July 22 2010 Overlay and Trades

I had the ES early AM inside support pull back identified to the tick but did not take any ES trades.

The 1073.25 inside support area from the prep was hit prior to the open and I do not trade prior to the open. After that, there really were not any good entries for me.

A powerful observation I will share about AM inside supports is that if the inside support is hit prior to the open, it will either just take off and extend a vast majority of the time or come back for the retest and break the inside support level.

This means the zone is far less trade-able if it is tested prior to the open. Usually what happens is that it will extend and move back above the inside support like I like to see but then fail and sell off.

Based on my communication with several other traders throughout the day, there are not many that even hit the inside supports. Especially the blind ones. I think they are powerful areas to trade.

I had 4 longs off the 628.00 area on the TF and went 3 for 1. The stop out was inside where I would usually place a stop but my tactics are different with the TF.

I would rather cut the trade with a small loss (shooting for 1/2 unit) then take large risk. This means I have to play for accuracy. I am OK with this because I have a significant edge on the TF and trade a very fast time frame which gives me plenty of opportunity to fight back.

There are times when I need to hold however. My entry after the stop out for example required more room than the initial entry. It was two completely different types of trades even though they were essentially at the same price and time. I am not going to get into the mechanics of that tonight.

I started to think this evening that it is possible that the intense visualization and depth of the morning prep may have been causing problems with my ES trading. I have not completely thought it through yet but am going to review.

I am certainly not looking too hard at a higher time frame on the TF. I am using the ES as an anchor of sorts though.