Day Trading Journal
Today, Monday, October 20, 2008, the market opened right in the middle of the prior day’s range as I stated in the Intraday Traders Daily ES Advantage Report and went sideways for the first 15 minutes and then, it started to expand its range slightly upwards to 960.50 by 8:54 am and 963 by 8:57 am Central Time…so I am watching to see if the news report drives the price up to about the 966 to 970 level and then, watch what happens at that point…that should be either the high of the day or the Make Or Break point…where the market goes higher from there. Let’s see what happens after the 9 am news and Bernanke starts speaking.
By 9:02 am, the price has pushed up to 969 and started to go back down…now…I am looking for short entries, after market proves it is going down and this is not a retracement for the market to go long…simple wait to see if we get a retracement scenario OR do we get a shorting scenario…now waiting for one set of rules to be met. That key reaction should happen when price retraces back to the 958 to 959 number…it is at that time the market will either retrace back upwards to see if it is going higher for the day…OR, it will start to break down…this will be the first high probability trade of the day and it looks like that will take place sometime after 9:20 am(it is now 9:10 am).
Looks like it is happening sooner at 9:15 am price reaches the 959/958 level with a long bar. I want to see if price breaks the midpoint of that bar or if it does not…if price turns back down at 962 and my other rules are met…I will go short with the ultimate target of market traveling back to at least 948 ish.
At 9:20 am, criteria is met…my stop is set at 962.75 and my entry is at 959.75 …now waiting for the market to breakdown…first target is set at 958 (hit at 9:23), second target is set at 956.25(hit at 9:27 am)…now I will manage the runner, which is the third target which I have set at 9:55 to start with. When the second target is hit, I will move the stop for the runner to breakeven -6 and leave it there for a while. I will watch the price carefully at the 953 level (which is the open for the day and determine if price will break that and continue downward toward the 947/948 number).
If price goes above my volatility MOB point, I will scale out of the runner’s stop at the break even level for the trade, if not, I will continue to hold for the 947/948 target. It broke the volatility MOB point and I scaled out at 959.50…therefore, for the first trade of the day…I hit +7, +14 and +1 or +22 ticks for the first trade.
Now, we see that price held the open price level…now looking to see if price goes all the way back to the 969 level or does it go back mid way and comes back down to breakthrough the 953 number to the down side. If price turns around at a number lower than the 962 number, I will go short again.
This happened at 958.25 entry at 9:38 am … hit first target at 9:43 am for +7 ticks (I notice a lot of volatility between the 958 to 961 level…this means the fight between the bulls and bears is happening now to determine the direction for the day).
I don’t like the price action…the bulls and bears are still fighting strongly…I will scratch out of trade at a loss of 2 ticks for the last two thirds of the trade setup…so I get +7, -2, and -2 for a net of +3 ticks. Good thing I scratched out it went about another 2 point against me
I retake the trade setup again at 9:53 am…but, I am going “all in/all out” until market actually breaks below the 953 level…I hit +7 for all three targets for a net of +22 on that trade.
Now, I reenter with my “all in/all out” target way at the break of 953 at 9:55…I hit my targets at 9:56 for a net of +22 on that trade. I will reenter on the break again with my normal three targets methodology because the pressure is definitely down and my trade criteria are still valid for entries.
I enter at 953.25 to go short at 10:02 am…I hit my first target of +7 ticks at 10:03 am… I move my second target to 948.25 now…because that is the next logical stop for price action to go. My stop is about 5 to 6 tick above my entry point. Hit the second target at 10:10 am for +20 ticks.
Now, I am trailing my stop to be about 8 to 10 ticks behind current price action…to protect profits on runner. I stopped the runner to get stopped out at 10:12 for 8 points. The net for the trade is +7, +20 and +32 or a net of +59 ticks.
Total net for first hour and 45 minutes is +22,+3,+22,+22 and +59 for a net of +128 ticks(32 points). The first trade was taken at 9:15 am and I am done trading by 10:15 am.
Key Points to remember from today’s trading:
1. I had to be patient until 9:15 am for first trade to setup.
2. On my second trade, I scratched out of last two parts for losses and remembered the concept of if a trade setup is valid and it wasn’t invalidated, you can re-enter the trade on the prior signal’s criteria.
3. When I noticed that the market was not falling out of bed, I did the right thing for the next two trade setups by going “all in/all out” because the market was not extending rapidly. Also, it was having the pattern look of one being where price was traveling in short range while it was trying to breakdown.
4. Then, I noticed that the probabilities of the breakdown trade was greater since it tried the last couple time so I switched back to my trading position with three targets.
When you are trading, this is an example of how you should be taking notes as the price action is taking place. You are paying attention to the principles stated in the Understanding The Market Flow document at the top of the home page and you are evaluating that flow based on the trade setup criteria and rules you have written down in your trading plan.
One of the important things you should realize with our methodology is that you have plenty of time to take notes, to think and to execute your trades according to your plan. You simply have to have patience and follow all of your rules and trade according to the principles we teach.
Then, re-read your notes every day to train your mind how to think and adjust as the market is flowing. What you accomplish by writing your own notes is that you are training your own subconscious mind to internalize being calm and being patient and training it to make key decisions in real time in a disciplined fashion. This is how you become an Independent Thinker and an excellent trader.
In our personal mentoring training, I teach you the exact trade setups to look for in your trade setups. Call me at 512-748-4237 if you have any questions.