Joey's MP Journal

This is a discussion on Joey's MP Journal within the Trading Journals forums, part of the Reception category; ES June 09 Yesterday, I got filled on the downside breakout of the 2-day Balance Area. The first 2/3 of ...

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Old Mar 31, 2009, 12:33pm   #239
Joined Mar 2005
Joey25 started this thread ES June 09

Yesterday, I got filled on the downside breakout of the 2-day Balance Area.

The first 2/3 of the position was covered for a 12 point profit:

(30th March) Sold 2 units @ 806.80
(30th March) Bought 2 units @ 794.80

P/L = 2 x 12.00 = 24.00 points.

I'm still running with the remaining 1/3.

Yesterday's profile saw non-overlapping Value (trend) vis-a-vis the preceding 2-day Balance Area, and in the overnight session today, price is drifting towards Monday's Mean ahead of the economic data out at 3pm BST.

The first alert to closing the remainder of the position comes when Value starts to overlap, and the market comes into balance again.
Attached Thumbnails
balancebreakout.jpg   ticket.jpg  

Last edited by Joey25; Mar 31, 2009 at 1:04pm. Reason: Put a clearer chart in
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Old Mar 31, 2009, 8:59pm   #240
Joined Mar 2005
Joey25 started this thread ES June 09 continued

Today's action has seen a Balance Area contained completely within Monday's, suggesting consolidation, even though at first glance it felt like a strong rally.

Of great interest to me was the failed auction above the "outside" Balance Area. In theory, if price gets outside of Value and is swiftly rejected, then market participants will panic and flock to test the other side. In Mind Over Markets, they reckon the probability of this happening is about 80%, but others reckon it's more like 60%.

The chart shows the two Balance Areas (today's Upper Edge is also confluent with Monday's Mean).

I'll be moving my stop to 810.10 at the end of today - at a safe distance from the range, and I'll see what happens next.
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valuearearule.jpg  
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Old Apr 1, 2009, 10:45am   #241
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ES Auction Chart

Joey25 started this thread If consolidation occurs over several days, the standard price chart is going to pretty quickly get messy.

The Auction Chart plots the Daily Balance Areas, with overlapping areas plotted horizontally and non-overlapping trending areas plotted vertically.

Monday and Tuesday are plotted, and it can be seen that Value has contracted on Tuesday and is contained within Monday's Balance Area.

This chart should hopefully give a quick guide to Market Condition and will have more meaning over an extended time period.
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auctionchart.png  
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Old Apr 1, 2009, 9:25pm   #242
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Joey25 started this thread ES June 09

The last 1/3 of the postion was closed for a loss of 3.3 points.

The situation now is that Value has consolidated in a 3-day Balance Area.

Monday's range of 815.25 to 775.50 has contained both Tuesday and Wednesday, with Value forming a noticeable "bulge" in the Auction Chart.

Whether the range can be broken before Friday's NFP data, remains to be seen.
Attached Thumbnails
esdaily.jpg   auctionchart.png  
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Old Apr 2, 2009, 10:37am   #243
Joined Mar 2005
ES Balance Breakout Trade (2nd April)

Joey25 started this thread Further to the previous post, I have been filled on the breakout of the 3-day Balance Area in the S&P.

Specifically:

Buy @ 816.00
Stop @ 809.10

2/3 of position targetted @ 826.40
1/3 of position "runner"

The target of 826.40 has just been hit for:

P/L = 2 units x 10.40 = 20.80 points.

Now I can relax and attempt to catch a trend with the remaining 1/3
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balancebreakout.jpg   ticket.jpg  
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Old Apr 2, 2009, 2:15pm   #244
 
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Good trade! (I tried rep you but again I need to spread it around first.)
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Old Apr 2, 2009, 9:25pm   #245
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ES Auction Chart

Joey25 started this thread I just wanted to update today's Auction Chart of Value, because it illustrates what I meant by plotting non-overlapping Balance Areas vertically.

Today has seen a migration of Value away from the previous 3-day Merge, therefore the area is plotted above the previous area. You can now imagine the previous 3-day area as a likely area of future support, should price fall.

However, at this point, once Value is non-overlapping, I will normally start the chart from scratch, because I am interested in when the market starts to come back into balance again (from the point of view of my remaining long).
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auctionchart.png  

Last edited by Joey25; Apr 2, 2009 at 9:32pm.
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