Techniques for Day Trading the ES, NQ, YM, MES, MNQ, and MYM

[volpri]

Suppose you shorted the market early this morning, at what point would you have changed your view of market from bearish to bullish? Or at what time would you have cut the loss on short positions? Thanks!

I would have gone long at the green X for the second leg up. MM (see blue) why? we had a reversal and I would want to see some strength from it to go long for a bigger move. In first leg the reversal was very strong. Then a PB then a high one entry where my X is at. The PB being 3 bars is a MINOR reversal with no strength. Prices likely continuing up after that bull bar because the PB is over. Going for a MM because of the strength in the first leg up in the reversal.

There would have been no loss on any short I took right after the open as I would not be holding it through this strong reversal.

As to where I would have exited a short position that I might have taken right after the open. I am out on that second bull bar after the big bear bar and the smaller bear bar. Bulls are pushing back. It could just be a PB or it could be a reversal? So I am locking in profits on my short. If it ends up being a PB and trend south resumes guess what? I enter short again. If it ends up being a reversal (which it did) I am bullish by the time that first leg ends and looking for a long entry such as described above and marked with the green X. Look how strong that first leg was. The high of that first green leg almost erased the ENTIRE opening bearish move. Some institutional bull are buying! Second leg is most likely. Mom and Pop traders cannot push this market up like this. This is nothing less than institutions. By this chart I would have done well locking in my profit and not holding for a possible PB and resumption of the trend.

 

[Overnight]

Where will you be going tomorrow, at the open, based on your analysis of this past week?

 

[volpri]

Magic!

Keep coming back you may learn some tricks!

 

[Overnight]

Keep coming back you may learn some tricks!

I'll tell you ONE thing I have found magical about your system/charts...How the hell can you write so neatly on them?

Either you are using a tablet with a stylus, or you are truly magical with the mouse in a paint program. Any time I try to write text with the mouse scrolling, it looks like anything other than English, hehe.

 

[volpri]

Where will you be going tomorrow, at the open, based on your analysis of this past week?

I have not made an analysis of this past week. I don't care about Monday or Tuesday or wed or Thursday. I am a scalper. I care about tomorrow if the market trades tomm. Period. Those other days are over with. They have no meaning for me. I will look at the overnight PA first thing (if I rise early enough) and see what happened and how prices are likely to open. Gap up or Gap down or around previous close. I may draw two little horizontal lines on my chart indicating the H and L of yesterday (Thursday) just as a quick reference for resistance/support levels but I am only interested in tomorrows (friday's) price action if the market is open Friday and I am alive. And I do not care if price goes up or down. Just doesn't matter to me. Whatever it does there will be plenty of opportunities to scalp 1 to 8 points and I will be flat by the close.

I usually wait to see what the open does before I decide which direction to go. I pay attention to the ORBO say first 45 minutes of market action. If we get a quick fast break BO before the ORBO is over with I may scalp multiple times for 1 or 2 points but not making any real decision for bigger moves until I see the first 45 min to 1 hour.

 

[volpri]

I'll tell you ONE thing I have found magical about your system/charts...How the hell can you write so neatly on them?

Either you are using a tablet with a stylus, or you are truly magical with the mouse in a paint program. Any time I try to write text with the mouse scrolling, it looks like anything other than English, hehe.

IPAD with a pen. I email the charts to myself from the trading laptop ..open my email..and download the charts to the IPAD then draw them up with all the magic!

However, this last chart above with the green arrows done straight from the computer with mouse pad.

Thanks! I always think my hand writing is sloppy. You have encouraged me. It does take a while to mark up these charts and I miss many trades doing it.

 

[volpri]

One more thing about that green arrow chart. Remember this! Do not forget it! When an unlikely event happens expect a MM move. Price opens and plunges. Then a smaller bear bar. Then the reversal begins. What is the expected? Just a PB with that big bear move and a continuation south... right? But what happens? Instead we get a reversal and a strong one at that. Institutions are buying. Almost all the bear BO was erased by the first leg up of the reversal. This is the unexpected event. So I look to go long and go for a measured move. Completed on that second leg up. You may find this info useful.

