Please excuse my inarticulateness.
Despite having a good feel for the direction allows me to still take trades both ways but not to expect much more than 2-2.5 points countertrend. Today was a good example. The first hour (beside the failure to close the gap between the opening and yesterday's close) indicated an up day. We are trending up so I'm looking at more movement to the upside.
Price action put support at 1034 on ES. It kept on bouncing off it. Alan Greenspan has made some lamebrained decisions in the last 2.5 years, IMO, and was certainly not going to do something that would harm the markets today.
To me this all added up to rising price action after 2:15 EST. I got in at 1034.25 and waited to go through the resistance that price action had created at 1035.5 and then at 1036.5. I was then able to move my stops up until after reaching 1043.25 (the low of today + the average range of the last 5-days), there was a close (on the 5-minute) below the previous bar. I use CCI a lot and while price action was in that narrow trading pattern today between 1035.5 and 1034, the CCI pretty much was above the Zero line, giving me another indication the move, when it came would be up. I digress.
Yesterday was in the 25% realm where it should have been an up day based on the first 60-minutes of action, but wasn't. So it was a scalp day of 2.5 to 3.5 moves based mostly on divergences between price action and CCI/Stochastics. In addition the resistance/support lines determined by price kept moving down indicating a larger target for short trades.
A lot has to do with which gets broken first, price-directed support or resistance.
Friday was kind of directionless the first hour so I traded that way. Thursday was up in the 1st hour and I traded it thusly. Wednesday was down the first hour and so it went the rest of the day. Tuesday was mixed so I went for short trades until the market made up its mind.
I keep an eye on the range through the day and if it's like only half of what it should be (lately 10-11 pts), I try to figure which way it's going to go to meet that range expectation.
Sorry to ramble on. Something else that helps is writing on my chart what my trades were and why. By looking back at the day's trades, I get a feeling what kind of day it is and how to play it. But usually after making 8-pts it doesn't matter and I'm thinking about lunch and a good book to read. Currently Bangkok-8.
Probably didn't answer your question except to say I do 3-5 trades a day.
Best wishes,
JD
