Trading For 16th April
Ok here is what happened for me on the 16th April:
We have some pretty interesting pre market action because it is very similar to yesterday. We have been trending upwards since about 6am today and had a decent drop at 8.30am which bounced back straight away. There was the Core CPI and housing starts at that time which no doubt caused the momentary volatility. We look as though we are going to open just over ten points above yesterdays close.
9:33 We had the open with a fair sized gap. We have stalled at a possible double top area with the pre market action so it will be interesting to see if the market pulls through this. The Tick is showing stocks are opening in the positive by buying up the bids. Still it's too early to get a good indication from that.
9:45 Ok I took a short trade at 1348 looking for a fade of the opening gap. Out of character to what I ordinarily trade but I just saw the market struggling up here and some decline looks imminent. I got out for a half point loss when I saw the market bounce from the SMA on the 2 minute chart. Fading the opening gap is part of my plan but it's not my strongest aspect of my trading so I rarely look to trade it. I am glad I took the trade, it has helped cement why I have stayed away from doing it. i didn't feel right in the trade even though the pause looked good for a shorting opportunity.
9:49 Currently the market is soldiering higher with the Tick supporting the rise. I'm going to stay on the sidelines now until we see what this market is doing. It is continuing the bounces off the SMA on the 2 minute chart that it was doing during pre market.
9:58 Took a long trade at 1348.75 for a bounce off the SMA on the 2 minute chart and the Tick hitting the zero line. Market hit the profit target of 1350 but didn't take my order, I gave it more time to reach there again and take me but it hung around the 1349.25 area. I got caught up in the quick moves of the 2 minute chart and got out for a 1 tick gain. Lost my cool a bit.
10:09 I'm a bit puzzled on this market right now. It is sliding sideways and the Tick is remaining positive yet not strongly. I'm cautious about this big gap up we have had and have a feeling part of it is likely to be filled. We may not get the whole way down but some of it. The Tick is showing a decrease in buying from the stocks. The YM looks about the same as the ES but the NQ appears dead flat. Why have a market at all?
10:20 Ok so we have just had a strong move into new highs for the day. I'm going to put my thoughts that we are likely to fill the gap to the side for the moment and work on this uptrend which has developed. The Tick shows the stocks have gained a second wind so I'll go with the flow.
10:32 Not much going on really. This upward move has continued without as much as a whimper. I'll just hang out here on the sidelines and wait for it to offer some opportunity. Right now its not my kind of market. The Tick is remaining above the zero line pretty well.
10:43 Ok I had a buy order in at 1353.75 but I pulled it. Wanted to wait a little bit longer on the move.
10:49 There we go. After typing what I just did above I kept a close eye on the market idea I had. It was a bounce from the SMA on the 2 minute chart and the hitting of the zero line on the Tick. I put in another buy order at 1353.75 and was taken. It took a bit of time to show some promise and I was almost about to get out according to my time stop when it kicked up a bit. A little longer and it took my profit target at 1355.25. It was a bit of a struggle to get going but I am happy I held my ground on it and noted the pulling of my order at 10:43.
10:52 We are still seeing the uptrend going strongly. We have only had one pullback since this thing took off and the Tick is still yet to move far below the zero line. So far the most stocks selling at the bids at any one time has been 243. The ranges of the candles up here are getting smaller but I'm not sure if this uptrend is over just yet. Granted I wouldn't mind a decent pullback so I wouldn't be as nervous trading long after such a big gap open. For some reason I am just waiting for this thing to fall from the sky. Something odd to note is that the bids and asks have been maintaining 1000 lots most of the time. Usually you see them appear and then disappear but today they seem to be sticking around the entire time. Usually in a strong uptrend you see the orders stay in the bids the entire time and vice versa. Today they are staying in both. It makes it hard to get a good idea of solid orders.
11:05 Things are starting to think out towards this 1358 resistance. The moves are smaller and the Tick has been declining. I'm not willing to jump on the short side until I get a solid indication we are changing direction. For that I'm looking for a big and quick rejection or some drawn out decline in acceleration. Similar to what we have seen but it doesn't look week enough just yet.
