06/06/2012 Example Trade

I’m not posting a specific example trade today, but rather commenting on how the day unfolded.  The markets moved up strong overnight in anticipation of an ECB rate cut and an 8:30am EST scheduled news conference.  The US employment and labor numbers did not meet expectations and the ECB decided to hold rates.  As the markets digested the news, the ES sold off  into the DTG 89.75 level.  It double bottomed at 89.75 which turned out to be the best trade opportunity of the day as rate cuts were still on the minds of traders and investors and the day turned into a 30+ point trend day.  After the cash open, price slowly grinded up  through the next 3 DTG levels on high volume, creating losses for most short trade attempts.  By the time price reached the DTG 09.50 level, I had personally reached my maximum daily loss limit and could not consider taking additional trades.  It was just one of those days; trend days are always tough for counter trend traders…  The 09.50 level turned out to be the first DTG level that provided a large enough rotation to recognize profits.  The subsequent price pullback into the DTG 6.50 level provided an additional long trend continuation trade into the day’s close.