one can guess correctly.  The more I focus on listening to what the market is telling me, the better I become at forming hypotheses and profiting when correct.

  5 Responses to “Long swing trade closed (early)”

  1. Hi Michael,

    I doubt that big guy (swinging d…) trade big overnight just because of the low liquidity. The overnight market was led by Asia like the European morning market is led by Europe and the ES just reacts. I don’t believe in “a method to clear resistance by taking advantage of low liquidity in the overnight session”..

    Kudos to you for your long swing trade!


  2. We each trade our beliefs. It doesn’t matter whether the beliefs are correct or incorrect, all that matters is that we can trade profitably. When we are not trading profitably then it’s time to re-examine our beliefs. I’ve done that countless times and my beliefs have evolved throughout my journey and I’m sure yours will too.

  3. Actually I trade my money 😉

  4. Wow.

    15 points…very good indeed.
    The answer is probably on the blog somewhere, but are you using market profile strategy for your swing trading as well ??
    Must admit swing trading on ES is not something I had considered, as the potential big moves would make me too nervous to sleep 🙂

  5. I use market profile concepts in all my trading. My swing trading is 100% intuition. No setups.

    A lot of big moves happen overnight. If you are on the right side you can profit nicely. If you’re on the wrong side.. you stop out. Just have to keep stops away from noise.

 Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>