Micro E-mini Madness (2% per day)

[volpri]

Can’t do much trading today as have a project to work on but here are two screen shots from this morning in little tiny ole MES. Breaking the guru’s rules. Averaging down. I suppose more diplomatic to say scaling in. Anyway first chart gap up on the open but bear bar. Sellers one that first bar. Bulls push back next 4 bars. But doji..overlapping...small range...in other words weak effort by bulls. 6th bar from open bears push back...three consecutive bear bar but tails on bottom of bar 7 and 8 so some buying present. But 3 bear bar ..larger...indicates weakness. Bars 9 and 10 pb followed by big bear bar. Now that bar 11 shows clearly the bears are winning as the opening gap too is filled. Time to start averaging in. So..averaged 2 contracts at a clip as price retraced on bars 12,13,14 SL was at 3008 If I recall. Although a closer SL could have function well at 3006.


So, I am loading up early on (by averaging in) to what is called a developing Lower High MTR (major trend reversal). I will explain in another post. So by bar 14 my position is completed - 8 contracts. Now I wait for the decline. Context support the idea. Bars 16 -through 19 we get a two legged decline. Two legged because on bar 17 we get a small PB then trend south continues. I exit on bar 19. $205.50 b4 comm.

Red line is my averaged in BE location.

And the exit below.

 

[volpri]

Here is another averaged in trade I took after the first one explained above. I could not watch this very well for typing the explanation of the first trade in the prev two charts. So, I missed put on more profit than I actually realized on this second trade. Normally, I would adjust the profit target and get more. Nevertheless, here it is. Profits from this morning 297.50 before comm deduction. Later will try to explain the latter trade but this is all the trading I can do at the moment.

The short averaged down entries. 2 contracts at a clip for 4 total contracts.

The exit..

 

[volpri]

Back to explanation of first averaged down trade.

This is a Lower High Major Trend Reversal. So during night price trended up causing the Gap open when RTH started. The big question is will the gap close after the open or will bull trend continue? Opening bar of RTH is a bear bar. Not good for bullish scenario but too early to tell yet. Next three bars bullish as bulls are reasserting, but not so good i.e. not in a very strong way. Why? Overlapping bars..doji’s ..etc. So, I am looking for a possible trend reversal. But first I gotta see a break of the green trend line followed by weakness with a pb reaching down close or through at least the 20 EMA. So PB penetrates not only the 20 ema but also the 50 sma (which shows the intermediate trend as now being down.) However, I want to see an attempt to resume the bull trend. Bar 12 shows the bears were able to keep an entire bar (even though a bull bar) BELOW the 20 EMA. This often indicates that what follows will be a final push up in the form of a final flag to test the previous high before the trend reverses. So, anticipating a forth coming Lower High MTR (because of all the previous described weakness to the left I begin loading up short ...averaging down ...breaking all the guru’s rules. I love to break their rules! Tickles me pink.

By bar 15 the test is over with and since it is a bear bar it becomes a signal bar to short below it’s low. So, bar 16 is the entry bar one or two ticks below bar 15’s low. However in my case I anticipated the LH MTR and loaded up averaging down. If i had not I would be shorting on bar 16 at 2 ticks below bar 15.

So SUMMARY: MTR ...break of trendline. Weakness in PB breaking or getting real close to EMA preferably breaking below it. Then a retest of previous high. Then a resumption of trend in direction of the weakness indicated. Can end up being a LH MTR or HH MTR. In this case I anticipated a LH MTR BECAUSE of the weakness for it not only went below the 20 EMA BUT ALSO below the 50 SMA AND put a bull bar completely below the 20EMA just causing a MA gap (bearish strength) and an indicator of one more push up, in the form of a possible final flag.

Enjoy. Or rail. Whatever...whichever.

 

[volpri]

One final concept here. THE OVERALL CONTEXT SHOULD SUPPORT AVERAGING DOWN INTO A LOSING POSITION AND IT DID IN THE CASE, REMEMBER THAT! I don’t just average down anytime I get the notion.

And 295.00 is peanuts but remember this is tiny MES. Change that to ES. Process is the same. Mama can go to Dillards instead of Dollar General.

 

[sstheo]

Volpri, in your last graphic, you said you were "loading up on any PB." But I can't tell if you are talking about selling bounces or buying dips after a big selloff day.

 

[Overnight]

One final concept here. THE OVERALL CONTEXT SHOULD SUPPORT AVERAGING DOWN INTO A LOSING POSITION AND IT DID IN THE CASE, REMEMBER THAT! I don’t just average down anytime I get the notion.

And 295.00 is peanuts but remember this is tiny MES. Change that to ES. Process is the same. Mama can go to Dillards instead of Dollar General.

295 bux is not peanuts, because you are forgetting proportion of risk. For how many contracts were you in to average into your position? 5? 12? 20?

How much risk did you take on to average your profits? I went in 3 on the average long today, and it was one of those days you never seem to face, Volpri...The day that never comes back in your direction. So I stopped trying to average in, and it has become a long-term swing.

 

[volpri]

Read my post #361 above. I thought it was quite clear. I started shorting at first red triangle 2 contracts the added two at next red triangle...then two more...then two more for a total of 8 contracts. My exit was about 25 minutes later at that green triangle, exited all 8 contracts, in the second chart in that post. Profit after that trade was 205.50 I believe. I took snapshots of the chart as the trade was unfolding hence two charts. First to show my entries and next chart to show both entries and the exit. Look at timeline at bottom of the chart. Platform placed the triangle markers as the trades were executed.

My initial SL was 3008 if I remember correctly. But 3006 would have worked fine. My actual SL ended up being about 3 points. (From red averaged in line in top chart to the top of the bar my that last averaged in short of 2 contracts took place). I distinguish initial SL from actual Risk with actual risk being what the market actually went against me before it went in my favor. By averaging in if it only moved 3 points in my favor I am at BE. Of course it went further.

 

[volpri]

295 bux is not peanuts, because you are forgetting proportion of risk. For how many contracts were you in to average into your position? 5? 12? 20?

How much risk did you take on to average your profits? I went in 3 on the average long today, and it was one of those days you never seem to face, Volpri...The day that never comes back in your direction. So I stopped trying to average in, and it has become a long-term swing.

All I can tell you is you need to pick when to average in. Not every trade is conducive. If you will post a chart marking your entries I will see about taking a look at it to see the “why” it didn’t work. If you like.

I actually took some more trades and ended up the day with more than 205.50 and even more than 295.

 

[Overnight]

All I can tell you is you need to pick when to average in. Not every trade is conducive. If you will post a chart marking your entries I will see about taking a look at it to see the “why” it didn’t work. If you like.

I actually took some more trades and ended up with more than 205.50 or even 295.

Sure man, when my trading machine is up next, I'll post the charts. But you did not answer the question on your end...How many contracts did it take you to get into profit today?

 

[volpri]

Volpri, in your last graphic, you said you were "loading up on any PB." But I can't tell if you are talking about selling bounces or buying dips after a big selloff day.

I am talking about the specific PB against that big bear bar. The PB where all the red triangles are. Each red triangle was a 2 contract short averaging down for a total of 8 contract position and all exit about 25 minutes later on the green triangle.

When I said I am loading up on any pb I mean any pullback against that big bear bar in this particular chart not any pb in any chart. Does that explain things?