June 22 2009 Prep Overlay and ES Trades

Here is the prep overlay for today. Be sure to check the Explanation Of Prep Overlays section if you are new here. I know We have at least 1 new reader. I spoke with them earlier today.

You can see the 899 key area we identified was tested and extended. The price action did not quite make it to 882 yet.

Since 924 was tested and failed and 899 was extended there is a good chance of this market gap-ping down to 882 overnight. Lets see what happens. I generally do not trade overnight premises.

My ES trades are posted above. I was stopped out of my 1st trade which was a long attempt. This trade was simply an attempt to catch a failed extension attempt. There was no reason for it other than extensions tend to fail.

It was a pure risk/reward entry. If you are wondering why I did not take the long entry at 899, which was my BZ (support), it was because I did not have confirmation on the entry.

I do not always wait for confirmation. In this case, I needed it and did not get it. The long I ended up taking had no confirmation but was a trade that if taken 10 times and won 3 times would be profitable in a sample. That is why I took it. That is trading.

Once structure is understood and a premise is defined, there are are number of ways to execute; or be executed on depending on the outcome.

I caught a late sequence short that I rode until the close. I was up just a bit today. No FX trades. Everything was constricted. It was not such a bad Monday.