Just a little bit. I had other things to do. I may find time to post my chart. Yesterday I did trade more.
Techniques for Day Trading the ES, NQ, YM, MES, MNQ, and MYM
- Thread starter volpri
- Start date
Here is a chart for ES RTH's 1-29-2020. We get an opening gap up then bears push back hard and we plunge south (intraday plunge that is LOL). The idea is to wait and see if bulls are gonna push back. Can even trade the plunge but I don't remember but I probably was still in bed LOL...That last bear bar in the plunge is big and exhaustive. The bulls push back and we get the reversal. Basically, Once I see enough bull bars in the reversal showing FT I start scalping all the way up on the reversal. Scalping, locking in profits, waiting for a PB even on same bar..enter again and exit again not only locking in profits but also compounding. I am a scalper and like taking scalps over and over on BO or reversals locking in profits and compounding profits. I mentally keep track of the commissions on each entry and try to exit with enough profit to pay for commissions and make 1 to 3 points above the costs of the commission. The benefit is I am locking in profits AS the reversal gives then to me and at the same time compounding (sometimes.. not on every trade but on most, if I can). Since I am not sure how far the reversal will go I just keep locking the profits in.
Notice the 10 bar reversal (count 10 bars from that big bear bar after the plunge (the exhaustive bar) ..well that reversal recuperated over 50% of the opening plunge. Once it gets to 70% or more then most likely we have seen the bottom for the day and price will probably go into a range or a small PB bull trend. Sometimes in the last hour or two we get a reversal back down and we did in this case. I only had time for trading in the morning so I missed the sideways range after my last exit. After that 10th bar from the opening bar (I have it marked 10 and it indicates that the low of the day probably was made if we get a successful reversal and we in fact did). A BO of the 18th bar (it is marked too) indicates at least a little more up move and we got that too before the reversal back down in the afternoon.
I know it looks messy but this is one way how I trade BO's, spikes, and reversal locking in profits and make more money than just buying and holding until the moves ends. Plus since I don't know how far the reversal will go... if the reversal just became a bear flag from the opening move and price started right back down at least I have some profit locked in.
Another note: if you look at that opening move down and the reversal on a higher TF you will see they are just spikes. (on 30 min or 1 hour chart)
Finally, that opening plunge went well below all 3 MA's which in itself is an indication of weakness and also and indication that the high of the day had probably been made on the open. Also another indication for me to lock in profits as the reversal was happening because the market even though in a reversal is still weak and could quickly resume back down. That bear reversal last two hours proved that idea of inherent weakness, still present, even after the earlier reversal back up.
Anyway, sometimes I scalp reversals..BO's..spikes this way. I get a high win/loss ratio, make more money than just holding through the move and often get compounding opportunities. Plus it just make me "feel" good.LOL
These were all LONG trades.
Notice the 10 bar reversal (count 10 bars from that big bear bar after the plunge (the exhaustive bar) ..well that reversal recuperated over 50% of the opening plunge. Once it gets to 70% or more then most likely we have seen the bottom for the day and price will probably go into a range or a small PB bull trend. Sometimes in the last hour or two we get a reversal back down and we did in this case. I only had time for trading in the morning so I missed the sideways range after my last exit. After that 10th bar from the opening bar (I have it marked 10 and it indicates that the low of the day probably was made if we get a successful reversal and we in fact did). A BO of the 18th bar (it is marked too) indicates at least a little more up move and we got that too before the reversal back down in the afternoon.
I know it looks messy but this is one way how I trade BO's, spikes, and reversal locking in profits and make more money than just buying and holding until the moves ends. Plus since I don't know how far the reversal will go... if the reversal just became a bear flag from the opening move and price started right back down at least I have some profit locked in.
Another note: if you look at that opening move down and the reversal on a higher TF you will see they are just spikes. (on 30 min or 1 hour chart)
Finally, that opening plunge went well below all 3 MA's which in itself is an indication of weakness and also and indication that the high of the day had probably been made on the open. Also another indication for me to lock in profits as the reversal was happening because the market even though in a reversal is still weak and could quickly resume back down. That bear reversal last two hours proved that idea of inherent weakness, still present, even after the earlier reversal back up.
