This was an interesting morning. The ES dropped right down into our 66.50 / 68.50. It was a great scalp opportunity, but the price bounce was too hard for any trade opportunity that involved a second push. After spending some time meandering around the overnight 73 VPOC, price moved up into our 76.50 / 79 level. Right below this level is 76 YC which is the zero line for the day and often acts as strong support or resistance. On the second push into our level, price failed to reach the previous high and closed right at the YC. If the YC was not there, I would have considered this a potential trade opportunity. As it was, the YC area had not been cleared and there was too much risk that price would not be able to push it’s way through it. Also since the level’s LVN area is wide, there was also no real resistance above to help keep price from probing higher.
After another rotation, price moved higher to the back of our 76.60 / 79 area which I consider as a first push into the back of the level. The next rotation was an opportunity worth waiting for. Buyers were trapped above the previous high at the top of our large level area. Now there is room back down into the YC which makes a good target.
4 Responses to “8/16/2010 Post Trading Analysis”
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NJ
Good trade. So entry around 78.25 on the 10:58 bar. Market goes down to 77.00 and then (on next bar) back up to 78.50 challenging the entry… At this point what are you thinking about as a stop or exit strategy?
thanks
Dave
The stop was moved into 79 after the 11:02 bar closed. Since the 10:58 bar did not make a new low, there were still stops below the previous low that have not been touched. I was confident the YC would be tested again so I was willing to sit through one pullback, however I probably would not have sat through a second. Since the trade did get 4/5 ticks into the money, I understand why you are asking about managing the stop. I wasn’t really thinking about it at the time. I was thinking price was in a rotation and I want to keep my stop outside of the range.
NJ
Sorry I did not get to this sooner.
Yes that makes sense to me. And the initial stop was somwhere slightly above 79.50 (the previous bar high – the 10:43 bar)?
thanks
Dave
Yes, the initial stop price was above 79.50.