NICE EOY MOVE FOR THE AUD 12/30/14

THE AUD was beaten down leading into the end of the year, selling below previous SB levels. Short break out target.  See terms/prior post for BOT levels and 50CB discussions).

Monday evening/Tuesday in OZ, the AUD price was at the lower end of the LB-SB range run and had a slight gap, which is a bullish signal.

Buyers had entered previously near the SB for a run to test the LB where a "D-Tracy" pattern developed and forced price to run the range back lower.  The new gap, albeit lower, had a 50CB to test near the MB and another just above.  Both of these would hit and fail, pushing price even ;lower.

As each 50CB test failed, it drew away resistance at those levels.  A bullish channel developed  allowing for nice long positions.

With resistance weakened, and the market not showing signs of breaking the bullish support just below the SB, the market was primed for a range run to the LB.  Since the break out attempts at the SB were weak, the LB was deemed to have a significant run break.

End to a great year.   Hope all have a safe and prosperous New Year.

THE AUD IN TROUBLE 12/16/14

THE evening started simple enough, price action on the AUD/USD was stagnant near the mid range (MB).  We had a 2 min chart 50CB and a 5 min 50CB  trapping just below the MB, and a lower trend line was developing in the 2m chart.  A parallel line was added as price continued to drift.

The lower extreme of the move was stopping at an earlier 50CB..  Three hits and we see the buyers enter pushing prices toward the LB.

A price failure developed quickly.  A FBO is believed to support a range run to the opposite level, which would be the SB in this case,

A FBO of a level  with a range run also suggests that we are likely to see the opposite level break.

The SBBO developed with no immediate attempt to test the 50CB, suggesting another leg down.

A bad day for the AUD, a great day to play the BOTs.

MORE AUD 11/21/14

BOT levels set, the AUD-USD began to work for our delectation.  Price followed the TL as it ran the range for a LBBO. (long BOT breakout).  While longs were taken (that is what the model was screaming!) traders need a reason (and location) to  to look for an area to short.  These locations will always reflect the trading risk, and the trader's risk.  The trading risk is related to the price entry point and the likelihood of a failure creating a loss.  Trader's risk is the behavior bias of the trader, i.e. aggressive or conservative.

[20:48] <CM> conservative short waits for the 86300-325 area

[20:49] <CM> aggressive  a reversal of the LBBO  (long break out)

So, how do we set up the trade off the model?

[20:53] <CM> philosophy  see a trade on longer term chart, use a shorter time frame to get a better enter.  pref a 2-3 bar tl break on lesser.  so you see trade, switch lower to see a pull back, buy the tl break of that pb.

have a model, trade it.  Now that you are in, what is your exit?  Always have an entry plan and a plan to exit.

[20:55] <CM> 86535 was a prior level  and considered the target
[20:56] <CM> that said, not going to be stupid if/when it fails..  last time I checked, profit was never bad...
[20:59] <CM> 523 target 1  535 max run est

We had a plan and price was working to make everyone happy.  I think price ran to 517, which brings up another point: never try to hold for tops/bottoms

[21:06] <CM> 86500 exit

charts to follow:

[21:16] <CM> 2m pb  new buyers
21:20] <CM> aud 5m  some topping  long above 45tl  higher risk short below  better at lower level  (chart link removed)
[21:21] <CM> the lower because it would be a break back into the range and a 50cb break short
21:25] <CM> now we can see the aggressive short and long exit.  tl inside the 45  5m chart

and we see the sell working,,,

And price continued to follow the script.  Price holding at TL's, price breaking TL's, price playing with our model levels.  Overall, a nice day, a nice week.

The Morning-Evening, Today-Tomorrow Trade

Good evening, it has been awhile since the last post.  When markets continue to work your plan, there is not much to add.  It becomes much the same.  The good news, there are opportunities to apply the plan to other vehicles.  Introducing the AUD/USD combo.

 Which is my segue  into reporting about a group of Aussies that are just crazy enough to let you join their evening discussions, or is that morning?  Thus the title of this post, for it is evening in the states and the next day A.M. in OZ,  Feel free to join them at #DayTraders on the Financialchat IRC.  You can ease into the morning/evening, today/tomorrow thing.