Anyway, sometimes I scalp reversals..BO's..spikes this way. I get a high win/loss ratio, make more money than just holding through the move and often get compounding opportunities. Plus it just make me "feel" good.LOL
These were all LONG trades.
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Here is the 1-29-2020 ES chart above marked up illustrating some concepts I use in PA along with a few comments.This is a 5 min chart. The blue MA is an 20 period EMA on the 5 min chart. The solid gray is a 50 SMA THAT indicates visually the intermediate trend of the day. It is also not too far from an approximation of the 20 ema on a 15 min chart but plotted on this 5 min. Actually a 50 ema would be closer to the 20 ema on a 15 min chart. The dotted MA is an approximation of 20 EMA on a sixty min chart. One reason for using these moving averages is to visually see strength or weakness especially when revealed as gaps between price and the MA’s.
So we get an opening gap up that rapidly close 6 bars after the open. Then we get an exhaustive vol bar (I added vol for those of you who like vol) followed by a break of the orange bear trend line. That BO has follow through and it also is biggest bull bar since the open. It is closing almost at it’s high and next bar is a bull also and it has a gap between it’s low and the trend-line. It also has a gap between it’s high and high of the previous bar. Plus there are 3 bull bars in succession (first is a doji but nevertheless a bull doji). All this means to me that we will likely get at least another push up and that any bear pushback will probably fail, at least on the bears first attempt to make the reversal fail. So, it is time to go long and I started doing just that.
Price then crosses all three MA’s. The reversal retraces more that 50% of the opening bear move (see magenta MM lines). We see green gaps between low of the bars and the 2O EMA. These gaps show that the bears on every reversal attempt CANNOT PUT a bar below the 20 ema much less form a gap south of the 20ema. The bears finally do so but not until around 2 p.m. central time (See red gaps). But until then price is mostly staying above the 20 ema and bulls are making these green gaps plus the retracement has reached 75% or more of the initial bear move down. All this indicate more bullish pressure for the time being and that price, if it weakens, will probably just go into a range (which is what it did). So, price breaks south of the reversal trend line and starts to move sideways. Bulls cannot push it back up through the trend line but neither can bears form gaps below the 20 ema. This is all indicative of range trading. They are above even in applying pressure to the market. Bulls want a bull BO and bears want a Bear BO. That is why a range forms and why 80% of BO ATTEMPTS (attempts is the key word here) of the range fail thus making range trading profitable. Some call this noise or chop, however, I don’t believe there is any such thing noise in the markets. If price moves 1 tick there is a reason.
So by 11:45 central tine we have a aprox 20 bar range that has developed (i.e. 20 bars of sideways motion see gray box). At this point it can be called a range not just a PB in the initial reversal from the opening slide down. Neither side is winning. This presents range trading opportunities. Short at the top ...cover in the middle or bottom. Long at the bottom ...exit in the middle or top half of the range. But the range is tight so it is a limit order market only and 1 max 2 point scalps.
The 2 o'clock bar is a BO of the range. It has FT and red gaps are forming between the high of bars and the 20ema and the 50 sma. After the BO first bull reversal attempt fails the(yellow gaps as price does not make it back up to the BO point before it continues down on the next two bars) price continues south. So, we get two bears bars together. Time for shorting. We are likely to get another leg down from the BO PB and we did in fact get such PA up into the close. In addition, the close was weak and price is now below all three MA’s with is indicative that we may get a gap down open on the next day depending on what happens overnight. We did get that gap down open on the next day.
As you can see price, from the initial reversal after the bear move on the open, did eventually make it to the measured move and just above it by 1 p.m. before subsequently moving down on a fist leg thru the bottom of the range on FT and then the second leg south.
