August 17 2010 Trade Review

Payback today after yesterday's afternoon fight and near comeback.

Price had been in a sideways range for 3 or 4 days and opened with a tight congestion at the highs of the range. This is bread and butter structure indicative of a very high probability breakout to the upside.

Many retail traders short this but today was a no short zone all day. Structure was overwhelmingly up.

I waited for a few minutes after the open. When the TF broke down to the 617.00 area it looked like a prime squeeze opportunity. Once price reversed out of there my read was clear and I hit a long that was essentially a retail entry.

I was fine with the entry because of the overwhelming structure. I did not want to miss the first high probability move.

I locked up open equity at 15 ticks according to my strategy which allowed me to hit the local retail high and get ready for the pull back. The second entry was a little over aggressive again and took almost 2 points worth of heat.

That is what it takes to trade this stuff. If you stick a random stop anywhere close to the pull back it will get hit. The price faked down twice then put in an inside pull back and launched.

It was clear to me that price was breaking out but my game is to cover quickly and not hold as I used to. This causes me to leave a lot on the table on days like today but it is more than made up for in most other types of trades.

The ES was tougher as usual. You can see it took me 3 entries to hit the long. The ES is nothing but grinds and fake outs. Yesterday, it did crap then sucked me into a long. The only move it had was a 4 point push against me and stopped out then went flat leaving no opportunity for a meaningful come back.

I am confident that the intra day edge on the ES when using stops is close to fractions of a tick per contract traded. Some can still do but there are greener pastures. I still trade it because I want to win at it and I will eventually.

I do not believe anything I see on the ES and had to cover my first two longs quickly as they were not opening up. A helpful observation is that the longer the price sits there is a tight sideways congestion, the more tight stops retail trades put way too close just below the congestion.

What do you think happens? The other market players fill the stops with a wash before taking the price up. That is why I no longer leave my orders there unless I am will to risk 4-8 points.

I got long a third time on the ES after it was clear the TF was about to launch then covered with a weak 2.5 points. That is about as much as I can repeatedly book on the ES.

I am fully capable of holding an ES trade for 10 points as many have seen in my videos but the frequency of which that is possible is completely random and can not be done on demand.

I am out for on demand daily profits and nothing short of that. It requires quick profit taking and near perfect feel to do that.

I talked a few traders through what was happening on the ES and had the move nailed including that point at which the real buyers stepped up to take it up. I thought it would for sure get to 1100.00 intra day but it stopped short (another fake).

I did not have much to engage for the rest of the day. There where pattern setups but they did not feel right. Everything I could have gotten into would have halved my profits at least.

I need to keep in mind that less is better. I need to pick my areas and hit them aggressive then get out for the day. There is no need to force pattern trades all day. There is much more to it than that.