Here are a few of the views discussed.  Essentially we still start with the calculated range, with a long at the upper (LB= Long BOT, where BOT=Break Out Target), find the lower SB for shorting, and a mid range for failures and continuations.

Then add 50CB's (control bars) and 45TL's (approximately 45 degrees from the BOT or the 50CB) and we have a plan.  Look for two bar dojis, and other reversal signals, pending news and "leaks', and a host of other tools and we are ready to trade.

This, by the way, is not a trading tool

These are trading tools:

Looking for the SB break and another sell leg down

Market Continues...

Nothing exciting to post, the market continues to work it's magic.  Some up, some down, some flat.  Keep an eye on the weekly and daily, and stay with the trend on shorter day-trading charts.

Point of debate, what will late September-October yield?  Are we due for one of those "adjustment October " surprises?

AFTER THE WIN-WIN DAY 6/25/14

Yesterday was a win-win day: bears could make money in a bullish market and bulls got a lower "better price" entry for their next move.  And the day after?

Last evening a buy signal alert was given.  Prices were in a favorable area for YM, NQ, TF, and ES.

[22:47] <CM> buyers us fab4 YM NQ TF ES


And the results:  bulls did push higher and had a leg two run in the U.S. Markets.

[10:06] <+CM> the range run to target lows allowed bulls and bears to win yday. bears made money in bullish mkt, bulls got a better entry price. issued a buy notice last evening and we had a run up this am play safe in the street have a great day! 

[10:13] <+CM> leg 2 for bulls all 4 majors

YM and TF remain under the prior range, NQ is playing in the middle of the range and ES is playing on either side of the bottom of the range.

Meaning?  More volatility in the markets and opportunities to swing your trades.

RANGE RUN OFF HIGHS TO TEST THE BREAK OUT 6/24/14

OK, I CONFESS.  It has been a gap in the posting, but again it it more for my study than the study of others, although hits still pile up.  Thanks, hope you find some benefit.

My recent discussions in trading chat was about a break out level (bullish) for the YM, NQ, TF, and ES.  Those levels held last week for some shorting of the markets and was followed by new bullish efforts.

Longs prevailed as we ran to test the daily upper trend line (from December) for ES.  Price this morning was showing signs of weakness, and shorts were eager to apply a little pressure as price staggered in a narrow, sideways path.

As mention in other post and as all traders should be able to recognize, prices do not move in a straight line.  Pushes up/down meet retracing action.  These actions are actually a win-win scenario.  Today was a perfect example.  Bears wanted to test a 50% retrace as a minimum, and even better move would be a full range reversal.  Shorts get to make some money in a bullish market.

The bulls are winners as well.  The dominant trader side will allow these retraces so a better entry price can be obtained for the perceived next big move. So, bears win today and bulls have their pullback for a better price entry.

Bandwagon, late to the party buyers will buy high only to sell lower (reverse the action for bandwagon sellers).  Smart traders will always play into this psychology of "the market" and gladly sell to these buyers or buy from them as they seek to end their misery.

One may ask, if that is the case it would seem logical that traders would soon learn to avoid such costly mistakes, or at least new traders would not follow prior paths of folly.  That would be logical, but fear and greed still dominate. The folly wagon continues with faulty steering and braking well entrenched.


TODAY:

[10:49] <CM> seller interested in YM NQ TF ES ES at upper TL from December

[10:56] <CM> bullish breakout test levels 16630 3800 1180.8 1950.75 a retrace is a sell bias a retrace that establishes a LH approx 50% would offer new buy interest

[11:36] <CM> mid day pull back as mkts trade sideways

the action suggest by the market..

[13:41] <CM> this is pic of the topping where we saw price softening . sell interest, looking for run to 50% min full range run even better


[13:37] <CM> exit all btc range run completed 

 [14:09] <CM> ES daily lower test area around 42.5-43.25 will see how this plays over next few days bears want the test bulls like a better price to enter both win



 [15:21] <CM> well, there is the test of ES 1942.5-43.25 :) time flies

THE BREAK OUT RUN 4/10/14

LAST evening there was a sell off in the US markets then price found a flat range to tread water,  This sell , and the only news was from China, was interesting.