When you see an opening gap of 10 points or more close rapidly on a spike (can see the spike on a 15 or 30 min chart) and price then gets a PB the odds favor either a bear channel will ensue or a strong reversal back up. In this case it was a reversal. After the spike it could go into a range also but that would be the least likely scenario since there was such strong bears on the move down. It is more likely they will succeed in pushing price on down in the form of a bear channel after an initial pb that fails. Or the bulls will wait for a pause and then push back hard at the bears causing a reversal. Especially, since it was early in the session. The latter is what happened.
I only had time to trade the initial reversal as indicated in my chart before this one and had to stop trading so I missed the subsequent range trading scalp opportunities and the BO south of the range in the last 1.5 hours but I just thought I would make some comments on these as to how I would have read the price action.
Hope it helps some.
So we get an opening gap up that rapidly close 6 bars after the open. Then we get an exhaustive vol bar (I added vol for those of you who like vol) followed by a break of the orange bear trend line. That BO has follow through and it also is biggest bull bar since the open. It is closing almost at it’s high and next bar is a bull also and it has a gap between it’s low and the trend-line. It also has a gap between it’s high and high of the previous bar. Plus there are 3 bull bars in succession (first is a doji but nevertheless a bull doji). All this means to me that we will likely get at least another push up and that any bear pushback will probably fail, at least on the bears first attempt to make the reversal fail. So, it is time to go long and I started doing just that.
Price then crosses all three MA’s. The reversal retraces more that 50% of the opening bear move (see magenta MM lines). We see green gaps between low of the bars and the 2O EMA. These gaps show that the bears on every reversal attempt CANNOT PUT a bar below the 20 ema much less form a gap south of the 20ema. The bears finally do so but not until around 2 p.m. central time (See red gaps). But until then price is mostly staying above the 20 ema and bulls are making these green gaps plus the retracement has reached 75% or more of the initial bear move down. All this indicate more bullish pressure for the time being and that price, if it weakens, will probably just go into a range (which is what it did). So, price breaks south of the reversal trend line and starts to move sideways. Bulls cannot push it back up through the trend line but neither can bears form gaps below the 20 ema. This is all indicative of range trading. They are above even in applying pressure to the market. Bulls want a bull BO and bears want a Bear BO. That is why a range forms and why 80% of BO ATTEMPTS (attempts is the key word here) of the range fail thus making range trading profitable. Some call this noise or chop, however, I don’t believe there is any such thing noise in the markets. If price moves 1 tick there is a reason.
So by 11:45 central tine we have a aprox 20 bar range that has developed (i.e. 20 bars of sideways motion see gray box). At this point it can be called a range not just a PB in the initial reversal from the opening slide down. Neither side is winning. This presents range trading opportunities. Short at the top ...cover in the middle or bottom. Long at the bottom ...exit in the middle or top half of the range. But the range is tight so it is a limit order market only and 1 max 2 point scalps.
The 2 o'clock bar is a BO of the range. It has FT and red gaps are forming between the high of bars and the 20ema and the 50 sma. After the BO first bull reversal attempt fails the(yellow gaps as price does not make it back up to the BO point before it continues down on the next two bars) price continues south. So, we get two bears bars together. Time for shorting. We are likely to get another leg down from the BO PB and we did in fact get such PA up into the close. In addition, the close was weak and price is now below all three MA’s with is indicative that we may get a gap down open on the next day depending on what happens overnight. We did get that gap down open on the next day.
As you can see price, from the initial reversal after the bear move on the open, did eventually make it to the measured move and just above it by 1 p.m. before subsequently moving down on a fist leg thru the bottom of the range on FT and then the second leg south.
When you see an opening gap of 10 points or more close rapidly on a spike (can see the spike on a 15 or 30 min chart) and price then gets a PB the odds favor either a bear channel will ensue or a strong reversal back up. In this case it was a reversal. After the spike it could go into a range also but that would be the least likely scenario since there was such strong bears on the move down. It is more likely they will succeed in pushing price on down in the form of a bear channel after an initial pb that fails. Or the bulls will wait for a pause and then push back hard at the bears causing a reversal. Especially, since it was early in the session. The latter is what happened.
