I’ve got to admit, I was surprised by the amount of directional volatility today. I was expecting volatility similar to yesterday as the markets wait on Bernanke’s prepared statement the the US House Financial Committee tomorrow. I also thought the bulls would try to push price through the ES all time highs at 1679.75. Soon after the 9:30am EDT cash open, price did make an attempt at 79.75, but could only double top at 79.50 with yesterday’s high before the day’s sell off started to unfold. Unfortunately, the institutional sellers did not tip off the day’s high and I missed shorting the highs. From the highs, the ES dropped into the DTG 74.25 level where it double bottomed and unfolded into an order flow long. The long tried to work, but couldn’t clear the VWAP and eventually the ES broke down further. There was some room for small targets, but for the most part this example trade was stopped out. I thought it would make a good example for trade management which I marked on today’s example chart below. The next long opportunity from the DTG 66 level provided much better results.
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