May 122010

As you can see we had the lack of overhead conviction at any specific level nailed right today. With 60, 62, & 66 all having the next level up stuck in the same tail above we didn’t trust any of them except for some volatility scalping which as I mentioned we are going to stop showing as they really aren’t intended to be the focus of the blog. Since 60 was hit several times pre-market we had it as a scalp only as we didn’t trust it to hold for a full rotation. We did get a nice bounce off our 56.75 level long and it set up perfectly with a Mousetrap. That was probably the highest probability opportunity of the morning. When we finally got to 66, I couldn’t decide whether it was worth a real fade commitment as I felt it would want to probe up some more at least to the 24 hour R1 and possibly to 69 – and it did (to the pivot at least) after grinding around for what seemed an eternity. But as you can see there was a textbook Little Prints setup and then a really strong Big Lots setup later in the grind cycle. Now that we have covered the order flow stuff in detail and finished the webinar series we decided the educational component will be all the more strong if we start labeling some or all of the potential set ups by name in the first hour or so which is of course when we are actively looking for opportunities. To that end there will sometimes be more than one snapshot as there are today. Hopefully you will find this modification useful. Hopefully you all continue to see that the levels themselves and properly reading and handicapping their probability of holding or failing is what matters above all else. When you have long rejection “tails” above or below the open price it is much more difficult to decide which one is “the” level to fade that gives you the best chance to win. There were some nice opportunities around 66, but with the R1 and 69 right above there with no major acceptance in sight I really wasn’t in love with those fades there but after it grinded for so long I became more and more convinced it was worth at least a small rotation down and it worked out fine. Normally though I like to be in love with a level a little more than that to warrant anything other than scalping it…

 Posted by at 11:48 am

  4 Responses to “5/12/2010 Post Trading Analysis”

  1. RG, Thanks for another excellent webinar yesterday.

    I saw the mousetrap this morning and traded it for 4 ticks (56.75-57.75).

    How do you manage your exits? Do you put in an order at your target 1 or target 2 level and then monitor the order flow? If so, what percentage of your exits just hit the target vs. what percentage require manually working the exit?

    I’ve been setting my target stops roughly based on my sense of volatility, typically 4 to 6 ticks with a 4 tick stop loss. I’ll manually intervene if I feel the order flow starting to move against me. I also can’t help but wonder sometimes when it zooms past my target and wonder if I left too much on the table.

  2. Hi guys,

    Back in the trading seat again and short at 66.5 for 12 tics. I only took this trade because I noticed the delta diverging with price around 11am (4pm for me in the UK). I couldn’t make your order flow webinar so am looking forward to the recording…hope you post it soon 🙂


  3. Welocme back Jess. MarketDelta has posted the webinar in their library I believe. We have a slightly different Post Trading Analysis angle each day now where we reference the specifc setup type(s) that come up roughly in the first hour. It should help the learning process for all and bring everything from the three webinars including the final order flow stuff into context. Try to watch that as soon as you can so you will know what we are talking about with the updated terminology.

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