I only had time to trade the initial reversal as indicated in my chart before this one and had to stop trading so I missed the subsequent range trading scalp opportunities and the BO south of the range in the last 1.5 hours but I just thought I would make some comments on these as to how I would have read the price action.
Hope it helps some.
Going through his video course now.
I don’t think I have time for any more trades today however, I took snapshots of ES and MES trades. I took 5 min chart RTH’s snapshots (both ES and MES), 5 min chart 24 hour snapshots (both), 1 hour 24 hour snapshots with vol bars (both) , and a daily snapshot (of one of them).
Some of these trades were straight trades and others were averaged down. All were profitable. I want to focus on the importance of context; larger, intermediate, and immediate in my comments tonight when I get time to post all the charts. Context is always more important than any single PA pattern or trade.
I just don’t have time to post my comments today but will try to tonight. It is a good day for trading (if one has the tools and skills to trade the contexts as they unfold) as most days are. Happy trading.
Would anyone like to take a shot at anticipating the close on a daily chart for today?
1) Bullish mid to upper on the daily chart?
2) Bullish but below the midpoint of today’s bar?
3) Bearish below yesterday’s close?
4) Bearish below yesterdays close and in lower half of todays bar?
Some of these trades were straight trades and others were averaged down. All were profitable. I want to focus on the importance of context; larger, intermediate, and immediate in my comments tonight when I get time to post all the charts. Context is always more important than any single PA pattern or trade.
I just don’t have time to post my comments today but will try to tonight. It is a good day for trading (if one has the tools and skills to trade the contexts as they unfold) as most days are. Happy trading.
Would anyone like to take a shot at anticipating the close on a daily chart for today?
1) Bullish mid to upper on the daily chart?
2) Bullish but below the midpoint of today’s bar?
3) Bearish below yesterday’s close?
4) Bearish below yesterdays close and in lower half of todays bar?
Ok, so it closed in the upper 1/3 and very close to it’s high of the day. Also, note today’s bull bar’s low has a gap between it and the EMA. That means bears could not push price below the 20 ema today and that is an additional sign of strength. Plus, the second bull bar (that is the 2-4-20 bull bar) was larger than the 2-3-20 bull Bar which is also a sign of continuing strength and indicates at least a little more bullish action coming for today 2-05-20. Also there was a BO right after the open today of the last 6 bars. These reasons along with the 4 listed on the chart are why a high close today was likely. I will try and annotate the other charts for today in both ES and Mes. I did end up finding time to take a few more trades. I will try and post, sometime tonight, the charts showing all the trades made today and some comments. With a focus on contexts. All were winners.
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I want to discuss contexts. For a scalper/trader who is going for 1 to 8 points in the ES, the “Day Time Frame” context, in my opinion, is probably the largest TF that needs to be considered when one is actually executing scalping tactics on a 5 minute chart. The daily chart can be considered to be the larger TF within a scalpers world of “time frame structures.”
The next TF to look at is a chart that is the 60 minute chart context. When considering contexts within “time frames structures” the 1 hour chart can be said to be the larger of the “intermediate context.” We get a successful BO of the range at the bottom = bullish. This BO becomes a tight bull channel of 18 bars of which 3 are bear bars = bullish. At the peak of this bull channel we get a BO of the last 62 one hour bars = bullish. This is followed by an 11 bar PB That then culminates in a 2 bar bull spike closing near it’s high = bullish. If the PB were a Range of 20 or more bars sideways to down then that would indicate some weakness. But the fact of it being an 11 bar PB with overlapping bars and both bull..bear bars followed by that continuation in the form of a spike ...well = bullish. So the RTH’s on 2-5-2020 opens after that spike. Why would anyone want to short? Unless, it would be shorting for perhaps a few short scalps of 1 or 2 points if the immediate context on a 5 min chart were to indicate an opportunity to do so. All the PA signs are pointing to BULLISH in this 1 hour chart. Therefore, the safer trades would be long trades using a strategies and tactics that support such action. That is not to say a trader cannot trade against the trend but they should be aware to not follow such trades too far and to not expect big rewards from counter trend trades.
