Mar 072012
 

Today was a tough day.  I put my thoughts in the chart but I did want to say something about the 49 short.  I tweeted in an exchange with Paul that I would rather get long support than short the 49 resistance.  I said that there was potential support at 47 which is only 2 pts away.

I was not able to get long because I was waiting for the support zone.  I don’t mind missing those, it’s the right thing to do (per my plan).  However when I do miss one I must be very careful about rushing into another trade to try and make up what I missed.  And that’s exactly what I did with a short at 49.  Is it at the zone?  Yes.  Should I have entered there?  No for several reasons.  First is 47 is likely to be support.  Second, it just failed to close the gap so Dalton says to go with these moves.  Third, when fading, you want to take the trade deep into the zone, not at the front.  (Thanks to EMP for this idea and the corollary is when going with trend you want to take it at the front, at least partially, to avoid missing it).   This mistake cost me a 10 tick loss which wiped out the 11 ticks I had made in globex.  And I know better.  Shame on me.

The plan is rather simple.  But some how I always manage to make it more complicated.  Better luck next time.

 

 

Mar 072012
 

I’ve been surprised by the number of people who have shown an interest in the eminiplayer zones.  Two of my trading buddies have subscribed to it.  I think this is great because it will give us something in common when analyzing our trades and sharing our ideas about how we saw it.  If you’re not a subscriber, he tweets his charts showing his zones towards the end of the US RTH session so you can study them to see if it’s something that can help you.

Monday I did well on ES but those gains were reduced by a loss on the Bund.  And so I decided to focus on ES & Stoxx.  In the past the Bund was correlated (inversely) with these markets and there was a real synergy.  Right now that’s not the case.

So I thought it’d be a good idea this week to show how I’m trading the EMP zones.  EMP did a webinar recently about this where he interviewed one of his subscribers and I realized how simple trading can be and how I’ve complicated the heck out of it!  So I’m trying to simplify as much as possible.  I do want to stress the fact that I don’t just blindly trade his zones, although I think that’s possible if you want to do that.  One reason I do my own homework is because I’m also studying Stoxx (and sometimes Bund & Euro).

Here’s the basic idea of what I do:

  1. I study the weekly chart.
  2. I study the ES daily chart with micro-composites
  3. I study a Market Profile chart where I split & merge profiles to isolate balance areas
  4. I study the “template day” profiles & S/R levels
  5. I combine all those to come up with my own areas of business.  I plot these on a chart.
  6. I then plot the EMP zones on a second chart and see how they relate to mine.  This is a great learning experience.  By doing my own homework I can better understand the EMP zones and that increase my confidence.  I can also understand if price stops short in front of a level or goes beyond it a little bit.
  7. I determine my bias for the day and where it will change.  I have my own method of doing this and I also use the EMP bull/bear line.  When these agree then that’s good.  When they’re conflicting I’m more careful because it’s not so clear.
  8. I decide where I’ll look to take my trades and put audio alerts there.
  9. When price gets there, I start watching the breath (NYSE TICK and S&P 500 Adv/Dec), footprint and “order flow” (I still dislike that term but volume seems static and order flow seems more dynamic and it’s important to see as dynamic).  I have tools to help me with this plan to make them publicly available in the future.  I also decide where I will be wrong.
  10. If I see a change in order flow to support my trade then I enter.  Sometimes I scale in depending on my confidence and the risk (if we’re at the front of an area I enter 1 contract and look to add a second towards the back of the area).  If price goes beyond my area I take a loss.  I take the first scale at the next level (could be mine or EMP’s or an important intraday level) which must be more than 2 pts away or I skip the trade.  And for the second I target the next level.

So knowing that, I thought I’d share my ES trades and you can share yours and ask questions.  I will plot my trades on a chart with the EMP zones so that we can use the EMP zones as a common basis.  If I have something that differs I’ll try to note that.

Monday March 5:

Tuesday March 6:

 

I hope that showing the trades and my interpretation of the zones will allow collaboration.  I welcome all questions and feedback.  If you’d like to post your charts & trades or ask a question please leave a comment below.

 

Mar 042012
 

I’m not going to post my plan every day.  I thought of several reasons:

  • My plan changes during the day
  • It’s easier to just draw my areas on my chart than write it out in text
  • I didn’t take many of the trades that was on my plan (missed some, passed on others, etc.)
  • I took trades that weren’t in my plan based on context (friday’s short at IBL)

Overall I just don’t think I can plan everything out.  I can identify the areas where I want to trade but I think most people can do that.  It’s what to do when it gets there and how to manage the trade that is difficult.

Last year I was a subscriber of eminiplayer’s site.  I liked his daily plan and I liked comparing my levels with his.   On January 20th I did not renew my subscription because I wanted to see if I could do well on my own.  I don’t know if this is a coincidence or not but that’s also when I started losing money.  The second half of January was not good and February was not good either.  Last week I rejoined and I did ok last week, a marked improvement from the weeks before.

A lot of times my levels line up with eminiplayer’s, and when they don’t his usually work better and I can learn from it.  And I think reading his plan and having his levels increases my confidence which is really important when it comes time to pull the trigger.  Last week I made enough trading at his levels to pay for many months of his subscriber fee.

Lately I’ve met a few other eminiplayer subscribers and have started exchanging some ideas.  I think this is a major advantage of his service:  By using a common set of levels, it’s much easier to compare the trades we took or didn’t take.  I’ve tried organizing forums here for people to share homework and trades but with everyone using different levels and approaches, it was a bit chaotic.  So I’m looking for ways to collaborate with other eminiplayer subscribers.  If you’re interested in collaborating please let me know.  I’m thinking about creating a private area for subscribers to post trades and give each other feedback.  Let me know if you think this would be useful.

Bund is building acceptance at the top of its trading range.  I have previously said longs are risky here, but it might be ready to break out.  So I have to be open for both scenarios.

Stoxx is in a similar situation as the Bund, which is interesting because these used to be inversely correlated.  Stoxx still looks bullish.

ES is looking like it’s getting weak.  I have noted lately that buyers are not willing to initiate at higher prices.  This is necessary for us to continue higher.  Well that or squeeze shorts.  Which is what happened after the drop on Wednesday.  1387 is a major reference above, the question is will we get there before pulling back.  I have no idea.  I’m more open to the short side though, provided I see some weakness (like friday breaking below the IBL).

Good luck to you in your trading.