Nov 012011

A few days ago I posted about the Euro being at a key area.  The level was a 62.8% fib re-tracement of the entire bear move down, backed by the composite VPOC.  The Euro broke through both and was consolidating on Friday.  Since these high prices were accepted rather than rejected, I expected ES to test the 1300 area.  However yesterday a string of news events came out and that sent both the Euro & the stock markets down.

One of the news items was the decision by Greece to have a referendum on the EU bailout package.  It is not expected that the Greek population will vote for it.  The average Greek is not the one who wasted all the money and blew up the deficit so why should they pay?  If I were Greek, I wouldn’t vote for it.

The markets had a huge run up so it doesn’t take much to spook some late longs into bailing and that spooks the early longs into profit taking.  Hence we get long liquidation and that can pave the way for a continuation up.  It all depends on the news and what the Euro does.

I’m not swing trading the Euro or ES so this is all just speculation for fun.  I’ve been taking my day trading setups as they come and I try my best to forget about all this market outlook stuff while day trading.  I am just looking for support & resistance areas with good trade location and letting the R:R take care of it.

I apologize for the lack of updates.  I’ve cut back on my trading hours and have been very busy with non-trading activities.  I will continue to post to the blog when I have some free time during my trading hours.  For example as I’m writing this I’m waiting patiently for my target on my ES short.  I find it’s much easier to be patient if I pre-occupy myself and not become enchanted by the DOM. Pre-occupations include playing music, working on a programming project (trading-related), or reading.

In this case I waited for a good trade location on a short which came when ES pulled back to its DVPOC just short of the European cash open (dotted green line).  I put on my short, scaled half at +2 pts and set the target for the lower HVN thinking ES will fill out this profile.  I trail my stop to lock in profits.

This trade is a good example of what I’ve been doing.  It’s really all about picking spots and being patient enough to wait for them.  My losses come from when I invent trades and/or take trades in bad areas.  If I can just reduce these mistakes my PL would improve considerably.

Good luck with your trading.





  9 Responses to “Euro retracing and an ES short”

  1. Hi,

    Is DVPOC the VPOC of yesterday or today?

    I think you trade the ES also during European trading hours, how do you define “a day” in this case? (from European cash open to ES close?)

  2. D = Developing so it’s the current one.

    I do trade ES during European morning. I use 24hr chart for Globex and switch to RTH about 30mins after the US cash open.

  3. Thank you.

    So if you trade ES during European morning, what time does the current days profile (and developing VPOC) start?

  4. Starts at 10:30pm European time (15 minutes after the US Cash close when ES starts trading again).

    I also watch stoxx which I start at 8am and is more representative of the European markets.

    Also I don’t always depend on the MP indicators. I look for HVNs. For example some days we have more than one distribution and the indicator has to pick one DVPOC (the biggest) but really there may be two or more.

  5. OK, I understand. Thanks for your help and your blog.
    Would be interesting to see more of your trades.

  6. Thanks for the feedback. I got tired of just showing my PL, I think it’s more interesting to show trades especially when I make mistakes. If I write about my mistakes it re-inforces things in my mind so it’s good for everyone.

  7. I was a little confused by your entry Michael, as I show a VPOC at the time of 1245, by a pretty wide margin. Either way nice scale in–where was your initial stop by the way if I may ask?

  8. Josh – I’m not sure what you mean by “VPOC at the time of 1245”. Do you mean price or time and if time, which timezone? Can you elaborate?

    I don’t remember my exact stop but lately I’ve been trying to use tight stops and in this case it was not far away because if the open is taken out I would be wrong on my short.

    Open = 9am European cash open price.

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