Forward to the open, price ids in an extremely tight range.  Albeit the chart narrows when a huge run occurs, the range was  around 5 points.  A 50CB developed on bar 1 and we had a 2 bar doji by bars 3 and 4. 

• Top not breaking
• 50CB  early test 
• 2 bar doji (read reversal)
• This market is in trouble!

Price broke lower (BO=Break Out) and we see a supporting gap until the BO-15 level.  The gap helps gauge the strength of the run.

A narrow pull back was stopped at a BO Level and was a relatively lower risk new short entry.  A nice 20 point break out day.

BULL CONTINUES IN A RANGE RUN 4/9/14

Price was in a narrow range  in pre open and was stalling after a nice extended two bar bull push.  A two leg sell off opened the market but found support just above a target level.

The B10 50CB conquered the failed bull pushes seen in bars 6 to 9. A plus 5 run retraced back to the 50CB and held setting up a higher low and the expansion run to the upper range target.  The gaps  added confidence to the bull run and used to select exits, and additional entries.

Another 50CB developed near the +10 run in price.

SELL AND SAIL 4/8/14

We started the day with a sell off inside the lower range for the day.  A channel was developing with a mid line off the bar 1 50CB.  I will draw the top for bears (bottom for bulls) then copy a parallel line for the opposite side.  The mid, if used, will come off a 50CB or other target.

Price was a FBO at the lower range and quickly retraced the B12 50CB and tested the B11 CB.  Price was positive to the 50CB trend line and at the top of the bear channel.  At these points we will always consider the possibility that the trend can stall, and in this case, return to selling.

[10:41] <CM> us mkts top of bear channel will look for additional selling

By bar 17 we were hitting the b3 50CB and likely pull back in price.  Both B17 and 18 closed off their highs at the 1840 area.

[10:54] <CM> 16182  3519.75  1135.3  1840

These targets were the pull back levels to watch for shorting.  The issue:  we have a strong bull developing due to the gap to the 20ENA and the gap above the 50CB TL.  The 1840 would not be considered until later in the afternoon, albeit price was stopped by a higher 50CB.

the next set:

[11:06] <CM> 16202  3527.5  1139.8  1843

[11:11] <CM> pa pushed higher  now see if it will return to the pb pt  we have 50cb's below and a prior pbs for a target

The high was set and price traded in the upper range with test of the lower 50CB at 1842.

ANOTHER SELL OFF DAY 4/7/14

The ES today had a major 50CB development early in the market.  Price broke for the bear and remained trapped below the 20EMA

New 50CB's developed and a bear channel indicating a weakening of the sell off.  This channel push slightly lower than the range finally finding the buyers to push the market higher.

FOLLOW THE CHAT:

[10:47] <CM> ES 57.5-10=47.5  10 point range in 
[10:48] <CM> 48 is bo point for sellers..
[10:49] <CM> or those that shorted b13 low..
[10:53] <CM> ES target 45

[11:10] <CM> sell bias ema hold 5m  gap on 15m

[11:21] <CM> ES consolidating=move coming
[11:53] <CM> ES target hit covered all shorts +** total

[12:57] <CM> buyers ES 42.5 targets 43.5 44.75 45
[13:13] <CM> ym tf nq es buyers

[13:17] <CM> bar 44 on 5m chart a 50cb to test on all majors
[13:22] <CM> stc ym nq tf 50cb test completed

[13:35] <CM> ym es tq nq at low of 30 minute range

[14:53] <CM> stc all  (trades shot deleted)

[14:57] <CM> done have a great day..

HOW TO FIND ( AND STAY) WITH THE TREND 4/4/14

A Forrest has been cut down to create all the paper used to publish trading books.  Read until your old, but sooner or later you must begin to trade  and shift your "reading" to the charts.

The easiest, and perhaps the lowest risk, trade may well be the With Trend Trade.  A review of some key signals can help you put our trades to work;  working for you and not against you.