11:15 There is another possible long trade to take advantage of the SMA but we have gone a touch below it and I just don't trust the long side right now. I probably have more faith in a short trade right now. I could be way off here but things look as though they will travel lower before higher for the moment. The Tick is now playing around the zero line after its decline. (File- Save
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11:24 The Devil made me do it. I got in on a short position at 1354.50 with a stop at 1356.50 with my profit target at 1353.25. The market sat there and wasn't pushing higher or lower, even as the Tick went below the zero line. Too much of a 50/50 trade for my liking so I got out at break even. Wasn't the best trade idea but I felt I had to test it. It still looks more likely to go down than up but the edge isn't that greatly in my favor. The idea was a rollover from the 1358 high. The Tick weakness and the SMA resistance that seems to have built up on the 2 minute chart.
11:34 This sideways move has really turned into a neutral zone. I haven't seen anything like this before. I have seen a few slow moving trends but never a slow sideways range no greater than 2 points. This is a great learning opportunity. What ever edge was present before has now become what is likely to be a "who has accumulated more contracts" battle between the big guys. I'm almost thinking this is the big guys unloading their long positions they have held. Market demand is possibly buying up the contracts the big guys no longer want to hold and they are doing it without setting off the alarm bells. Definitely a left field theory but we'll see what happens. Could be why I was seeing so many 1000 lot orders on both sides.
11:45 Still going. The Tick is not having the same effect it was having around the zero line so I'm presuming the buying excitement has diminished at least momentarily. There are big orders still on the bids side though I wonder if they are soon to disappear to accommodate a big drop. Whichever way we go from here, it has taken a while to get it going.
12:01 Ok time to call it a night for me. I have been bored stiff watching this past hour of market action go by. At first it was interesting, now I'm just over it. I made quite a few trades today and possibly over traded. The first two trades were a bit unnecessary however I am glad I made them. It just helps me clarify that patience is much better in the market than constant action. No point trying to squeeze more from the market than it's willing to give. The last trade was the right idea but we turned into this long drawn out mess. All in all I was happy with what I learnt from my trading today.
Daily Wrap Up
Well what a day it turned out to be. Where we had that major pause I thought we would take a dive but instead we spent another 2 hours idling about before taking off again. Definitely new type of market action compared to what I am accustomed to.
After further thought, the first trade is the only one which I can honestly say was not a good trade. I am much better at trading according to the pieces of the puzzle rather than trying to anticipate them before they occur. Some people are quite good at doing that but it's not one of my strengths. I am glad I took the trade as it has helped reinforce the reasons why I don't trade that early into the day. For me it feels more like a gamble simply because I don't interpret the open so well.
The rest of the day's trading I was happy with. My second trade was aimed at a continuation of what we had been seeing during the pre market hours and it was the right idea, I was just a bit early on it. My profit target I set was hit but my order wasn't taken. I gave it a little bit more time to get back there but it took too long so I scrapped the trade for a small gain.
The third trade was good and it showed that my daily focus helps me when I set goals. I made a point of noting the order I had in the market and then removed. Once I typed it I realized that the trade idea was still good and I put my order back in and was taken. There was some initial hesitation on the move but after some time it kicked up and took my target.
The last trade was an attempt to capitalize on a rollover from these highs but the market just didn't want to budge. The extended flattened trading range wiped the edge I had and it became a 50/50 market. At that point I was happy that I cut the trade for break even and stayed out of the market for the rest of the day.
I mentioned that I possibly over traded the day in my journal. In a fresh view on the day I think only the first trade was one that I would say was unnecessary. The other three were good trade ideas. In fact I am quite happy with the number of trades bar the first one that I made. I have learnt a lot from the trading day and it has reinforced my trading plan to me. I am growing more confidence in the way I trade and I think it was seen in my trading.
For following my focus today I give myself a 'B'. I made a trade in the first 20 minutes which was something I was keeping in my focus. Apart from that I followed my set focus well. I switched to the 2 minute chart when I recognized we were creeping up it from the pre market action. I also was keeping a stern eye on the Tick chart and staying up to date with it. When I placed an order and pulled it before it was taken I noted it in my journal. It actually helped me assess why I pulled it and I could see that it was a valid trade idea and deserved to be taken.
I followed my risk and money management well. My trade management was good and I utilized my time stops well.