 

[volpri]

This type of price action is called a spike with a reversal that morphs into a SPBL channel (small pullback bull channel). The spike phase ends with that first pause bar (that first bull bar at the bottom). At this point the market can do one of three things.

1) It can have a PB of 2 to 10 bars and then the trend resumes south. This is the most common scenario. When this happens the trend that resumes in the original direction (in the case south) is usually a weaker type of trend fraught with PB’s ..overlapping bars..trend bars in both directions, flatter slope i.e. a channel. So this becomes a spike and trend channel. Remember, this is usually what happens. Spikes evolve into channels in the direction of the spike. That first PB after the spike is a test of the gap. See all spikes are a gap. In the case below the PB “filled the gap” the spike created and did so on the first leg of what became a reversal. That PB was 6 strong bull bars. That was enough buying pressure to start looking at this as a reversal and not a spike and channel trend in the direction of the spike. This scenario DID NOT happen in the chart below.

2) The second scenario is after the spike a range forms. Once we get a pb then sideways action for 10 or more bars we are going into a range (which didn’t happen in this scenario). A BO of the range can be either direction but odds favor in this case a BO out of the bottom of the range because of the big spike down. If the range last a long time you can dial up to a bigger time frame like maybe a 30 or 60 min chart and see that the range in this case below is likely just a bear flag and odds favor a BO south and trend resumption on that 30 or 60 min chart. This WAS NOT the scenario that played out in the chart below. It was the third scenario which I will get to next.

2) The last scenario is a reversal from the spike. This is the less often scenario but it can happen as we see it did happen below. A spike forms in the opposite direction. This first leg up in the reversal is a spike on a higher TF chart. Look at the 15 minute chart above (with gray highlight post #62) and that first big bull bar after the bear spike is a spike itself in the opposite direction. On the 5 min chart below this spike is a strong tight bull channel with gaps made up of 6 bars before a pb. Since this scenario was the least likely event I look for a measured move up. Bears will fight back trying to make the first leg of an evolving reversal fail. They did so in that PB after the the first leg up. But they could only manage 3 bars down and the bulls resumed control. That first bull bar that breaks above that last bear bar in the PB is where I go long on a H1 (high 1 is first bar to break above the high of the previous bar in a PB) look at my chart in post 71 above to see were I would go long fir the second leg up. We get the second leg of the reversal up. Usually in a bull reversal the bears will try to push back more than once. And price can go into a range of sorts or sideways move before a channel develops. We see that at the end of the second leg of the reversal. By then my carcass was out of bed and I started trading. Usually price will then evolve into some sort of channel. It can be a broad channel or a tight channel. In this case it became a SPBL trend tight channel and I trade it as such. I started averaging down with 4 contracts before the channel actually started. Why price was getting close to the 20 EMA and I reason with such a strong reversal just to the left we gonna go into a channel. Price coukd go back down and just form a big trading range but the odds favor it will form a bull channel of sorts. The reversal not only erased all the bear spike but traded above the high of the day. Odds favor a channel forming. The details of my trades in the SPBL TIGHT CHANNEL can be seen in my chart in my post #61 EXCEPT the last two trades which can be seen on this chart. On those trades I went long 2 contracts then exited above. Then on the PB I went long 1 ES contract and exited above. Gross from the day $1150.00. At this point I quit trading for the day.

Now I got to get back trading for today 10-4-2019 cause I am sure I have missed sone trades while typing all this up.

 

[volpri]

I only had time to take one trade today. It was averaging down. I have to quit for the day. Here is the 5 min chart showing the trade. I averaged down long 7 contracts (2 on the last entry) then exited all seven with $1700.00 gross. I didn't follow it exactly but at one point I know I was down around 1100 - 1500???

But that is typical trading the ES and averaging down. I take bigger risks. But the process is the same ES or MES. I will explain later today or over the weekend the "why" of the trades. And will posts more charts of it.

Have a great weekend.

 

[trader1974]

Here are some trades in ES this morning will comment later. But can you guess why the trades were all long trades? All winners. First was averaging down 4 contracts. Other three trades were straight long scalps. Gross at this point $800.00

I think you did the long trade because the price crossed with force the moving averages of 20 and 50 in graph of 5 and 15 and 30 minutes, am I right?