• Price relationship to a moving average
• Price relative to recent highs/low
• Price to +8 to +10 targets
• Price failure to break, or price breaking 50% area of a control bar (50CB)

OK, enough for now.  No need to get too complicated.  Use these parameters and read the chart and make your own judgement.

[10:26] <CM> US Mkts looking to test lower support potential new LOD
[10:35] <CM> low test in nq  which has been a drag on the mkt
[10:38] <CM> mkt shorts entering NQ is the anchor dragging
[10:39] <CM> im short bias until the two lh's break     (LOWER HIGHS)
[11:10] <CM> someone opened the drain...

Each long attempted was a counter trend trade, failing to close the EMA gap and failing to break 50CB levels.

LONG WITH BUYERS, SHORT WITH SELLERS 4/1/14

One of the hardest trades is changing your trade comfort to match the market. The market is going up, longs with trend are easier than the counter trend short.  The trades are reversed with a declining market.

Your comfort trade becomes taking longs, or shorts, then the market flips.  Your trying one trade and finding it difficult to garner the wins or points your accustomed too.  This is one reason traders find it difficult to trade.  It is also a reason to work diligently on market reading and develop a trading system that will have a high probability to work for your style, and one that will attempt to reduce risk.

Trades in the market today centered around two forces: the range for price, and the BULL-BEAR trend lines.  We had a break out of the pre-open narrow range, followed by a broader two leg run into resistance.  Leg 1 was bar 1 on the 5 minute chart and b3 began leg 2.  Sellers were interested as we got to b5 and 6.  This is where your read abilities come into play.  Sellers are interested but your fell should be:

• sellers (buyers) will enter in stages at a given resistance level or support.  It is easy to see the sellers at b9 or 16 and it is easy to see sellers at b8/9 high of the day after price runs to the buyer support line.
• IT IS DIFFICULT TO SEE THE SELLERS/BUYERS AS THE BAR IS FORMING
• Solution:  you must be willing to trust your read and play that read.  Shorts were entered in that sell range.  The optimal hold would be until price hits the Bear TL or the buy support line.  In real time, the covers were taken at the EMA and dictated by distractions and price action in other markets.
• For longs, plan trades at/above the buy line.  Stronger were trades that were + to the buy line, Bull TL and Bear TL.

If you are having trouble flipping between trades-long to short or short to long- then learn to trust your reads and wait to play the trade(s) that seem to have an advantage and assumed lower risk.

FOLLOW THE 50CB BO TO RESISTANCE 3/28/14

Trading discussions have covered the 50CB, resistance levels, and targets for the buyer/seller at the +8 to +10 return on their trade.  Today, we had it all play out nice and neat.

The early 50CB break out ran to resistance.  Price was above the 20EMA and the 50CB upper trend line.  This is used to gauge the strength of the run and a focal point to look for exits.  It also servers as part of the planning for a reversal trade when a new direction develops in the market.

The second part of the decision process was the signs of resistance: buyer taking exit and bears entering the market. These entries are expected to produce a +8 to +10 return for the risk .

Have a plan and execute your trade.  Let the market work for you.

THE SELL BIAS 3/27/14

The bias last evening was short.  The bias continued into the US Open and covers for the shorts and a 50CB pull back was anticipated.  The bull was expected to wain and exhaust with the market retuning to the short bias and ultimately remain flat for the day.


red:shorts   green covers       green: counter trend buys   EMA exits















IN THE CHAT

[09:45] <CM> mkt continues to sell; shorts from last evening covered  (LINK DELETED)
[09:47] <CM> us mkts ym tf nq es buyers b4 on 5m charts ES target 38.75-39.25
[09:48] <CM> test of b2 50CB
[09:57] <CM> target exits

[10:12] <CM> if you like fbo of selling channel this buy push will exhaust and rekindle shorts ym 16180 nq 3570 tf 1153 es 1843.5 approx flip points essentially a flat day outlook for mkts

TRANSITIONING MARKETS CREATE SWINGS 3/21/14

Nice end to a week.  Market opened and seem spooked by the high of the day.  Some were looking at YM pushing higher.  I was watching NQ and thought the read was a market ready to short or sell off for the day.  Bias in, look for the trade, have a strategy for exiting.