So, this hourly chart along with the daily chart in the previous post set the scenario for the larger and first level intermediate contexts within “time structure.” At a minimum they are something that a trader needs to be cognizant of as he/she employs trading strategies and tactics on a 5 min chart after the open of RTH’s. They are not something to be agonized over and analyzed to no end before placing any trades on a 5 min chart but they are something to be looked at perhaps prior to the open of RTH’s. They help define the setting in which the open will take place. They can help a trader to avoid making foolish mistakes in the heat of trading on a 5 min chart.
When I get some more time I will post another chart showing more intermediate context within time frames.
You can see my trades in the ES on this one hour chart.
CONTEXT IS MORE IMPORTANT THAN ANY SINGLE BAR OR PATTERN.
PS I failed to mark it on the chart but just so it can be seen; the sideways motion after the spike just before the open of RTH’s on 2-5-20 is really just another flag and with all the bullish background pressures should be looked at as a most likely continuation pattern that will succeed, and not a range. It does not have enough bars in it to be considered a range on the 1 hour chart. Need 20 or more bars. It could be a developing range but at the final bar on the chart it is not yet a range (on the 1 hour chart). IT IS a range on a smaller TF chart and we will see so later on.
The next TF to look at is a chart that is the 60 minute chart context. When considering contexts within “time frames structures” the 1 hour chart can be said to be the larger of the “intermediate context.” We get a successful BO of the range at the bottom = bullish. This BO becomes a tight bull channel of 18 bars of which 3 are bear bars = bullish. At the peak of this bull channel we get a BO of the last 62 one hour bars = bullish. This is followed by an 11 bar PB That then culminates in a 2 bar bull spike closing near it’s high = bullish. If the PB were a Range of 20 or more bars sideways to down then that would indicate some weakness. But the fact of it being an 11 bar PB with overlapping bars and both bull..bear bars followed by that continuation in the form of a spike ...well = bullish. So the RTH’s on 2-5-2020 opens after that spike. Why would anyone want to short? Unless, it would be shorting for perhaps a few short scalps of 1 or 2 points if the immediate context on a 5 min chart were to indicate an opportunity to do so. All the PA signs are pointing to BULLISH in this 1 hour chart. Therefore, the safer trades would be long trades using a strategies and tactics that support such action. That is not to say a trader cannot trade against the trend but they should be aware to not follow such trades too far and to not expect big rewards from counter trend trades.
So, this hourly chart along with the daily chart in the previous post set the scenario for the larger and first level intermediate contexts within “time structure.” At a minimum they are something that a trader needs to be cognizant of as he/she employs trading strategies and tactics on a 5 min chart after the open of RTH’s. They are not something to be agonized over and analyzed to no end before placing any trades on a 5 min chart but they are something to be looked at perhaps prior to the open of RTH’s. They help define the setting in which the open will take place. They can help a trader to avoid making foolish mistakes in the heat of trading on a 5 min chart.
When I get some more time I will post another chart showing more intermediate context within time frames.
You can see my trades in the ES on this one hour chart.
CONTEXT IS MORE IMPORTANT THAN ANY SINGLE BAR OR PATTERN.
PS I failed to mark it on the chart but just so it can be seen; the sideways motion after the spike just before the open of RTH’s on 2-5-20 is really just another flag and with all the bullish background pressures should be looked at as a most likely continuation pattern that will succeed, and not a range. It does not have enough bars in it to be considered a range on the 1 hour chart. Need 20 or more bars. It could be a developing range but at the final bar on the chart it is not yet a range (on the 1 hour chart). IT IS a range on a smaller TF chart and we will see so later on.
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