Quote from JoshDance:
That's the problem -- my direction feel is not strong right now, and even when it is sometimes, I'm still dead wrong.
6-8 points is a little beyond my acceptable risk tolerance, and I would need to see about 20 points profit to make that viable. And while I see evidence of buying, I do not seen evidence that it wants to go to 1200 this moment.
Objectively speaking, we have gone below yesterday's value area (globex), and failed to re-enter it after trying a few times. 85 is the upper boundary which held 2 or 3 times. We are establishing value down here. A long simply is not a high probability at this moment, until something on the order flow drastically changes, or until we go back above 85.
http://screencast.com/t/lQgePvNwBB8l
good analysis and very well said....however i will counter all of this (and this is not that I am defending my position due to my ego, I personally strive to be as ego-less as possible in my trading. I genuinely believe what i am writing is true). This may not apply to this trade in particular, however I am talking in general terms over multiple trades, trading in a swing manner.
Few facts:
1. ES backfills to a large extent. so a trader can be reasonable confident that price will revisit every point in some time down the line (can be 3 hrs can be 3 days). This in my opinion is the reason why overnight gaps fill also (although there might be some other reason also behind gap filling phenomena on an intraday basis)
2. You buy here at 1180 and leave the trade with a stop at 1170 and a target of 1200, and leave the screen......Don't look at DOM skew, what price is doing, any indicator, value area, what LF is writing, what ammo is writing, what gmst is writing etc. etc.
3. You come back after 4 hours, either stop/target would have got hit or trade will be still open. No one can change this fact.
4. Now this is important, what i am saying is - if you are in a ballpark manner buying at a very oversold level, giving the position 10 points stop, chances are given sufficient time, ES will backfill and hit 1200 or even 1210 (looking at we are coming from 1280 AND we had such a large number of down days) before it does go and hit 1170.
5. The key to trade using this approach is to use at least 10k per ES contract or even more like 15k. But i can bet your win rate would go up dramatically. Even better if you can add at 10/15 point move against you and scalp that extra contract for 10-15 point profit....probably what i am saying is just ammo's approach.