[09:47] <CM> gm  nervous open  something is about to be released
[09:52] <CM> mkts spooked at highs? bears seem to be looking for reason to swing lower

A multi-market look is akin to a multi-chart look:  both can provide a clue to the market.  The read was a market trying to sell, and if wrong, the upside risk was known (HOD or some percentage of it).

Do not be distracted by the trade to the point you miss the why for the trade.

Exit, and look for the next trade.  My personal bias is that buyers/sellers will look for a +8 to +10 return on their investment when in a strong move, making the exit a -8 from the ES HOD.

[10:09] <CM> looking for ES -8 from hod

 [10:27] <CM> buyer support hit es -8 area from hod
[10:28] <CM> ym recovery push
[10:32] <CM> buy the falling knife...
[10:34] <CM> ym should pull others to ema

The new vigor in YM was expected to pull the other markets higher

The markets seem to be turning (read) for a quality pull back.  Had a why, a target, and known risk at the lows.

Sometimes looking at the trade helps to clarify the thought behind the trade.  Read the market, practice, know why to enter, your plan, and your exit.  Also try to get a feel for the risk involved.  Risk is always in the market and the best you can do is try to minimize it.

Enough on trades. back to discussions next week.

MARKETS IN TRANSITIONS: SAME REASONS TO TRADE 3/20/14

Markets can be trending, moving in a side-ways range, stagnant, or simple in transition from one to another.  markets now appear in such a transition.  Are the bulls ready to rest?  Not today, but tomorrow can be totally different.  Small, moderate, and large swings are feasting times for traders if your on the right side.  Transition swings also offer value  for those unable to wait out a trend, which likely is most traders.  Only the institutions and deep pocket accounts can hold a trade over an extended time and, by its very nature, futures are short term holds due to expiration and gaping weekend action.

So, what are the trades for these swing days?  In simple terms, they are the same as any other trade.  They will be with trend or counter trend, however the swing volatility tends to create better PB CTs.

You will need the basics:  a reason to trade and an exit strategy.  If you do not have a answer to either, save your money and find another adventure.

SIMPLE EXAMPLES

Today I was sharing some information and made simple trades for clarity.  There is no need to watch someone trade 20 contracts if you only have 1-5.  You will sooner or later find yourself trying to mimic the trader and loosing while they win.  Why?  They will add to average and get out with a profit (oops. you can't average!) or they will (by larger leverage) take a profit that is OK but minuscule for you.   Cost eat up your account and you stop trading, or continue to loose.  The same actions but expecting different results folly.


in chat:  [10:27] <CM> sellers noted ym es tf nq

selling pressure noted and worth a look.  Price was starting to stall after a bullish run up and had sights of a quality pullback.  IF WRONG, your exit gets you out and you evaluate an entry in another push by the bulls.  In transitions, the PB CT seems more viable so a trade was executed.

Now we are back to the EMA (or slightly below) in the majors:  YM, NQ, TF, and ES.  A range at the end of a push run with price pulling back for support.  A single trade which is doable by traders.


Once the support is reached, The exit in this case, you must evaluate again.  Does the bears have more or will the bull return.  Wait for your read on an entry and trade.  In this case, the read was: support would likely hold and longs were viable, lower risk trades.

  [11:39] <CM> bar 26 pb (5m chart) buyers at top of b25 ym es nq tf will be looking for new hod


We now have support, and a "why" to look long.

Markets as a whole were stable around the EMA and we played to the high of the day and the exit window when price again showed signs of slowing.  Another single and doable.

ES TODAY

Support by the EMA, price bullish (favored trade) and two resistance levels where price stalled.

Read, react, exit.

RANGE RUNNING INSIDE 50CB CHANNELS 2/25/14

Price action today was dominated by range runs inside 50CB channels.  When a 50CB appears, parallel lines can be created on prior highs/lows and a future estimating line can be added.  Today, those lines were helpful with timing issues.

BULLISH BREAK OUT FOR A NEW HIGH 2/24/14

Price was at a key level and threatening a break out.  At the US open a 50CB developed and price continued to run BO LEVEL.